House prices going up isn't good, subby.

Endive Wombat: CSB:

Funny, I was just having this conversation the other night with my sister and her husband.  They are desperately trying to buy their first house and are having a hell of a time doing so.  Their price range is $300K-$350K, they have a $190K downpayment, have great credit, and can close a loan very, very quickly.  In the past 90 days, they have made offers on average, 2-3 homes a week.  So they have made at least 30+ offers.

Yeah, they have been outbid a few times.  But, at least 80%-90% of the homes they did not get are because someone came in with a cash offer and could settle the next day.  My sister has even upped the ante and offered up to $10K more than the cash price and homeowners are going with the cash offer over a less than 30 day closing time...their broker said that if need be, he can turn around a purchase within a week.  They are already preapproved for a loan.

So these cash buyers are buying homes, dumping like $25K into them, and adding $50K to the purchase price.

My sis is frustrated as hell as you can imagine.

I had that exact same issue.  I've been looking for a year and a half in the same general neighborhood of Chicago.  I have 50% to put down on a place in the price ranges I'm looking at.  EVERY TIME I've put an offer on a conventional sale, by the time I even get the paperwork filled out they've already accepted an offer, for cash, above asking.

Short sales, or things with absolutely ludicrous asking prices to begin with, are the only things that are sticking around long enough to even try to put an offer in on. And as they sell, prices keep rising.  When I started looking, I was able to see a dozen properties in a weekend in my range.  Now, via the automatic listing service my agent uses, I see one, maybe 2 reasonable properties with my requirements show up per week.

With the rising prices, the banks have figured out that they can start making money again, and so far I've had two short sales fall through because they decided they wanted well above what the fair market price is on those units today (20% above, or more) because they know if the market keeps recovering they'll either get it or make money on the foreclosure.

I finally have a closing scheduled for the end of the month, but if it falls through I might just walk away from buying right now.  Sure, I'm being utterly gouged with rent in the area, but I can't keep giving up all of my weekends and evenings trying to chase the impossible dream....

rent in the SF Bay Area is totally insane, our daughter just moved back in to save $$$

and all the places for sale are scooped up by Chinese with lots of cash

America, F yeah

kab: House prices going up isn't good, subby.

Who doesn't like paying more in property tax?  Amirite?

vernonFL: Sin_City_Superhero: My rent is a little over $1000 per month. If I wanted to buy a house right now, and keep my payment roughly the same (including taxes and insurance), what price range should I be looking at, assuming $5000-$10,000 down, and a 15 year fixed rate mortgage (at a realistic rate)?
[3.bp.blogspot.com image 400x300]

Cozy.

Let's be realistic here:

Sin_City_Superhero: My rent is a little over $1000 per month. If I wanted to buy a house right now, and keep my payment roughly the same (including taxes and insurance), what price range should I be looking at, assuming $5000-$10,000 down, and a 15 year fixed rate mortgage (at a realistic rate)?

Depends on your property taxes, but roughly 90k-120k

vernonFL: tricycleracer: Let's be realistic here:

I would actually love to live in one of those. Tumbleweed house, right? It would be fun for a couple of months, then it would probably get old.

As far as going down that path, wouldn't a used motorhome make more sense?  I've never looked into it.

Sin_City_Superhero: My rent is a little over $1000 per month. If I wanted to buy a house right now, and keep my payment roughly the same (including taxes and insurance), what price range should I be looking at, assuming $5000-$10,000 down, and a 15 year fixed rate mortgage (at a realistic rate)?

Also, there are mortgage calculators on line for these kind of things.

And the rich continue to get richer.

vernonFL: tricycleracer: Let's be realistic here:

I would actually love to live in one of those. Tumbleweed house, right? It would be fun for a couple of months, then it would probably get old.

Depends on the person. I've existed in 10'x10' spaces for the last 6 years. Necessity is the mother of invention, and if you don't have claustrophobia, you can probably adapt.

The way things are going in Los Angeles, the fiance and I are thinking about find a friend who has land and putting on of those up on someone else's property. And yes, the Chinese and the Japanese are buying everything that goes on sale here too. I don't see how anyone my age is buying a house for the first time unless they got extremely lucky job-wise.

