All that is really needed for a double dip is for the arrogance of the sellers (and listing agents) to get so strong that it turns off the buyers, and nobody is left to play:
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Jim Klinge
Klinge Realty Group
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Trustindex verifies that the original source of the review is Google. We sold a home with Jim and Donna and from beginning to end they were consummate professionals. Their initial walk through the property resulted in a list of items to be repaired or updated. They supplied a list of vendors and job quotes to do the repairs and updates. We originally wanted to sell ‘as is’ and just get it over with. They gave us a selling price for ‘as is’ and options for doing a few updates/repairs to doing it all with the selling price for each option. We agreed to do all they suggested and we sold for the exact price they predicted. For every dollar spent we got back more than $2 back in the selling price. And they got that price in a rising interest rate environment! Donna and Jim are extremely detailed and guide you through ever aspect of the sale. There were no surprises thanks to their guidance. We couldn’t be more pleased with their representation. Thank you Donna and Jim, Jerry and MaryTrustindex verifies that the original source of the review is Google. We have known Jim & Donna Klinge for over a dozen years, having met them in Carlsbad where our children went to the same school. As long time North County residents, it was a no- brainer for us to have the Klinges be our eyes and ears for San Diego real estate in general and North County in particular. As my military career caused our family to move all over the country and overseas to Asia, Europe and the Pacific, we trusted Jim and Donna to help keep our house in Carlsbad rented with reliable and respectful tenants for over 10 years. Naturally, when the time came to sell our beloved Carlsbad home to pursue a rural lifestyle in retirement out of California, we could think of no better team to represent us than Jim and Donna. They immediately went to work to update our house built in 2004 to current-day standards and trends — in 2 short months they transformed it into a literal modern-day masterpiece. We trusted their judgement implicitly and followed 100% of their recommended changes. When our house finally came on the market, there was a blizzard of serious interest, we had multiple offers by the third day and it sold in just 5 days after a frenzied bidding war for 20% above our asking price! The investment we made in upgrades recommended by Jim and Donna yielded a 4-fold return, in the process setting a new high water mark for a house sold in our community. In our view, there are no better real estate professionals in all of San Diego than Jim and Donna Klinge. Buying or selling, you must run and beg Jim and Donna Klinge to represent you! Our family will never forget Jim, Donna, and their whole team at Compass — we are forever grateful to them.Trustindex verifies that the original source of the review is Google. WeI had the pleasure of working with Klinge Realty Group to sell our home in Carmel Valley, and I cannot recommend them highly enough! Jim and Donna demonstrated exceptional professionalism, offering expert guidance on market conditions and pricing strategy, which resulted in a quick and successful sale. Communication was prompt and we were well-informed throughout the entire process. For anyone looking for a dedicated and knowledgeable real estate team, look no further! ---Trustindex verifies that the original source of the review is Google. Donna and Jim Klinge of Klinge Realty Group have our highest possible recommendation. From Donna and Jim’s first visit to our house through closing their advice and counsel was candid and honest in all dealings. They kept us fully informed throughout the process. The house sold less than three days after listing with a two-week closing. My wife and I have sold several houses during our lives. This was by far the best experience. Klinge Reality is a premium service realtor. You can’t make a better choice for someone to sell your home fast and for top dollar.Trustindex verifies that the original source of the review is Google. Donna and Jim provided exceptional support and professionalism throughout the entire process. We couldn't have been happier with their efforts. They made our house shine, and thanks to their expertise, it sold above the listing price in the very first weekend! Truly a fantastic experience from start to finish.Trustindex verifies that the original source of the review is Google. This year has been difficult on our family, mainly due to having to sell our home. Thankfully we knew God had a plan for us and working with the Klinge team was a key part of it. It was an obvious decision to work with them again after such an amazing experience when purchasing the same home we needed to sell. The challenge was, how will we do this in so little time with so much going on? Jim and Donna held our hand every step of the way. Whenever an unexpected issue arose they found and provided a solution. Never once did we feel pressured to make a decision and the Klinges were always reassuring after providing the information that the decision was ours to make. Despite the curve balls, they never panicked and exemplified the “can do” attitude, making us feel