---

Lizard wrote:

Yet we have hoards of people jumping through hoops trying to buy now. What have they not understood?

---

---

Lizard wrote:

We all have seen how high home prices are not sustainable. Even with prices much lower and banks requiring real income, real tax returns, etc. many cannot qualify for a loan.

 

Yet we have hoards of people jumping through hoops trying to buy now. What have they not understood?

 

Home prices are not going back to where they were before, there is no depth of lending to permit high home prices. The only place prices have to go is down.

 

About 24mos ago right on these forums I questioned the sanity of buyers and I mocked the Nat'l Assn of Realtors. Friends and some people on here thought I was nuts.

 

I urge people now not to over bid on house because it will be a money loser for the next 10-12yrs or longer. As outrageous as it sounds, that timetable is conservative given what has happened economically and what has still to happen.

---

You maybe right on the trend of home price is going down.

However, until it really happens, people still need a place to live in.  Are you asking them to keep paying that already over-priced rent which is almost as expensive as the mortgage payment?

Paying rent is not a (long term) solution, neither is paying the mortgage.   The best solution,in my opinion, is to have a good personal financial planning (job, savings, good credit, not over-spending, insurance, various income sources...etc.) and buy a house that is truly affordable to YOU.

Not everybody can afford a $500K 3br/2ba house.  Nevertheless, there are relatively more people can afford a $300K 2br/1ba house or a 2br/2ba condo.  People are asking for trouble themselves to buy a $500K house if they can only afford a $300K house to begin with. 

Buying a house is not a sin, greedy mind is.

There are exceptions to every rule. Regardless if your home is going to lose value or not, rents aren't falling as fast as home prices are. Or were, at least in my area. 

I think it's up to every individual to do their homework and make sure that buying now is right for them. If you aren't going to be able to stomach the fact that your home will probably lose value over the next five years, then don't buy now. If you plan to live in that home for at least 10 years and your cost to own is less than rent, you might want to consider buying a home now. But every situation is different.

---

amydevemma wrote:
What if I'm paying less for my PITI than I was paying for rent? 

 

---

amydevemma wrote:
What if I'm paying less for my PITI than I was paying for rent? 

 

There are exceptions to every rule. Regardless if your home is going to lose value or not, rents aren't falling as fast as home prices are. Or were, at least in my area. 

 

I think it's up to every individual to do their homework and make sure that buying now is right for them. If you aren't going to be able to stomach the fact that your home will probably lose value over the next five years, then don't buy now. If you plan to live in that home for at least 10 years and your cost to own is less than rent, you might want to consider buying a home now. But every situation is different.

---

Could be that you were paying too much for rent. Rents have come down quite a bit now. From my observations, we haven't yet reached the point where one can rent out a house for more than the PITI. (I'm assuming everyone here is talking about Los Angeles, of course, since this is the Los Angeles forum.) We were getting close, but this latest little wave of government interference just kicked the can further down the road.

I agree that if you find a deal that makes sense for you, you should go for it. Personally, I haven't found that yet. I seem to get outbid every time by frantic sheeple who were either desperate to get the tax credit, or wrongly think they will be "priced out of the market" if they don't buy right now. But I don't see that happening. All the data shows that prices will not continue to rise. This is a very important decision, and I have to go with my head and not my gut. So I will keep looking and if I still don't find anything where the numbers make sense, I will continue to wait. If I'm wrong, I'm wrong, but I will not let fear rule my decision-making process.

People are playing the safe game.

No matter where you are, prices are down.  Some places not as much as others, but they are down from 06.

On top of that you have interest rates at close to record low levels.

On top of this, you have the fact that the foreclosures have stopped--at least for now.  While I realize NODs may be up, REOs are definitely down.

An effect to the slow down in foreclosures is that those median prices are going up again. 

So typical buyer views this as prices are down at least 15-20%.  Interest rates are near record lows. REOs may or may not deluge over the next 2 years.  Safe bet is to buy in because what if interest rates go up, prices don't come down to reflect that rate hike and REOs continue to trickle out.

---

Sickofit wrote:

People are playing the safe game.

 

No matter where you are, prices are down.  Some places not as much as others, but they are down from 06.

 

On top of that you have interest rates at close to record low levels.

 

 

---

I remember people making that argument 2 years ago, when the L.A. County median price was $499,000 and interest rates were over 6%.