patrick.net

1. What do you tell people who are currently thinking about buying a home and why?
Don't buy if you don't have to; wait at least one to two years before you seriously commit to buying a home -- hopefully, deprecated/ignored banking regulations/practices are reinstated along with strict property assesments, and higher interest rates and enough foreclosures occur between now and then to bring down the prices of homes.

2. What is is the general area you live in?
11230.

3. Do you currently own a home?
Yes, a co-op.

1. What do you tell people who are currently thinking about buying a home and why?
If they're looking for a deal, they should wait. Don't buy unless you can afford the home on one salary, and look for energy efficiency and the home you need vs. the home you want.

2. What is is the general area you live in?
Southern Utah, which has been hit hard by the economy and housing crash.

3. Do you currently own a home?
Yep. I bought pre-bubble and still have phantom equity. However, I kick myself every day knowing that if I'd sold at the height of the bubble I'd have $200k in my pocket right now.

1. What do you tell people who are currently thinking about buying a home and why?

A home is a consumer purchase, just like a car. You have to determine if the expense is worth the pleasure derived. With that attitude, compare renting vs buying, especially with how long you plan to keep the home.

2. What is is the general area you live in?

Hampton Roads, VA

3. Do you currently own a home?

Yes, two houses. My residence (2400 sqft 2car) and a rental (1500 sqft 2 car), both built around 1995. Both are paid for, and unlike another blogger, I had no inheritances. But I did have my Dad's advice to pay off the mortgage.

1. What do you tell people who are currently thinking about buying a home and why?

First and foremost do not buy unless you can actually afford it with a conventional mortgage (30 year fixed). I.e. your PITI on that conv. mortgage are no more than 1/3 of your income. Hoping for appreciation and a quick flip on an exotic mortgage was a great part of the problem we've seen. Further, if rent is significantly lower than PITI for the same property, do not buy. In my case a 30 yr. fixed @6% with 20% down would be more than twice my current rent (based on most recent purchase price).

2. What is is the general area you live in?

SF Penninsula.

3. Do you currently own a home?

No, but I have owned two houses in the past.

1-I tell them about what I read here, as well as what I have read on numerous other housing bubble forums, and ask them to compare the historical data and past/current RE bubble scenarios against what they see in their local market, before they get too serious. Also, I try to get them to review economics sites. I am a fan of Peter Schiff, Gerard Celente, Garth Turner, Nouriel Roubini, et al. Then I sit down with them and "do the math" if I can........and, it is the actual math that usually gets to them as it breaks thru the female based emotional aspect of home ownership (nesting) that they have to combat.
2-Calgary, Alberta, Canada and Rio de Janeiro, Brasil (70/30%)
3-Not here, I rent in Canada for 1/3 the cost of ownership....but I own a condo in Rio.

1. Wait
2. Central valley, NorCal.
3. No.

1. Be patient. Even if housing is bottoming, (which it isn't) a 10% increase in home values over the next 2 years is only a 10% increase in payment. The only way that homes appreciate 10% over the next two years is if incomes increase sharply, or the tax credit stays intact, and interest rates stay this low or go lower. If either of those two scenarios do not occur, homes aren't going up.

2. Jacksonville, fl

3. I rent a home for $1300/mo. in a neighborhood where the most recent sale was 305K. The lowest priced home for sale is 395K, but it needs at least 70K of work to be liveable. The lowest priced home that is move-in ready is 455K (next door to me). Basically, I pay 2/3 of what it would cost to buy if I got a home for 305K, and about 55% of what it would cost me to buy the lowest listed home, without fixing it up.

1. In the area I live in I tell others to wait. Prices will continue to fall due to the disconnect between wages and house prices as well as the still declining economic situation. Many people disagree but not as many as when I moved to CA. in the fall of 2004 and told people that house prices were unsustainable and would surely fall. Back then I was literally laughed at and told that being from out of the area I just didn't understand that in CA. real estate never declines in value. Silly me

2. Southern Sonoma County CA.

3. Yes, I own a house as well as commercial real estate and farm land but not in CA. I currently rent a single family house

1. What do you tell people who are currently thinking about buying a home and why?
Be careful, because housing prices may come down further over the next 3 to 5 years and unemployment remains high/unstable. Government incentive programs may cease over this same time period which could reduce the effect these programs have had to artificially inflate home prices.