/fark a war with America, the Chinese will just buy all the houses and the MOVE everyone here. . . :/

StrangeQ: And the rich continue to get richer.

Hey, once all the baby boomers reverse mortgage their homes just so they can afford cat food, the handover of wealth from the middle class to the rich will be complete.

Here in the Seattle area, bubble era prices are back. Houses in my neighborhood have gone up ~50% in price in the last 2 years. That is completely nuts.

I've been convincing the younger people that I have been working with lately to rethink early home ownership. I know everyone has been told their whole lives that renting is throwing money away, but the people I work with are software developers who are just getting established. Buying a home (especially in this market) could tie them down and keep them from moving where they need to go in order to really advance their career. In fact, one of the frustrating aspects of the unemployment rate is that there are a lot of open positions that can't be filled due to a lack of candidates. The problem is that different areas have a need for different kinds of workers, but the workers can't sell their existing houses and therefore can't move to where the work is.

I believe people are better off waiting to buy a house until they are really ready to grow some roots in the community. Of course, this is somewhat reflective of the fact that you can't just flip a house after a couple of years and walk away with a profit anymore.

kab: House prices going up isn't good, subby.

It depends on exactly why they're going up, where they started, and how high they're going. Home prices in my area never really took off. You can get a decent new house here on a small plot of land in a safe, quiet area that's convenient for approximately three years worth of middle class salary from the same area, so we have room to grow.

Now... if you're living somewhere that you can't even get a rat's nest in a ghetto for anything less than 10 years of salary... well, that's another story.

Damn. Vancouver, BC is just starting to pop its first housing bubble and you guys are already working on your next one? I guess we really are slow up here.

Sin_City_Superhero: tricycleracer: StrangeQ: And the rich continue to get richer.

Hey, once all the baby boomers reverse mortgage their homes just so they can afford cat food, the handover of wealth from the middle class to the rich will be complete.

I know this is gonna sound stupid, but what the hell IS a reverse-mortgage?

It's where the lender buys your house in installments with a guarantee that you get to continue to inhabit the house as long as you live. When you die they acquire the deed.

GameSprocket: I've been convincing the younger people that I have been working with lately to rethink early home ownership. I know everyone has been told their whole lives that renting is throwing money away, but the people I work with are software developers who are just getting established. Buying a home (especially in this market) could tie them down and keep them from moving where they need to go in order to really advance their career. In fact, one of the frustrating aspects of the unemployment rate is that there are a lot of open positions that can't be filled due to a lack of candidates. The problem is that different areas have a need for different kinds of workers, but the workers can't sell their existing houses and therefore can't move to where the work is.

I believe people are better off waiting to buy a house until they are really ready to grow some roots in the community. Of course, this is somewhat reflective of the fact that you can't just flip a house after a couple of years and walk away with a profit anymore.

This is entirely true, and has been studied quite a bit. Unemployment and homeownership are positively corelated for the very reasons you listed.

Until you are sure you want to live in that spot forever, and deal with the employment issues don't buy.  Hell, don't buy until you get married and/or have kids.  It's funny that people still think homes are "an investment".  Aside the fact that they actually add a huge liability to your financial statement, the average return is no better than inflation.  Add to that the constant repairs and depreciation in the form of needing a new kitchen every 20years and you are actually losing money most of the time.  People also forget that to really figure out your return you need to factor in all the hundreds of hours you spent fixing things or even just calling and waiting for people to come fix things.

I own because I want to live here forever, and I want my house to be what I want.  (i.e. my pool, and soon to be awesome basement)  I consider my home a piss poor investment (although a reasonable hedge against my meager stock portfolio) but obviously way better than buying a car.

nocturnal001: GameSprocket: I've been convincing the younger people that I have been working with lately to rethink early home ownership. I know everyone has been told their whole lives that renting is throwing money away, but the people I work with are software developers who are just getting established. Buying a home (especially in this market) could tie them down and keep them from moving where they need to go in order to really advance their career. In fact, one of the frustrating aspects of the unemployment rate is that there are a lot of open positions that can't be filled due to a lack of candidates. The problem is that different areas have a need for different kinds of workers, but the workers can't sell their existing houses and therefore can't move to where the work is.

