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Old 11-03-2008, 11:08 AM
 
4 posts, read 22,126 times
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I live in Austin, Tx. Have since 1982. The last decade saw a huge rise in housing costs, but also huge growth and development. I have been waiting to purchase a home or land until things come down a bit. My financial advisor said to hold off on buying a house but a real estate friend of mine says that now is a good time to buy raw land for investment or later building. I live in NW Austin in close proximity to the lake and easy to access highway and toll roads. I work around 38th and Lamar and drive there up to 4 times a week.
What do you think?? Good time now to buy a home (in NW Austin area, for lake and commuting reasons) or raw land (as close in as possible because of commute, but prefer not south).
Thanks for any insight anyone can shed on this for me
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Old 11-03-2008, 11:35 AM
 
Location: central Austin
7,228 posts, read 16,096,785 times
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Paying cash? Or need a loan?

If no urgency, I'd wait.
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Old 11-03-2008, 04:06 PM
 
1,151 posts, read 2,993,122 times
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It's never a bad time to get the right property at the right price
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Old 11-03-2008, 05:31 PM
 
Location: Central Texas
20,958 posts, read 45,387,627 times
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Why does your financial advisor say to wait? (Figuring they know more about your situation than any of us Invisible Friends out here.)
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Old 11-03-2008, 06:56 PM
 
Location: SW Austin & Wimberley
6,333 posts, read 18,050,807 times
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Quote:
Originally Posted by Austin-Willy View Post
It's never a bad time to get the right property at the right price
Hey, I've heard that somewhere before! And nothing could be more true.

Quote:
My financial advisor said to hold off on buying a house
This gives the better informed buyers more to pick from and better negotiating power. In other words, your financial advisor is saying "wait until lots of other people start buying, then start running with the herd".

Ask your financial advisor to provide you a spreadsheet justifying his advice. Tell him you want two columns, Buy vs. Rent, and assume a modest 3.5% real estate appreciation for a 5 year and a 10 year hold period. I'd like to see what he produces and upon what assumptions the data is based.

Might as well ask him where the stock market will be in 6 and 12 months from now also while you're at it.

Only one thing is guaranteed when it comes to real estate. Those who don't own any don't make any money from it. The rest of us do, when we follow some simple rules of thumb and stick to the game plan.

Steve
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Old 11-03-2008, 07:22 PM
 
1,151 posts, read 2,993,122 times
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Quote:
Originally Posted by austin-steve View Post
Hey, I've heard that somewhere before!
Oops! I should have given credit where it's due.
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Old 11-03-2008, 08:19 PM
 
Location: SW Austin & Wimberley
6,333 posts, read 18,050,807 times
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Quote:
Originally Posted by Austin-Willy View Post
Oops! I should have given credit where it's due.
Well, I tried to give you points anyway, but I have to spread the point wealth first.
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Old 11-04-2008, 06:35 PM
 
7,742 posts, read 15,121,973 times
Reputation: 4295
Quote:
Originally Posted by plwitt View Post
I live in Austin, Tx. Have since 1982. The last decade saw a huge rise in housing costs, but also huge growth and development. I have been waiting to purchase a home or land until things come down a bit. My financial advisor said to hold off on buying a house but a real estate friend of mine says that now is a good time to buy raw land for investment or later building. I live in NW Austin in close proximity to the lake and easy to access highway and toll roads. I work around 38th and Lamar and drive there up to 4 times a week.
What do you think?? Good time now to buy a home (in NW Austin area, for lake and commuting reasons) or raw land (as close in as possible because of commute, but prefer not south).
Thanks for any insight anyone can shed on this for me
real estate people will never tell you it is a bad time to buy.
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Old 11-05-2008, 08:40 AM
 
Location: SW Austin & Wimberley
6,333 posts, read 18,050,807 times
Reputation: 5532
Quote:
real estate people will never tell you it is a bad time to buy.
When is it a "good time" to buy then? If this is currently a "bad time" to buy, then which future date will represent the transition to a "good time" to buy, and what indicators will tell you that the "good time" has arrived?

As for telling buyers it's a "bad time", I've talked countless "investors" out of buying real estate in Austin, not because it was a "bad time" from a market perspective, but because after a few short questions I determined they were not buying for the right reasons, nor did they have the needed financial strength. The questions are simple:

1) Why are you interested in buying real estate in Austin TX?
2) What real estate or other investments do you already own?
3) Do you have any debt, such as car payments or credit card bills?
4) Can you make a 20% downpayment and afford a $300 to $500/mo. negative cash flow?
5) If you don't want negative cash flow, can you make a 30% or 40% downpayment?

Not suprising, given what we now know, many of the "investors" calling were simply chasing a fad, investing in real estate because they were starting to feel left out, listening to co-workers and friends brag about their "deals" and investment property purchases.

But then I find out they have $800/mo. in car payments, credit card bills that are not paid off, a mortgage on the home they are taking equity out of to invest with, no experience investing, and once the purchase is made, no financial reserves with which to weather an extended vacancy or bad tenant damage. For that person, it's a "bad time" FINANCIALLY to be buying, and I would tell them so. Same goes for zero-down first time buyers.

Some would listen, others would go find another Realtor willing to help dig their hole.

Steve

Last edited by austin-steve; 11-05-2008 at 08:42 AM.. Reason: typo
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Old 11-13-2008, 11:53 AM
 
4 posts, read 22,126 times
Reputation: 10
Sorry it took so long for me to respond back.

I am debt free (no car loan, no mortgage, no credit card debt, etc.). Am renting right now for approx $800/mo. Only myself, no dependents. Up to $50K available for downpayment.

My advisor said that homes in Austin were inflated in price. And even if I saw a 10-20% increase in value, say in 5 years, it doesn't take into consideration taxes, repairs, insurance, upkeep, HOA fees, utilities, etc. That most homeowners buying now realistically only see a 1-3% investment return. Is this true??

I don't have the income to pay up to $500/mo for something I'm at least not living in or on. I can't afford rent/mortgage and land payment. I probably could, but would I want to??? Are there tax advantages?

I hate being so vague. I just don't know enough information and that's what I'm trying to obtain. And I wanted more opinions than just one.

Thanks for anything and everything you can tell me.
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