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Thread: Saving for a Condo

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    Default Saving for a Condo

    Ive decided to save for a condo. Houses are waaay too much here still. Hopefully, I will probably be buying by the time I get out of junior college which is about 2-3 years from now.
    The average price for a new condo is in the 400's. A conversion condo is about mid 200's on up.
    I figure I need to save at least 30K to even be considered as an applicant. In the mean time I'll make sure to monitor my credit and not have anything late. Im still working enough to comfortabley support myself and save at the same time.

    I saw what Melonie said as mentioned in another thread.
    Quote Originally Posted by Melonie
    Again, where girls are just beginning to establish themselves financially, they need to go through the process of establishing a 'replacement income' fund, then establish some stable 'passive income' investments, then establish some medium risk 'growth opportunity' investments, and finally if they still have income left over for investments they can consider playing around with 'high risk high potential return' stuff !
    ~
    I know I'm all over the place these days. I think at this time saving for a condo or just saving a large lump sum in general would be best for me.

    I think that the "replacement income" would be a good place to start. Probably with a CD. I looked at bankrate to compare 6 month cd's so I can get started. (btw, I need a little help finding threads on CD's as I cant search with 2 letters) That way I can get my car faster so I can move on to getting my condo faster. Is there anything I can do to go about saving this much in a better way?
    you live like an ivy vine
    you can only survive by clinging onto trees
    that's your flaw
    put down some roots so you can stand on your own
    -Kenpachi



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    Default Re: Saving for a Condo

    Condos are theorized to hold their value better than houses over the expected real estate decline of the next couple of years. The reason is speculated to be that demand for rental properties is expected to continue increasing rapidly as more and more 'shaky' homeowners are pushed into bankruptcy, thus many condo developers may decide to convert (or reconvert) their offerings to rental apartments, thus the supply of future new condos is likely to be somewhat limited.

    (snip)"in Las Vegas, Phoenix, San Diego, Washington, D.C., and much of Florida, an estimated 25 percent to 40 percent of condos under development or apartments that were converted into condos for sale will be put back on the market as rentals, says Marcus & Millichap, an investment brokerage firm.

    During the real estate frenzy, thousands of apartment renters were forced out by landlords who converted their units into condos for sale. Last year, about 200,000 apartments were sold for conversion to condominiums, on top of 135,000 new condos." (snip) from USA Today


    Again it is theorized that two years from now not only will credit standards be tightened but equity requirements will increase as well. Therefore, to qualify for the lowest mortgage rates available then (which might be several percent higher than they are now), think about being prepared with a 20% down payment plus closing costs in the bank. With more 'conservative' lending practices expected to be in effect two years from now (due to an expected epidemic of bankrupt 'shaky' home / condo owners costing mortgage lenders big losses in the meantime), I'd be prepared to cough up more like $60k to close on a $250k condo in 2008.

    As to Certificates of Deposit (and you can do a net search if you just type it out the long way rather than CD) , one online outfit that has consistently offered high interest rates is EverBank. Check out the latest rates at on US dollar denominated accounts (with a $1,500 minimum buy-in). Their 6 month CD's are now paying 5.5% APY.

    As to there being any 'better' way of 'saving', the 'crystal ball gazers' are mostly of the opinion that the FED will have no choice but to keep increasing interest rates throughout the rest of 2006. Right now the 'yield curve' is inverted, which explains why 6 month CD's pay higher interest than longer term CD's. This also explains why there are now some money market accounts out there which are paying 5% APY with no time commitment and no early withdrawl penalties. But in general, if you are interested in saving rather than gambling, 6 month CD's are about as good as it gets right now. If you can afford to save up to buy a $2000 6 month CD every month for the next 2 years, and roll over older 6 month CD's as they mature, you'll be where you need to be in 2008.
    ~
    Last edited by Melonie; 07-24-2006 at 05:13 PM.

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    Default Re: Saving for a Condo

    Wow, amazing that advice was gold to me. Thank you for the link as well. Makes me feel alot more confident about saving my money for something worthwhile besides education. Everything makes better sense to me now.
    you live like an ivy vine
    you can only survive by clinging onto trees
    that's your flaw
    put down some roots so you can stand on your own
    -Kenpachi



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