Quote:
Originally Posted by Topless
Now is still a good time for house shopping if you have your finances in order. I agree that keeping the Box and paying off the 401K loan are probably excellent goals. Once you get a house you will have a built-in hobby because it just always needs something...
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Maybe in CA. everywhere else I disagree -- it's a good time to SELL. The Fed is tapering, a new Chair is coming in (uncertainty) and banks like BOA are already queing up thousands of mortgage division employees for layoffs because interest rate jumps are already cooling off loan demand. Year over year home sales went up too fast. If you are on the buy side and a market moves up well above its short term average, over the last year alone, something is about to correct agasint the seller -- big, sudden waves in RE don't last forever.
In any case, when you have a market (like RE) whose buyers are bidding primarily with borrowed money, the last thing you want to be is the one of the last buyers to jump onboard. The market never seems to take Warren Buffett lessons (be greedy when there is fear) to heart no matter how many times we go bust. The minute the banks opened up their valuts again, a buyer should have been scooping up distressed properties, because the banks needed them to do so -- badly. But like all things real estate this is the end of yet another bubble to bust cycle. There will be more and given that we've already used our govt bail out Trump card once with TARP/TALF/etc., I think the next bust could be an even bigger drop in home values as banks will be expected to take the haircut they avoided last time. IMHO, home buyers have become pawns in a never-ending speculative bubble by the Fed and the lend-to-securitize banking sector.
Frankly, unless you live somewhere where rentals are in short supply and cost of ownership is high, I don't understand the emotional need to own (just because everyone else is buying... if anything you should only be doing it when no one is buying). Particularly if your real estate positions represents half or more of your asset portfolio. With some its nearly all of their net worth. Given the volatile history of RE/mortgage market, more diversification/bigger cash position is needed. So many Americans are retiring on a prayer because they over-leveraged on their home and missed out on other investments because nearly all their income went into the mortgage and related costs.
Lil Red
2009 Porsche Cayman 2.9L
Hybrid Mode
