'Sitting on the fence... and have paid dearly for it.'
I thought this comment deserved its own thread:
Looks like, of all of you, only Angie has some sense. I have been sitting on the fence for the last 3 years in Seattle, waiting for the prices to fall, and have paid dearly for it. The house which I did not buy in 2004 for $350K is today worth $650K - way above what I can afford. In 2004 I made the fatal mistake of reading bullshit mags like the Economist etc which were perenially predicting a RE bust. Wish I had done what others had done.
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Besides that, all those "houses" that have doubled in "value"... You have to realize that the supposed profit, with no buyers that can actually afford these prices, its just invisible money. You haven't actually gained anything other than 350,000 of debt on a property that isn't selling. God forbid, 1 year ago, when you realized how much your homes value had increased, and decided to take out a large equity loan for your new hummer...
You even stated that you can no longer afford that house. Who can? Certainly not a Microsoft tech making 90k a year, or a Boeing field engineer making 120k. Where are the actual buyers that can afford these homes? I don't see any.
But by the same token - no one should try to claim that when the boom is over, the same arguments still apply. And it is over, everything except the crying.
And losing money--come on. You didn't LOSE anything--sure, you missed out on some incredible gains, but I could say the same about not buying the stock of the company that laid me off 5 years ago--their stock has increased 9-fold in that time--darn I LOST thousands!!!
While the market may be cooling (or crashing) quickly, there are still a lot of people who are in the mindset that they're in the mood to get a great deal. It's certainly a gamble, but if you're in the belief that the market has a long way to fall, it's still a good time to pull the eject handle.
Prior to moving here I had owned my own residence for nine years. Those markets were sane and I did not see very much appreciation.
Do you really think prices have come down that far already? We'll have to wait for August Case-Schiller numbers to be sure, but I think >20% depreciation from the peak is a bit optimistic. I doubt it's more than a few percent as of now, but would like to hear why you think it's that low already.
No, I don't really think prices have fallen that far. The $500K number was picked in more of a sense of how there's still a lot of inflated equity to be cashed out if you got in at the right time and you really want out right now. I don't follow the listings closely, so I can't pinpoint how far we've fallen so far, but I just know there are people buying at the right prices and there will be for some time.
Then after biding my time in a really nice rental house for the last year, I should have taken every last penny out of Google a couple weeks ago and bet it all on Appalachian State over Michigan, and then the following week on South Florida over Auburn.
If only...
Damn. I wish I woulda thought of that too! LOL
On the other hand, Economist was right with the predictions for almost the entire country (housing peaked during 2005 in most other cities). But, since "Seattle is special", the prediction never turned out to be true here :-(
http://www.kbhome.com/Community.aspx?CommID=00868100
Moreover, salaries are about 90% of what the Seattle area pays, and the economy is pretty strong with a lot of technology. They have Whole Foods' world headquarters, too
The super expensive areas (i.e. central Austin just N of UT campus) was selling for $300 sqft when I left.
Rents are in line with sales prices -- heck, it might even be possible to find rentals that flow cash.
There is no state income tax. Travis county (where Austin is) has 2% property tax. Some of the surrounding counties have 3% property tax.
I don't know how WA gets by with 1% property tax.