Vegas, don't forget what happens when rates go back up. Also don't forget that higher rates equal higher Mort Interest Tax Deduction. Don't forget too that higher prices equal more property taxes.

Overall your point is taken. ZIRP sucks.

If your rent is about the same as a mortgage, and you live in a non recourse state AND your job would not be affected by a foreclosure, then I'd go for it. I don't see the downside. Just don't go crazy remodeling and don't get so attached that you won't walk when you need to.

Y'all need to take a vacation to somewhere outside of California and take a look around.

Eaglewwit

based on Zillow data
it is still cheaper to rent in Orange and Anaheim hills, Irvine etc compared to buying right now

I would not want to buy a 1960s home for 400K when I could rent something nicer in a better area for the same. This is another reason we had no issues leaving SoCal

for my area up here—— the rental market is tight and it is more expensive to rent now than buy
—it was not that way two years ago

I agree this sucks but you have to keep re-evaluating your own personal financial situation/options as the market changes

BTW— we don't ever plan on selling
— this is our retirement home

Vegas are you by chance in the Sacramento area?

I'm in Placer County which is ~40 mins North East of Sacramento

tons of lakes up here — nice conservative cities— Excellent schools

Vegas, you are one of the biggest housing bears out there.. yet you purchased a home... dont you think there are millions out there like you??

Who thinks rates are going up?

Laswyguy wrote..

dont you think there are millions out there like you??

no

I don't think there are millions of people who have 20% saved to put down on a house and excellent debt/income and credit. If they did then home ownership rates wouldn't be at 1965 levels and the "controllers" wouldn't need to go to great lengths to manipulate the market as they are just to keep prices at their current lows.

plus, I tend to be a contrarian in nature— albeit early

agau wrote..

Who thinks rates are going up?

JMO— I think rates will get real low again before the end of the year— then go up

I live about 20 miles West of Orlando. We only have around 3 months of inventory on the market now (whereas they say 6 months is a balanced market), so we're firmly in buyer's market territory now.

I've been looking for months and the choices are pretty awful and prices are HIGH. We're paying $1,100 to rent, when we could buy a $200k house for the same money. Saw a forclosure last week that was listed for $78k. Price was jacked to $117k and the thing has a leaking roof + mold in the closets. It needs a new roof (the one on there is 15 years old) and roof won't be cheap due to the numerous valleys, ridges, etc or whatever you call them.

Anything under $140k is under contract almost immediately. (even short sales) We looked at another REO that had multiple offers on it. The foreclosure on our street sold a few months ago for over asking and I see that the new owners just installed a brand new A/C system.

The low inventory here (+ low rates) is keeping prices up. Meanwhile, there are 5 new communities here that are in "active building" phase now. This place is not cheap, esp when you factor in property taxes, homeowners insurance (ouch), and HOA dues ($400 a year seems to be standard, with many hitting $92/month or more).

Think of it this way Erica, all you need is a 35K household income for the government to finance that 140k house. It will be just as bad as the last foreclosure crisis, just spread over a longer period of time.

Quote:

for my area up here—— the rental market is tight and it is more expensive to rent now than buy
—it was not that way two years ago

I agree this sucks but you have to keep re-evaluating your own personal financial situation/options as the market changes

bingo.. and when that happens .. housing bears such as yourself buy...

In my opinion, GSE's and banks are holding back a huge amount of inventory and thus making things look better than they are due to the election year in an effort to make things look better than they are and stalling the realization of losses. Additionally, markets are being pumped by the current record low interest rates. Put those things together and it pushes a good narrative that now is a good time to "get off of the fence" and buy now.

Shadow inventory (Units in default, in the foreclosure process, redemption periods, etc.) is still there and building. Of course, the amount of shadow inventory varies from market to market, but be careful and do your homework. You will not find the shadow inventory numbers anywhere because they are being carefully hidden.

Prevalent financing is FHA (5% down) with incentives offered to pay 3% closing costs.

In some markets new home demand is increasing due to diminished lot supply over the past 5 years or so, but don't let that fool you.....games are going on and supply and demand is being manipulated.

Las,
you make it sound like there are so many of us bears out there
but there aren't

Landman, The GSE's were Nationalized last Friday 8/17. They [or now you the taxpayer] are going to eat the second leans and write down/restructure the firsts on the defunct loans to keep people in their underwater.

Vegas,

What do you mean that the GSE's were nationalized last Friday? (GSE=Government Sponsored Enterprise) .gov has been floating them since the beginning of this crisis and they have been saturated by .gov influence since they came into existence.

Landman
We may have been floating them but they were privatizing the profits and .gov had no say over how things were run.

Now, all the profits go to .gov and they can dictate what they want to do with the loans.

http://ca.news.yahoo.com/u-tweaks-fannie....

Vegas,

Correct. We are ****ED, they just formalized it a little bit.

There are no profits for GSE's for the past 5+ years or anywhere in the future, however, I believe they will find a way to support them as long as it is politically expedient and/or fiscally possible. i.e. supporting the U.S. real estate market and worldwide financial market illusions until they can't do it anymore.

When it truly stops the whole house of cards (MBS, property tax revenue, real estate industry) collapses.

Yep — we are all ****ed

Quote:

When it truly stops the whole house of cards (MBS, property tax revenue, real estate industry) collapses.

that is just it Landman——When can be longer than anyone here anticipates

Eagle, my husband makes a little more than that, and we are pre-approved for a $156k loan at this very moment. WAY too much!

I don't want to buy now, but renting is costing us $300 to $400 more per month.

O.C. homebuying up 18% vs. 2011
August 25th, 2012, 5:59 am by Jon Lansner

Highlights of DataQuick’s Orange County homebuying report. For the 22 business days ending August 8 — the latest numbers — Orange County’s real estate market saw …

Median selling price for all residences of $445,000 — that is up 1.8% vs. a year ago.
Total Orange County sales of 3,117 residences closed in the latest period — that is up 18.2% vs. a year ago.
Resales of single family homes were up 24.0% vs last year; condo sales rose 18.4% vs. year ago. Builders’ new homes sales were 40.8% lower in the same period.
Note: 36 of 83 Orange County ZIPs had both rising sales and prices in the period. Is your ZIP one of those neighborhoods? To see, CLICK HERE!

Low interest rates cannot last forever. Monetary flat spin.

Most of you have not been paying attention.

Prices are up in Santa Clarita,CA as well. But part of that is people fleeing our new section 8 residents who are moving into some parts of town.