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Thread: Bad time to buy a home?

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    Default Bad time to buy a home?

    I've saved up enough to put 25% down on a home, and my friend who is telling me to buy and invest in something, since most of my money is sitting in the bank. I'm not sure if now is a good time, because of what's happening in the U.S. and our real estate market has gone up so much... Another friend of mine is saying to be cautious in investing in equities right now since their is so much volatility. Are there any other options to consider, I have about 100k saved up? Plus my apartment is in student housing in a great area of the city and rent is cheap, so i don't feel so bad about throwing my money away in rent...

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    Default Re: Bad time to buy a home?

    Personally speaking, I would wait at least a year. The economic fallout from the strengthening Canadian dollar has yet to really have its inevitable impact ... and when it does housing prices should decline.

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    Default Re: Bad time to buy a home?

    Quote Originally Posted by missgvs1 View Post
    I've saved up enough to put 25% down on a home, and my friend who is telling me to buy and invest in something, since most of my money is sitting in the bank. I'm not sure if now is a good time, because of what's happening in the U.S. and our real estate market has gone up so much... Another friend of mine is saying to be cautious in investing in equities right now since their is so much volatility. Are there any other options to consider, I have about 100k saved up? Plus my apartment is in student housing in a great area of the city and rent is cheap, so i don't feel so bad about throwing my money away in rent...
    Timing the housing market is similar to trying to time the stock market, very few people do it just right. If you click on this link then go to the bottom and click on the home prices, it'll bring up a chart showing the rise in prices since the trough in 1996. House prices are due for a good correction, but who knows when that will start or end.

    If you are happy where you are, then no worries, just keep saving your money and collecting that nice safe interest. But a home is much more than just an investment. There is nothing quite like owning your own home. As long as you buy something you really like, and that you'd like to live in for a long time, i wouldn't sweat the ups and downs. The long term trend is up.
    hb

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    Default Re: Bad time to buy a home?

    Owning a home is about more than coming up with the downpayment. BTW, congratulations for saving up a handsome amount, that is fantastic considering the nature of exotic dancing.

    When you buy a home, you will not only need to pay closing costs (not that significant), but repairs/improvements, furniture, insurance, property taxes, etc.....

    Would your cashflow support it? Personally I'd keep renting and invest the money in a diversified portfolio. Market volatiliy isn't an excuse not to invest. Markets are volatile at the top and at the bottom. Its just emotionally scarier at the bottom.

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    Default Re: Bad time to buy a home?

    Quote Originally Posted by missgvs1 View Post
    I've saved up enough to put 25% down on a home, and my friend who is telling me to buy and invest in something, since most of my money is sitting in the bank. I'm not sure if now is a good time, because of what's happening in the U.S. and our real estate market has gone up so much... Another friend of mine is saying to be cautious in investing in equities right now since their is so much volatility. Are there any other options to consider, I have about 100k saved up? Plus my apartment is in student housing in a great area of the city and rent is cheap, so i don't feel so bad about throwing my money away in rent...
    Do it now and you will be paying tuition at the University of Life.

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    Default Re: Bad time to buy a home?

    Quote Originally Posted by Deogol View Post
    Do it now and you will be paying tuition at the University of Life.
    Why? That's extreme. My place has greatly increased in value despite the real estate decline due to other reasons besides the mortgage meltdown. There are ALWAYS going to be good places. Do you see demand for houses in West Campus decrease ever?

    "Have you ever been to American wedding? Where is the vodka, where's marinated herring?" - GB
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    Quote Originally Posted by Mia M
    If a cupcake was tossed at me... well, I'd only be upset if it missed my mouth

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    Default Re: Bad time to buy a home?

    Depends on where you're intending to buy.

    Feature costumes for sale!

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    Default Re: Bad time to buy a home?

    ^ Agreed. You need to know the areas trends. Some areas are great places to buy and others are not.

    Usually by a college is not a good place unless you are going to rent out (most families do not want to be around a lot of college age kids). But, you have to look at the trends, the area, and go from there.

    Buying a house is more than just, "oh, I like this place." If you're going to use it as a long-term investment, you have to do just as much research as you would buying stock.

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    Default Re: Bad time to buy a home?

    Quote Originally Posted by Katrine View Post
    Why? That's extreme. My place has greatly increased in value despite the real estate decline due to other reasons besides the mortgage meltdown. There are ALWAYS going to be good places. Do you see demand for houses in West Campus decrease ever?

    Demand and desire are separate from ability to pay. The value of the college area maxes out at the loan limits the students can borrow at and allocate to housing.

    Having a hot chick living next door probably helps the value of the neighboring homes.

    What are you doing that increases the value?

    Granite counters and stainless steel isn't helping a lot of places.

    For me it would be energy independence tools like solar water heater, etc.

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    Default Re: Bad time to buy a home?

    Demand and desire are separate from ability to pay.
    This was exactly my line of thinking when I suggested she wait a year ... in order to see what magnitude the stronger Canadian dollar, a US recession, and mortgage meltdown is likely to have on the Canadian economy and housing market.

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    Default Re: Bad time to buy a home?

    Um, does this mean it's a bad time to buy in the US too? I was hoping to buy in Dallas in a few months :[

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    Default Re: Bad time to buy a home?

    Quote Originally Posted by phairestofthemall View Post
    Um, does this mean it's a bad time to buy in the US too? I was hoping to buy in Dallas in a few months :[
    The real answer is: Nobody knows.
    But long term,
    Housing and World Stock Market have always performed well

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    Default Re: Bad time to buy a home?

