[JimKing]

hiknapster....the number of Buy Now posts has increased dramatically over the last 2 weeks. Every news story points to worse and worse conditions for Florida real estate.

Hopefully people are smart enough to see through it. There are a lot of people who work in the real estate industry with lots of time on their hands. I think they are using it to post here.

[hiknapster]

Jim, maybe we do not realize how clever these people are with their steak analogy. If you buy now you very well may be "eating" your mortgage!

[cariad]

Originally Posted by kort677

could it be that you'll never be able to afford to buy a house? I'm not being mean but history is not on your side, and you can say that houses are overpriced but as long as there are people buying then things aren't going to change much.
you've already seen a correction in many places and barring a catastrophic collapse where almost nobody will be in a position to be a home buyer, prices aren't going down too much further. Houses are on sale now and if you are thinking of buying now is a great time. It may not last forever

Kort677,
I have owned my own home 3x over 30+years. We never bought more house than we could afford. That meant we started out small, got a little larger, but never the biggest or best. We wanted to be able to take vacations, have some spending money and save a little. We got into debt, but never over our heads. When we sold our last home and retired early we were able to pay off our debt and still have savings for a sizable down payment.

I watched younger coworkers of mine decide they had to start off with a 4/3/2 mcmansion in the "best suburb" with the best schools-rather than the smaller "starter" homes in nice neighborhoods. They spend 2 hrs a day commuting, try to work overtime or extra jobs,can't afford to go out for lunch, max out 3/4 credit cards or more and still have more bills than money at the end of the month. To top it all off they have any equity in their homes tied up in HELOS.

I am not ever going to adopt that lifestyle-especially at this stage of my life, nor are most of the other baby boomers I know.
But if you had asked me in 2004, I would never have said I may never own a house again.

[Mike1306]

Originally Posted by JimKing

You guys have to be kidding with this? Now is the time to buy? I can only hope you are joking.

Every single indicator points to a long, long unwinding of an insane market. Florida houses are not going to go anywhere but down. Heck, the vast majority of junk loans have not even reset yet. They reset over the next 12-24 months. A few months to buy at these prices....sure, if you want to overpay. Prices are heading DOWN and will be for years.

This market will unwind for 5 years or more and stay flat after that for 10 or more years. There is absolutely nothing coming to start a 'recovery', just the opposite.

Steak analogy? Huh? If steak was down 30% we should buy it and not wait for it to be down 40%? That has nothing to do with housing.

Rent multipliers are still 150-400 in markets where they should be 100-120. This is pretty much to the point of being silly now. Anyone here can go to any housing bubble blog and read hundreds and hundreds of detailed reports on what is coming for Florida real estate.

I can only think that all you realtors who have not sold a listing in a year are sitting here creating fake profiles and posing as regular folks.

Using a gross rent multiplier does not take into account all the variables of different markets and even if it did 120 would definately be on the low end of the scale.

My rental, which rented for $1000 a month is under contract for $185,000.
A 185 multiple.

I see you bring it up all the time saying houses that are renting for "x" should not sell for "y" but the fact is that they are.

Regarding blogs, I could go start a blog right now or you could or my 11 year old daughter could. Why would me putting it into a blog make it more valid.

[kort677]

Originally Posted by cariad

Kort677,
I have owned my own home 3x over 30+years. We never bought more house than we could afford. That meant we started out small, got a little larger, but never the biggest or best. We wanted to be able to take vacations, have some spending money and save a little. We got into debt, but never over our heads. When we sold our last home and retired early we were able to pay off our debt and still have savings for a sizable down payment.

I watched younger coworkers of mine decide they had to start off with a 4/3/2 mcmansion in the "best suburb" with the best schools-rather than the smaller "starter" homes in nice neighborhoods. They spend 2 hrs a day commuting, try to work overtime or extra jobs,can't afford to go out for lunch, max out 3/4 credit cards or more and still have more bills than money at the end of the month. To top it all off they have any equity in their homes tied up in HELOS.

I am not ever going to adopt that lifestyle-especially at this stage of my life, nor are most of the other baby boomers I know.
But if you had asked me in 2004, I would never have said I may never own a house again.

all what you say is true, but what is your point? a person who gets in over their head is in over their head regardless of a good real estate market or a bad one. If anyone thinks that they are going to make big bucks in real estate is mistaken, buy what you can afford, think long term and more than likely regardless of what happens in the short term, you will come out ahead. Houses are not cars, you cannot be upside down on a house unless you are thinking too short term, history has shown us and my own real life experience has shown me, that over time RE will almost always be a good investment

[hiknapster]

You can certainly be upside down on a house. The term use to be only used for cars, but not lately.

[kort677]

Originally Posted by hiknapster

You can certainly be upside down on a house. The term use to be only used for cars, but not lately.

only if you made a bad investment choice. and to those in that situation, you have my sympathies but not much else.

[cariad]

Originally Posted by kort677

all what you say is true, but what is your point?

My point is that I am not buying because I can't afford to buy, but because I think the houses are overpriced, growth cannot be sustained because the middle class is already living in houses they can't afford -and as I said before- why the heck should I waste my money on a $200,000 house(affordable, but much less house than I had) when I can afford to rent a $400,000 house for less than the mortgage payment,nevermind the taxes and insurance?

[kort677]

Originally Posted by cariad

My point is that I am not buying because I can't afford to buy, but because I think the houses are overpriced, growth cannot be sustained because the middle class is already living in houses they can't afford -and as I said before- why the heck should I waste my money on a $200,000 house(affordable, but much less house than I had) when I can afford to rent a $400,000 house for less than the mortgage payment,nevermind the taxes and insurance?

if you can find such a deal take it, but 10 years down the road, after paying someone else's mortgage, you'll have nothing to show for all the money you paid for rent.

[Prichard]

You can certainly be upside down on a house. The term use to be only used for cars, but not lately.

Absolutely! If not, there wouldn't be any foreclosures. In fact I've seen a house in a nearby neighborhood in Winter Springs that the Buyer has been trying desparatley to get $600,000+ for several years. The house is in terrible condition, but sits on a nice lot that backs up to a creek. He paid about $500,000 for it. It's now in foreclosure and he's trying to get his money back out, but I can tell you that's not going to happen. The house has wood rot and roof problems. The pool looks like a muck pond - beyond green, now dark muddy brown. The lawn has turned weeds. Much of the landscaping is overgrown or dead. Inside, the house is obsolete. It has ugly cheap tile all over it. The ceiling is falling down in places. I could go on and on.

Just 3 years ago, this was a fairly decent house - other than the obsolecense. The owner hasn't been able to rent it, regardless of all of the cheap paper signs in front of the house that say "RENT TO OWN", etc. He spends nothing on maintaining or upkeeping his house. Frankly, I hope he looses his ass on it!

The bottom line is that it will cost no less than $150,000 - $200,000 to do basic and necessary renovations, and to make the house, property and pool right again. Even if you could get the house for $350,000 ($150,000 less than what the guy has into it), you will still end up paying at least $500,000 and major headaches before you can live in it. Maybe the house could then be sold for $600,000....maybe. So, I figure that for it to be worth my while to mess around with that house, I'd really need to get it for $275,000.

That won't happen, someone will probably get it for around $380,000. They will either renovate it the right way and have to sit on it for a long time, or they will do a shoddy renovation and again lose their butts on it (at least in this market). This is what happens when someone overpays for a house and the bank goes along with it.