Good time to buy a home? Granted how low rates are at this minute?

[InPaulWeTrust]

I believe there is further room for decreases in home prices considering the inventory of houses still out there. However with all the current backings of the Federal Government on mortgages in order to hold the market together and further push prices via inflation, is now a good time to buy a new home? Not as an investment, but to live in. What is your take on the current situation?

Would you wait further, get it now with all the incentives, or not do it at all given the uncertainty of short term economic affairs in the US?

 

[Romulus]

It all depends on where. Markets vary. But I do believe its a buyers market and right the right deal ownership is better than renting sometimes.

 

[Revolution_Ready]

Heck yes, I just closed on my 5th property, it's a commercial service garage. Picked it up at the courthouse for 20 cents on the dollar. I guess I have the fed to thank for the current buyer's market. It's not right that people with cash can do this, it's a huge transfer of wealth over the next few years, but I'm a capatilst first, you gotta play the hand your dealt.

 

[WaltM]

I think interest rates are less important than actual house's price.

 

[Zippyjuan]

Interest rates are important. At a lower interest rate you can afford a more expensive house than with a higher interest (higher interest rate means higher payment for the same house and more money you pay in interest which over the life of a 30 year loan can be quite a bit of money- assuming you keep the loan for 30 years). Price will (as mentioned) depend on where you live. I am in San Diego and we have already seen the median home price go up for three straight quarters already- the strongest market in the country.

As for the Fed incentives, many of those are expiring and for some it may already be too late to qualify (you have to have the loan closed by a certain date and all your paperwork turned in- they have a huge backlog to go though right now) so unless you have already gotten signed up, you are probably not going to get anything from that ($8000 tax break for first time buyer and something like $6,000 for buying a replacement home). As these move on, I would expect a little softening of demand for say two or three months or so which could mean a bit more fall in prices. Some places (like here) have already bottomed out and are moving up again. Interest rates are quite low right now and low rates will eventually go up (when is anybody's guess and you can't go by the Fed's actions either- I was waiting to refi mine several years ago and the Fed was cutting rates but mortgage rates continued to rise for several months so I had to wait a while before I got a good enough rate to be worth refinancing).

If it was me and I found a place I liked and could afford, I would go for it now and not worry about trying to time the market or interest rates. This gets you started on making payments sooner which means you will have it paid off sooner. If rates go higher, you are locked in. If they go enough lower you can later refinance.

In budgeting don't forget to include property taxes or if you get into a condo or some other homeowners association group that you include their fees as well.

 

[tmosley]

Absolutely not. You need to wait until the rest of the shadow inventory comes on to the market, and for the mortgage resets to slow down. Wait until 2012-2014, and anytime in the ten-twenty year long depression that follows.

The only reason to buy now would be if you think hyperinflation is close and you can inflate away your note. This is possible, but I would rather hold PMs until I could buy for cash.

 

[Zippyjuan]

Or you can wait forever because it might be better next year. Or maybe next year. Or maybe the year after. Nobody can predict what things will be like in two to four years. Maybe interest rates and prices are both up and it costs you more. Maybe enough that you can no longer afford to buy (I can't afford most current prices in my area). In the mean time, you could have two to four years of payments already made and equity started to build. If you had a fifteen year mortgage today, by 2014 you could be down to a bit more than ten years to go on it.

Everybody needs to make their decision based on their own needs and circumstances. Tmosley has a preference for gold at this time based on his own expectations of the future and that is fine. My own preference is to have a home all paid for to get rid of that expense before I retire- and the sooner you get started paying for it, the sooner it is yours and you no longer have to pay rent (sure there is still property tax). If a home is your goal, this can be a good time in my opinion (and is is strictly that- my own opinion- I have no better or accurate view of the future than anybody else).

"If only I had bought that beach front property 20 years ago when it was more affordable...." The best time for buying is usually when everybody is selling. You are going to be paying rent anyways- why not get something for it? (again, assuming you make sure you can afford it).

 

[InPaulWeTrust]

Thank you all for the input thus far. Yeah I am 25 and have a decent income and was thinking of splitting this with my brother since with our combined incomes we should be able to afford the house.

I guess you're right zippy, it's impossible to predict anything ahead of time and if you hesitate you will always be saying, "man I should have done it then"...

I may start looking around my area as I think we have somewhat bottomed but part of me believes there is still room for further depression in prices. I am in the Central Florida area, so you know here we had one of the largest bubbles.

 

[WaltM]

Or you can wait forever because it might be better next year. Or maybe next year. Or maybe the year after. Nobody can predict what things will be like in two to four years. Maybe interest rates and prices are both up and it costs you more. Maybe enough that you can no longer afford to buy (I can't afford most current prices in my area). In the mean time, you could have two to four years of payments already made and equity started to build. If you had a fifteen year mortgage today, by 2014 you could be down to a bit more than ten years to go on it.

