patrick.net

In a word, "No." For the reasons, please refer to the entire site. Re-read it if you still feel the need to buy in 2010.

We are in the same boat . . . high combined income and yet still renting in H'wood, waiting for prices to get real. They may never. They say the Bay Area is "special,"; apparently, so is much of westside LA. Prices are no different compared to last year, at least where we are looking which is West H'wood/Miracle Mile/Hancock Park area. Possibly Los Feliz.

Not sure I would move to the Valley. That is where LA-area housing is going to decline the most outside of the Inland Empire (and, really, who wants to live there??).

Both of us are on the verge of losing our jobs; our companies are still trying to lay off people. I don't get how unemployment is so high in LA and a house in a not-terrible neighborhood here is still $1.5mill. Stoopid.

We are disgusted at this point. We have saved $80k downpayment from waiting so long and are ready to just go back to Florida, pay cash for a house, and retire early. I could just clerk at the gas station to pay taxes and the light bill, and opt out of this game altogether

The $8,000 credit shouldn't be an impetus to buying a house. If you get $8,000 back, but your house decreases in value by that much or more, it's not worth it. The tax advantage is a bonus, but many people are sitting on houses that they can't sell & can't afford - and because they're not making payments, they're not gaining any tax advantage.

The only reason to buy a house is because you believe it's the right thing for you to do and you're willing to ride out a decrease in value, etc. It should be in the right location - are you considering the drive time from the valley? And the extra gas?

If I were in your shoes I would save some more money first. Although I have nothing against buying in the current market, I recommend having more money saved before purchasing a home. At 3.5% you are probably looking at needing around $20k just to cover the down payment. Unless you save a lot of money between now and 2010, you will not be left with much of a security blanket if one of you looses your job or if you discover an expensive repair needs to be done on the home or car. I would avoid using your 401k as a security blanket at all costs if possable.

Agree with elliemae regarding the $8,000 credit.. it should not be a factor in your decision, particularly in the price range you're looking at, as it would be such a small percentage of the purchase. Same thing regarding tax benefits, as $15k in tax savings/year could be easily offset by declining home value.. And don't forget to consider property taxes which you'll be paying each year. It's not unreasonable to assume that home prices will swing back to 1998-ish levels. I understand that LA area homes are currently at 2002-2003 levels, which would mean another 30% or so drop if it did go to 1998 levels. If you want a home to start a family, that's one thing. But strictly financially speaking, it's a poor risk/reward

Thanks for the thoughtful responses... I figured posting on this site I'd get mostly 'No" on buying home in 2010. I'm sure I'd get 20 different realtors phone numbers posting somewhere else.. haha.
The parts of the valley I've been looking have been in Woodland Hills, Northridge, Granada Hills ( only the westside near Granada High). Even considering Simi Valley.. since we both work in sherman oaks/studio city area currently... not in Hollywood. But I know down the road I could easily work in Hollywood again.. especially if I do more freelance work.

I've been looking at homes to rent in the areas I've been considering to buy... Not apartments because I want a fair estimate of rent/own ratios... Most homes I see for rent are $2300+ a month in these areas. And that doesn't include one of my must have items.. a backyard pool in the very hot valley.

So if i could get a mortgage for say $2800-3200... or rent a similar place for $2300-2500... That's why I'm considering buying.

Sure we could rent a 2 bedroom apartment with a community pool... for $1500. But one of our wants is a yard / private pool.

Anyway.. any website I can go to search for homes for rent in these areas... Or a comparison of rental rates to own ratios. I keep finding sites with mainly apartments for rents.. Which isn't a fair comparison to a home for rent with a backyard pool/yard.

Every rental complex I know has rules about not having guests in the pool.. and crap like that. We are tired of rules...

Brother RMM:

Do not buy until the markets have reset, resist the urge for this emotional investment and follow step 3 of Patricks agenda which states:

3. It is far better to pay a low price with a high interest rate than a high price with a low interest rate, even if the mortgage payment is the same either way.

