What just happened?

[kartius919]

Re: What just happened?

I cannot read, I can only type nonsense.

[Basil]

Re: What just happened?

OK, well, for what it's worth, I've wanted to buy a house for years. I haven't been able to because I had a big grad school debt, and while I was paying it off, house prices were rising above what I could afford. So I rented and saved and saved. Now prices have fallen to the point that I can do it, with a mortgage, but with substantial savings left over to stock up. I just wonder if buying right now, when prices could drop a lot further, is a stupid idea. On the other hand, if I don't buy now, while mortgages are available and affordable and before things fall apart, I may not be able to buy before inflation evaporates my savings. I really want that big vegetable garden (and maybe some chickens) and a basement for stocking up. I would like a place of my own.

Mark,

It sounds like we have been examining the same real estate market. I have concluded that it is best to wait at this time. Though my circumstances are probably different than yours. I see a drop of 10 to 15% coming quickly in the greater Boston area. The upscale suburbs have been the holdouts, but even places like Wayland have been falling rapidly as of late. I would bet that places like Newton, Lexington, Brookline, etc. go down hard in the next few months.

A great forum for these issues is Bostonbubble.com. The monthly graph that the administrator calculates is excellent. It demonstrates that the declines are increasing more rapidly by the month.

I also like to use this calculator http://www.nytimes.com/2007/04/10/bu...T_GRAPHIC.html. It is the best I have found, especially interesting when you increase the rate of inflation to match itulip's projections.

By waiting one year, you could save a very big chunk of change. A very good friend of the family, who has made a killing in real estate twice and lost her shirt once has told me to wait until there is blood in the water and then low-ball with abandon, unless I find the perfect place for my family.

So for now we are waiting and watching.

[ThePythonicCow]

Re: What just happened?

Actually, I am considering a move right now from my rented Boston apartment to a mortgaged house in a somewhat nice Boston suburb.

One other thought on this move -- Some neighborhoods, after they get enough foreclosures, are going to go to h*ll in a handbasket. I'd look for places to live that will be able to keep pretty much the same people, still on good terms with each other, through hard times. Some of the most recently built subdivisions already have too many vacant houses, which become magnets for disrepair and crime.

[ASH]

Re: What just happened?

One other thought on this move -- Some neighborhoods, after they get enough foreclosures, are going to go to h*ll in a handbasket. I'd look for places to live that will be able to keep pretty much the same people, still on good terms with each other, through hard times. Some of the most recently built subdivisions already have too many vacant houses, which become magnets for disrepair and crime.

I've been watching my street fill up with renters. Since I myself am a renter, I know this is kind of hypocritical, but the trend bothers me. I just signed a renewal of my lease for another year, but if I start seeing signs the neighborhood is actually headed downhill, I may have to move. I'm a renter by choice -- I suspect my neighbors rent out of necessity.

[markoboston]

Re: What just happened?

Mark,

It sounds like we have been examining the same real estate market. I have concluded that it is best to wait at this time. Though my circumstances are probably different than yours. I see a drop of 10 to 15% coming quickly in the greater Boston area. The upscale suburbs have been the holdouts, but even places like Wayland have been falling rapidly as of late. I would bet that places like Newton, Lexington, Brookline, etc. go down hard in the next few months.

So for now we are waiting and watching.

I suspect you are right about this, but my partner is very eager to "own", and I agreed a couple years ago that we would do this in 2009, and here we are. So we are going to go ahead. Your circumstances probably are different from mine. Newton, Lexington, and Brookline are out of my league except maybe for a cramped condo. I am looking at Stoughton. I think it offers good value for money right now. It has already had a bigger drop than most of the Boston area. It probably has somewhat further to fall, but probably not as far as overpriced Lexington, Newton, or Brookline, as the corporate layoffs hit more and more managers, and as all those old people in those big houses pass away or downscale or move to Boca Raton.

[Basil]

Re: What just happened?

I suspect you are right about this, but my partner is very eager to "own", and I agreed a couple years ago that we would do this in 2009, and here we are. So we are going to go ahead. Your circumstances probably are different from mine. Newton, Lexington, and Brookline are out of my league except maybe for a cramped condo. I am looking at Stoughton. I think it offers good value for money right now. It has already had a bigger drop than most of the Boston area. It probably has somewhat further to fall, but probably not as far as overpriced Lexington, Newton, or Brookline, as the corporate layoffs hit more and more managers, and as all those old people in those big houses pass away or downscale or move to Boca Raton.

I cannot afford those areas either. But I do think that they are about to get more affordable and my gold and that real estate may meet in the middle at some point over the next few years.

My wife has been hot to own for some time, but now that she sees that everything we discuss on these forums is coming to pass, she is very glad that we did not buy. It took some time, but she is fully on board with the rent and wait strategy. The rent vs. own calculator from NYT was useful in this regard.

[markoboston]

Re: What just happened?

I cannot afford those areas either. But I do think that they are about to get more affordable and my gold and that real estate may meet in the middle at some point over the next few years.
... It took some time, but she is fully on board with the rent and wait strategy.

You're lucky. My partner was never fully on board with rent and wait. A bit brainwashed about owning being a way to accumulate wealth, a bit in denial about evidence to the contrary. Meanwhile, I am getting a little nervous about economic collapse and a shutdown of the financial system, perhaps followed by hyperinflation, making it difficult to purchase anything at a certain point. Part of me wants to get in while things are still kind of normal. Part of me wants to wait for the bottom as you are doing. But we are not going to wait. My partner is making an offer on a place tonight.

[Basil]

Re: What just happened?

You're lucky. My partner was never fully on board with rent and wait. A bit brainwashed about owning being a way to accumulate wealth, a bit in denial about evidence to the contrary. Meanwhile, I am getting a little nervous about economic collapse and a shutdown of the financial system, perhaps followed by hyperinflation, making it difficult to purchase anything at a certain point. Part of me wants to get in while things are still kind of normal. Part of me wants to wait for the bottom as you are doing. But we are not going to wait. My partner is making an offer on a place tonight.

Does not sound like you are stretching. So if it brings peace and stability, then it is a good thing indeed. I hope it works out well. I just got my landlord to lower my rent. So my argument for buying is getting weaker.

[flintlock]

Re: What just happened?

Mark,

It sounds like we have been examining the same real estate market. I have concluded that it is best to wait at this time. Though my circumstances are probably different than yours. I see a drop of 10 to 15% coming quickly in the greater Boston area. The upscale suburbs have been the holdouts, but even places like Wayland have been falling rapidly as of late. I would bet that places like Newton, Lexington, Brookline, etc. go down hard in the next few months.

A great forum for these issues is Bostonbubble.com. The monthly graph that the administrator calculates is excellent. It demonstrates that the declines are increasing more rapidly by the month.

I also like to use this calculator http://www.nytimes.com/2007/04/10/bu...T_GRAPHIC.html. It is the best I have found, especially interesting when you increase the rate of inflation to match itulip's projections.

By waiting one year, you could save a very big chunk of change. A very good friend of the family, who has made a killing in real estate twice and lost her shirt once has told me to wait until there is blood in the water and then low-ball with abandon, unless I find the perfect place for my family.

So for now we are waiting and watching.

Only thing I'll add to this is unless you are paying cash, consider what mortgage rates might be in a year.