I believe people are better off waiting to buy a house until they are really ready to grow some roots in the community. Of course, this is somewhat reflective of the fact that you can't just flip a house after a couple of years and walk away with a profit anymore.

This is entirely true, and has been studied quite a bit. Unemployment and homeownership are positively corelated for the very reasons you listed.

Until you are sure you want to live in that spot forever, and deal with the employment issues don't buy.  Hell, don't buy until you get married and/or have kids.  It's funny that people still think homes are "an investment".  Aside the fact that they actually add a huge liability to your financial statement, the average return is no better than inflation.  Add to that the constant repairs and depreciation in the form of needing a new kitchen every 20years and you are actually losing money most of the time.  People also forget that to really figure out your return you need to factor in all the hundreds of hours you spent fixing things or even just calling and waiting for people to come fix things.

I own because I want to live here forever, and I want my house to be what I want.  (i.e. my pool, and ...

Not to mention that I really hate having to do all the freaking maintenance. I never knew how fast things fell apart until I owned a house.

Endive Wombat: vernonFL: Endive Wombat: CSB:

That is farked up. Where is this? Northern Virginia?

Just as retarded/well off - Southern California.  Specifically Orange County.

It seems like all this market stupidity occurs on the coasts. LA, San Fran, Vancouver, DC, New York. I'll be pissed is there's another Great Recession just because you non-flyover country farkers screw it up for the rest of us once again.

Endive Wombat: Their price range is $300K-$350K, they have a $190K downpayment

Why in god's name would someone make a down payment in excess of 50% when mortgage rates are so shockingly low? Do they just hate money?

Im a residential building contractor in san francisco. I have rent control where i live. For the bay area, 500k is the minimum price for something in a livable area that isnt ready to fall over. There is no farking way i would go a half million dollars in hock for a house in California. The only thing stupider than that would be loaning me the half a mil to begin with.

Endive Wombat: mjohnson71: Endive Wombat: vernonFL: Endive Wombat: CSB:

That is farked up. Where is this? Northern Virginia?

Just as retarded/well off - Southern California.  Specifically Orange County.

It seems like all this market stupidity occurs on the coasts. LA, San Fran, Vancouver, DC, New York. I'll be pissed is there's another Great Recession just because you non-flyover country farkers screw it up for the rest of us once again.

As I understand it, these cash purchasing, home repair and flippers are do a disservice to the neighborhoods that they buy in, in a couple different ways.  First, they are not strengthening the neighborly bond...and second, they are making houses worth so much more than the others in the neighborhood that it is causing problems for other homeowners trying to refinance and folks, like my sister, trying to buy.

These investors have no personal or emotional investment in the neighborhood and that's not good.

Higher prices help refinancing. And they can help you get out of PMI earlier if you have it. It gives you more wiggle room to keep your refi under what ever threshold of the houses value that the bank uses.

E_Henry_Thripshaws_Disease: rent in the SF Bay Area is totally insane, our daughter just moved back in to save $$$

and all the places for sale are scooped up by Chinese with lots of cash

America, F yeah

Mind you, the rent is totally insane because the starting salaries are even more insane.  When all of your neighbors work at Google (starting $90K + stock, topping out at a quarter million + more stock for some of the senior guys), you don't get to be shocked when rent is $2,000 a month for lead paint and asbestos in the ceiling.

/Mind you, if they invested in actual infrastructure, your choices wouldn't be: Million dollar shoebox with 20 minute commute or very nice place for $300K with a 3-hour commute.
//When rush hour lasts from 2:30 - 8:30, you need to invest in some infrastructure.
///Seriously, Detroit has better traffic at 6:00 than SF does at 3:00

Sin_City_Superhero: My rent is a little over $1000 per month. If I wanted to buy a house right now, and keep my payment roughly the same (including taxes and insurance), what price range should I be looking at, assuming $5000-$10,000 down, and a 15 year fixed rate mortgage (at a realistic rate)?

Using my trusty old HP12C financial calculator, $1,000 a month payment with insurance and taxes included in that payment, I'm guess would mean $750 towards you house, and $250 towards your insurance/taxes.

so I would put $750 in PMT

                        3.5% g I

                           30 g N

                           That's roughly around $165-170K

Depending on if yo can get 3.5% interest and a 30 year mortgage,  $1000 a month not including taxes and insurance is closer to $220K

JolobinSmokin: Sin_City_Superhero: My rent is a little over $1000 per month. If I wanted to buy a house right now, and keep my payment roughly the same (including taxes and insurance), what price range should I be looking at, assuming $5000-$10,000 down, and a 15 year fixed rate mortgage (at a realistic rate)?