Your property taxes will be lower with a low purchase price.
A low price gives you the ability to pay it all off instead of being a debt-slave forever.
Paying a high price now may trap you "under water", meaning you'll have a mortgage larger than the value of the house. Then you will not be able to refinance, and won't be able to sell without a loss. Even if you get a long-term fixed rate mortgage, when rates inevitably go up the value of your property will go down. Paying a low price minimizes your damage.

Poor Righteous Teacha

RMM221:

Try not to listen to any suggestion here, I will say 80% of them don't know what they are talking about. Even some knows, but they got no guts to put them in action.

Bottom line is, it is your money, use it wisely.

The fact is, the good old day will never come back and long gone. Somehow lots of people up here still dreaming about "Affordable housing" like 20, 30 years ago, using only 10%, 20% of their single income, can cover the mortgage. Just don't expect that will happen, forget it, especially in high living costs of BayArea.

You still can buy it now, but with lots of negotiation skills, like 30% off from listing is considered normal, remember, never trust the local R.E. agents that they will stand on your side, always cross checking their work and don't hesitate to "FIRE" them if needed. If you want to wait, fine, but noone knows how long it gonna be, cause our Mr. President try very hard to interfere our Free Market, even our expertise Robert Shiller is in "Fear and Conflict".

Good luck.

I personally grew up watching real estate primarily go up in value. As a child/young man, I saw the rapid rise from the early '80s to the late '80s, and saw the relatively small and short-lived decline in the early '90s, only to see it skyrocket for about fifteen straight years. For the most part, I only saw positives. I joined the game in 1999 and experienced great "success" for a few years, taking equity loans out and having them able to be paid off by refi's and home sales. I didn't think the home inflation would go on forever, but I stupidly didn't see the inevitable crash, either.

After 10 years personally in the game, I'm currently -$100,000. If you factor in all the refi's and sales, though, I've taken far more out than in... I just spent it foolishly.

One major lesson that I am taking away, and that will impart to my children and any young person looking to buy is this... Home prices don't automatically go up, even after twenty or thirty years. Buy a house for the same reasons you buy a car... because you need one... and not for any other reason. If you assume equity, you very well may be assuming wrong.

Aside from "it is your money, use it wisely," I wouldn't listen to Tomrisk. I don't know how he's claiming "30% off listing is normal." He just makes stuff up. We've offered on three different houses in the bay area and have been outbid every time. We offered list for two of them and above list for the other.

Tomrisk says

RMM221:
Try not to listen to any suggestion here, I will say 80% of them don’t know what they are talking about. Even some knows, but they got no guts to put them in action.
Bottom line is, it is your money, use it wisely.
The fact is, the good old day will never come back and long gone. Somehow lots of people up here still dreaming about “Affordable housing” like 20, 30 years ago, using only 10%, 20% of their single income, can cover the mortgage. Just don’t expect that will happen, forget it, especially in high living costs of BayArea.
You still can buy it now, but with lots of negotiation skills, like 30% off from listing is considered normal, remember, never trust the local R.E. agents that they will stand on your side, always cross checking their work and don’t hesitate to “FIRE” them if needed. If you want to wait, fine, but noone knows how long it gonna be, cause our Mr. President try very hard to interfere our Free Market, even our expertise Robert Shiller is in “Fear and Conflict”.
Good luck.

RMM, many will tell you that Patrick is wrong and that you should buy. Ask yourself, whom in their right mind would buy know the economy is faltering and housing is depreciating even with brother Obama's tax credit? Re-read Patricks 12 points of wisdom then solution will be in your eyes. Now, should you decide to buy because you want to satisfy your wifes desire that is your choice. But now is the time for you to show her that you are a man of principles that makes decisions based on logic and not emotion.

You will know that the markets have reset when there has been 1-2 years of full appreciation at 3% or below at which point if you save properly you will have put your family in a much better position to buy.

"“Affordable housing” like 20, 30 years ago, using only 10%, 20% of their single income, can cover the mortgage. Just don’t expect that will happen, forget it, especially in high living costs of BayArea."

