Housing IS an investment, not in the stock-market sense, but like buying a new piece of expensive equipment is to a manufacturing company. There is far, far more to value in a home than the purchase price. The houses I was shown were consistently of marginal to poor value.

It would have to be a combination of things: drop in absolute price, better ratio of buy vs. rent, and most of all it would have to include some sort of quality judgement.

I was looking at buying a house until about May of this year. Like everywhere else, prices here in eastern Virginia have doubled in the last 3 years. My budget is modest, and all I am interested in is at most a 3-1, 1000sf home. I’m single and living by myself, don’t need a lot of room.

Oh, the parade of utter crap! Like Judge Judy says, don’t pee on my leg and tell me it’s raining. I can’t tell you the number of run-down/cracked-foundation water damage major mould problem/ daylight through the roof/gunshot holes in the siding/graffiti in the walls/marijuana grown on the property POS’s I saw, and was told what a “fantastic deal” they were. Or that they were perfect for a first-time homebuyer. I eventually went under contract on one, which mercifully failed the inspection.

Now even if its free and clear, you do not really “own” it since the government will take it away from you if you do not pay your yearly protection (er taxes) money.

This is our plan too — we’ll probably be renting out our current house. We know there are cycles, and I’ve actually lived through a housing bust. Yes, prices are coming down, but in the localities that suffered a bust fifteen years ago, the prices went back up. People post as if bottoms were permanent — tops aren’t, obviously, so why should bottoms be?

Investors/speculators, and not actual homeowners (except for those that perhaps bought units priced at 5x-6x their household income during the past 36 months), might have wider emotional swings.

Yeah, make sure there is an “all of the above” option.

Waiting out the coming storm in my bungalow, paying less than 20% of household income on my mortgage, stuffing retirement accounts and saving up for a bigger house in a better neighborhood a few years down the road.

Don’t be so quick to assume… This is not a blog of whiners who missed the market and are crying about it.

There are lots here who already have homes and with high levels of income, cash and investments that are holding out.

I could easily get financing to buy anything reasonable in Seattle even with 20% down and 30 yr fixed, up to $500-600K. Without having to sell any other real estate holdings.

However, even smart people agree that now is a very high risk time to buy. I think even Meshugy agrees with that one.

When/if the market falls and/or lending is tightened there were be plenty of us in a position to take advantage. For the “haves” that is a much better place to be. Real money will be required instead of easy credit. Those with a stronger position will do well.

Right on! This “bubble sitter” is also doing just fine – I figured that until I know that I’m staying put for several years, the financial incentives to rent are quite strong. Whether one believes that housing market values will decline or not — even the value of these overpriced King County houses as shelter are out of line.

Living debt free, six figures+ in secure, interest-generating investments, while maxing out my 401k and IRAs, and still saving more every month for a “rainy year” or an eventual down payment when prices correct.

Either my spouse or I might decide to leave our job in the next 12 months, to work on another degree while the other works fulltime. No way could we entertain this thought, if we were scrambling to send interest payments to the bank. At some point, a white picket fence and “granite countertops” become FAR less important than actual _Freedom_. Based on what I’ve seen some of our friends go through, it seems like these days, chasing the ghost of the “American dream” equates to giving up any real freedom.

I can’t speak for others, but this bubblesitter is doing just fine financially. I could afford the houses I’ve been looking at with 30/fixed, but I don’t think the houses are worth their price, and I think prices will indeed be coming down in the next few years. Doesn’t make sense to buy, so I don’t. I have very good credit and a growing supply of cash. It’s just a matter of waiting for a house that’s worth the price.

Sounds like you are assuming that everyone is commuting downtown. There’s lots of jobs on the Eastside, including Microsoft of course. That makes commuting from “the boonies” along I-90 quite possible, in much less than 1-2 hours.

Not really surprising. I suspected most of the “bubble-sitters” aren’t prudent investors sitting on a ton of cash, just waiting to pounce after the bubble bursts. But rather it’s people who spend far too much of their income on “stuff”, don’t save enough, and now find that they have nowhere near enough of a down payment to afford a decent place without “creative” financing.

Just wait ’till the lending standards start tightening, then ven with a big price decline you will need AMAZING credit and LOTS of cash to be able to buy, so the situation might not be much better.

If you do not currently own, what is the main factor that would cause you to consider purchasing a home?

- Drop in absolute purchase price
- Improved rent vs. own monthly cost ratio
- Negative public sentiment toward real estate

Are there other options I should add?

FYI, Snoqualmie is NOT Seattle or the Eastside. It’s the boonies…that I-90 commute is brutal.

It’s similar to what happened in Chula Vista in San Diego. A ton of building and master-planned development in a formerly bad/undeveloped area, but everyone now finds themselves with 1-2 hr commutes and are starting to bail to homes closer to the city.

And it is the most gaudy lot of cookie cutter McMansions you can imagine with tiny lawns, and small spaces between the homes. And the construction continues at an incredible pace. There were scads of homes in various stages of construction.

So much for the idea there’s no building going on in the Seattle area.