The housing market...Good time to buy?

[Mellman]

I'm sure others are in a similar position.

I currently live at home with my parents. It's not really a problem, except that I wouldn't mind having a garage, and start building some equity.

I've begun looking at houses in the area, the market is at a low, I looked at a house on Sunday that was foreclosed, they bought it for $525K in October last year, and foreclosed on it a month ago and the house is on the market for $375K. The house needs maybe 5-10K worth of work, depending on if I do it myself or contract it out. I'd likely do it all myself unless any electrical work needs done.

I plan on staying in the area for at least 3-4 years, and have pretty good job security where I am at, and based on what I could pay in Rent in the area, vs what I could pay on a mortgage with a roomate, it would cost me ~$7-8K per year more (in lost tax deductions if I had a mortgage) if I rented.

I don't NEED to move out of my parents house, I pay $400/mo in rent to them, with a roomate I can afford a 360K home, while continuing to contribute to my 401K and other savings.

I realize nobody else knows what the market will do, it could turn around any day now, but the 'experts' claim the prices are just going to continue to drop. If the house loses value in the next year or 3, and doesn't appriciate, I'm basically out money or even, but if it goes up, which it almost has to, I stand to gain a lot of equity to put towards a down payment in whatever area I move to in a few years.

So what're you guys doing?

 

[imported_griffis]

Really depends on the area, but is definetly a buyer's market right now.

Also, if you are only paying 400 a month right now, what makes you think you can afford a 380,000 even with a roommate? Not try to be smart, just making sure you are not making an empty decision here and have budgeted this out.

 

[maddogchen]

I say wait a bit. its times of financial uncertainty. People are even having trouble getting loans approved. You might have to jump through hoops to get a loan too. Its at a downward trend now and I don't think it has reached the bottom yet. You are in a good position to save even more as you watch it fall.

 

[MiniDoom]

I'm buying soon. My 3rd. I think now is a good time to buy. Prices may drop more but interest will probably rise so it all equals out. Do you have a good down payment? That payment will probably be over 3k a month. Avoid interest only loans.

 

[hanoverphist]

i heard yesterday that theres like 55000 houses for sale in metro phoenix area. people are taking losses like crazy, and even invvestors arent buying up for flips like they used to. id believe it too, i see the same houses for sale now that i did 4 months ago in my daily commute. i had one of those mortgage companies that keep calling my house finally work out their "killer rates" refi for giggles. didnt tell them what my %rate was beforehand so they didnt have any way to skew their "bet" rates. they came back with almost .375% higher than mine is now, and when i told them they said they could match the % and give me a good payment. too bad with matching my % the payment they offered was 50 bucks more than im paying now, which i told them about. they havent called back, so im thinking they cant beat it lol. id say that rates arent really dropping that fast, because 6.9% doesnt seem low to me. if it were the 4.5% my mom is paying, id have signed papers. i want to buy a new house too, but i think im going to wait out the summer and see how it looks in nov-jan before deciding.

 

[Mellman]

Originally posted by: griffis
Really depends on the area, but is definetly a buyer's market right now.

Also, if you are only paying 400 a month right now, what makes you think you can afford a 380,000 even with a roommate? Not try to be smart, just making sure you are not making an empty decision here and have budgeted this out.

Northern VA area, I know its a buyers market, and I'm a first time home buyer. I can afford it with a roomate, two would be ideal, but one would be fine too. I've budgeted it out I didn't think I could do it either, but after looking at it, with an interest only loan payments should be around 2000-2200 depending on my downpayment.

Originally posted by: rdubbz420
I'm buying soon. My 3rd. I think now is a good time to buy. Prices may drop more but interest will probably rise so it all equals out. Do you have a good down payment? That payment will probably be over 3k a month. Avoid interest only loans.

I agree prices may continue to drop but I"m not sure they'll boost interest rates.

Then again, rates aren't that "high" now anyways if you look at historic figures, my parents had a 12-13% interest rate on their new home ~22 years ago.

With first time home buyer incentives like 0 money down and interest only, I can get into a house, locking interest only down for 7+ years will be fine since I intend to sell the house at that point anyways and move out of state.

 

[Vette73]

Me and my wife just bought a house in Springfield VA (Close to DC). It sold for $525k a coupel years ago. We bought it for $369k. We will put in maybe 20k or so for redoing the FULL master bed/bath and some other items.