You mean to tell me (or us) 20-30 years ago.. say 1979-1989... we didnt have dual income families?
I hope your not saying that... since many women have been in the work force for decades. Perhaps
you too will be surprised as prices decline further. Adjusted for inflation, we have seen prices go back
to 1979. The rest will follow.

http://www.housingbubblebust.com/OFHEO/Major/NorCal.html

Check this one and the price over the past 10-15 years..

http://www.redfin.com/CA/Santa-Rosa/315-Anteeo-Way-95407/home/2341930

What's gonna happen to your 150K dual income when the future children come? Childcare can cost hundreds/thousands of dollars a month, versus stay-at-home parent=lost income. I say live below your means till you've got way more money in the bank.

You want to trade a $1250 rent payment for a $3,000-plus straitjacket? Good luck with that.

Tough crowd, huh?

Seriously, many of us believe that housing will continue to devalue in your area. We could be wrong, but we don't think so.

chrisborden says

You want to trade a $1250 rent payment for a $3,000-plus straitjacket? Good luck with that.

I have been attempting to give the young man some advice, I bought my first home in 1965 and have seen the peaks and valleys in value. We are just exiting the peak prices...it will be at least 2-5 years of downturn before prices begin to rise again.

...plus its not like the prices are going to skyrocket back to peak prices. It takes 10-15 years for bubbles to develop.

Not at all sure the point of the prior post; I was being quite facetious, but apparently my sarcasm was lost in translation somehow. It's hard to imagine why anyone would want to trade $1250 for rent vs. $3,000-plus to have a vastly overvalued "home," ESPECIALLY in Los Angeles. Simply dumb, no other explanation.

It’s hard to imagine why anyone would want to trade $1250 for rent vs. $3,000-plus to have a vastly overvalued “home,” ESPECIALLY in Los Angeles. Simply dumb, no other explanation.

Like elliemae said, "tough crowd". Although I agree that purchasing a home in LA now is probably not a wise choice financially, he clearly said that his choice between rent and monthly mortgage was $2300-2500/mo rent vs. $2800-3200/mo mortgage, not $1,250 rent as you posted. In that context, rmm's quandry is not so "dumb"

More from the tough crowd:

>>After the wedding… not factoring in any cash gifts… we should have about $30K left over in liquid savings..

How much are you spending on the wedding?

Our wedding budget is $15K... (excluding most likely a $3K honeymoon). But we are now actually receiving some unexpected parental help... So we'll easily break even post-wedding.

We just looked at an open-house this past weekend.. gorgeous home, great schools/neighborhood, great pool and backyard... 2-story 2500 sq feet 4bed/3 1/2 bath. It's going for $529K... last sold in 2005 for $680K... and peaked in 2007 bubble based on zillow at around $750K estimate.

Trulia-ed the mortgage plus tax /insurance estimates.. and it's just too much though.... would be around $3500K a month. Which would be fine on our salary until we wanted to have kids... which is basically the point of getting such a large house.

Sure, I'm pretty confident my peak earning years are ahead of me, as well as my finance... so it would probably work out... But we will have to let this "dream house" go. For $429K I wouldn't think twice... That's a 20% drop from it's current price.. which isn't out of the question... but doubtful...It was in escrow a few weeks ago.. until the buyer literally lost his job during closing and couldn't close.

We'll probably end up waiting until after the marriage to seriously start looking... Which would be Summer of 2010...

Think by Winter 2011 we'll be hitting a safe point to jump?

Not if Congress keeps giving out tax credits.

I remember when the bailouts were given out to the banking industry there was major outcry as to why no help was given to the homeowners. Now that the help is here, those of us on these threads still continue to cry foul. Including me. My wife told me the other day that if we were home owners i wouldnt be so much against the tax credits....and you know what, she is right!

You simply do not have enough money, period. Even before buying you don't have enough money. Wait until you have 20% down PLUS 30-50k left over AFTER buying.

We make a little more than you, are 10 years older than you, and have a total debt load (mortgage only) of 260k, everything else is paid off. It's still hard when you are saving for retirement, saving for a emergency fund, paying the constant bills one has with a house. Do you realize if you spend $500k+ in CA your property taxes alone will most likely be $500 a MONTH or more? Trust me, it sucks to be paying my $2400 a year... I simple could not imagine $6000-$7000 a year!