Using my trusty old HP12C financial calculator, $1,000 a month payment with insurance and taxes included in that payment, I'm guess would mean $750 towards you house, and $250 towards your insurance/taxes.

so I would put $750 in PMT

                        3.5% g I

                           30 g N

                           That's roughly around $165-170K

Depending on if yo can get 3.5% interest and a 30 year mortgage,  $1000 a month not including taxes and insurance is closer to $220K

250 for taxes and insurance? Some times I hate living in ny state. Taxes are nearly half my 900 payment.

squegeebooo: JolobinSmokin: Sin_City_Superhero: My rent is a little over $1000 per month. If I wanted to buy a house right now, and keep my payment roughly the same (including taxes and insurance), what price range should I be looking at, assuming $5000-$10,000 down, and a 15 year fixed rate mortgage (at a realistic rate)?

Using my trusty old HP12C financial calculator, $1,000 a month payment with insurance and taxes included in that payment, I'm guess would mean $750 towards you house, and $250 towards your insurance/taxes.

so I would put $750 in PMT

                        3.5% g I

                           30 g N

                           That's roughly around $165-170K

Depending on if yo can get 3.5% interest and a 30 year mortgage,  $1000 a month not including taxes and insurance is closer to $220K

250 for taxes and insurance? Some times I hate living in ny state. Taxes are nearly half my 900 payment.

Ouch.  In KS my payment is about 900 for interest and principle and another 400 for taxes and insurance.  Having grown up in MD/DC I still find it retardedly cheap to live in the Midwest, despite the fact that my county is among the wealthiest in the nation.

The state has been taken over by the T party though so there are definitely other costs.

The time to buy was four years ago, not today.

/bought a house for $150k then that the previous owner paid $400k for (well, before he lost it in foreclosure)

squegeebooo: JolobinSmokin: Sin_City_Superhero: My rent is a little over $1000 per month. If I wanted to buy a house right now, and keep my payment roughly the same (including taxes and insurance), what price range should I be looking at, assuming $5000-$10,000 down, and a 15 year fixed rate mortgage (at a realistic rate)?

Using my trusty old HP12C financial calculator, $1,000 a month payment with insurance and taxes included in that payment, I'm guess would mean $750 towards you house, and $250 towards your insurance/taxes.

so I would put $750 in PMT

                        3.5% g I

                           30 g N

                           That's roughly around $165-170K

Depending on if yo can get 3.5% interest and a 30 year mortgage,  $1000 a month not including taxes and insurance is closer to $220K

250 for taxes and insurance? Some times I hate living in ny state. Taxes are nearly half my 900 payment.

You're right, I forgot to de-oklahomafi that,  so it would be more like

$600 PMT CHS

3.5 g I
 30 g N

PV = $133,619.99 is the number that spit out if your taxes and insurance would be around $4800 a year

I live in OKlahoma and my taxes on a $200K house in Mid-Town tulsa are around $2k, and my taxes are around $2k, but i'm in a great area, so I'm gonna sell, I purchased my house in 2006 for $140K,

In Oklahoma the oil and gas industry pretty much kept us from seeing the huge fall in prices other places saw, but if you get outside Tulsa or Oklahoma city that doesn't really hold up.

I appraised a triple-wide Manufactured home (rare) that sold for $139K in '08 for $80+/- the other day.   It was over 2600sqft+/- granite counter-tops, probably the nicest one i've ever been inside with 5 acres a pond and a 30 x 40 workshop.

But you have to live about 40 miles North West of Tulsa.

nocturnal001: I own because I want to live here forever, and I want my house to be what I want. (i.e. my pool, and soon to be awesome basement) I consider my home a piss poor investment (although a reasonable hedge against my meager stock portfolio) but obviously way better than buying a car.

Depends on where you live, specifically what the rent/buy price is.