So we got a great deal but that is also based on the fact we will be living here at least 5 years. I don;t see housing jumping back for at least another year or 2. So there is not a lot of money to be made, esp. after you take into account realtor fees, taxs, etc...



Mellman, where in N.VA are you at? Our house is near the end/start of the Blue line metro in Springfield.

 

[MiniDoom]

Dont forget to add on tax, ins and HOA, probably will be an extra $500 a month.
NoVA (reston) here also.

 

[Mellman]

I currently live in Oakton VA, work in Reston VA, and am looking for a house in Herndon VA, the developments just east of Dulles airport have a ton of houses on the market right now, several foreclosures. I personally prefer a foreclosure because I enjoy doing a little work to get a property up to nice condition.

That is a good deal for springfield, but I couldn't live down there...don't want the commute

The houses I 'm looking at are detatched, with 1 or 2 car garages, 4-5 bed, 2-2.5 bath. typically around 2000+ sq ft. based on craigslist rent in the area goes for around $700-900 for a room.

 

[tfinch2]

Originally posted by: Mellman

Originally posted by: griffis
Really depends on the area, but is definetly a buyer's market right now.

Also, if you are only paying 400 a month right now, what makes you think you can afford a 380,000 even with a roommate? Not try to be smart, just making sure you are not making an empty decision here and have budgeted this out.

Northern VA area, I know its a buyers market, and I'm a first time home buyer. I can afford it with a roomate, two would be ideal, but one would be fine too. I've budgeted it out I didn't think I could do it either, but after looking at it, with an interest only loan payments should be around 2000-2200 depending on my downpayment.

Originally posted by: rdubbz420
I'm buying soon. My 3rd. I think now is a good time to buy. Prices may drop more but interest will probably rise so it all equals out. Do you have a good down payment? That payment will probably be over 3k a month. Avoid interest only loans.

I agree prices may continue to drop but I"m not sure they'll boost interest rates.

Then again, rates aren't that "high" now anyways if you look at historic figures, my parents had a 12-13% interest rate on their new home ~22 years ago.

With first time home buyer incentives like 0 money down and interest only, I can get into a house, locking interest only down for 7+ years will be fine since I intend to sell the house at that point anyways and move out of state.

Interest only? In your OP you talk about building equity. How do you do that with an interest only loan?

 

[Mellman]

Originally posted by: tfinch2

Originally posted by: Mellman

Originally posted by: griffis
Really depends on the area, but is definetly a buyer's market right now.

Also, if you are only paying 400 a month right now, what makes you think you can afford a 380,000 even with a roommate? Not try to be smart, just making sure you are not making an empty decision here and have budgeted this out.

Northern VA area, I know its a buyers market, and I'm a first time home buyer. I can afford it with a roomate, two would be ideal, but one would be fine too. I've budgeted it out I didn't think I could do it either, but after looking at it, with an interest only loan payments should be around 2000-2200 depending on my downpayment.

Originally posted by: rdubbz420
I'm buying soon. My 3rd. I think now is a good time to buy. Prices may drop more but interest will probably rise so it all equals out. Do you have a good down payment? That payment will probably be over 3k a month. Avoid interest only loans.

I agree prices may continue to drop but I"m not sure they'll boost interest rates.

Then again, rates aren't that "high" now anyways if you look at historic figures, my parents had a 12-13% interest rate on their new home ~22 years ago.

With first time home buyer incentives like 0 money down and interest only, I can get into a house, locking interest only down for 7+ years will be fine since I intend to sell the house at that point anyways and move out of state.

Interest only? In your OP you talk about building equity. How do you do that with an interest only loan?

When the market turns back around and values increase again, any increased value in the house is mine, assuming the house goes up in value ~20k at least, i'd be breaking even since i'd have around that in costs of selling the house.

 

[Vette73]

Originally posted by: tfinch2

Originally posted by: Mellman

Originally posted by: griffis
Really depends on the area, but is definetly a buyer's market right now.

Also, if you are only paying 400 a month right now, what makes you think you can afford a 380,000 even with a roommate? Not try to be smart, just making sure you are not making an empty decision here and have budgeted this out.