optimistic and taken care of. Their expertise and professionalism was superb. But of all the reasons to work with the Klinges, the most impactful and valuable is their compassion and genuine care for their clients. We pray that we can one day purchase our forever home and you better believe that Jim and Donna will be representing us - as long as they will have us of course. Thank you again Klinge team! Your execution, experience, and care are unmatched.Trustindex verifies that the original source of the review is Google. Jim and Donna were fantastic! Jim understanding my needs, recommending potential places, pointing out the pros and cons of each property was invaluable. Then when the offer was accepted Donna’s organized guidance through the inspections, paperwork etc made the whole process seem effortless. So grateful that I had them on my side!Trustindex verifies that the original source of the review is Google. We first found Jim through his blog at bubbleinfo.com, which really showcased his knowledge of SoCal real estate. Since then we've done three transactions with Jim and Donna, and they are an incredible full service agency, with Jim's deep market insight and Donna's deft contract and project management. We trust them implicitly in their analysis and strategy, which is based on years of experience. They're always available and on top of things, and we strongly recommend them to anyone.Trustindex verifies that the original source of the review is Google. The Good The Klinge Realty Group operates like a finely tuned machine, with a very personal touch. We contacted them on a Sunday and they were talking to us about our family and our needs on our living room couch the following day. They carefully listened to us and worked with us to identify the best and quickest path to listing within 2 weeks to take advantage of the low inventory conditions in our South Carlsbad neighborhood. They knew our tract specifically and had many previous sales there over the years - they came prepared with a thorough analysis of comparative sales and recommended a pricing strategy that they felt confident would yield offers the first weekend on the market. The Great Over the next two weeks Donna coordinated a range of vendors who she knew from experience could get the preparation to list work we needed done on time and with high quality. Our light tune-up involved excellent experiences with their stagers, landscapers, contractors, electricians, and plumbers. Throughout this period Donna's daily communication was clear, concise, and responsive. Any time we had questions Donna picked up the phone or texted immediately - but almost always, she answered our questions before we even knew we had them. The Outstanding We had a tricky situation with a shared fence that could have delayed our escrow. Donna used superb mediation skills to negotiate the terms of replacement and was personally on site with the fence contractor to make sure everything went smoothly. The fence looks great and escrow closed on time. The Truly Exceptional Our house came on the market on a Wednesday and between then and Monday morning Jim was personally at all three open houses. He was in constant communication explaining potential buyer reaction and strength. As he predicted offers began to come in on Saturday and each one was incrementally higher than the last. At the end we had 5 offers, 4 of which were over list, and the final accepted offer was $100,000 over list. In addition to being over list it included rent back terms that met our needs. The Recommendation For all of these reasons we would strongly recommend The Klinge Team to anyone wanting to sell in North County Coastal San Diego. I had been reading Jim's bubbleinfo.com blog for 15 years and knew when the time came to sell that he would be our first call. Jim Klinge is not your standard realtor. He is keenly aware of market conditions and sales strategies. And, works his tail off - though not as hard as Donna . At this point he's gone from realtor to friend and I plan to have him over to grill and chill at our new place to talk real estate, but also just about life and raising kids in San Diego. He's more interested in relationships than his sales numbers - and that's why his sales numbers are so high. We have already recommended the Klinge's to some close friends and another successful sale is on deck right around the corner...Trustindex verifies that the original source of the review is Google. We recently had the pleasure of working with Jim and Donna from Klinge Realty Group to sell our house, and we couldn't be more satisfied with the experience. From the initial meeting, they listened attentively to our needs and provided invaluable guidance on specific improvements to get our home market ready. Their responsiveness throughout the entire process was truly impressive. Anytime we had questions or concerns, they were quick to address them, ensuring we felt comfortable and informed every step of the way. What stood out the most was their team and extensive network of tradespeople, which made addressing any necessary repairs or updates seamless and stress-free. Thanks to their expertise and dedication, our house sold quickly and at a great price. We highly recommend Jim and Donna to anyone looking to buy or sell a home. They are a fantastic team who truly care about their clients and deliver exceptional results.Load more
There is hope after all!