2. What is is the general area you live in?
Long Beach, California, 90814.

3. Do you currently own a home?
No, but we are keeping a watchful eye. My husband and I plan to be first-time buyers, have a 20% downpayment saved, two stable incomes, and good credit scores. We wanted to buy a home before starting a family, but are having to reconsider this dream. Being emotional about a decision involving $300,000 does not seem like a good plan in a market where home prices will likely drop. Prices in my area are similar to david1 above with condos similar to the one I rent selling between $200,000 and $450,000. (List prices are all over the place in Long Beach, CA with some condos totally overpriced and some underpriced.) I suspect that list prices are more indicative of what people/banks need to break even rather than proper valuations.
We currently rent a 2-bed/1-bath/garage apartment for $1,100 a month, 3 blocks from the beach. Rents in Long Beach have dropped by about 10% over the past year and many landlords offer a free months rent with a 1-year lease now. Instead of buying a home, my husband and I are thinking of moving into a bigger rental now to start a family - maybe a 2-Bed/2-Bath detached home in the same area or a bit inland (approx $1600/month). Overall, I'm disheartened about the high prices of starter homes in Southern California and the abundance of all-cash investors who continue to compete and win against first-time buyers for these properties. If we stay in this area and prices do not come down - we will continue to rent.

1. Wait
2. Pasadena area, SCal.
3. No.

1. Only buy if you can actually afford to pay cash for the whole thing.
Then put about 30 percent down to get a decent fixed rate loan and a small payment with enough reserves to pay the mortgage for several years.

2. I am in Pasadena where we need another 50 percent decrease to be even remotely reasonable on prices.

3. I rent using some of the the interest on the money I have saved by not buying to pay the rent.
I keep looking at these bank repo open houses and I hope that when the tax rebate goes away and the next bunch of foreclosures hit these guys might actually get real about pricing.

1. Purchase within your means. Follow the 20% down and 3:1 ratio on income to home price. Believe it or not, there are more houses and condos in the Bay Area than families making $150-$200K a year. Now is not the time to buy as it is far cheaper to rent than it is to purchase the same house/condo. Be a long term thinker when you eventually buy.

2. 94087

3. I rent a three bedroom Ikler where I live. The same style house a couple doors down recently sold for about $750,000. I have an interest in a house that is owned out right (inheritance), which is in the Bay Area. So, if prices become reasonable, I'm willing to buy. But if not, I remain quite content to let the absurdity continue. My primary interest is in the schools in my area over the next 15 years and whether I buy or rent during that time depends on housing prices compared to rent.

1. If you can afford the payment by "traditional" lending standards, and it is a fixed rate, go for it, but know full well that you're house will loose value in the next few years, so you better hope you don't have to move unexpectedly. When in figuring out what you can afford, trust your accountant, not your banker.

2. Northeast

3. No.

1. 20% down, 15 year mortgage, 3:1
2. New Zealand
3. I own cash flow positive rentals in Texas and Oregon. Renting in NZ. Renting a 2.5 million (about 1.75 million us) beachfront house for $2120 nzd a month. Needless to say the market here is in a major bubble.

1. Wait . . . depending on the neighborhood here, list prices will probably continue to come down.
2. 23451
3. No, just sold Oceanfront property in July. Currently, renting and waiting for what's next.

1. I stopped telling people my opinions on homes since 99% of everyone I know thinks I'm an idiot to go against the flow of modern consumerist society. They all still think housing is a rich investment, and hey "everyone is doing it". Now I just nod my head and listen to how they are strapped for cash, late on payments, cannot take vacations, and worrying about unemployment, while I have a load of cash in my back pocket.