You are too young to go into that much debt with no savings left. Live cheaply, sock away your money, and rejoice when you can practically buy a house for cash in 5-10 years.

Dream On.

Buy a house now for sure. Have it insured very well. That way, when California falls into the ocean on Dec 21, 2012, you can collect the insurance and buy some nice oceanfront property in Las Vegas.

Tude,

I respect your opinion.. But waiting 5-10 years we'd be 35-40... If someone's going to lend you money for cheap... there reaches a threshold where it behooves people to accept cheap money.. aka at low interest rates with tax credits.

Do you think people should put huge downpayments on cars or pay in full for cars also.. when you have 0% interest rate options? Why pony up 20K in cash for a car when it's a depreciating asset... similar case with a house. It's a big opportunity loss...

I bet we are in the top 10% of 29 year-olds in terms of savings in the U.S.... I know I am in credit score... I feel like delaying a purchase like this until your 40.. seems a little overkill, considering I'll be halfway to the grave. $55K saved by this time next year... seems like a good time to start seriously looking.

I agree with you that on our current income a $500K home would be stretching us too thin.... especially with even just one child in the next 3 years. But I'm willingly to stretch to $400K-429K... by late 2010-2011.. if i can get similar amenities as the $529K home I looked at this past weekend.

You also don't factor in at all... the benefits we'd get out of a owning a home come tax time. The tax savings in the first two years would be around $20K.... That's saving 10K a year if we just cover our mortgage... and we'd still be contributiing to 401K... I don't think that's that bad.

We may look into renting a house for a few years if we can't find exactly what we want at a price point we are comfortable with... It's just easy to get excited when last year at this time we were only finding shit-hole boarded up foreclosures in bad neighborhoods asking $370K.... Now for $150K more we get a "dream home" like the one we look at this weekend.

I'm facing a similar question. Difference (problem) is I'm 45. My area is Los Angeles and I've been looking for 10 years. I've been somewhat put off buying a home, period. As in forever. It's not sour grapes as I've taken my money an bought in the Bahamas and London. I've been busy while waiting for things to calm down (investment property) here in the US. Which they are... however there are a lot of people caught up in this mess and a lot of debt forgiveness is needed, and is going on. Where it's not being forgiven... you, as the buyer are being asked to make up the difference. So it's going to take a long time to work through all this. It took 10 years to build up and now it's going to take a while to settle down. I don't have 3-5 years to wait to buy the home I live in. (Running out of life)

I'm too busy at work today to really get into it, but here is something to consider...

Let's say it's a 500K home. You put down 20% to be 'good' homebuyers and avoid the PMI punishment.
=100K down with 400K to pay back in 30 years. (standard).
Take your age + 30 years. (For me that's 75)
We make decent money, but in 30 years our household income won't be what it is now.
Yet the mortgage payment will. Same amount on first day as last (if you got a fixed).
Furthermore in California the average property tax is 1.25% (I know... worse in other states).
In the 30 years it takes you to pay off the loan the property tax will add another $187,500 to the cost of the home.
So now your home is $687,500
Let's check out the interest... 5% sounds good about now... 400K loan amount
=$2,147 per month which totals out to $772,920 in 30 years.
$772,920 subtract 400K = $372,920
Add that to our grand total...
So your 500K house (once all the paperwork has been signed) is really $1,060,420.

When you hit 74 years old you'll still be paying $2,147 + property tax.(+gardner+insurance, etc)

It's possible that house prices may go back up. But you're living in your investment which is tied to the RE economy. So unless you downgrade, you can't get the equity out and live on it. Sure... there are reverse mortgages and refinance... but really how smart are any of those options?

Now the counter argument against me is... inflation, and tax benefits and equity and, and, and... My argument back is... I did 2 sums and got to a over a million on a 500K purchase. How many sums does the counter argument need to bring it back down?

The bottom line is you have to remain viable in the income community to benefit from any of the upsides offered on the tax side.

