Posted on 12/29/2010 10:21:40 AM PST by SeekAndFind
I'm in my late 20s.
A month ago, I learned, for the very first time, that a friend my age and his fiancé were about to buy their own house.
A week later, another friend and his fiance, both just over 30, told me that they had gone house-hunting in New Jersey over the weekend.
And that was wonderful news!
And it was only possible because house prices have finally fallen to a level that people like me can afford. Specifically, house prices have finally fallen to close to their long-term average relative to rents and incomes--to a level where me and my friends can actually consider owning instead of throwing away tens of thousands of dollars every year in rent.
I'm giddy about that. And other people like me should be, too.
We got more good news on this front today: Housing guru Robert Shiller announced that the decline in October's Case-Shiller house-price index was much steeper than expected (over 10% annualized).
I sure hope they're right.
If prices keep falling, maybe my wife and I will be the next couple in our young professional peer group that will finally be able to do what our parents all did at much younger ages: Buy houses.
(Excerpt) Read more at businessinsider.com ...
All of which goes to show that “bad economic News” can be “good News” for some other group. Seldom does it get reported as such.
And if prices keep falling after that... you will be upside down and bankrupt.
Pray that “young professional peer group” still have jobs next year.
For every loser in the economy, there is a winner. Falling housingprices stimulates demand while letting people who couldn’t formerly get a home afford one now.
The whole time the market was rocketing up half of me was happy to see the increasing value. The other half was relieved because I wouldn't have been able to afford a home during the height of the bubble.
Now I'm 40 with a very nice home where the value has dropped about $30k since I purchased it. The entire downpayment was made with money I made selling my pre-bubble home. The old home's value is back to where I bought it at so I'm actually ahead on the whole deal. Timing is everything.
I would be happy too if I could afford to buy a house.
Rent. Until you see the market bottom out....then buy....
Property taxes will MORE than make up for that. Flee NJ - NOW!
Wow. A non-hysterical article from the so-called “Business Insider”? Did hell freeze over?
Also a good investment too for rental properties. CD’s are at 2%, corporate bonds a hair over 3%, and the DJIA is way overvalued at 12,500.
Without dismissing the economic harm of falling house prices, they became ridiculously overpriced and what sense did it make to keep prices sky high while trying to “help” lower income folks own a home?
About 12 years ago, prices were already so high that in a not too great neighborhood in North Jersey a young couple was looking at older 3 bedroom homes, and looking to pay $500,000! I knew the neighborhood because family there previously had sold a house for not much more than $100,000!
The negative is the economy is not supporting higher home prices because we aren’t producing/ earning enough.
It is true that property taxes in NJ will pretty much replace your mortgage when it’s paid off.
I sort of agree. But you can never “see” the market bottom out. That would be my sole disagreement.
Instead, buy when you get the right deal. If the market goes up or down, who cares? You got the right deal, period.
The bubble-buyers should have simply refused to pay a dime more for a house than they could afford. No one had a gun to their head. Of course, many of the bubble-buyers were engaged in theft themselves (taking hundreds of thousands in cash in equity loans they would never ever pay back).
If prices keep falling, why would they want to buy instead of rent? What's the attraction to owing more that the house is worth? The economic ignorance is astounding.
If you want to buy a house, wait. It's not as if the supply is going away anytime soon. The decline will moderate as the economy improves, and turn positive, eventually. The sweet spot will be locating a desirable property near the bottom, before interest rates take off.
You've also got to watch property taxes and insurance. NJ is a bad place for exhorbitant property tax rates, to the point that taxes alone are more than most in this country pay for principal, interest, tax and insurance. Florida has hideous insurance rates.
I just get the impression from articles such as this, that there's a whole batch of gullible people who are itching to lose their shirts.
And if prices keep falling after that... you will be upside down and bankrupt.
Complete nonsense. They will pay cash. Cash is king, mortgages are dead. If you save you can actually purchase a house, instead of getting a mortgage.
It has nothing about going bankrupt, unless your a member of the housing scam.
Only someone who believes in personal responsibility would post something like that.
Why anyone would live in NJ is a whole ‘nuther subject.
Only if you are in it for the short term, or have to deal; with lost or reduced income. Values have always come back and eventually increased; it's just a matter of how long.
Property taxes, however, are the X factor. If they increase dramatically your monthly housing cost can rise and cause problems.
The problem is, you don't see the bottom until the rebound has started; then it's too late.
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