Posted on 12/15/2005 4:50:01 PM PST by conservativebabe
It looks like the housing boom is finally over. If you buy now, the risk is high that you'll get zero or negative returns on your investment over the next few years. What, then, should you do?
Easy -- focus on affordability. If you can, choose a house in a market where prices haven't gone through the roof, whether it's Buffalo, N.Y., in the Northeast; Atlanta in the Southeast; Youngstown, Ohio, in the Midwest; San Antonio in the Southwest; Yakima, Wash., in the Northwest; or Riverside, Calif., in the West. You'll get more living space, and you won't have to worry so much that a financial setback such as a layoff will leave you unable to pay the mortgage.
(Excerpt) Read more at realestate.msn.com ...
We are planning to build our own home in IL, (not Chicago area) with an owner/builder program. Buying being your own builder, you can save 30% or more.
My question for those FReepers in real estate is this- Does the slow-down have any implications for those who will build, given that having instant equity due to the difference in building cost to actual value should put an owner/builder out on top?
Think of it this way. You need to live somewhere. You can either stuff your money down the rental rathole, or pay too much for your home.
Building your own sounds like a reasonable option, as long as you are realistic about your capabilities, and unexpected costs.
Good luck to you!
I'm in the same boat - hoping to start building next fall and doing my own general contracting. Unfortunately, also hoping to unload my current place on the market next summer before I start building.
On another front, any article that suggests living in Youngstown, OH because of the cost of buying property there is suspect. The reason it's cheap to live there is because the economy is stuck in reverse, their government is so corrupt that officials take out contract hits on each other, and Jim Trafficant is not an aberration - he's just like your other neighbors will be.
Thank you.
I feel like we will be prepared. We are starting hopefully in the summer. We have been researching for a few years now, and already have land to build on.
It will be a great deal of work, but we think that it will be worth it in the long run.
We are reasonable in our expectations as far as what we can afford. We will be perfectly happy with an 1800 sq ft plan we found.
Aha, had to know there was something going on there.
Good luck selling your place. Luckily, for us, we are renting. We have lived in CO for the last year and a half, renting, knowing we weren't staying forever. My husband gets to keep his current job (programmer) so we are fortunate enough to be moving back home to the Quad Cities, in IL. The housing market there has been booming for several years. The economy seems to stay on an even plane with John Deere being located there.
btw, are you going with a traditional loan? We are going to try one of two places we found online. Haven't decided which one just yet. One is Buildmax and the other is Instant Home Equity. They will finance with little or no money down, which would be bad under normal circumstances, but when you build yourself, your equity is already present after the home is built and appraised.
Just seems like the way to go to us.
That is one of the other questions I have. If things go bad, it could be bad for those who already own homes, but for those who are buying/building,it seems as though things may be a bit cheaper sans higher interest rates.
It would seem that dropping values might also allow the house to built for more reasonable prices.
We aren't looking beyond our means at all, so I am not worried about financing more than we can afford. I would think that being reasonable in our expectations, either way we should be okay, I hope.
"If you buy now, the risk is high that you'll get zero or negative returns on your investment over the next few years."
I don't care if every one else makes a bazillion bucks, but I hope and I pray that the slimeball who bought my old landlord's house, treated me and hubby like we were slime, drove us and out and is attempting to stiff us for our security deposit, loses every single penny he spent.
And yes, we're suing for our deposit money.
Riverside is cheap for good reasons.
We are building a house (and have been for almost two years), we are $100,000 over bid, but if we were to sell at completion we could get twice the building cost. Is that what you were asking?
Hope you don't need to work for a living. And bring a lot of guns.
It depends how much we get for our current place - we used most of our equity to buy the new land outright. If we break even on the sale (i.e., sell for about $5000 more than we paid 5 years ago), we'll still own the vacant land outright. If we do better than break even (i.e., sell for going market price in surrounding houses) we'll be able to finance a good chunk of the building ourselves. If we have to mortgage the vacant land, that's ok too because the developer finished a road on it after we finalized our contract which increased the value by about $20,000 the day we signed. I figure I'll start lining up financing next summer when I know more about whether my current place will move.
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