This is just 1 aspect to consider. The real culprit is the property tax which will hammer you until you fall down dead. It's tied to your home value and not to your ability to earn income. if you think about it, it's really designed to move you on. "You're too old, 'old man', time to move along, we have vibrant new flesh waiting to pay. And they can. And they will".

Will you?

Try www.nomarriage.com Take the wife test. Do the Math. RUN.

I just saved you a lot of money. You're Welcome.

junkmail says

I’m facing a similar question. Difference (problem) is I’m 45. My area is Los Angeles and I’ve been looking for 10 years. I’ve been somewhat put off buying a home, period. As in forever. It’s not sour grapes as I’ve taken my money an bought in the Bahamas and London. I’ve been busy while waiting for things to calm down (investment property) here in the US. Which they are… however there are a lot of people caught up in this mess and a lot of debt forgiveness is needed, and is going on. Where it’s not being forgiven… you, as the buyer are being asked to make up the difference. So it’s going to take a long time to work through all this. It took 10 years to build up and now it’s going to take a while to settle down. I don’t have 3-5 years to wait to buy the home I live in. (Running out of life)
I’m too busy at work today to really get into it, but here is something to consider…
Let’s say it’s a 500K home. You put down 20% to be ‘good’ homebuyers and avoid the PMI punishment.
=100K down with 400K to pay back in 30 years. (standard).
Take your age + 30 years. (For me that’s 75)
We make decent money, but in 30 years our household income won’t be what it is now.
Yet the mortgage payment will. Same amount on first day as last (if you got a fixed).
Furthermore in California the average property tax is 1.25% (I know… worse in other states).
In the 30 years it takes you to pay off the loan the property tax will add another $187,500 to the cost of the home.
So now your home is $687,500
Let’s check out the interest… 5% sounds good about now… 400K loan amount
=$2,147 per month which totals out to $772,920 in 30 years.
$772,920 subtract 400K = $372,920
Add that to our grand total…
So your 500K house (once all the paperwork has been signed) is really $1,060,420.
When you hit 74 years old you’ll still be paying $2,147 + property tax.(+gardner+insurance, etc)
It’s possible that house prices may go back up. But you’re living in your investment which is tied to the RE economy. So unless you downgrade, you can’t get the equity out and live on it. Sure… there are reverse mortgages and refinance… but really how smart are any of those options?
Now the counter argument against me is… inflation, and tax benefits and equity and, and, and… My argument back is… I did 2 sums and got to a over a million on a 500K purchase. How many sums does the counter argument need to bring it back down?
The bottom line is you have to remain viable in the income community to benefit from any of the upsides offered on the tax side.
This is just 1 aspect to consider. The real culprit is the property tax which will hammer you until you fall down dead. It’s tied to your home value and not to your ability to earn income. if you think about it, it’s really designed to move you on. “You’re too old, ‘old man’, time to move along, we have vibrant new flesh waiting to pay. And they can. And they will”.
Will you?

That was some great fuzzy math, I think you would make a great car salesman.

I didn't own a home until I was 35, so what? Now I am almost 40 and wish I didn't own this damn home and had spent the last 5 years saving even more money. Seriously. Wait.

I buy my cars with cash. I drive a 1998 M3 that I paid 7k cash for. Person who bought it new paid 45k in 1998.

At 29 you have known nothing but bubbles and financing FREE MONEY. Seriously, save more money.

Waiting until you're 35 (my age btw) isn't so bad, especially because of the fabulous financial and mobility flexibility of renting.

If it would only take a year or two of more savings and raises to afford your current dream house? Don't buy now. Transaction costs of buying an in-between house, and then trading up later far outweigh the "costs" (having to rent) of waiting another year or two. And that's if prices don't decline, putting your current house underwater.

We've been doing pretty much exactly what you have, accumulated 5% and started looking, hated what we could afford, kept accumulating, had 10%, thought this is reasonable, again, life was too short to buy what we could afford, now have 20% on $400k and are still debating waiting one more year... to go for the "dream" (extremely modest but nice) home in the suburbs of DC. You'll find that having that cushion and size DP is a really good feeling, and you'll get pickier about what house to buy.

