|
Redfin Real Estate Forums :
Bay Area :
"Now's the time to buy!" BAH!
|
|
|
|
|
|
|
"Now's the time to buy!" BAH!
|
|
paul_burkett
Contributor
Posts: 21
Registered: 06-14-2008
Message 1 of 9
Viewed 3,027 times
|
|
Ok, I'll admit that this is more of a rant, but I feel like I need to vent. I decided in April that with the way home prices were going I might dabble in this home buying frenzy. Even though I'm a little young to be thinking about starting my nest egg (24), my income is decent and I have excellent credit. I figured it was "worth a shot."
Now it's almost the end of July, and I've put in a total of 7 offers so far. 6 of them were REOs and only 1 of them was a short sale. The strange part was, the only offer that was accepted by the lender was the short sale, but then he decided to foreclose on it anyways  For my most recent offer, I placed an offer at listing price seeing that similar homes in the area were sold at the same price. It's been less than a week and my agent tells me there's already 12 offers on it.
I know homes prices are historically low. But my purchasing power ($240,000) leaves me at the lower range and it's too competitive. Now that interests rates are climbing and the Housing Bill is going to pass, I wonder if buying a house is even worth my time. Plus, with the media telling me how bad the housing market is, and people always telling me, "now's the time to buy!" It's hard not to become discouraged, bitter, and burned out.
|
|
|
|
07-29-2008 12:05 PM
|
|
|
|
|
|
|
Re: "Now's the time to buy!" BAH!
[ Edited ]
|
|
jsteele
Newbie
Posts: 3
Registered: 07-29-2008
Message 2 of 9
Viewed 3,019 times
|
|
Hi Paul,
I understand your frustration since I am in a similar situation. There is a lot of competition for foreclosures and REOs, and that will continue. I know that a lot of people are saying that now is the time to buy, but I think that will be true for years to come. In March, sub-prime loan resets peaked and by September they will be almost non-existent (falling from over $100 billion in March to less than $5 billion in September). But toxic option-ARM loans will not start to reset heavily until next April, so we will experience a whole new wave of foreclosures, etc. 60% of these loans were in the state of California, so we will get hit harder than the rest of the country. The one variable is interest rates on mortgages (which you pointed out). They could go up a lot as credit tightens and the Fed starts raising. Keep in mind that even when the Fed rate hit 5.25% last year a 30 year fixed never averaged more than 6.75%, so they don't necessarily move in tandem. My guess is that as the price of your home falls, your payments will probably stay the same or rise a little since rates will go higher. The question is whether you don't mind losing equity in the short term to get a cheaper loan. I am thinking that I will probably wait a year or two and get a lower price even though payments will be the same if not a little higher. I'm not saying this plan is for everyone since we will probably spend at least $60-70,000 in rent during that time, so I think you just need to decide what is best for you. Foreclosures are going to be in abundance for years, so don't worry about missing the boat there. If you are patient, you might be able to get a great deal.
One last thing is that residential real estate generally appreciates faster in times of high inflation. I think that this could happen, but it will be a delayed reaction since there is so much inventory to get rid of before that appreciation can begin. In other words, your future house will probably not jump up in price until after foreclosures and REOs are under control.
Good luck
Message Edited by jsteele on 07-29-2008 12:38 PM
|
|
|
|
07-29-2008 12:37 PM
|
|
|
|
|
|
|
|
|
|
|
|
|
Re: "Now's the time to buy!" BAH!
[ Edited ]
|
|
Hibryd
Regular Contributor
Posts: 317
Registered: 04-15-2008
Message 6 of 9
Viewed 2,912 times
|
|
Best of luck on everything. The market is frustratingly hard to predict, especially around the Bay Area, especially now. Even though I see prices generally dropping, I still suspect that there are a lot of people with money around here who *could* buy, but are just holding off.
The bottom line is that a home is the biggest thing you'll ever buy in your life, and with so much money (and so many years of your life paying it off) on the line, and no clue when to move or what's the best thing to do, it's easy to get worried or even obsessive about making the wrong move.
If the REO dance is wearing you out, however, you might want to see if there's any new construction in the area. There's no back and forth with new places; the price in the brochure is the price you'll pay. And builders, unlike most homeowners, can't just sit in their homes until the prices go up: they *have* to sell to pay their bills, so these days you can get a lot of free upgrades or discounted closing costs or other goodies. And if this first purchase is just to get your foot in the homeowning door, so you'll have more equity when you want to upgrade in 5-10 years, newer places have the added bonus of being easier to sell. (Just make to to mention Redfin as soon as you enter the office so they can represent you; builders want to avoid paying buyer's agent fees whenever possible!)
Oh, and while we may be between rate reset waves, actual foreclosures trail behind by 6 months to a year, and right now they're still coming in at record numbers. Don't worry about REO homes drying up; you still have plenty of time to take a look at those.
Message Edited by Hibryd on 07-29-2008 03:57 PM
|
|
|
|
07-29-2008 03:54 PM
|
|
|
|
|
|
|
|
|
|
|
Re: "Now's the time to buy!" BAH!
|
|
JanelleS
Redfin Staff
Posts: 1262
Registered: 07-05-2007
Message 9 of 9
Viewed 2,669 times
|
|
|
Paul,
I'm afraid we need to hold the line on our service areas at this point, painful as that probably is. At the moment, given the high volume of the summer season, we've had to define our markets as they are to ensure we can provide the service we promise. Unfortunately, someone is always just "over the line". As we continue to grow, we expect to either service more areas, or develop other methods to help clients get the help they need.
I'm sorry we can't be of more assistance at this time.
We used to service Sonoma, Solano and Napa Counties, but scaled back our operations in Northern California about a year ago. We found we spread ourselves a bit thin, and as a company decided to serve the above areas amazingly well rather than 10 counties "pretty good".
We would love to be back in Sonoma County, and may be someday soon. Right now Redfin is focusing on growing our national presence rather than growing larger in established local markets.
Always a bridesmaid, never a bride. :-(
Janelle Saylor | Real Estate Operations
|
|
|
|
07-31-2008 02:40 PM
|
|
|
|
|
|
|
|
|
)
