Is now a good time to buy? Seems so... Boston area

[vanvaley1]

Re: Is now a good time to buy? Seems so... Boston area

Don't know the laws in Boston bout condos. Out here there was a case where the HOA got sued after an individual became a paraplegic from falling down some stairs. If I remember the case correctly the individual owners of each condo became responsible for his expenses also after his and the HOA insurance ran out. Check with an attorney to see your liablity responsibilities in an injury case.

[metalman]

Re: Is now a good time to buy? Seems so... Boston area

No I did not fall off the Turnip Truck and as I have posted before I do work in the Commercial Real Estate industry. Although I have been reading and posting to I tulip for some time I did search it again and the charts show that over time housing price appreciation follows CPI very closely (ex the bubble years). If you expect the "Poom" you should see housing prices follow the CPI again and that is wealth preservation. I did not say appreciation in real terms but in nominal terms (I think EJ may have said this as well). I just tried to put the math behind the decision making process and give some information on the different forms of ownership. I also wanted to give some thoughts on what to look for when buying a home that I have learned over the course of my career inorder to help potential new home buyers on itulip make a better decission for their individual needs. I am not recommending buying real estate or land here as and investment. I am not recommending everyone buy a home. But I do believe that if you are going to plant your roots and stay in an area for the long term buying a house is not a bad idea depending on your situation. If you disagree maybe you should post your thoughts as opposed to name calling it is far more beneficial to the people who come here for information sharing.

30 yr mortgage rates have only one way to go... up.

as they do, housing prices will fall, just like in latvia...

http://www.globalpropertyguide.com/E.../Price-History

...but not so dramatically... unless a balance of payments crisis occurs and interest rates spike.

[metalman]

Re: Is now a good time to buy? Seems so... Boston area

I agree that the most likely senario is for interest rates to rise. As to how that translates into Home prices is a different matter altogether. But in the 2012 senario we have calculated the price to drop a furter 40% from the 2009 senario and interest rates to rise 100%. The total difference in cost for the life of the loan is only 6% or pretty much a commision. The main difference being you paid more interest in the 2012 senario.

Once again this is for 30 year fixed rate mortgages.

I also think your comparison to Latvia is off the mark. You just cannot compare the housing market of a country with 2.3 million people that has had property rights for 20 years to a housing market with 300 million people with 233 years of property rights. Its comparing apples to oranges.

most people bought houses because they thought prices go up. who wants to buy houses once it's understood that the prices will fall for 5 or 10 more years?

[Uno]

Re: Is now a good time to buy? Seems so... Boston area

It is all about the local market, local economy, local jobs, local quality of life (neigborhood), local quality of government, local rental market demand, ect..

I don't know Boston well but a quick search on craigslist (link below) shows that $1,200 is close to current 2 bedroom rental rates in that area.

My opinion, when your payments plus condo dues plus propery taxes, transaction costs, ect.. goes well under rental rates then things start looking better.

Make sure you are buying a home you want to live in and are not viewing it as a speculative investment. Land under a home is an asset, always has been, the structure (home) is just a bunch of wood.

Condo's are a seperate market from houses, more risky, condo prices tend to crash more. Condo market in a Manhattan is much different then a condo in the suburbs that competes with track housing. Timing the botton is of course difficult, no reason the condo cannot go back down to 200K. Buying a home with land under it is usually a much better idea.

Next few years could be a good time to buy although high local property taxes in many areas means that you will never own your home outright and are always a renter in America.

Vote for politicians that agree to eliminate property taxes in America, mostly libertarians.

Vote to break the real estate cartel in America, 6% fees means round trip transaction costs in America are 7% - 12%.

My personal prediction is that the housing market bottoms in 2011, each market is different so this is a generalization based on mortgage data. After 2011 most of the option arms will have reset. Of course it depends on what your government does as well because they now own most of the mortgages after Bush had Paulson "purchase" them with your money.

http://boston.craigslist.org/search/...300&bedrooms=2

[leegs]

Re: Is now a good time to buy? Seems so... Boston area

...investing it at a conservative 5% annual return...

That would have struck me as a sensible statement 6 months ago, so sensible it would have hardly registered. I mean heck, the stock market has averaged 11% returns over the past 100 years (or something like that - I don't feel like looking it up). However now it seems a bit optimistic. What is the conservative method I should have been using since 1997 to achieve 5%? More importantly, what is the conservative method I should use going forward to achieve that 5% return.

Now certainly I suppose that even, or perhaps especially, in these interesting times, there are many clever folks here on iTulip who will far exceed that. I sure hope my big investment in various oil ETFs does:confused:. But again, how should the average not-too-dumb guy 'conservatively' get 5%?

