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Malcolm
2008 Aug 5, 3:16am
OMG, you guys were right. I'm reading somewhere else that the tax credit to buy a foreclosure actually has to be paid back. What a complicated hassle.
“We believe that there is going to be a tremendous shift back to urban areas, led by those who bought homes in the outlying areas who lose their homes to foreclosure. They will choose to rent near work to save money,†wrote John Burns, a national real estate consultant in his July building market analysis.’
While I'm sure there will be some shifting, the outerlying areas are now becoming truly affordable (that's what those 50% declines will do for you). For reference, a monthly ACE pass from Stockton to San Jose goes for $282.50; this is equivalent to servicing a $27,500 mortgage at 7% (30 year fixed). I will leave the rest of the math up to the reader (including calculating the "psychic cost" of commuting that far each day...)
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Dear Patrick,
After many years of saving and prudence, I have helped my parents find
and purchase a home in the Central California town of Los Banos.
Arguably, we could have waited a bit longer. After much wrangling they
found a house at a very reasonable price and can now live in it
comfortably, having paid for it with the money they saved (not
borrowed). They paid $143,000 for a home that was last sold for about
$450,000. It was a mere coincidence that they happened to know the
couple who was foreclosed upon and thus could verify this information
firsthand. When everyone else was stark raving mad with visions of
real estate riches I begged and pleaded with my folks to wait it out
since there was no way to rationalize half million dollar homes in the
Central Valley-California's Appalachia. I am glad there were others
out to support and substantiate my view.
Sincerely,
Efrain Rojas
#housing