Has anyone bought, or know anyone who has bought in 2011?
Are you/they happy with their purchase?
This general post will have some interesting follow-ups this year...
Bought or Buying a house in 2011.
By American in Japan Follow Wed, 2 Feb 2011, 9:47pm 17,553 views 189 comments
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By human instinct, no one will ever disclose to the world they made a big mistake.
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Alexandria, VA
This is Feb 3rd, 2011.
Traditionally not many people buying home in Jan and lot of them are still busy painting/reparing the house. It's just little too soon to ask a question like that, IMO.
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I think "buying" implies a planned purchase in the near future.
My own next purchase won;t be until it's time to have a kid. And I don't even know what country I'll be in when that happens.
(Checking out condos and co-ops in NYC... not cheap!)
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Newbury Park, CA
Bought a REO sfh home in South Puget Sound area. 3b/2bath/1990 sq ft for 194k. Closed on 1/24/11.
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Scottsdale, AZ
robertoaribas's website
closing on another 1 next week... 3/2 condo with 2 car garage... will rent it out.
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Most everyone is either walking away from them or burning them, the smart ones, anyway.
Early days in the death spiral yet and it takes a while for some folks to catch on.
If you care about your own survival and that of your family, learn to kill with your bare hands and plant potatoes.
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Scottsdale, AZ
robertoaribas's website
I can kill potatoes with my bear hands already!
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Monterey, CA
robertoaribas says
lol
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@seaside
I think so, but I hope to keep this post going throughout the year
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APOCALYPSEFUCK says
U from Idaho?
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I bought two houses in 2009. Both have seen modest appreciation based on recent sales, maybe a few percent. Both are happily rented and are covering costs plus a modest profit.
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I just bought a house. Closed on Feb1. Moving stuff in already. "Happy" ? I wouldnt call it happy but objectively speaking I did get a good deal for what I was looking for and I think in the near future will see a return. The return will be the rent on my current house is slightly more than the mortgage and the rent is definately on the low side so I see a rent increase as perfectly feasible and reasonable for the market. My immediate return will be knowing my mortgage is locked in slightly below a "low" rent. My long term return will be watching my cat climb the wall to attack my dog. Not something you can do in most rentals ! BTW, I am not knocking renting, in fact I seriously pondered continuing to rent and having the house as a rental but it is not me so I am moving in
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I'm thinking about it. (new here, long time lurker) I'm in Concord and something in between 200-250 is in my price range. Some stuff has come up. I'm hoping that more will be coming up in the future, but everyone keeps saying this is as good as it will get. I don't know what to think, sometimes. : P
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robertoaribas says
I've read and heard many times that condos aren't a good investment, and that it is better for individual investors to stick with SFH. In your experience, do you think there's some truth to that, or too broad of a generalization?
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I'm buying a couple of rental properties in the next couple months in south Texas.
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South Pasadena, CA
Never buying, period! Being debt free=freedom.
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Monterey, CA
Truth is, you're either a slave to rent or a slave to property taxes. No matter how debt free you are.
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Bowie, MD
I have been waiting for a few years, and recently (I finally bought shortsale) a property. I needed due to increase in famaly size. I leave in DC, the previous owner paid about $1 million, I paid about $600k. I hope I made a reasonable deal on this one.
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South Pasadena, CA
joshuatrio says
True dat. In my case, property taxes. I have inherited a rental property. I plan to live here as long as I can drag myself up and down the stairs, but no more car loans, no cc debt, woohoo!
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Newbury Park, CA
robertoaribas says
Robertoa,
Do you have a 1,5, and 10 year plan?
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South Pasadena, CA
Mr.Fantastic says
My father bought our property back in 1963...much different time indeed. Luckily, it's paid off and we have great tenants that stay for years...sometimes even decades!
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robertoaribas says
What are your HOAs? I can't find a single condo in the LA area that's worthwhile.. with HOAS under $400 a month. In that situation you might as well just continue renting... My first apartment back in 2002 that I shared with some roommates cost me less per month! And those fees will keep rising.. I'm betting by the end of a 30 year mortgage.. your might be paying $1500 a month in HOA Fees!!! So whoopdie do.. the condo is "payed off" but I'm still paying $1500 for the "pool maintenance".. haha.. what a scam!
I'll keep renting and buy a single family home....
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Alexandria, VA
fille says
I am also in DC area looking for reasonable deal.
Do you mind telling me where in DC you bought?
Don't worry I am not gonna go there and snooping arround or something, unless you invite me. :-)
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Alexandria, VA
Buying a home, preferbly SFH, in 2011 was my original plan. I thought local housing market would hit its bottom here in DC metro area, specifically in fairfax county, at the end of 2010 or early 2011. I am wrong about it and my plan is being postponed. I've been waiting long enough, I don't mind waiting little longer. It doesn't matter.
When I think about housing market in last few years, 2008 was chaotic, 2009 was interesting, 2010 was... well... extremely boring, I mean, in the west of potomac river. All I can see back in 2009 was crappy homes in crappy area, and now, ziprealty is sending me whole bunch of listings with better homes in better area... at still bloated price, mostly over 500K range. It is like, housing market is booming. It remind me of last April when the tax credit is about to expire. The funny thing when I dig information little further, I found large portion those homes are bought in last year, being flipped, and being put in the market with 100~150K mark-up. Some of them are bought in 2007 and being on the market at the price they bought. I was like, good luck with that price, pal. Are they finally unloading their stuff or what? Is the correction that happens in the west is finally taking place here in the east? I can't tell yet, but I have this feeling that year 2011 is gonna be interesting.