Great info, Jim.
Holy smokes! Circuolo Sequoia at $625 K? I would have done that too…especially as the first contender at $840 K. No takers…I’d like to have took. Wow, let’s fire up that program!
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Well, I gave up.
I had to pull the trigger. Closing on a place soon. I’d like to say I’m happy, but I’m not. After 8 months of working SSs and REOs, and trying to find reasonably priced equity sales I’m just beaten down and tired. I just couldn’t wait around anymore for these idiot sellers to get priced better or the moron banks to get REO properties listed or SSs approved. Effectively there’s almost no inventory. I have a family that needed to get into a house and start integrating into a community.
I bought place that was not stupidily priced, but not great either. Equity sale, nice sellers.
I’ve seen so much insanity in the distressed stuff.
– There was a SS property that we liked a lot at a great price. 1st had approved but the 2nd wanted the better part of $100k under the table in addition to the purchase price. We said “NO” to that. 1st eventually foreclosed and now it just sits.
– One SS started at a reasonable price – it needed a lot of repairs. Bank comes back and wants more money. Eventually we back out. That house is just sitting vacant too.
– Offered on a house that was a SS – vacant. The price was admittedly low, but not giving it away. 1st eventually foreclosed. It went back on the market for just an insanely high price. We made offers that were at market but the bank wasn’t interested. The house is now into its third month on the market and its second price reduction. They’re priced where they should have been two months ago, and where our first offer was. The bank will be lucky now to get the offers they had when it was a short sale. It’s been vacant for a year.
– Two homes were purchased by flippers. We would have paid the bank more than the flippers paid, quite a bit more. I was unwilling to pay the flipper’s price however.
The last house that we owned in another part of the country we purchased after a week of looking. We owned it for almost two decades. It was a beautiful home that my whole family enjoyed. We would have had our old house paid off in a couple more years. We will never payoff this house. I know it’s old fashioned, but I thought the point of a loan was to pay it off, not keep adding to it so you can continue to buy more things.
After all of this I’m already dreaming about the day that I can leave San Diego. This experience has colored my view of everything here. Buying a house shouldn’t be this hard.
Thanks for the forum to talk and vent. I am still . . . waiting to feel the magic.
My two favorite words since I am still renting
Double Dip!
Hoping to see this movie as a sequel in Nor Cal next year…we will see
By the way, we were in a short sale and backed out because of constant demands by lien holders. We may have bought if all info was disclosed up front, but it wasn’t and we kept on getting hit with yet another hand to feed.
The guy who bought the place (we are still renting it) paid outside the HUD — he claims didn’t know it was illegal nor his agent….but the city and county did catch up with him and forced higher prop taxes and I’ll bet a nice tax penalty. Just a word of caution to those who think paying outside HUD has no impact on the buyer. I also bet if the investors who ate a loss on the first found out, they could go after the buyer in addition to the seller for the deficiency. With the crazy system unlikely — but I wouldn’t like sleeping with that possibility on my mind.
There’s been some tight flips lately. There’s one on Cascadia in Encinitas Ranch that’s pending but had I think two (at least one for sure) price reductions. Don’t know how much profit that one will clear. There were a couple on Rancho Cortes that I’m sure the flippers were sweating. There are also a couple “corporate owned” (according to listing) in Bressi that aren’t flying off the shelf (though it’s still early.)
Flippers might be getting scared. I also agree with Shadash’s comment in the previous post that I wouldn’t be surprised if they gave up going to the steps with all the cancellations.
Waiting… Congratulations (?) on your upcoming new home 🙂 I’m with you. Buying a home shouldn’t be this aggravating! We’ve suspended our search this summer…but I’m envious. You get to move into your home, get settled and move on with life. That’s worth a lot.
Thanks Jinx. I appreciate it.
Good detailed info. I wouldn’t want to be that neighbor that paid $950k.
Waiting to feel the magic,
I feel your pain. I think I would do the same thing if I were you. I am just starting a family and my first child will be born around Christmas. If I had older kids, I would probably bite the bullet for the sake of them as you stated about integrating into the neighborhood.