Go find a great rental that you'll be happy waiting it out, make sure month-to-month is a reasonable option at lease end, and get ready to shop a year or two down the road.

Tomrisk says

RMM221:
Try not to listen to any suggestion here, I will say 80% of them don’t know what they are talking about. Even some knows, but they got no guts to put them in action.
Bottom line is, it is your money, use it wisely.
The fact is, the good old day will never come back and long gone. Somehow lots of people up here still dreaming about “Affordable housing” like 20, 30 years ago, using only 10%, 20% of their single income, can cover the mortgage. Just don’t expect that will happen, forget it, especially in high living costs of BayArea.
You still can buy it now, but with lots of negotiation skills, like 30% off from listing is considered normal, remember, never trust the local R.E. agents that they will stand on your side, always cross checking their work and don’t hesitate to “FIRE” them if needed. If you want to wait, fine, but noone knows how long it gonna be, cause our Mr. President try very hard to interfere our Free Market, even our expertise Robert Shiller is in “Fear and Conflict”.
Good luck.

And why should he listen to ya?

dadab says

And why should he listen to ya?

Because I am not a Blinded follower and can foresee it. Just kidding, here is the example.

"Santa Clara County home values may be stabilizing"

http://www.mercurynews.com/business/ci_13744491

Good luck house hunters.

javco says

Try www.nomarriage.com Take the wife test. Do the Math. RUN.
I just saved you a lot of money. You’re Welcome.

rmm221:

Firstly, Javco thinks you're making a huge mistake even getting married because, according to his link, women change immediately after marriage. You think your fiance is great now, but she'll change. She's biding her time now. It's possible that she can't wait to get married so she can get fat, like half the girls in my high school class.

Of course, since people are in constant state of change as we act & react to the world around us, it's possible that you'll change with her, and that change will be for the better. Perhaps you'll grow old together, have children and have a beautiful life... But I digress. Heed Javco's advice and run wild, run free. You should buy that book because it seems to be a veritable plethora of valuable advice designed to help you stay on the right track.

Now, on to the $15k to get married (excluding the $3,000 honeymoon). Everyone knows that you could get married for less than $150 if you do it at the courthouse or Justice of the Peace (note, if you're bi-racial please check the JP's attitude toward your union). To spend that much money on a wedding is obviously foolish, considering you're making a big mistake that you'll regret the rest of your life anyway.

Weddings are so overrated. Women are forced at an early age into anticipating these huge debacles considered to be declarations of their love. It's institutionalized entrapment, little girls playing dress-up and bride and all that stuff. Weddings are actually contrived occasions whose sole purpose is to gain stuff you'll have to split up when you divorce - and remember that marriage is the first step toward divorce. I mean, after dating, which is the first step toward marriage and therefore the first step toward divorce.

It's great that parental units will be assisting with the wedding - but that probably means that they'll want a say in who sits with drunk Uncle Gary and his "friend" Bruce. It starts innocently enough, them wanting to help with the wedding and the next thing you know, they've moved into your guest room and you'll have to see them in their underwear and face cream at 7:00am. They'll tell your future children what to do and mock you when you attempt to discipline them - and probably have yappy little dogs that commit crimes of nature on your new rug.

It gets worse with in-laws, they'll ruin your bbq's and hate your friends. They'll always take HER side in the argument and you'll feel like a stranger in your own home. Your favorite chair will be relegated to the garage along with your other stuff. And forget your matchbox car or comic book collection - that'll be sold at a garage sale along with your tennis racket.

But you've already decided that to marry & start a life with your American girl is the right thing to do, even tho there's empirical evidence to the contrary (see javco's link). You're gonna have a wedding - I get it. But you do have other options: An alternative to marriage at the office of the Justice of the Peace is to marry on a beach. No beach? Any water will do, even a bathtub in your apartment. Or a faucet in a public bathroom. If you're on water, the captain can marry you - so a shoebox wrapped in a plastic bag on the feet of a restroom attendant standing in a sink will suffice and... TA DA! Just saved you $15k.

