986 Forum - The Community for Porsche Boxster & Cayman Owners - View Single Post - May have to sell the car....need suggestions

gschotland · 10-01-2010, 07:21 PM

As a seasoned residential & commercial RE developer/owner/manager and enthusiastic student of the RE market, I'd like to add my $0.02:

Keep your car, rent a cheap place, stockpile cash and invest a chunk in mutual funds - for the long term, and buy a house when you can really afford it.

Why NOT to buy now:

- Dayton area prices ($/sf) are very low, have gone nowhere for the last 10 yrs (see zillow.com), and there's nothing happening in the regional economy to suggest a meaningful positive change any time soon.

- Foreclosures in that area are at a high level - and rising. Not good for prices. (zillow.com) It's going to take YEARS for the market to absorb all the foreclosures and get back to "normal."

- Rents are low. Almost without question you can rent for far less than buying and be in a more comfortable place in terms of financial security.

- A cheap house is going to need lots of TLC, your time & $$$. If your furnace takes a crap, do you want to (1) come up with $1500 to replace it - or (2) call your landlord and let him/her deal with it? Answer: #2.

- As another poster said, you really can't afford to buy if you have to trade down from a $300 car payment. Trade down to what, a bicycle, a Corolla? I'd rather have bamboo stuck under my fingernails. What ARE you thinking?

- Almost all of your monthly payment on a 30 yr mortgage is interest for the first 5-7 years. You are effectively renting your own home (no gain in equity from paying loan down) - with all the costs of ownership to go along with it. If prices are flat, where's the upside?

- The tax "benefit" from the mortgage interest deduction that realtors love to tout is insignificant on a teacher's salary (actually on most people's salary). This should never be THE reason to buy.

- A house is a place to live and for some people a vehicle for forced savings over the VERY long term through paying off the mortgage. It's not an "investment." There many other places for far better returns.

Bottom line: Buying in your situation offers no near term upside and possibly a lot of downside if the house turns out to be a POS. In 5+ years when you're really ready to buy, houses in the Dayton area will still be just as cheap as they are now, maybe cheaper. Enjoy your Boxster and have fun with your life.

10-01-2010, 07:21 PM	#19
gschotland Registered User Join Date: Apr 2006 Location: nj Posts: 389	As a seasoned residential & commercial RE developer/owner/manager and enthusiastic student of the RE market, I'd like to add my $0.02: Keep your car, rent a cheap place, stockpile cash and invest a chunk in mutual funds - for the long term, and buy a house when you can really afford it. Why NOT to buy now: - Dayton area prices ($/sf) are very low, have gone nowhere for the last 10 yrs (see zillow.com), and there's nothing happening in the regional economy to suggest a meaningful positive change any time soon. - Foreclosures in that area are at a high level - and rising. Not good for prices. (zillow.com) It's going to take YEARS for the market to absorb all the foreclosures and get back to "normal." - Rents are low. Almost without question you can rent for far less than buying and be in a more comfortable place in terms of financial security. - A cheap house is going to need lots of TLC, your time & $$$. If your furnace takes a crap, do you want to (1) come up with $1500 to replace it - or (2) call your landlord and let him/her deal with it? Answer: #2. - As another poster said, you really can't afford to buy if you have to trade down from a $300 car payment. Trade down to what, a bicycle, a Corolla? I'd rather have bamboo stuck under my fingernails. What ARE you thinking? - Almost all of your monthly payment on a 30 yr mortgage is interest for the first 5-7 years. You are effectively renting your own home (no gain in equity from paying loan down) - with all the costs of ownership to go along with it. If prices are flat, where's the upside? - The tax "benefit" from the mortgage interest deduction that realtors love to tout is insignificant on a teacher's salary (actually on most people's salary). This should never be THE reason to buy. - A house is a place to live and for some people a vehicle for forced savings over the VERY long term through paying off the mortgage. It's not an "investment." There many other places for far better returns. Bottom line: Buying in your situation offers no near term upside and possibly a lot of downside if the house turns out to be a POS. In 5+ years when you're really ready to buy, houses in the Dayton area will still be just as cheap as they are now, maybe cheaper. Enjoy your Boxster and have fun with your life. Last edited by gschotland; 10-01-2010 at 07:25 PM.