Everybody needs to make their decision based on their own needs and circumstances. Tmosley has a preference for gold at this time based on his own expectations of the future and that is fine. My own preference is to have a home all paid for to get rid of that expense before I retire- and the sooner you get started paying for it, the sooner it is yours and you no longer have to pay rent (sure there is still property tax). If a home is your goal, this can be a good time in my opinion (and is is strictly that- my own opinion- I have no better or accurate view of the future than anybody else).

"If only I had bought that beach front property 20 years ago when it was more affordable...." The best time for buying is usually when everybody is selling. You are going to be paying rent anyways- why not get something for it? (again, assuming you make sure you can afford it).

interest rate definitely matters if you're talking about a 30 year term

but what if the house depreciates another 30-40%?

wouldn't you be able to pay the same monthly, and get out sooner if the interest was the same, or have more down payment, less loaned?

 

[tmosley]

Or you can wait forever because it might be better next year. Or maybe next year. Or maybe the year after. Nobody can predict what things will be like in two to four years. Maybe interest rates and prices are both up and it costs you more. Maybe enough that you can no longer afford to buy (I can't afford most current prices in my area). In the mean time, you could have two to four years of payments already made and equity started to build. If you had a fifteen year mortgage today, by 2014 you could be down to a bit more than ten years to go on it.

Everybody needs to make their decision based on their own needs and circumstances. Tmosley has a preference for gold at this time based on his own expectations of the future and that is fine. My own preference is to have a home all paid for to get rid of that expense before I retire- and the sooner you get started paying for it, the sooner it is yours and you no longer have to pay rent (sure there is still property tax). If a home is your goal, this can be a good time in my opinion (and is is strictly that- my own opinion- I have no better or accurate view of the future than anybody else).

"If only I had bought that beach front property 20 years ago when it was more affordable...." The best time for buying is usually when everybody is selling. You are going to be paying rent anyways- why not get something for it? (again, assuming you make sure you can afford it).

In that case, might I suggest you build your home on the rim of Mt. Katla?

We know EXACTLY what is going to happen with mortgage resets. You are going to be underwater with the rest of the suckers if you buy now and make payments for a few years, simply because home prices are liable to fall another 75%. With this huge overhang, you should wait until it lets loose, and THEN buy, in CASH. You will have your home, 100% paid for, long before you would otherwise (assuming no hyperinflation in the next few years). Also remember that if you own the home, you have to pay taxes, insurance, pay for lawn services, pay homeowner's association fees if applicable, and worst of all, you have to pay for your own repairs. All of that can get expensive, not to mention that the prices are being propped up with all these government subsidies.

Buying a home right now is exactly like buying a home on the rim of a stirring volcano that is overdue for eruption. We know the reset schedule for these mortgages, and we are climbing toward a peak that is higher than subprime was, and much broader. We also know that after a housing bubble, prices stay near the bottom for about a decade before they start really climbing again, so you have a lot of time to decide. In the meantime, you can negotiate lower rent at your current place. I see it all around me, where people are paying less and less rent, because they are out of jobs, or because they threaten to move.

Edit: I saw an alarming number of people agreeing with what can only be characterized as pure idiocy. Sorry Zippy, but the poison is in the dose, and the dose of foolishness you are selling is off the charts. Speaking of charts, look at this one:

Now tell me again that now is a good time to buy. It's like going from being sixty feet under water to being 40 feet underwater and saying, "Well, now's a great time to take a nice, deep breath."

 

[Zippyjuan]

interest rate definitely matters if you're talking about a 30 year term

but what if the house depreciates another 30-40%?

wouldn't you be able to pay the same monthly, and get out sooner if the interest was the same, or have more down payment, less loaned?

I note that you are constantly afraid of further depreciation of housing prices- you have mentioned that several times in other posts. Sure, price declines are possible. So are price increases or interest rate increases- which raise the price you pay for a house. Say you bv a TV or an ounce of gold. You are enjoying that TV or gold. The price of gold goes down or the TV goes on sale. Do you worry about "losing" money because you did not buy at the absolute lowest point? What if you wait? What if you wait too long and the price goes back up? If you bought gold and the price goes down it does not really matter if you are not selling at that time. If the value of your house goes up or down it does not matter if you bought at a price you could afflord, felt was reasonable, and are not selling while it is low. You don't realize any gains or losses until you actually sell. If you paid $1000 an ounce for gold and today it went to $800 have you lost anything? Not unless you sell at $800.