I could easily rent out my house for double my total house payment (including taxes and insurance).  However, 50-75 miles to the west of me (I'm in Riverside, CA, east of Los Angeles), houses rent for double but cost ten times as much.  Obviously, buying here is a much better move than in a more prime location west of me.

JolobinSmokin: squegeebooo: JolobinSmokin: Sin_City_Superhero: My rent is a little over $1000 per month. If I wanted to buy a house right now, and keep my payment roughly the same (including taxes and insurance), what price range should I be looking at, assuming $5000-$10,000 down, and a 15 year fixed rate mortgage (at a realistic rate)?

Using my trusty old HP12C financial calculator, $1,000 a month payment with insurance and taxes included in that payment, I'm guess would mean $750 towards you house, and $250 towards your insurance/taxes.

so I would put $750 in PMT

                        3.5% g I

                           30 g N

                           That's roughly around $165-170K

Depending on if yo can get 3.5% interest and a 30 year mortgage,  $1000 a month not including taxes and insurance is closer to $220K

250 for taxes and insurance? Some times I hate living in ny state. Taxes are nearly half my 900 payment.

You're right, I forgot to de-oklahomafi that,  so it would be more like

$600 PMT CHS

3.5 g I
 30 g N

PV = $133,619.99 is the number that spit out if your taxes and insurance would be around $4800 a year

I live in OKlahoma and my taxes on a $200K house in Mid-Town tulsa are around $2k, and my taxes  insurance is also around $2k, but i'm in a great area, so I'm gonna sell, I purchased my house in 2006 for $140K,

In Oklahoma the oil and gas industry pretty much kept us from seeing the huge fall in prices other places saw, but if you get outside Tulsa or Oklahoma city that doesn't really hold up.

I appraised a triple-wide Manufactured home (rare) that sold for $139K in '08 for $80+/- the other day.   It was over 2600sqft+/- granite counter-tops, probably the nicest one i've ever been inside with 5 acres a pond and a 30 x 40 workshop.

But you have to live about 40 miles North West of Tulsa.


FTFM

JohnBigBootay: Endive Wombat: Their price range is $300K-$350K, they have a $190K downpayment

Why in god's name would someone make a down payment in excess of 50% when mortgage rates are so shockingly low? Do they just hate money?

Please explain, unless you're counting on inflation going up considerably within a 15 year mortgage period. If they get a 30 yr mortgage after putting down 50%, then that's retarded, but 30 yr mortgages are retarded regardless.

JohnBigBootay: Endive Wombat: Their price range is $300K-$350K, they have a $190K downpayment

Why in god's name would someone make a down payment in excess of 50% when mortgage rates are so shockingly low? Do they just hate money?

We don't know how much they were preapproved for. They may only make $70k/year between them, and were approved for up to a $150k mortgage. In which case, if they want a $350k house, they'd have to put all of that $190k down.

Or maybe they just want to pay it off quickly. Some people don't like the psychological weight of being in debt.

Geotpf: nocturnal001: I own because I want to live here forever, and I want my house to be what I want. (i.e. my pool, and soon to be awesome basement) I consider my home a piss poor investment (although a reasonable hedge against my meager stock portfolio) but obviously way better than buying a car.

Depends on where you live, specifically what the rent/buy price is.

I could easily rent out my house for double my total house payment (including taxes and insurance).  However, 50-75 miles to the west of me (I'm in Riverside, CA, east of Los Angeles), houses rent for double but cost ten times as much.  Obviously, buying here is a much better move than in a more prime location west of me.

Of course, things vary and we should always be suspicious of anyone stating "this is always the case".

The housing market is a weird thing.

jigger: JohnBigBootay: Endive Wombat: Their price range is $300K-$350K, they have a $190K downpayment

Why in god's name would someone make a down payment in excess of 50% when mortgage rates are so shockingly low? Do they just hate money?

Please explain, unless you're counting on inflation going up considerably within a 15 year mortgage period. If they get a 30 yr mortgage after putting down 50%, then that's retarded, but 30 yr mortgages are retarded regardless.

Not always. I have a 30 year mortgage, but I make the payment on it every month as if it were a 15 year, which works out to an extra $300. This does mean that my interest rate is something like 0.25% higher, but in return, if I have a month where things are dicey, that extra $300 is optional, so I have a bit more financial freedom.