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Bought or Buying a house in 2011.


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2011 Feb 2, 1:47pm   37,637 views  163 comments

by American in Japan   ➕follow (1)   💰tip   ignore  

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...

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14   fille   2011 Feb 4, 2:06am  

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.

15   PasadenaNative   2011 Feb 4, 2:46am  

joshuatrio says

Truth is, you’re either a slave to rent or a slave to property taxes. No matter how debt free you are.

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!

16   burritos   2011 Feb 4, 3:13am  

robertoaribas says

closing on another 1 next week… 3/2 condo with 2 car garage… will rent it out.

Robertoa,
Do you have a 1,5, and 10 year plan?

17   PasadenaNative   2011 Feb 4, 3:49am  

Mr.Fantastic says

joshuatrio says

Truth is, you’re either a slave to rent or a slave to property taxes. No matter how debt free you are.

Yup, but I’d rather deal with California property taxes. When I bought my home, it was a much different time. The young couples buying in the past decade are the true slaves.

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!

18   LAO   2011 Feb 4, 5:13am  

robertoaribas says

closing on another 1 next week… 3/2 condo with 2 car garage… will rent it out.

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....

19   seaside   2011 Feb 5, 1:08am  

fille says

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.

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. :-)

20   seaside   2011 Feb 5, 1:39am  

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.

21   thomas.wong1986   2011 Feb 5, 1:30pm  

seaside says

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.

In process, and still correcting...

22   joshuatrio   2011 Feb 5, 11:03pm  

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.

23   GregP   2011 Feb 6, 7:13am  

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).

24   American in Japan   2011 Feb 12, 1:04pm  

Some say prices of homes are rising again in the Bay Area...Lol!

25   jaded   2011 Feb 16, 12:48pm  

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.

26   Â¥   2011 Feb 16, 1:24pm  

jaded says

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.

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.

27   Hysteresis   2011 Feb 16, 1:52pm  

American in Japan says

Some say prices of homes are rising again in the Bay Area…Lol!

actually they are. spring season is starting early this year.

28   Wanderer   2011 Feb 17, 1:43am  

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?

29   American in Japan   2011 Feb 17, 1:49am  

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...

30   thomas.wong1986   2011 Feb 17, 2:43am  

American in Japan says

Professor Pigginton (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…

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.

31   Wanderer   2011 Feb 17, 3:14am  

I appreciate the responses about San Diego. One metric I often use is sales price pre-2000 and then compounding 3% yearly- what I believe to be normal house appreciation. It still always comes up way off what the sellers are asking. I guess Piggington's point is that monthly price is low but not necessarily sales price. Ugh, stupid sunny San Diego.

32   bubblesburst   2011 Feb 17, 3:20am  

Yes, I will definitely buy a house in the San Diego area towards the end of this year. I've been waiting the past 6 years for prices to go down. MANY of the houses we are looking at in the area are down 25% to 30% from peak prices. I think prices can fall a bit more but I also think San Diego will always be a more desirable areas. I've noticed lately more price reductions and a few of the houses we are looking at that are in "pre short sale" the banks (1st and 2nd) have both approved short sales. One we looked at the buyer made a lower offer and either didn't get qualified or backed out.

We're hoping prices continue to fall this year before we buy. I know there are a lot of bears on this board but our situation is a bit different. We definitely know we will stay in the home for the long haul. We have 2 small kids and don't want to move around in rentals. We're in it for the long haul so we are looking at larger 5 bedroom homes in nice areas. Homes are still pricey there even with the price drops. Most of the houses we are looking at are over $1 million still.

With Patrick's buy/no buy formula it's about a 6.5 which is borderline but rentals are around $6,000 - $7,000+ per month for a rental in a high end home that size. Property taxes in that area for that size home is mostly around $13,000 - $18,000 per year and Mello Roos fees in some of those areas is as high as $500 per month. Still even accounting for those high fees, we're going to stay in the home until our kids are finished with high school. So for us it's not an investment but to live in and we won't move around.

I've looked at tons of cities around the USA but for us we really love everything that San Diego has to offer including fabulous weather, great beaches, great schools (we're looking at the La Jolla, Del Mar, Carmel Valley areas) and beautiful homes. About the only negative factor I can think of is the cost of housing. But not too many other negative things about the city besides the higher cost of living that I can see. The job market, like the rest of California pretty much sucks but I'm not sure if I'll go work for a company. So it might be a moot point.

