I bet you those people that lost their house from the foreclosure feel like they're "RETARDS".

 

Truth is, a good number of current homeowners should not have allowed to become "homeowners" in the first place.

My father and I put together makes more than $150k a year. We're not rich, we consider ourselves the lower end of the middle class. Yet, because of the inherent stability of our industry (tech-related), we are still quite apprehensive about pitting our money together and buying a house. With the way credit has been tightening lately, and housing coming back down in prices, I don't think that this is a good time to buy a normal, decent 3bed/2bath house (currently around $600-$700k).

The higher-priced homes around $900k and up will always have homebuyers, due to the fact that people who can afford such houses ACTUALLY can afford them, and don't have to extend themselves on their limbs on exotic loans like the ones who are now in $600-700k homes.

I'm just gonna wait it out, for another two years. Truth is, if the market does start tanking like nuts, even bying a house in 2 years I will end up losing money afterward. But it's alright....

I will be buying a house not so much as an investment, but as a roof over my head, a place on Earth to call my own (after I pay the damn thing off), where I can raise my children throughout their years and see them off to college. I am not buying a house to do investment, to flip, anything like that.

And maybe 10 years down the road the prices start picking up again, then I'll count that as a bonus blessing from God.


And I'll be straight up about it too, most of the houses in the Bay Area that costs around $650k and below are really ****ty houses.

I mean, wtf, the backyard is a patch of grass that you can mow in 3 minutes? What happened to the prototypical American house with a swimming pool in the backyard? I don't want to step out of my door look to the right and see my neighbor's face full of zits 4 feet away. Where's the spaciousness?

There are areas in Bay Area that even if the sellers give me their houses for free I would not live there. And those people are trying to fetch $600k for their run-down houses in the middle of thief-infested neighborhoods. Give me a break...

Anyways, enough rant....LOL

 

haha you can find those prototypical american houses over here in Sac. to find a place like that in the bay is going to cost you way more, which im pretty sure you knw, but for $400k you can get a decent house wit your swimming pool here in sactown

 

Same here, but after I got married we saved and put 20% down. Still now we are saving to move in 2 years to SoCal, and homes there are more than homes in Sac.

 

Yep, and I fall into this catergory. I cannot be a homeowner with my current salary. Somehow a 10:1 real-estate:income ratio is impossible.

 

Nope. High tech worker with an actual high tech college degree.

The real cost to your friend is $24k less than it would have been if he didn't have the mortgage interest deduction as a result of his take home pay increasing as a result.

You'll notice in my original post, I said 10 to 15 years.

That's what everyone said back in 1992 when the housing market in the bay area was also in a depression. Now, they look like geniuses. Even without the crazy growth from '98 to 2005, they would have still had significant equity built-up in their house today and they would have been realizing the benefits of the tax deduction over the last 15 years.

All the qualifiers I stated previously still apply. Don't buy more than you can REALLY afford. Don't expect a short term pop that you can flip and retire on. You have to be in for the long haul. I agree, wait until the middle of next year if you need that time to save up for a reasonable down payment.

Because most people will loose thier azz trying to "day-trade", risking your money in the stock market is generally not a good idea for the vast majority of the population. A much safer bet than the mercurial stock market is the slightly less volatile housing market. JMO

 

You are wasting your breath, LWW! He makes 1/4mil a year with his commission, and somehow the IRS allows him to put $20k/year into 401k, not the $15.5k we are all limited to. That-is, unless he is over 50, then can put $20.5k in.

Tossing $2k/month out the window for rent is the new hawtness. We should all be so smart. He should ask his accountant about deducting home mortgage interest, eh?

Don't watch the yoyo, watch the man walk up the stairs while he yoyos.

Zs rule.

 

I bought my first house when I was 23. I rented out two of the four rooms and it almost covered the monthly payments and the only thing I had to come up with was the property taxes and insurance.

Then, later my gf moved in and she threw some money my way. What she was paying for rent. At the time it was pretty cool. Later, I married her and she took half of everything through the divorce. Doh !!!!

 

Wow, when I bought my first house it was 3:1 annual sal vs. house price.
I was a buyer for SONY and made $25K a year and shouldn't have gotten in at the time. The house was a forclosure and the bank wanted to dump it. My house was $105K in Campbell, Ca. in the 80's on 1/3 acre. That was a pinch at that time. I was glad to get in with 5K down and $700 a month payment. That was when interest rates were around 10% and everyone thought they would never own a home.

 

Yep, I'm looking for that $240,000 house that will put me in that 3:1 ratio.....NOT! Not out here.

 

 

perhaps a house at this time is too large of a purchase for a first time owner. Loft or a condo in SF is a good idea? Only thing is i can't rent it out as they are usually a 1bd or 2bd room with 1br

 

something else to consider if you are buying a condo, town house. The HOA is not tax deductable. Might as well look into a house and apply that HOA payment toward the house. Of course in the bay area, the housing prices are still so high, sometimes the difference in HOA is not enough to get into a house.
just a thought

 

Marry someone rich and let her parents buy you a house.

I should've thought of that sooner.

 

I grew up in your area... That's why I moved to Campbell, and then to Livermore. This is why people are now moving out to the Central Valley and commuting. A house at 3:1 just isn't available anymore over there. You can still buy a house in some small towns in the Central Valley for that. It's I think even 1 bedroom townhouse in Northwest Square is $350K plus these days.

I do wish you the best of luck. I know exactly what your going through. Been there and couldn't pull it off for a year or two. Then, I figured a way. At least with the interest rates down a bit it should be a little easier.

 

I figured just keep doing cheap rent, dump everything into 401k, IRA, and savings, and when I'm ready to retire, move somewhere affordable.

 

That's what I'm doing right now. The real estate market is sad. I'm trying to sell one of my Townhouses in La Quinta now. It's been on the market for over a year. It looks like it's best to wait a couple years before I really try to sell that one. If I sell it in the next few months I'm just going to shift into Stocks, Bonds, IRA, Money Mrkt for now. I wish I could do another 401K but, I can't. It's a toss up on whether to sell it now for marginal profit or wait and see what happen. I guess it could get worse and I think it will for a year.

For me, I think in a year you could buy something for less than you can now and ride the recovery. That would set you pretty. I think we have about another 1.5 before things get better in the real estate market though.

I think it's really sad ... a lot of people are going to lose a lot. I have had friends overextended ... I'm sitting in a smallish old house so no worries on the monthly payment.
I simply lucked out because I too was looking at my dream house a couple years ago. Just didn't want a $5500/mo payment. It would have taken all of my free cash away.

Point - When you get there, really think if you need that BIG house right now. I seen a lot of people lose their homes recently and more will before this is all over.