[cjppjc]

Re: Is now a good time to buy? Seems so... Boston area

You know I always have this arguement with people. Rent V Own, as far as which is the better investment. There is an implied bias twords owning. But if you crunch the numbers, even adding back the tax deduction, Renting is not too bad. People always leave out the need for repairs and improvements. Maintanence fees on condos. Money spent maintaning the yard and snow removal. The future property taxes. How you would invest the monthly savings if you rented. How much of your profit will be taken away when you sell. These and many others should be poured over.

All these iTulipers who ask if now is the right time. I've said it before. If you want to own a home. Do it. If you think your going to buy low and sell high. Good luck.

Now that I've said the above before. Someone please correct me if I'm wrong. Now might be the time to lock in a 30 year mortage, and pay it off with cheaper dollars. Thre is however the possibilty of asset depreciation.

[petertribo]

Re: Is now a good time to buy? Seems so... Boston area

FLA Condo Crisis, unit owners petition State for help:

Florida's condominium and homeowners' associations are facing what experts call a trickle-down disaster from the property crisis. Dozens and perhaps hundreds of condo buildings have budget shortfalls as thousands of owners, under water on their mortgages or in foreclosure, stop paying monthly fees.

"I call it a death spiral," Miami Beach city commissioner Jerry Libbin said. "It's a catastrophe in the making."

Nearly half of Florida's 18 million residents live in condo or homeowners associations, communities where owners pay monthly fees for common expenses like cleaning, landscaping, pool maintenance and building insurance.

When a unit owner stops paying monthly fees, which can range from $150 in a small building to over $1,000 in a luxury tower, a condo board must collect money from other owners to make up the shortfall. Rising fees or special assessments, or levies, can drive other vulnerable owners into insolvency.

No one seems sure how many condo buildings are in trouble but the number of calls to Florida's condo ombudsman could be an indicator. They are up tenfold in recent months.

At Miami-based condo management company CADISA Inc, co-founder Jackie Diaz-Sampol estimated that delinquency rates are running at 30 percent to 35 percent in half her buildings.

As a result, associations are cutting back pool and hallway maintenance, trimming services and firing maintenance staff.

"We've had to become very creative. Desperate times create desperate measures," Diaz-Sampol said. "We've even had owners who have volunteered to do a little painting."

TROUBLED BUILDINGS

Carol Housen, the board president at the Miami Beach condo where nearly half the units are in hot water, would talk about its problems only with an agreement that the address would not be published. It's tough to sell a condo with a bad reputation.

Housen points out chipped paint on the concrete walkways, which haven't been redone lately. Crown-of-thorns and bougainvillea plants are blooming but she wonders how they will survive with the landscaper visiting less frequently....

Libbin, the Miami Beach commissioner, left this week for the state capital Tallahassee to lobby lawmakers to pass a bill giving more financial protection to condo associations. He took with him resolutions from Florida condo boards representing some 135,000 unit owners pleading for help.

He said the state might end up taking over bankrupt condo associations. "Imagine what it will be like if you have to call the governor's office to get a plumber," he said. [my bold]

http://www.reuters.com/article/newsO...BrandChannel=0

[vanvaley1]

Re: Is now a good time to buy? Seems so... Boston area

Sales have increased recently in our area. Well...some have. Properties in the $225,000 and below which is the low income price range in this area have increased. In fact, there are multiple offers on some of these properties. Rates are relatively low and that plus pricing is motiviating some buyers to jump in. Most of the listings and sales are foreclosures. The banking community is making little overture to the idea of maintaining pricing and not depressing prices for the benefit of the community . They just wanta unload inventory. Conditions and location of properties vary from a mess to be careful.

Have no data yet whether these are investors or owner occupant buyers. Suspect that whoever these buyers are they are well qualified. Short sales are apparently still frowned upon by some banks. One property have five offers on a short sale. None were accepted. Debt forgiveness seems not on the banking industry radar. At least, apparently not large enough to get a blip. The retail and commercial leasing in our area remains flat...and that's an optimistic and kind observation. Ag still is holding its own but folks in Silicon Valley are getting a bit nervous about job security. So who are these buyers and what do they see that we're missing as we talk with local business folks, walk the local malls with vanishing tenants, and listen to our buyers and sellers?

The folks we are working with trying to help get loans modified are still attempting to do so...it's running on four months now. So the banks don't appear to be in a hurry to remodify marginal players or they are simply swamped with loan applications of every size and texture. Ya'd think they'd hire more loan people. It's not like there aren't a lot of unemployed loan folks out there.

[cjppjc]

Re: Is now a good time to buy? Seems so... Boston area

No doubt about it, There are comming out of the woodwork. Activity has picked up a lot. Multiple offers, few days on market. A rising tide will not however lift all boats. The really ugly homes, in bad locations will stay on the market for a long time.