Homeless in America
I am currently homeless. Assuming I could afford to buy a home:
When do you think it would be a good time for me to buy a home?
- This year
- Next year
- Within 3 years
- 3 to 5 years
- Other______
Should I:
- Obtain Fixed rate mortgage
- Obtain Variable rate mortgage
- Get seller to finance
- Pay cash
Down Payment:
- 0%
- 2-5%
- 10%
- 10% +
Please feel free to submit your responses to this informal poll.
Real Estate Blog
Comments
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I’ve been looking at houses with the intent to buy sometime in the next few months. Initially, my goal was to buy a home in December 2006. But it looks like the market is continuing to favor buyers. Since I’m in no rush, my hope is wait it out a bit longer and then jump on an opportunity with the idea that I might have some negotiating leverage given the market. As a first time homebuyer, my plan is to put 10% down, get a fixed-rate mortgage, and take out a second mortgage so I don’t have to pay PMI. Anyone have any experience, feedback, thoughts on this? Should I be considering something that I’m missing?
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You are wise to be patient. Home prices are falling in many parts of the country, and may continue to do so for the next few years. Many alternatives exist, including 100% financing, with an 80/20 loan. This avoids pmi. Adjustable rate mortgages are also a possibility, as long as they give you a 5 to 7 year one time adjustment. (Presumably you can either sell or refinance before then.)Talk with a competent real estate broker and a mortgage broker that you can trust for specific advice regarding your unique situation.
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Plain and simple, there is no bad time to buy real estate. True there are times that prove to be better than others but over any lenghty period, say 10 years, you could have made money in 99% of the United States buying real estate. One more piece of advise from the one of the richest men I ever knew, “Only buy real estate, Never sell it” Borrow against it to buy more, but never sell it………..After 25 years of doing just this he pays cash for a new rental property every 90 days using the cash flow off of the 300+ house he owns………..Just my .02
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hard to understand what people who chose to use 100% financing within the last 2 years must be feeling as values fall and they owe more than their home is worth. even harder to imagine owning several properties with these issues.
better them than me… -
Bill, it is hard to argue with the premise that you present regarding successful real estate investing. Long term cycles in real estate certainly suggest to me that short term pullbacks in real estate are opportunities to accumulate property when everyone else is selling at distressed prices. Our response to cjason reflected our belief that after a lengthy run up in prices, we think this market needs more time and/or price adjustments to “return to the mean” of historical price appreciation. I love real estate, and one of my income streams comes from a real estate brokerage firm that I own. You also offer a valuable insight that this real estate mogul uses his profits to purchase more property rather than fritter it away on consumable items with no long term value. Thanks for your .02 cents. (PS: See “We laughed while we cried all the way to the bank” under archived newsletters.)
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Bill (and everyone else), are there any things to look for with respect to location/neighborhood that would make a home a better investment than others? Ideally, I would like to rest easy knowing that I will make money down the line on this purchase, in addition to living there. I realize this could be an entirely separate discussion thread, just wondering if you have any tips.
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I like to buy the best neighborhood I can afford. OK if house needs work – build in some sweat-equity. Avoid mixed use areas/much harder sell down the road. Also things like proximinity to railroad tracks, fire stations (lots of sirens),etc. These problems stay with the house.
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well here we are in the heart of the spring market and it’s beginning to look like a bust for sellers. buyers won’t be pushed into overpaying for a home and sellers are still livng in the dream world of 2 years ago. when even David Lereah of the National Realtors Assoc. says it can’t be spun, you know the real estate market is in trouble…
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The market looks to be crawling further and further into a depressing place not seen in the last 20 years. What do you guys think will be the catalyst to turn things around? For people who have puchased homes in the last year or so, is there hope for a return on investment and how long do you think it will take to “get out of the red?”
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There will always be people with oposing views of the market. To me, all the statistics continue to project lower prices for another year at least. Some experts are suggesting 25 to 35% lower from here within the next two years. This is consistent with bear markets. Lower interest rates only help those not already encumbered with debt, or who have suficient equity to refinance. The catalyst will likely be lower prices, and more time that allows a “new” crop of buyers to emerge who have not been caught in the death spiral of declining values. As long as you are living in a home that you can afford, with someone you love, relax and enjoy it. The signal that real estate prices have bottomed will probably be when all the pundits and newspaper headlines proclaim that real estate is not an investment but a roof over your head.
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