Northern VA area, I know its a buyers market, and I'm a first time home buyer. I can afford it with a roomate, two would be ideal, but one would be fine too. I've budgeted it out I didn't think I could do it either, but after looking at it, with an interest only loan payments should be around 2000-2200 depending on my downpayment.

Originally posted by: rdubbz420
I'm buying soon. My 3rd. I think now is a good time to buy. Prices may drop more but interest will probably rise so it all equals out. Do you have a good down payment? That payment will probably be over 3k a month. Avoid interest only loans.

I agree prices may continue to drop but I"m not sure they'll boost interest rates.

Then again, rates aren't that "high" now anyways if you look at historic figures, my parents had a 12-13% interest rate on their new home ~22 years ago.

With first time home buyer incentives like 0 money down and interest only, I can get into a house, locking interest only down for 7+ years will be fine since I intend to sell the house at that point anyways and move out of state.

Interest only? In your OP you talk about building equity. How do you do that with an interest only loan?

Same mistake everybody else did in the bubble, they just KNEW their house would go up in value.
The guy that lost the house I own bought it as a investment.

 

[slsmnaz]

Originally posted by: Mellman
I pay $400/mo in rent to them, with a roomate I can afford a 360K home, while continuing to contribute to my 401K and other savings.

I'm basically out money or even, but if it goes up, which it almost has to, I stand to gain a lot of equity to put towards a down payment in whatever area I move to in a few years.

So what're you guys doing?

Those 2 points stood out to me. I would not get into a place that I could not afford on my own. Things happen and a roommate could leave you paying a mortgage by yourself.

The 2nd one is partly how the housing market got to this point. Why not buy a house where you can afford to get a traditional mortgage and pay into it rather than hope it goes up?

 

[49erinnc]

Originally posted by: Mellman



When the market turns back around and values increase again, any increased value in the house is mine, assuming the house goes up in value ~20k at least, i'd be breaking even since i'd have around that in costs of selling the house.

Buying a house that seems to be outside of your budget, based on an assumption of future value increase is not a very smart thing to do. As a young person who will be a first time home buyer, you certainly don't want to be gambling on the market.

 

[49erinnc]

Originally posted by: slsmnaz

Those 2 points stood out to me. I would not get into a place that I could not afford on my own. Things happen and a roommate could leave you paying a mortgage by yourself.

Couldn't agree more. I had a buddy who bought a home that was a little outside his means but he had a roommate who was also a good friend. There was never a doubt that it would be a secure, long-term situation. His friend fell into some financial hardship and couldn't pay his half. My buddy wound up having to sell his home later and take a loss.

Do NOT buy a house you cannot afford on your own. Depending on someone else to help you make the mortgage payment is too unpredictable. Unless it's a spouse or family member, I really can't condone it unless you could continue to make the payments on your own if something happened.

Why not just crawl before you walk? Get your own apartment for a little while, save up some money for a down payment and then get your own little starter house to build up some equity and credit.

 

[Mellman]

Originally posted by: slsmnaz

Originally posted by: Mellman
I pay $400/mo in rent to them, with a roomate I can afford a 360K home, while continuing to contribute to my 401K and other savings.

I'm basically out money or even, but if it goes up, which it almost has to, I stand to gain a lot of equity to put towards a down payment in whatever area I move to in a few years.

So what're you guys doing?

Those 2 points stood out to me. I would not get into a place that I could not afford on my own. Things happen and a roommate could leave you paying a mortgage by yourself.

The 2nd one is partly how the housing market got to this point. Why not buy a house where you can afford to get a traditional mortgage and pay into it rather than hope it goes up?

I can afford the house on my own. having a roomate or two gives me more money to put away each month into my emergency fund.

And why not buy a house where I can afford a traditional mortgage? That doesn't really exist in this area. "affordable" condo's are $300K, I can buy a 1 bedroom condo for 280-300K, or I can buy a house that I can get a roomate or two with, for $380K. The latter makes more sense to me.

I do understand WHY the bubble happened, But I look at it like this, with a roomate or two i can spend ~$1000/mo in rent, and have the potential of the housing market turning around and my house appreciating in value over the next several years. (so a chance at making some equity)

OR...I can just go pay ~$800-1000 in rent, for a room, and know that I won't be getting anything out of it in the end. I'd have to deal with not having a garage, not having a safe place to keep my motorcycle...etc.