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seaside says
Real estate only goes up.
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seaside says
In process, and still correcting...
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Scottsdale, AZ
robertoaribas's website
To answer a couple of questions up above:
1. Are condos a worse investment than homes. Perhaps. I didn't buy any of these for appreciation however. The average price for the 3 of them I purchased, with rehab and appliances is $40K. I am renting one for $750, one for $825, the third I anticipate $795. They are all close in, near the light rail and near centers of employment, i am much more concerned about future rent trends then future price trends. Factoring in a month of vacancy and $1000 for maintenance, i am making 12 to 14% on each of these, without loans.
2. Condos sell at a discount to homes, true. But it seems fairly evident to me, that through the principal of economic substitution, that discount percent ought to stay relatively constant. So, if it is 30%, well it should stay there in an up or down market. However, due to lack of available financing, condos have fallen MUCH further in price than homes. [ you cannot get a fannie or freddie loan on many places, due to too high of a percentage being delinquent on HOA payments, or too many rented out] Someday, the market will improve. Hell, most people have learned nothing, 5 or 10 years from now, there may be another bubble.
3. What is my 5, 10, 20 year plan? who knows! I didn't plan on selling my investment properties last time around, the bubble basically forced me too. If the prices go crazy up some day, I'll sell, if they don't, I'll rent them out forever.
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Monterey, CA
Roberto - what are your hoa fees on them? Condo's seem to have easy cash-flow positive potential.
Did you pay cash for these units, or finance them? Sounds like you're doing well.
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Hillsboro, OR
We are looking to purchase in 2011... trying to patient and wait for a good deal and a good fit... preschool age child + stable job situation mean that we are likely to be in our next home for 15-20 years.
Portland is still overvalued (from a price/rent ratio) though, so patience is crucial right now. I'm not part of the doomsday crowd but I want to protect our family from what happened to a lot of poeple who bought in 2005-2007 (and we know people across the Southwest who are in a world of hurt right now, so we are a little gun shy).
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Some say prices of homes are rising again in the Bay Area...Lol!
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I want to buy this year. There are a few signs that make it seem pretty worthwhile.
1. The prices in the neighborhood I am looking at are pretty much around the price to rent (including HOAs, PMI, Property Taxes)
2. One building I really like seems to have a few short sales and foreclosures in the pipeline. 4 new units on the market in the past 2 weeks. 4 more in pre-foreclosure state on the tracking sites right now.
3. Current renters in the area are looking to buy (evidenced at the open houses)
My big problem is I am still saving for a down payment. The list prices seem to have fallen by 10-15% over the past few months -- so it looks to be right in my target. I hope this trend continues until I have my down payment together. ;)
Plan to buy by the end of the year. I think ratio is fine and it will be a good investment/place to live.
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Bellingham, WA
jaded says
This is better than it was for me in 2000-2002, when I came back from Japan.
I was saving for a down payment too, but prices in 2000-20001 were rising faster than I could save! Seriously -- what was a $300,000 place in 2000 became $400,000 in 2001 -- requiring $20,000 more down payment! WTF!
Then IIRC around 2002 they started innovating in 90/10 mortgages which helped me since the bay area was too high for FHA. But by then the dotcom bubble was dead and I decided renting was the better deal.
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American in Japan says
actually they are. spring season is starting early this year.
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Lafayette, CA
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I intend to buy at least one more SFR in 2011 and perhaps two if I can find the cash.
Looking at Concord of course.
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La Mesa, CA
I want to but what's up with San Diego real estate? Anybody following have insight/ predictions? It seems to be one of the few cities showing slight increases when it clearly needs to be decresing to fall back to reality...starting to really piss me off actually.
Thoughts?
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Professor Piggington (sorry) shows that San Diego has historically maintained high average home prices relative to average incomes.
http://piggington.com/shambling_towards_affordability_yearend_2010_edition
Ratios of over 7 have been the norm...
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47 male
Lafayette, CA
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American in Japan says
Thank you for that link. Here's a chart that SHOULD shock the hell out of real estate bears and make them rethink their entire position. Pretty amazing considering the "people can't afford it" rhetoric going around.
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American in Japan says
Yes, up to 1990. Than the income dried up, decline in the Aerospace industry, sending prices downwards for the next 7 years. Prices declined even though Mrt. rates also declined. Pigginton does a very good job looking back at historical trends and providing some excellent analysis. His is correct providing you do find a "reasonable" priced home.
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thomas.wong1986 says
Not according to the above chart. There's plenty of income and housing has never been more affordable.
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iwog says
Pigginton:
"I've argued a million times (latest iteration here, I won't drag everyone through it again) that price-based ratios are much more important than payment-based ratios in determining whether housing is fairly valued on a sustainable basis."
"Well, we are out of the danger zone of high aggregate valuations as far as the price-based ratios are concerned. But unlike with payments, home prices are not actually cheap. They are right square in the middle of their historical range. While this removes the dangers posed by overvaluation, it certainly doesn't rule out a move into undervaluation."
"My own suspicion, and this is purely a guess, is that valuation ratios will drift downward in the years ahead. Not plunge, but drift downward. This is based on headwinds to housing price growth I anticipate: a big foreclosure backlog, structurally high unemployment, higher rates, and the potential for a serious economic downturn (plus much higher rates) as a result of a US sovereign debt crisis. (I know I have said that rates don't impact valuations as much as many people think, but nothing happens in a vacuum -- a sufficiently large and sustained rise in rates could certainly exert some downward pressure on valuation ratios, at least for a time). "