{"id":219,"date":"2008-07-29T19:32:20","date_gmt":"2008-07-29T23:32:20","guid":{"rendered":"http:\/\/mattfife.net\/wordpress\/?p=219"},"modified":"2008-07-29T19:32:20","modified_gmt":"2008-07-29T23:32:20","slug":"now-things-are-getting-reasonable","status":"publish","type":"post","link":"https:\/\/mattfife.com\/?p=219","title":{"rendered":"Now things are getting reasonable"},"content":{"rendered":"

As a perspective new home buyer – I’ve been sitting on the sidelines for about 2 years (well, saving up a good down payment anyway).\u00a0 The prices during the boom were ridiculous, and as things are crashing, I’m waiting to see if were at a bottom (most experts are saying not likely till end of next year – but they’ve said that for 2 years now).\u00a0 The latest national S&P Home price index<\/a> keeps dropping but Portland has fared much better than most.\u00a0 Lately, however, it looks like we’re no longer immune.\u00a0 It reported that Portland average prices dropped a record 5% since last year<\/a>.<\/p>\n

Looking on forclosures.com and RLMS database the other night, I actually found several very nice condos and houses in my price range.\u00a0 It was actually amazing\/frightening\/sad how many pre-forclosures were in the works.\u00a0 And how many of those homes were in the 500k-1000k range (I thought rich people didn’t go bust?).\u00a0 I did the same search about 2 years ago and got nothing but run-down shacks in questionable neighborhoods on the edges of my desired region.\u00a0 Now I have 10 really good hits right where I was looking – one even had 2 garage spaces (kind of unheard of around here).<\/p>\n

But when prices are dropping 5%\/year -it definitely isn’t buying time.\u00a0 At -5% a year, you seriously jeopardize the value of investing in a home.\u00a0 The whole point of buying is to grow equity.\u00a0 But, for example, if you have a $200,000 loan who’s home is losing only 5% value in a year, that’s $10,000\/year you’re losing in real value.\u00a0 If your mortgage payment is about $1200\/mo, then you are just dumping about a years worth of money down a hole with nothing to show for it.\u00a0 And any conceivable tax benefit doesn’t really offset that kind of loss.\u00a0 Yes, if you really need a home, then you might jump on a good deal – but this is hardly a buyers market – even if the latest home stimulus package includes an incentive for first-time buyers<\/a> (not very useful, it’s a $7500 tax credit that phases out based on income and you still have to pay back, just interest free).<\/p>\n

So what to do?\u00a0 Look for good deals.\u00a0 Wait until we see some stability and\/or growth.\u00a0 I get the feeling things will keep dropping for the foreseeable future.\u00a0 And so what if you miss the ‘bottom’?\u00a0 Well, it doesn’t matter if you catch prices at the same point on the way down or the way up.\u00a0 I’ll wait and keep saving a better down payment.<\/p>\n","protected":false},"excerpt":{"rendered":"

As a perspective new home buyer – I’ve been sitting on the sidelines for about 2 years (well, saving up a good down payment anyway).\u00a0 The prices during the boom were ridiculous, and as things are crashing, I’m waiting to see if were at a bottom (most experts are saying not likely till end of next year – but they’ve said that for 2 years now).\u00a0 The latest national S&P Home price index keeps dropping but Portland has fared much…<\/p>\n

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