Hurray! We've (inadvertently) been doing the right thing!

[jan_andrea]

http://www.npr.org/templates/story/story.php?storyId=11361676

Audio isn't available until about 6 eastern, but this is immensely reassuring. It's been a seller's market since 1995, with humongous runups in price, and the guest (Dean Baker) says that in areas where that's the case (like, for example, Seacoast NH), it's perfectly wise not to buy now (or for the last 6-10 years). He recommends waiting longer until prices are lower still -- and he does expect the bubble to shrink even more than it has -- and that's exactly what we were planning. As far as the equity issue goes, he makes the point that if you buy at $300k and then the market falls by 10% over the 5-7 years you've owned, you haven't gained any equity -- in fact, factoring in all the fees, etc., you've actually lost equity. That makes me feel a WHOLE lot better about having rented for the last 7 years. We're planning to start looking on a serious basis (not just looking vaguely at listings) in Dec/Jan, so that we can move out of here as close to the end of our lease as possible (since the landlord, a lawyer, has a thousand little fees in the lease if you break it early), and it sounds like that's probably the way to go. So, yay!

Comments

[brunahildm.livejournal.com]

We were dumb! But I don't regret it, because I love living on my own little patch of land with no shared walls :)

[jan-andrea.livejournal.com]

I don't think you guys were dumb -- you really needed a bigger place, and no asshole neighbors :) Until about 6 months ago, anything bigger than what we have (and in an area we wanted) would have been totally out of our reach -- pretty much everything on the market in our range was either a mobile home or a condo, or was smaller than our apartment. So I don't think it was dumb, necessarily; your needs were different from ours :)

[andreaq.livejournal.com]

We're in the same boat as you and just starting to look in eastern Massachusetts. Thanks for the link and happy house hunting!

[geeki.livejournal.com]

YEAH!

We bought but we did it in San Diego, where I am terrified to say, our prices havent gone down much.

We bought from buyers who were upside down, so we spent 100K LESS than it was "worth" but we covered their bills so they were fine with it. And since we DIDNT own another house, we were able to close in 28 days (another thing they "needed")

We bought this place with the intention of renting it (4 bedroom 2 bath, 2 miles from San Diego State) and moving to a bigger place in the next few years :) So technically our real estate lady has us on some searches now, but we will start serious looking around June of next year.

no winners in a down market

[(Anonymous)]

The problem with waiting is this...

http://futures.tradingcharts.com/chart/US/M

The dollar has lost 30% of it's value in the last 5 years(fiat currency/inflation). The depreciating housing market will only drag the dollar down further, because homes are priced in dollars. Damned if you do, damned if you don't.

It's in the best interest of the federal reserve to create inflation(turning on the printing presses) because it makes debt "cheaper" to pay back, of course, this is at the expense of joe citizen's savings and cost of living. This is why they call inflation "the silent tax".

The Pound and Euro are at record highs against the dollar as well. Japan's asset price bubble(1990) is similar to what is happening in the prime markets of the US right now. Japan is still recovering from that and it took a few years before real estate prices stopped falling.

Why a Housing Recovery Is Far Off
http://online.barrons.com/public/article/SB118377332233059776-u87JfztvY4J1exeyrMrsWt0taAM_20070806.html?mod=9_0002_b_free_features

A Cautionary Housing Tale from Japan
http://www.bullnotbull.com/archive/japan-tale.html