I know that the market probably won't explode again like it did -- but I think it has to be pretty close to bottom, keep in mind this is Northern VA, people have more money than sense in this area

 

[imported_griffis]

Originally posted by: slsmnaz

Originally posted by: Mellman
I pay $400/mo in rent to them, with a roomate I can afford a 360K home, while continuing to contribute to my 401K and other savings.

I'm basically out money or even, but if it goes up, which it almost has to, I stand to gain a lot of equity to put towards a down payment in whatever area I move to in a few years.

So what're you guys doing?

Those 2 points stood out to me. I would not get into a place that I could not afford on my own. Things happen and a roommate could leave you paying a mortgage by yourself.

The 2nd one is partly how the housing market got to this point. Why not buy a house where you can afford to get a traditional mortgage and pay into it rather than hope it goes up?

I totally agree with this. If you want to build equity, it wont happen with interest only. Dont make the mistake that a lower payment for interest only is better. I just bought a house two months ago for no money down, got a 6.375% FIXED for 30 years. I pay an extra couple hundred bucks sure, but it's worth it in order to build some value in the house.

 

[imported_griffis]

Originally posted by: Mellman
I currently live in Oakton VA, work in Reston VA, and am looking for a house in Herndon VA, the developments just east of Dulles airport have a ton of houses on the market right now, several foreclosures. I personally prefer a foreclosure because I enjoy doing a little work to get a property up to nice condition.

That is a good deal for springfield, but I couldn't live down there...don't want the commute

The houses I 'm looking at are detatched, with 1 or 2 car garages, 4-5 bed, 2-2.5 bath. typically around 2000+ sq ft. based on craigslist rent in the area goes for around $700-900 for a room.

I fly up to Dulles every week and work in Herndon, quaint little town. Although some parts can be real expensive for housing. Shout to everyone here in Herndon!

 

[MiniDoom]

Originally posted by: griffis

Originally posted by: Mellman
I currently live in Oakton VA, work in Reston VA, and am looking for a house in Herndon VA, the developments just east of Dulles airport have a ton of houses on the market right now, several foreclosures. I personally prefer a foreclosure because I enjoy doing a little work to get a property up to nice condition.

That is a good deal for springfield, but I couldn't live down there...don't want the commute

The houses I 'm looking at are detatched, with 1 or 2 car garages, 4-5 bed, 2-2.5 bath. typically around 2000+ sq ft. based on craigslist rent in the area goes for around $700-900 for a room.

I fly up to Dulles every week and work in Herndon, quaint little town. Although some parts can be real expensive for housing. Shout to everyone here in Herndon!

Hernduras is a great place.

 

[imported_griffis]

Originally posted by: Mellman

Originally posted by: slsmnaz

Originally posted by: Mellman
I pay $400/mo in rent to them, with a roomate I can afford a 360K home, while continuing to contribute to my 401K and other savings.

I'm basically out money or even, but if it goes up, which it almost has to, I stand to gain a lot of equity to put towards a down payment in whatever area I move to in a few years.

So what're you guys doing?

Those 2 points stood out to me. I would not get into a place that I could not afford on my own. Things happen and a roommate could leave you paying a mortgage by yourself.

The 2nd one is partly how the housing market got to this point. Why not buy a house where you can afford to get a traditional mortgage and pay into it rather than hope it goes up?

I can afford the house on my own. having a roomate or two gives me more money to put away each month into my emergency fund.

And why not buy a house where I can afford a traditional mortgage? That doesn't really exist in this area. "affordable" condo's are $300K, I can buy a 1 bedroom condo for 280-300K, or I can buy a house that I can get a roomate or two with, for $380K. The latter makes more sense to me.

I do understand WHY the bubble happened, But I look at it like this, with a roomate or two i can spend ~$1000/mo in rent, and have the potential of the housing market turning around and my house appreciating in value over the next several years. (so a chance at making some equity)

OR...I can just go pay ~$800-1000 in rent, for a room, and know that I won't be getting anything out of it in the end. I'd have to deal with not having a garage, not having a safe place to keep my motorcycle...etc.

