Is Now A Good Time To Buy First Home (Los Angeles: for sale, loans)

[myfirsthouse]

Is it a good time buy a first home in Los Angeles???

[artichoke63]

No, of course not. Are you joking? Read the paper.

Artie

[myfirsthouse]

Do you simply just sit on this board to respond ignorantly or do you have something more to say, aside from the sub-prime lending fiasco?

[Kingsnkali]

It might be. I would probably get qualified and just watch the spring market. The underlying economy remains quite decent in California. True, there are bad loans out there but the unwinding has (so far) been orderly.

We have dropped at least 10% on home prices from their peak here in northern California (Sac market). The worst areas appear to be in new neighborhoods/communities that were building great guns from 2004-2006 where all the buyers were paying top dollar. There are for sale signs all over these newer areas. The other areas will have some scattered repos, but the majority of homeowners still have plenty of equity and will not sell into a soft market.

Watch the economy. In my opinion, that will be a better indicator of the market than junk loans. If I was buying now I would probably do some low-balling offers and let the lenders know that I'm available to take a troubled property off the market for the right price.

My 2 cents.

[myfirsthouse]

Thank you Kingsnkali

[artichoke63]

Originally Posted by myfirsthouse

Do you simply just sit on this board to respond ignorantly or do you have something more to say, aside from the sub-prime lending fiasco?

myfirsthouse,

In my opinion, it is not a good time to buy a home in California, but really, it's not even that simple. If you are thinking about making an investment as important as a home, you need to do a lot of research. A lot of factors come into play. Why are you buying a home? How long do you plan to live there? What interest rate do you qualify for? How much are you planning to put down? How much income do you earn? Are you living alone or sharing expenses? It sounds like you have a lot of homework ahead of you!

But as a general answer, no, now is probably not a good time to invest in a home in California, for a lot of reasons. If I were going to buy a home now, I'd look at markets that offer a better value and have seen a more stable increase of 4-5% a year.

Artie

[killer2021]

Simple answer is no.

[newportbeachsmostwanted]

In general, home prices just DOUBLED in price over the past five years. Don't count on another boom like that for a while. Expect small gains as people begin to catch up with the market. With that said, I'm unaware of the exact neighborhood you are buying in. future development? general plan? Most RE investors study those types of things intensively before making a decision to buy.

[Sorcerer68]

The housing market has been rough long enough now for a couple things to have happened:
1. Housing prices have come down in many areas
2. Sellers are really willing to deal, everyone knows it's now a buyer's market. Some sellers still aren't in touch with reality, don't even deal with their properties. You're going to live somewhere and if you live in the house a long time, even if you lose a couple more percent, you'll make it up again and then some.

Personally, I look for "the deal" as I'm an investor. Liking the property itself is only part of it. It's still possible to buy a house without a lot of cash from your pocket if you're smart and creative. I personally either pay nothing (at closing) or get money back at closing every time. I structure my deals that way. I look at trends and use them to my advantage.

The first thing you need to do is to talk to some lenders to find out what's possible for you. There are also some programs allowing first time (or someone who doesn't currently own a home) buyers to buy houses in grittier demographics at 97% LTV 5% interest only. Direct lenders won't know about these, most brokers don't, you have to keep asking. I only recommend this if you're going to stay in the house for a while. Included areas are 91103, 90042, 90065, 90038, 90026...there are a bunch. This is based on the 2000 census. You might also consider buying more than one unit to offet your mortgage. The latter program works for up to 4 units.

Look into the costs v. benefits of home ownership, the latter are many. Aside from the financial, I like not having a landlord breathing down my neck.

[artichoke63]

"I personally either pay nothing (at closing) or get money back at closing every time. I structure my deals that way."

Interesting investment scheme! The only reason someone would put nothing down on a home is if they had nothing to put down! There's been a huge trend over the last several years of people buying homes with little down small monthly payments in the form of interest-only loans. They did this in the hopes of flipping the home in the short term and making a profit on the sale after the home went up in price. I can't tell you how many of these so called "investors" I've bumped into in the last year or two. All of a sudden, everyone was jumping into the housing market. Everyone was an investor! House flippers is what you call them. Some of these folks made some money but those who didn't pull out in time are now losing their shirts! As we now know, anyone can own property, but property doesn't equal assets, unless you've paid off the loan. Actually, many people who "own" houses now can only sell them at a huge loss, so they don't sell them, they hang on and on and on..

Just my 2 cents on flippers.

Artie