You're welcome.
---------------------------------------
Stay tuned for Elliemae's advice about raising children. It's free, and unsolicited...

Sarcasm, just another service that I offer - in case that wasn't evident. :)

Tomrisk says

dadab says

And why should he listen to ya?

Because I am not a Blinded follower and can foresee it. Just kidding, here is the example.
“Santa Clara County home values may be stabilizing”
http://www.mercurynews.com/business/ci_13744491
Good luck house hunters.

You forgot to mention the main point. Temporary or permanent stabilization?

I would say waiting 1-2 years for things to start turning around isn't a bad idea. It's a small compromise. You'll save during that time and if things get better you won't lose much, if anything you'll have a bigger downpayment. If they stay the same, you've gained more savings and a better understanding of where things are headed (hopefully in 2 years we'll all have a better idea) and if they get a lot worse, you'll be happy you waited. Seems to be pretty much a good gain on waiting in every scenario, but quite a few potential loses by going at it early.

Don't wait forever, but right now, things are just too hairy. Way too many unknowns. I don't think anyone has claimed a massive run in housing prices any time soon, everyone is claiming either massive doom, less doom, neutral or very slow recovery.

For the person who said they bought in the 80's and saw ups and downs and that housing isn't gauranteed to go up - I would say this: What has stayed the same for an entire lifetime that continued to go up? A house is still a fairly stable investment. It's not going to go to $0 like the potential for most investments. It might move around, but the potential for $0 is impossible. What other investments have turned a steady profit for 100 years? They might not have gone up, but they didn't lose out to inflation either.

Also, for the person who said they would be making their last payment at 75 if you bought now. What are your other options? Buy into the stock market? What if those tank on you in the next 30 years? When you're 75 you'll be renting and have no home. What if inflation takes off? Your secure savings might start losing out. What if you invest in stocks and hit a bad stream. What if your investments take a nose dive and you're left with $20,000 in the bank at 75? How will you pay rent? It won't matter WHAT rent costs, if you have no money, you're not renting anywhere. What if your house goes down to a value of $20,000? What will you live? In your house. (Yes there are taxes, which are far below rental rates, if they go up, they'll effect rental rates and home values as well) A house offers a huge amount of security in the future.

Interest rates aren't likely to change for quite awhile. People on one side say they'll solve our problems. A big swing in interest rates will drop housing prices, and could put us into more people under water. It could slow down our spending, as debt would need servicing, which could in turn lower GDP. The higher interest rates might seem appealing to some, but to others they'll start wondering when the US might recover and might be hesitant.

It comes down to one thing. If you drastically change one variable in the economic equation, it's going to cause consequences else where. Interest rates might be a great solution to many problems we have today, but they'll introduce new ones which will need taking care of.

dadab says

You forgot to mention the main point. Temporary or permanent stabilization?

Depends on what you want to hear? Honestly, the current situation is just too confuse and nobody really know what will happen next. Google what Robert Shiller said lately about the R.E. market, you will know what I mean.

All of this is a moot point now...

My fiance just lost her job.. aka was fired for very shady reasons along with a handful of other employees. Basically the company after a round of layoffs earlier in the year... Is now setting up people to be fired for unethical reasons so they don't have to pay unemployment. So now she's going to have to fight to even get unemployment and we might have to get married at a courthouse so she can get on my health insurance.

We'll be fine financially because we have a lot saved...But i feel for one of the employees who has two kids and a stay at home wife to support... I'm the main bread-winner making up 2/3 of our total income.. So even if she finds a low-paying job.. all her money will go into savings.

It's so weird that we were thinking of stretching both our incomes to buy a $529K home last week... And she loses her job the next week. Like it was a sign not to buy...

Just wish the "sign" included unemployment benefits...

Agree with prior post. Here is another voice of reason: Get OUT NOW. Do not pass go, do not collect unemployment. Just GO. The state passed its carrying capacity 25 years ago. It is dead and bankrupt, and vastly overvalued. Why waste your time and money there?