Theoretically, I think you should pay off a mortgage in 15 years or less! My parents never owed a dime on their home in Texas. Now that my mom is older that has paid off in no stress for her since her income is lower. It is just one less thing to worry about. I feel the only way that I will be able to pay off the home that I will eventually buy here is to die and let my life insurance pay it off for my family. I least they will be able to live stress free and enjoy it.
Maybe a shark will get me in the water one day..I hope I go quickly.
Let’s take a look at the vaunted “short-sale negotiator”.
Typically these are former loan processors who used to get $250 to $500 per file, and in this case now are charging $12,000.
It’s the listing agent who brings in these kooks because the LA needs the extra “expertise”.
This team had been on the job for months, yet were so ineffective that the bank thought it was better to foreclose at $625,000, than to see if the “negotiator” could pull off a sale around $800,000.
If your job is to “negotiate” the short sale, how does this happen?
You just worked for months (though probably only a couple of hours) and wound up with nothing, and cost the LA his commission too.
An unexpected SS negoitator fee – just another factor that can destroy a deal.
None of my SS offers had negotiator fees attached. If it’s stated up front I would have factored it into the offer. If the listing agent tried to tag it on at the end of the deal I would have walked.
Waiting – where were you before moving here to ‘the center of the universe’?
What were comparable homes going for in your prior market?
wifey and I looked at a house Thurs evening with our realtor/friend… Renting for two years and ready to pull the trigger… just to be done… told him we would get our offer to him in the AM.
I was blown away when he stopped us and said if we wait a little while longer, you will pay 10-20% less. He knows hundreds of people who wish they were in our situation (renting). There are at least two agents (Jim) with their clients best interest in mind.
wow steve – 10-20% less… hope so. i’m currently on the sidelines, renting in waters end (previous post), watching… waiting…
i think the biggest problem with agents is their disbelief of obvious price fluctuation and the it-will-always-go-up attitude that still hasn’t gone away. uneducated.
how many times have you heard ‘i just can’t believe the prices are this low’…
clearfund, in my former location home prices were roughly half of what they are in RB, PQ area.
what part of the country were you in?
Please remember that the banks are playing chicken. They are betting that they can hold on to the properties long enough for prices to return to where they were when they gave out the loans in the first place. If they lose that bet….
Realtors are in an odd situation.
– To get listings they often tell sellers prices are going up.
– To attract buyers they’re starting to say prices are going down.
– Generally Realtors are also heavily invested in the product they are selling. Which means publically they say the market is stable or going up.
I understand all this. Greed makes sense to me…
What I don’t understand is the listing agents that put houses on the market that are WAY higher than the current comps. First, is will be difficult for buyers to qualify if using a loan. Second, how as a commission agent are you going to eat waiting 4-6 (or more) months on each sale? To make $$$ you need to churn and burn pushing through as many sales as possible.
swm, sounds like they are losing that bet.
Waiting…there comes a time when the downside is limited. There will always be a downside, but you want to limit it. Buying a house priced at $1.4M in 2001 for $850k today, your downside is limited! You’ve been on these forums enough to have in your head what downside risk you are willing to take. Waiting for the “bottom” is hard to do, since you will always miss it by 1-2 years. Seeing a bottom can happen only in hindsight.
Here’s a good exercise that I did. Find a comparable 1996 sale price in the neighborhood you are under escrow, and adjust that for inflation, and that is a decent ballpark figure for the “bottom”. (of course, it could still go lower if this Depression continues).
I have a friend trying to sell his house right now. His agent gave him a price saying it would create a bidding war. Lots of showings but no offers after three weeks. His comment was, “everything our realtor told us . . . the opposite has happened.”
So the LA is the one who mandates the negotiator? Is there no way to bypass this? Couldn’t make any less sense. Would you buy a new car using a negotiator of the dealer’s choice?
jee… i’m seeing 2004 prices in encinitas
Waiting for the Magic,
It’s amazing how a simple thing like a home hunt (and housing in general) can influence how you feel about a community. In late ’07 when we began our search from out of town, we were pumped. Now, after having bought land and made it through about 60% of the building process, I am soured as well. Something about dealing with jack*ss pencilpushing city bureaucrats, lying developers, everyone with a hand in your wallet, and then the usual budget over-runs in epic proportions kinda ruined it. And it has made me notice all things that were before invisible to me, like the teardowns nearby that wreck the area, and the seeming ubiquity of strip malls… I’m hoping (for both of us) that once done and in, we forget all about that and settle in.