    Quote Originally Posted by Deogol View Post
    Demand and desire are separate from ability to pay. The value of the college area maxes out at the loan limits the students can borrow at and allocate to housing.

    Having a hot chick living next door probably helps the value of the neighboring homes.

    What are you doing that increases the value?

    Granite counters and stainless steel isn't helping a lot of places.

    For me it would be energy independence tools like solar water heater, etc.
    Thanks for the Econ 101 lesson dude. Even in times of economic trouble, the demand to attend college remains high, if not higher. Especially for UT. They are always short on housing, and there are always kids with daddy's money willing to a premium to not have to live amongst the commoners in the dorms.

    I'm not talking about economic meltdowns either, just good old inevitable recession.

    The hot chick line is really annoying, btw. The energy indep. is a great idea, not enough builders are implementing it.

    "Have you ever been to American wedding? Where is the vodka, where's marinated herring?" - GB
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    Quote Originally Posted by Mia M
    If a cupcake was tossed at me... well, I'd only be upset if it missed my mouth

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    Default Re: Bad time to buy a home?

    Quote Originally Posted by Katrine View Post
    Thanks for the Econ 101 lesson dude. Even in times of economic trouble, the demand to attend college remains high, if not higher. Especially for UT. They are always short on housing, and there are always kids with daddy's money willing to a premium to not have to live amongst the commoners in the dorms.

    I'm not talking about economic meltdowns either, just good old inevitable recession.

    The hot chick line is really annoying, btw. The energy indep. is a great idea, not enough builders are implementing it.
    Nice dodge on my question. (Note the lack of a compliment this time.)

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    Default Re: Bad time to buy a home?

    Quote Originally Posted by phairestofthemall View Post
    Um, does this mean it's a bad time to buy in the US too? I was hoping to buy in Dallas in a few months :[
    The US is ahead of Canada in terms of 'subprime' woes, and the US doesn't quite have the same concerns about domestic currency labor costs issue versus a foreign owned company (there are a few though like US employees of Honda, Toyota etc., roughly analogous to Canadian employees of GM, Ford etc.).

    The analysts are saying that it will be at least 2009 before any serious market bottom develops in US real estate. But that doesn't mean that in one specific place, on one specific house, that great deals can't be found before 2009.

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    Default Re: Bad time to buy a home?

    there are great deals now locally (PacNW for me), but they'll be even better in a couple of years.

    it's always a great time to buy if you already have the money, because people with large downpayments and easy ability to cover the mortgage can set their terms in any market. in the end, it's pretty much your call on how badly you want a home (not a house).

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    Default Re: Bad time to buy a home?

    in the end, it's pretty much your call on how badly you want a home (not a house).
    This is a VERY IMPORTANT point to absorb and understand. Until last year, houses were a sought after commodity ... the housing market was 'liquid' ... demand ( defined as willing and ABLE buyers ) exceeded supply.

    However, this year it's an entirely different situation. The housing market has turned 'illiquid' due to much tighter creditworthiness and equity requirements. Supply ( defined as 'must' sellers ) continues to increase with every new foreclosure. Cash out re-fis are history. Thus if you own a house today you have to be operating under the assumption that you're going to be the owner of that house for a very long time if you want to avoid losing money.

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    Default Re: Bad time to buy a home?

    If you want to get into a home and have the money, then its not a bad time. So what if the values go down 5-10% in the short-term? This isn't a short-term purchase/investment, and those aren't your real returns. However, its not as simple as my above statement of course. Do your homework, real estate goes up and down like the market. We just don't have the news giving us S&P500, DJIA averages every second....

    "Have you ever been to American wedding? Where is the vodka, where's marinated herring?" - GB
    "And do the cats give a shit? No, they do not. Why? Because they're cats."-from The Onion

    Quote Originally Posted by Mia M
    If a cupcake was tossed at me... well, I'd only be upset if it missed my mouth

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    Default Re: Bad time to buy a home?

    This is a GREAT time to buy, but only if you can afford it. Remember all of the attending expenses, taxes, insurance, maintinance, etc. With prices falling or stagnant, and foreclosures everywhere, it is a great time to pick up properties as much as 50% off. If you have the resources to do so and the assets to maintain the property and get renters in, you will be in good shape for years to come, and when the market goes back up (it certainly will) you will have made a great investment.

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    Default Re: Bad time to buy a home?

    ^^^ I just had to lol at this post. Here is my name and ss number. Could you get me prequaled?

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    Default Re: Bad time to buy a home?

    ^ What?

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    Default Re: Bad time to buy a home?

    Quote Originally Posted by missgvs1 View Post
    Are there any other options to consider, I have about 100k saved up
    Jesus Christ, I want to be YOU! Congratulations.

    I'd advise you spread that around & not just in real estate investments...make some friends that are sharp in the financial planning area.

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    Default Re: Bad time to buy a home?

    Quote Originally Posted by VenusGoddess View Post
    ^ What?
    They are being a smart mouth is how I read it.

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    Default Re: Bad time to buy a home?

    Your personal housing is different from any investment. Personal housing is for shelter. Buy less than you can afford. Your home becomes an investment only when you no longer need the roof over your heads.

    XOXO
    Z

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    Default Re: Bad time to buy a home?

    It's probably been said, but in some locals it's a great time to buying a house, especially if you do it right.

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