I know that the market probably won't explode again like it did -- but I think it has to be pretty close to bottom, keep in mind this is Northern VA, people have more money than sense in this area

Actually, if you plan on doing interest only, those several years of owning mean didly squat because you are not paying down on the principal. It can take anywhere from like 7-10 years, depending on the loan, for an interest only to start paying towards the principal. You might want to spring for the traditionaly, you would be surprised what you can get if you just look.

 

[imported_griffis]

Originally posted by: rdubbz420

Originally posted by: griffis

Originally posted by: Mellman
I currently live in Oakton VA, work in Reston VA, and am looking for a house in Herndon VA, the developments just east of Dulles airport have a ton of houses on the market right now, several foreclosures. I personally prefer a foreclosure because I enjoy doing a little work to get a property up to nice condition.

That is a good deal for springfield, but I couldn't live down there...don't want the commute

The houses I 'm looking at are detatched, with 1 or 2 car garages, 4-5 bed, 2-2.5 bath. typically around 2000+ sq ft. based on craigslist rent in the area goes for around $700-900 for a room.

I fly up to Dulles every week and work in Herndon, quaint little town. Although some parts can be real expensive for housing. Shout to everyone here in Herndon!

Hernduras is a great place.

That does represent a good portion of the ethnicity around here. Althought, there are some nicer parts as well!

 

[Vic]

It's a buyers market right now, but financing is in a bit of temporary turmoil. Qualifying is more difficult than it used to be, and most of the more creative products no longer exist anymore.
If you do buy, don't expect the market to bounce back and appreciate like it did before. I suspect that prices will remain flat for some time to come (and may sag a bit more in the short term).

 

[Ns1]

Originally posted by: Mellman

Originally posted by: tfinch2

Originally posted by: Mellman

Originally posted by: griffis
Really depends on the area, but is definetly a buyer's market right now.

Also, if you are only paying 400 a month right now, what makes you think you can afford a 380,000 even with a roommate? Not try to be smart, just making sure you are not making an empty decision here and have budgeted this out.

Northern VA area, I know its a buyers market, and I'm a first time home buyer. I can afford it with a roomate, two would be ideal, but one would be fine too. I've budgeted it out I didn't think I could do it either, but after looking at it, with an interest only loan payments should be around 2000-2200 depending on my downpayment.

Originally posted by: rdubbz420
I'm buying soon. My 3rd. I think now is a good time to buy. Prices may drop more but interest will probably rise so it all equals out. Do you have a good down payment? That payment will probably be over 3k a month. Avoid interest only loans.

I agree prices may continue to drop but I"m not sure they'll boost interest rates.

Then again, rates aren't that "high" now anyways if you look at historic figures, my parents had a 12-13% interest rate on their new home ~22 years ago.

With first time home buyer incentives like 0 money down and interest only, I can get into a house, locking interest only down for 7+ years will be fine since I intend to sell the house at that point anyways and move out of state.

Interest only? In your OP you talk about building equity. How do you do that with an interest only loan?

When the market turns back around and values increase again, any increased value in the house is mine, assuming the house goes up in value ~20k at least, i'd be breaking even since i'd have around that in costs of selling the house.

wow, you know that's what started this subprime mess in the first place.

"hey let's take out an interest only mortgage, the house is gonna go up by 50k in 2 years, we'll just refi and it'll be ok"

 

[Mellman]

Originally posted by: griffis

Originally posted by: rdubbz420

Originally posted by: griffis

Originally posted by: Mellman
I currently live in Oakton VA, work in Reston VA, and am looking for a house in Herndon VA, the developments just east of Dulles airport have a ton of houses on the market right now, several foreclosures. I personally prefer a foreclosure because I enjoy doing a little work to get a property up to nice condition.

That is a good deal for springfield, but I couldn't live down there...don't want the commute

The houses I 'm looking at are detatched, with 1 or 2 car garages, 4-5 bed, 2-2.5 bath. typically around 2000+ sq ft. based on craigslist rent in the area goes for around $700-900 for a room.

I fly up to Dulles every week and work in Herndon, quaint little town. Although some parts can be real expensive for housing. Shout to everyone here in Herndon!

Hernduras is a great place.

That does represent a good portion of the ethnicity around here. Althought, there are some nicer parts as well!

LOL yeah...granted a lot of them can't afford it anymore and have started moving away...but it's their homes i'd be buying

 

[Phokus]

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