“- To get listings they often tell sellers prices are going up.
– To attract buyers they’re starting to say prices are going down.”
You may have this logic reversed.
When you’re surprised about “no takers” there may have been a lender bid. At the downtown trustee sale the auctioneer will say for example, “Opening at 625k, but I’m going to 850k”. So nobody bids because they’re not willing to go up to the lender’s reserve bid ad it goes back to bene at 625k. So unless you’re at the sale, you might not know the full story…
Thanks Moraz, that should clear up the mystery.
Unless somebody was at the steps to verify, we won’t know until they list them – I doubt they’ll be listing the first one here for $625,000.
Bad on the SS negotiators though.
waiting…
ahhhh!!! we are so similar to you. we have been renting for four years, looking seriously for two. my oldest is going into kindergarten next month and years ago my hubs and i had agreed we would *for sure* have a house by this time. we have tried to get a few short sales, foreclosures, etc. and not been successful. i feel like we will probably end up feeling much the same as you do when we do finally buy.
even though you are feeling ambivalent about finally buying, i am still going to congratulate you. 🙂 it’s just one less thing taking up stress in your life… i hope?
Anonymous, we tried to find a new home before our oldest went into kindergarten too. I think a lot of parents try to do that. I was spending so much time stressing about finding the perfect house. A deal fell through at the last minute so our son had to attend kindergarten at a an elementary school near our home in Oceanside. He (and we) ended up loving his school! He’ll be in 1st grade this fall and we’re still house hunting, but I realized my son is fine where he is for the moment. Kids adapt. So relax, take your time and find the home that is right for you and your family.
Anonymous – Thanks for the congratulations. It’s a nice house and I’m going to get into it (mentally). I just need some time. Some of the stories here of folks like you looking for years are part of what’s pushed me towards buying now instead of waiting longer. My wife and I talked seriously about renting long term but there were too many financial and emotional downsides for us. Hang in there. It will happen for you. I think it’s a really good time right now, but we just didn’t want to wait any longer and this house was too good to let go.
Jeeman – A good piece of advice. I do think prices will trend down for some time, hopefully not too much.
clearfund – SW WA state.
I’m curious why the renters on this forum are so anxious to buy? What is wrong with your rental or renting? I hear “we can do remodeling” or “right to paint my walls”. Is that the only reason? And is that reason enough? And why not do remodeling and painting to your rental – after all everyone who did any remodeling and painting over the past 5+ years was really just remodeling and painting the banks’ homes, not their own and lost all of that money too.
I am curious as I am selling my too small for my growing family home, and plan to rent for the foreseeable future and no longer have a love for being a homeowner and am disillusioned by the so called “American dream” of home ownership.
“I doubt they’ll be listing the first one here for $625,000.”
In my relatively unbiaseed opinion—If it lists below $850K I’ll be surprised. The overzealous sellers (agents) in the same side of the tract have recently listed from $1.2M-$1.8M–No luck, but 4 or 5 other listings and NOTHING else even close to $1M. If a 3rd party picked it up, it would most definitely be in the low to mid $900K’s.
@ soontoberenter,
Speaking for myself, I’m anxious because I’ve wanted to buy since… oh… 2001. Back then I had the desire, but not the means. Now I have the means and the desire but I’m suspicious that the game is rigged against me. What you’re hearing from me (and maybe from others) is just the mounting frustration that’s accrued over a long period of time.
What benefits does owning bring? Well, beyond paint, it’s true that most landlords won’t let you make any major changes to a property and might sue you if you tried, so you pretty much have to live with things as they are. Most of the time that’s OK, but a corollary to this is that the longer you stay in a rental, the less nice it gets. This is because you’re not incentivized to update anything and your landlord won’t care how dated things are getting until s/he has to re-rent the place. You can fix this by moving, but moving sucks and carries transactional costs too.