33   thomas.wong1986   2011 Feb 17, 3:50am  

bubblesburst says

I’ve looked at tons of cities around the USA but for us we really love everything that San Diego has to offer including fabulous weather, great beaches, great schools (we’re looking at the La Jolla, Del Mar, Carmel Valley areas) and beautiful homes.

LOL! have fun. Just remember many didnt pay for the Sun and Beach Tax, so be sure to avoid that.

34   thomas.wong1986   2011 Feb 17, 4:25am  

Los Angeles Times - Los Angeles, Calif.
Subjects: Shutdowns, Pacific, Layoffs, Corporate reorganization, Aerospace industry
Author: Vartabedian, Ralph
Date: Jul 01, 1992
Start Page: 1
Text Word Count: 993

Unemployment in county soars to 9-year high | 42,000 jobs lost in last 2 years
[1,2,3,4,5 Edition]

The San Diego Union - Tribune - San Diego, Calif.
Author: TERRY SACKS
Date: Aug 1, 1992
Start Page: A.1
Section: NEWS
Text Word Count: 563

Abstract (Document Summary)
The last time the county rate topped 8 percent was in 1983, in the aftermath of the deep recession of 1981-1982. Though the area's jobless rate hasn't reached the 10 percent level of that earlier slump, the current recession is far worse in terms of job losses.

Since the start of the U.S. recession in June 1990, San Diego County has shed 42,200 jobs, with declines in construction, manufacturing and retail trade accounting for 85 percent of the losses, according to EDD figures.

Max Schetter, general manager and director of the Economic Research Bureau at the Greater San Diego Chamber of Commerce, had expected the recession to bottom out by midyear. But the California and San Diego economies are lagging behind even the snail's pace of the U.S. recovery.

---------------------------

Hughes to Close 92 Facilities, Lay Off 9,000

Hughes Aircraft will lay off 9,000 workers over the next 18 months, close 92 company facilities and take a $1.2-billion charge against profits as key elements of a restructuring to improve its competitiveness and adapt to lower defense spending, company Chairman C. Michael Armstrong announced Tuesday. About two-thirds of the layoffs will be in Southern California, roughly proportional to the company's employment here. The Los Angeles-based aerospace firm will emerge from the cutbacks with 15% fewer workers than its current 60,300. (excerpt)

---------------------------

Jobless Rate Reaches 8.1% in S.D. County

Los Angeles Times (pre-1997 Fulltext) - Los Angeles, Calif.
Author: CHRIS KRAUL
Date: Aug 1, 1992

Among economists, there was little optimism that the employment decline will reverse itself soon. David G. Hensley, director of the UCLA Business Forecasting Project, said San Diego in particular and the statewide economy as a whole are still "declining" based on key economic indicators such as housing starts, auto sales, construction employment and retail sales.

Raford Boddy, professor of economics and coordinator of San Diego State University's Center for Public Economics Forecasting Project, said San Diego's current economic problems resemble those of the two-year recession beginning in 1973 when local unemployment topped 10%. Then, as now, a downturn in the business cycle coincided with deep military budget cuts, a double whammy for San Diego's defense-reliant economy.

San Diego County has lost 4.5% of its jobs over the past two years. California has lost 600,000 jobs since 1990. Hensley said 175,000 of those lost jobs were in construction, and 90,000 were in aerospace.

35   Wanderer   2011 Feb 22, 11:55pm  

Just wanted to update you all- we were preapproved for an insane amount, something we would never saddle ourselves with. I think the industry is up to it's old shenanigans and again, I don't see how this could be indicative of a price correction. But nevertheless, we looked at our first house in 3.5 years and may put an offer on it- for no more than Patrick's calculator though (82% of the asking price) so wish us luck!

36   American in Japan   2011 Feb 28, 12:24pm  

Hmmmm...best to buy by this April if you plan to buy at all before next winter?

Will the seasonal effect override other effects? Summer sees price increases all other things considered...

37   toothfairy   2011 Mar 10, 2:39am  

I just put in an offer this week. Apparently there are multiple offers so we'll see how it goes.

38   Wanderer   2011 Mar 10, 2:54am  

Yes, good luck. We put in an offer ABOVE asking price on a foreclosure and were beat out by one of 7 all cash investors so yea...