2. San Francisco, real estate boom ground zero

3. Heck no. I know a couple here that are turning 60 soon, and bought their 1st house in 1982. They are just a few payments away from paying it all off, and over the years have lived in some of the nicer Bay Area neighborhoods. Upon their last payment, they will have paid just over $700,000 in payments total over almost 30 years (not counting upkeep, maintenance, taxes, insurance, etc.). And guess how much their country-club gated community home in the 'burbs is worth right now? You guessed it, around $700,000. So if they sell anytime soon, they have made ZERO dollars over 28 years of payments, in fact have lost money due to all the other expenses a bought home occurs.

Based on that anecdotal story and many like it here in the Bay Area, I don't think we'll ever buy a home here - and we make over $200,000/year, have plenty of cash for a sizable 20%+ down payment. The truth is, we like to be cash rich, instead of house poor... even 30 years from now.

1. Wait.

2. Bay Area.

3. Nope. And glad of it.

1. Wait, houses in a lot of areas have yet to come down far enough. Once the tax credits end and interest rates go up with out a recovery in jobs they will come down more. Some parts of sac are probably a buy, but others have yet to come down enough. Elk Grove has crashed and gone getto.
2. Sacramento.
3. Yes, 1, 1500sqft

1. What do you tell people who are currently thinking about buying a home and why?
Just be patient and wait. It's never be to late to buy a house but it might be to early to jump in. You'd rather buying a house while the price is picking up than price is bottoming down.
2. What is is the general area you live in?
Los Angeles, CA
3. Do you currently own a home?
NO.
I just check wikipedia for average US household income chart.
http://en.wikipedia.org/wiki/Household_income_in_the_United_States
Me and my husband's income is on around top 5% of the chart. However, we're still renting and we still feel we're not making enough to afford a decent house in a nice area in greater Los Angeles. I don't think we're asking too much. But if we're considering having kids in the next few years and putting some money aside for kids' education, we're left with option of $350k to buy a house and still feel comfortable. $450k might be the top line.
$350-$450 in Los Angeles for a house? You'll probably find a 30-year-old condo in nice area with 2beds 2baths or you'll find a 50-year-old house in a not-so-great area such as Monterey Park. That's why we're not buying any. We'd rather save $$ and invest to somewhere else than jump into the bubble.
12 years ago when I first came here. I like California alot and I feel I want to stay here forever. But now, with government's screwing up the funds, 9.75% sales tax, and everything's higher than most states but education ranked bottom 3 among US....plus wildfire every year due to global warming, plus we haven't had earthquake energy released in the past 30 years....
I don't see the point of living in here anymore. I don't feel like California is my dream hometown anymore.

mistagenki says

I know a couple here that are turning 60 soon, and bought their 1st house in 1982. They are just a few payments away from paying it all off, and over the years have lived in some of the nicer Bay Area neighborhoods. Upon their last payment, they will have paid just over $700,000 in payments total over almost 30 years (not counting upkeep, maintenance, taxes, insurance, etc.). And guess how much their country-club gated community home in the ‘burbs is worth right now? You guessed it, around $700,000. So if they sell anytime soon, they have made ZERO dollars over 28 years of payments, in fact have lost money due to all the other expenses a bought home occurs.

I guess that the only good thing about that would be that they have $700k; they could sell & use it toward their requirement. If they had invested the difference between rent and buying (rent equals $800/buying equals $1,000, so invest $200/mo) every month they might not have the same amount of dollars now. But, after upkeep, etc who knows. About the best thing I can say about buying for me is that my house payment won't increase, other than the taxes/insurance required.

1. What do you tell people who are currently thinking about buying a home and why? Frankly, I try not to engage in discussions since many Kool-Aid drinkers are clinging to the REIC mantra that real estate only goes up crowd / it's different here / everyone wants to live in SF Bay Area, et al. I have stuck to my core beliefs that it's been insane to buy in the Bay Area since the early 2000s. Moved to South Florida and had no qualms buying there in 2002 since prices were still reasonable there at that point in time.