On the other hand, the benefits of renting should not be overlooked. It’s nice when that leaky roof isn’t your responsibility (it *isn’t* nice when your landlord’s not prompt about fixing it, though). It’s also nice not to be tied down in these uncertain times (but people like to hunker down in uncertain times, which isn’t easy in a rental, where there are two parties to a contract that is regularly renegotiated).
But this is all a rationalization. By any rational measure, renting’s absolutely fine unless you have an emotional need to own. If the housing bubble’s taught us anything, though, it’s that this decision is most decidedly not a rational one; it’s emotional.
Sorry if your question was rhetorical and you didn’t really want an answer, but I tend to think out loud (er… in type) and you happened to ask a question I’ve been thinking a lot about lately.
Sounds to me like JTR should take a little down time with the family this fall and enjoy life while everyone is frustrated.
Once the new year hits, all the sideliners will come running off at the first sign of heating up now that the next ‘unknown’ cycle has cleared and all hope of a big crash ‘seems’ hopeless.
I see the herd getting nervous and weak, struggling to hold onto their convictions and fight off the little devil/Realtor on their shoulder telling them that its not going to get any cheaper.
JTR will make up for the lost commissions during the downtime 3 fold from what I see here.
Jim, thinking we start shopping after lunch the Monday after the superbowl!!!!
Once the new year hits, all the sideliners will come running off at the first sign of heating up now that the next ‘unknown’ cycle has cleared and all hope of a big crash ’seems’ hopeless.
Doubtful.
redys – that was exactly what I was looking for. Thanks for the thoughtful response. Unfortunately I bought in at the wrong time, remodeled and painted, and lost a ton of money. In hindsight I could have rented an even more amazing place and offered to pay any landlord cost, including upgrades, and come out way ahead financially.
I think for the soon-to-be-buyers above it ought to be a rent vs. own calculator making the decision – and not just the monthly carrying cost comparison, but the opportunity cost of a 20% downpayment. Only buy if owning is cheaper than renting. Otherwise rent and throw the extra money at your soon to be grateful landlord.
Anyway – I do hope everyone above does use JTR when they buy because sticking with an amazing blog like this isn’t easy. And if others feel like sharing their why-I’m-buying stories I am curious.
TJ – doubtful..think again…on this single blog post there are 7 different posters who are seriously wanting/trying to buy but are frustrated.
the hardcore, go down with the ship, principled holdouts (myself included) will likely wait, but we’re the minority (good or bad, we’ll find out in the end).
clearfund,
I’m not doubting the “gottahaveahouse” crowd; I’m doubting next year will yield *anything* positive about RRE.
TJ – we are in argeement about the real estate itself. My point is that its the sideline people who will finally capitulate and dive in.
clearfund– One of those 7 posters is my wife and although we will buy if we can find a great deal, we are “principled holdouts” as much as anyone.
It shouldn’t be too surprising that a real estate blog is followed mostly by people that are interested in buying a house.
Once the new year hits, all the sideliners will come running off at the first sign of heating up now that the next ‘unknown’ cycle has cleared and all hope of a big crash ’seems’ hopeless.
If there is a double-dip feeling between now and then, you can count on it happening. If rates are still in the fours and prices seem lower than today, the gold rush will be on.
Additional competitors will make the ‘right-house, right-price’ struggle even tougher.
To all the renters….
GOOD LUCK when rates and inflation skyrocket in the next 3 to 5 years. You could see your rent going up 20% per year and you’ll be kicking yourself for not buying in 2011 when you could of bought a great home at a great price with a 30 year fixed 4.5%
What a bunch of dumbasses!
I do not think things are going to get better for the simple reason there is too much uncertainty in the financial markets. Corporate earnings are high, but they have no interest to hire without a known return on investment. They can’t make that calculation in the current economic environment. Government, at all levels, has run out of money, with no apparent growth, other than government. That does not and will not work to grow the economy.
I know quite a few people sitting on the sidelines waiting to buy. On the other hand I know at least three times as many people that are dying to sell their home, but don’t want to “give it away”. And in many instances, they also have rentals they would love to off load.