Suppose you were considering buying stocks during the crisis and were trying to wait until the market hit bottom before you jumped back in. March of last year comes and stocks start to head up. But many thought it might be just a little bump- they were waiting for it to go still lower. By the time people realized that the market had indeed hit bottom, it had already retraced more than half its losses and missed out. Point being you cannot time the market in anything. Buy when you think it is good for you and if you plan to hold for a while, don'e worry about what it will do in the next few months or few years. Wait for a bottom and you will surely miss it. Or wait forever.

We know EXACTLY what is going to happen with mortgage resets. You are going to be underwater with the rest of the suckers if you buy now and make payments for a few years, simply because home prices are liable to fall another 75%. With this huge overhang, you should wait until it lets loose, and THEN buy, in CASH. You will have your home, 100% paid for, long before you would otherwise (assuming no hyperinflation in the next few years). Also remember that if you own the home, you have to pay taxes, insurance, pay for lawn services, pay homeowner's association fees if applicable, and worst of all, you have to pay for your own repairs. All of that can get expensive, not to mention that the prices are being propped up with all these government subsidies.

Boy you are pessimistic about the maket- no wonder you are such a gold bug. A 75% further reduction in home values? If that is what you believe that the future will bring, I can see why you would prefer to stay on the sidelines. I do not intend to say that housing prices will soar like they did during the bubble- I don't think that they will and since I am not selling it does not matter if it does- but that is not my goal in purchasing a home, my goal is to get rid of that expense as best I can. Yes, I will still have property taxes. But as renter, so do you. Just not your own taxes- you are paying taxes for somebody else.

Question- do you ever intend to buy a home at all (it is fine if you do not)? If so, at what point or market conditions would you do so? As for your list of the expenses of home ownership, yes, those are real. But you are not avoiding those by renting. You are paying them for somebody else- your landlord. He is passing all those costs on to you in the rent you pay- plus a profit for him. Why not keep the profit for yourself as well as gain a share in a tangible asset? It may be less liquid than gold but is still a tangible asset you can hold, keep, and later resell. You can't get that from renting. Of course if you do not intend to stay in a property long then renting makes more sense. But since you know "exactly" what the housing market I guess I will look like a fool in three more years when my mortgage goes away, my effective disposable income goes up by about a third from losing that expense, and you will continue to pay rent while I have a valuable asset. But that was my decision and I will have to live with the consequences. Oh well. Things could be worse.

 

[tmosley]

I note that you are constantly afraid of further depreciation of housing prices- you have mentioned that several times in other posts. Sure, price declines are possible. So are price increases or interest rate increases- which raise the price you pay for a house. Say you bv a TV or an ounce of gold. You are enjoying that TV or gold. The price of gold goes down or the TV goes on sale. Do you worry about "losing" money because you did not buy at the absolute lowest point? What if you wait? What if you wait too long and the price goes back up? If you bought gold and the price goes down it does not really matter if you are not selling at that time. If the value of your house goes up or down it does not matter if you bought at a price you could afflord, felt was reasonable, and are not selling while it is low. You don't realize any gains or losses until you actually sell. If you paid $1000 an ounce for gold and today it went to $800 have you lost anything? Not unless you sell at $800.

Suppose you were considering buying stocks during the crisis and were trying to wait until the market hit bottom before you jumped back in. March of last year comes and stocks start to head up. But many thought it might be just a little bump- they were waiting for it to go still lower. By the time people realized that the market had indeed hit bottom, it had already retraced more than half its losses and missed out. Point being you cannot time the market in anything. Buy when you think it is good for you and if you plan to hold for a while, don'e worry about what it will do in the next few months or few years. Wait for a bottom and you will surely miss it. Or wait forever.



Boy you are pessimistic about the maket- no wonder you are such a gold bug. A 75% further reduction in home values? If that is what you believe that the future will bring, I can see why you would prefer to stay on the sidelines. I do not intend to say that housing prices will soar like they did during the bubble- I don't think that they will and since I am not selling it does not matter if it does- but that is not my goal in purchasing a home, my goal is to get rid of that expense as best I can. Yes, I will still have property taxes. But as renter, so do you. Just not your own taxes- you are paying taxes for somebody else.

Question- do you ever intend to buy a home at all (it is fine if you do not)? If so, at what point or market conditions would you do so? As for your list of the expenses of home ownership, yes, those are real. But you are not avoiding those by renting. You are paying them for somebody else- your landlord. He is passing all those costs on to you in the rent you pay- plus a profit for him. Why not keep the profit for yourself as well as gain a share in a tangible asset? It may be less liquid than gold but is still a tangible asset you can hold, keep, and later resell. You can't get that from renting. Of course if you do not intend to stay in a property long then renting makes more sense. But since you know "exactly" what the housing market I guess I will look like a fool in three more years when my mortgage goes away, my effective disposable income goes up by about a third from losing that expense, and you will continue to pay rent while I have a valuable asset. But that was my decision and I will have to live with the consequences. Oh well. Things could be worse.