39   toothfairy   2011 Mar 10, 3:36am  

jessica says

Yes, good luck. We put in an offer ABOVE asking price on a foreclosure and were beat out by one of 7 all cash investors so yea…

Nothing worse than being outbid. by that time you're already mentally moved in and picking out the drapes.
My usual strategy is to not use a buyer's agent. Go directly to the listing agent and present your offer.
We'll see if that works again.

40   I-man   2011 Mar 15, 3:28am  

I just went under contract. I've been looking for over a year for a place that's close to my kids. There are not a lot of rentals and prices have remained stubbornly high (local economy is good). I finally found an REO in pretty good shape:

Newtown, CT
3Br/2Ba
2200SF
1 acre
$287500
Taxes = $7300

20% down, 5.125%APR, $3500 back from bank (reverse points) towards closing costs
annual rent/price = $24000/$287500 = 8.4%
Price/income = $287500/$160000 = 1.80
5+ years expected residency

I'm currently renting a 1Br cottage and my PITI will be only $850/month more. I'm satisfied.

41   American in Japan   2011 Mar 15, 4:06am  

Price/income = $287500/$160000 = 1.80

Great ratio! If only banks hadn't lent to people with ratios of 7, 8 or more!

42   Mark_LA   2011 Mar 15, 6:05am  

I-man says

$287500
Taxes = $7300

Wow, a 2.53% Property Tax rate?!?!

Well, at least it looks like they're investing some of that money into the schools. Newtown, CT has high-rated (9&10 out of 10) schools. http://www.greatschools.org/search/search.page?search_type=0&q=Newtown&state=CT&c=school

43   Patrick   2011 Mar 15, 6:20am  

I think rates over 2% are common in the US. California has strangely low property tax rates.

44   American in Japan   2011 Mar 15, 6:36am  

Bring on the Georgist land tax!

45   toothfairy   2011 Mar 15, 9:51pm  

jessica says

Yes, good luck. We put in an offer ABOVE asking price on a foreclosure and were beat out by one of 7 all cash investors so yea…

looks like I am going into contract! I guess the strategy worked.

I think It's very hard for regular buyers to compete for the best deals.
My offer was with no contingencies, no agent, all cash, as-is no inspections.
I can pretty much eyeball the inspection myself now on a small property. I looked at the place once and made offer on the spot.

46   cloud13   2011 Mar 15, 11:47pm  

closing in 10 another days, It's in San Jose's Cambrian neighbourhood.

47   david1   2011 Mar 24, 5:45am  

Bought in Tega Cay, SC (lakefront resort community near Charlotte, NC)

Close April 29th. Paid $100/sqft. for Brick front/vinyl side house built in 2003. Has 1200 sqft. walkout basement unfinished. Figure I can finish that for 10K, adding another bath/bedroom if I want. Whill push the price down to the $80 sqft range.

Total PITI is $1500, 14% of net income. About $1320 net of taxes which you cannot touch in this area in rent on a house of similar quality.

May live to regret it but at least I can paint the walls...jk.

48   Fisk   2011 Mar 28, 2:19pm  

I think rates over 2% are common in the US. California has strangely low property tax rates.

Just under 1% in Eastern WA.

49   Payoff2011   2011 Mar 31, 2:12am  

My property tax rate is 2.6% of assessed value, with homeowner credit and lottery credit applied. My parents property tax rate is 2.5% of assessed value with homeowner credit and senior citizen credit applied. Latest assessed values 2010 have been adjusted down for market, but market has declined further.

50   American in Japan   2011 Apr 3, 12:30pm  

@cloud13

How did the purchase go last month? You said you would close around the 26th...

51   uffthefluff   2011 Apr 8, 9:26am  

California real estate is fairly overpriced. Buy there at your peril.

But yeah, we'll be buying this year in Chicago for about 60% off of peak. Figure that's enough to be safe considering historical norms, rents, and incomes.

52   American in Japan   2011 Apr 8, 1:15pm  

Wagamama who just bought in Cambrian Park, California has a good story:

http://patrick.net/?p=657918

Is anyone planning to buy in May (before the “summer rise” comes)?

53   Icabod   2011 Apr 8, 3:53pm  

robertoaribas says

I can kill potatoes with my bear hands already!

lol that was awesome.

We're looking but only low balling right now because I know all of the sellers out here are hoping for Spring fever. Plus all the REO hawkers around here are pricing by the neighborhoods, which have a way to go to be fair. I'm thinking wait til next Jan honestly, unless I can grab a short sale on one of these offers.

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