Thus, I think the supply will way outweigh the demand should the market get moving.
Inflation can only occur when people feel wealthy or when they don’t want to hold onto the currency. With massive amounts of household debt, most people don’t feel wealthy, currency will be in hot demand for a while, so people can pay down their debts.
All this can change on a dime when two things happen:
1) Wealth destruction stabilizes (i.e. the value of stocks, RE losses and credit destruction is equal to currency printing)
2) Then SS and Medicare (and Obamacare from the get-go?) go insolvent, and the only way to pay the gov’t bills is to print physical currency.
Meanwhile, I think renters will be in a financial enviable place until these things happen.
dan-o…
this long-term renter “could of” purchased years ago but didn’t. my neighbors who own have spent more than 2x what i’ve paid for the same house over the last 3 years… simple math no “dumbass” should miss, well – not most. doubt this will be different anytime soon.
financially enviable? i’d say
In order for rent to increase 20%, wages are going to have to increase proportionally. A landlord can ask for any amount of rent he wants, but will only receive what the market can afford. 4.5% mortgage rates mean nothing to a renter.
Further, I prefer to buy a home at a higher mortgage rate. That means the price of the home is lower, the tax assessment is lower, and I will have a larger amount of mortgage interest to deduct on my taxes. But what do I know, I’m just a dumbass renter…
This sight is notorious for good news/bad news. Most of us seem to forget the historical trends of Real Estate and waste our time with the day to day concerns of a volatile market. If you are in a position to buy then do it if the price is right! If not, I’m sure you have your reasons but please quit complaining. There are flippers who get killed, and there are others who have profitable ventures depending on their business model and expertise. Ten years from now this website will have the same old entertaining news about the market and Jim will still be making $$$ as will a ton of other Agents and Investors.
Troubled Loner nailed it on rates. I’m so sick and tired of hearing I should buy because rates are low. It’s the typical mindset of living month-to-month, basing your entire financial life on “what’s my payment?” If rates have nowhere to go but up, that should be a deterrent (for reasons mentioned by TL, plus the fact that you can always refi if rates drop.)
Jeeman nailed it on inflation. It’s too much of an assumption these days. In fact, deflation’s not out of the question, though Bernancke will keep rates low.
And as usual, Jim nailed it on buyer sentiment. I also think there’ll be a rush early next year, just like this year. The best deals in the next 12 months could be had this October and November.
We’re with Troubled Loaner and The Blur. It’s better to buy when interest rates are higher, not lower — for so many reasons.
As for that 20% increase in rents…good luck with that. People are seeing pay reductions, not raises.
Houses where I’m looking that sold for 800k two years ago are now listing (but not selling) around 550k.
Pretty black and white who’s winning the renter/owner war in RB/Poway.
Once the bank starts evicting the free renters prices are going to continue falling.
I would like to hear clearfund’s opinion on buying at high interest rates. Does that make sense? If you’re buying long term that can’t be good.
As far as rates “having no where to go but up”, people were saying that 5 years ago:
http://bit.ly/9PtbIG
Osidebuyer, I’m not clearfund, but I will chime in anyway. I believe if you’re buying long term that higher interest rates are better than the record low rates we have now. Why? Because with a higher interest rate, I can always refinance if rates fall. If I have a 4.5% loan, I see very little chance of ever being able to refinance to a lower rate.
One of the big disadvantages I see by having a 4.5% mortgage rate is, let’s say that, over the next few years, rates increase from 4.5% to 8.5% (close to their long-term average), someone who could qualify for a $500,000 home at a 4.5% mortgage (assuming 20% downpayment) would only be able to qualify for a $332,000 home; that’s a 33% drop in home prices. I’m sure, however, that the government will make every attempt to keep rates artificially low (if they’re able).
Just because people were saying that rates had nowhere to go but up 5 years ago, and they haven’t, doesn’t mean anything. People tend to believe that the longer a condition goes on, that the longer it will continue, and the more entrenched it is (see: people who bought homes in 2005 out of fear that they would get left behind due to 25% perpetual annual home appreciation). See also “recency bias”.