2. What is is the general area you live in? I live in the city of San Francisco.

3. Do you currently own a home? No - I currently rent a nice, detached 3BR home with large yard for about 40% of what it would cost to buy. I sold my home in South Florida about 4 years when I moved back to the Bay Area. Didn't buy another house when I moved back since I could rent for pennies on the dollar and wasn't willing to spend $800k for fixer-upper. Personally, I sleep a lot better at night not worrying about paying off a $600k mortgage and what would happen if I was living paycheck to paycheck and lost my job.

1. What do you tell people who are currently thinking about buying a home and why?
Better deals will be available if you are patient.

2. What is is the general area you live in?
Baltimore City 21230

3. Do you currently own a home?
Yes.

1. Buy with 20% down. If you can't afford to save the down payment, you are not ready for home ownership.

2. NW Ohio

3. I am currently building a new home. I bought the lot last March and paid 20% down on the construction loan using cash and the lot as collateral. The home will be about 2000 ft^2. The home will also be an energy efficient ICF home with 3 bedrooms, a 2 car garage and a full basement.

1. DON'T DO IT. There is still a big shoe to drop.

2. San Francisco

3. No

"Yep. I bought pre-bubble and still have phantom equity. However, I kick myself every day knowing that if I’d sold at the height of the bubble I’d have $200k in my pocket right now."

Off topic, but this is basically what happened. It was a big casino. Spin the wheel and see what your prize is!! Some people ended up with 100's of thousands (or millions) of dollars in their bank accounts, and some ended up with 100's of thousands (or millions) of debt. Two sides of the same coin. And of course a hugely disproportionate share of the winning side went to the top 1%.

1. Save for a dp and wait and see what happens with all these foreclosures the bank are sitting on. Portland didn't have as much of a subprime problem but we sure enjoyed those Interest Only, Option ARMs, Neg Am loans. Our foreclosure rate continues to go up. Our last 7+ years have relied on housing from builders to landscapers, realtors, mortgage brokers, etc. We do not have strong fundamentals for a good recovery as we have lots of inventory to work through and not much of a job market. Prices are still out of line with incomes. $500k+ homes are seeing huge drops in asking price even though you hear about fools outbidding each other on starter homes, around $225K. Oh, and rent is dropping like a brick!

2. Portland, OR

3. Purchased a home in 1999 in prime close-in Eastside. Needed two incomes to afford the home, 1st mistake. Used a zero down VA loan as prices seemed to be increasing faster than we could save, 2nd mistake. We were fresh out of college with a boat load of college debt. Spouse got hit with the tech bust 2 years after we bought the home. Managed to hold on with unstable work but then threw a baby into the picture in 2006. We saw the bubble ever increasing, wondered how the heck people were pulling it off. Decided to sell while it was hot. Unloaded in May of 2007, near the peak of Portland's bubble. made out quite well though much went toward debt accrued from the years of unemployment, baby/childcare expenses, and bought a much needed car for the growing family. I've been a professional bubble sitter since around 2003. We'll sit and wait. Enjoying the cheap rent:O)

Leigh says

Used a zero down VA loan

How were you able to use a VA loan? Did you assume it? Or perhaps you were in the military before you went to college? If so, the loan amount under VA is limited by rank (usually it is junior enlisted who get out and go to college), so you can not have been hurt too bad.

HeadSet says

Leigh says

Used a zero down VA loan

How were you able to use a VA loan? Did you assume it? Or perhaps you were in the military before you went to college? If so, the loan amount under VA is limited by rank (usually it is junior enlisted who get out and go to college), so you can not have been hurt too bad.

Spouse was in the Navy in the late 80's early 90's then went to college. No injuries, though maybe psychological;O) Went to college on the GI Bill. We supposedly qualified for $250K in 1999 but we figured we could only afford about $180 given the pile of student loans. The GI Bill back then didn't cover much. The interest rate is higher when you use a VA loan by about 1%.