Look at the chart I posted. It is clear from that alone that housing prices are in for another big hit, not to mention all the shadow inventory out there. Buying a house now is like buying a home in New Orleans during the eye of Katrina. It's madness. Wait for the storm to pass before you buy a home. The only way you should even think about buying a home now is with cash, and if you do that, you will still take a big loss on paper as 50+% of those in your neighborhood still paying mortgages lose their homes.

When you rent a home, the landlord is stuck with the property, and can afford to simply not pay the mortgage, taxes, maintenance, etc, that or the mortgage is already paid off, since it can take 3 or more years to repossess a property these days. Further, rents go up and down according to market pricing, not according to whether the landlord is breaking even or not. It is better to have a tenant that is paying 50% of your expenses than have no tenant and have to pay those expenses out of pocket, not to mention vacancy rot (homes last longer when they have people living in them, because they don't let it freeze, and tend to fix small problems before they become large ones).

All I am saying is rent until about a year after those resets in the above chart have occurred, increasing your choices and decreasing your prices. Eventually, the banks will have to capitulate, otherwise, we'll have hyperinflation, and you will do much better if you have gold rather than property anyways (it's always best to buy property at the height of hyperinflation, as the inflation rate on property is the lowest, since it can't be exported.

 

[WaltM]

I note that you are constantly afraid of further depreciation of housing prices- you have mentioned that several times in other posts. Sure, price declines are possible. So are price increases or interest rate increases- which raise the price you pay for a house.

That is correct, or just the opposite, I hope and pray for depreciation of houses.

Say you bv a TV or an ounce of gold. You are enjoying that TV or gold. The price of gold goes down or the TV goes on sale. Do you worry about "losing" money because you did not buy at the absolute lowest point?

Bad analogy, because I lose less than $1000, not tens of thousands.

But do I worry about losing money? Yes, to a certain point.

What if you wait? What if you wait too long and the price goes back up? If you bought gold and the price goes down it does not really matter if you are not selling at that time. If the value of your house goes up or down it does not matter if you bought at a price you could afflord, felt was reasonable, and are not selling while it is low. You don't realize any gains or losses until you actually sell. If you paid $1000 an ounce for gold and today it went to $800 have you lost anything? Not unless you sell at $800.

You are correct, you never know until it happens. So my bet is waiting, I could certainly be the loser if the next bubble inflates again (and maybe by that time, it won't be considered a bubble).

Suppose you were considering buying stocks during the crisis and were trying to wait until the market hit bottom before you jumped back in. March of last year comes and stocks start to head up. But many thought it might be just a little bump- they were waiting for it to go still lower. By the time people realized that the market had indeed hit bottom, it had already retraced more than half its losses and missed out. Point being you cannot time the market in anything. Buy when you think it is good for you and if you plan to hold for a while, don'e worry about what it will do in the next few months or few years. Wait for a bottom and you will surely miss it. Or wait forever.

You are right, you could be waiting forever. In my personal case, I am almost forced to wait just based on what I have in hand and what to expect for the future.

Boy you are pessimistic about the maket- no wonder you are such a gold bug. A 75% further reduction in home values?

I'm not a gold bug.

If that is what you believe that the future will bring, I can see why you would prefer to stay on the sidelines. I do not intend to say that housing prices will soar like they did during the bubble- I don't think that they will and since I am not selling it does not matter if it does- but that is not my goal in purchasing a home, my goal is to get rid of that expense as best I can. Yes, I will still have property taxes. But as renter, so do you. Just not your own taxes- you are paying taxes for somebody else.

I said this many times, in theory, a renter pays whatever the landlord pays, plus premium & profits, but in reality, many times, the market will force down the price and renters get a deal (I know that being in both sides, a renter myself and my parents being landlords).

I also personally know of condo apartments which literally cannot find renters because they ask for $500 extra above the market, nobody wants to pay $500 more just for free parking, free gym, free pool and security (you'd have to use it daily, which makes it an obligation).

Question- do you ever intend to buy a home at all (it is fine if you do not)?

YES.

 

[WaltM]

Question- do you ever intend to buy a home at all (it is fine if you do not)? If so, at what point or market conditions would you do so?

It depends on my income, if I made a million a year, it wouldn't matter much.

Where I live today, I'd like to spend less than $300K, period.

If I were to move to a less crowded area (which I have considered), I'd like to spend less than $100K.

I'm very spoiled and naive, so what I want has nothing to do with what I will get.

As for your list of the expenses of home ownership, yes, those are real. But you are not avoiding those by renting. You are paying them for somebody else- your landlord. He is passing all those costs on to you in the rent you pay- plus a profit for him.

Again, not if the market doesn't allow it.

My parents & friends are exactly in that situation.

My parents even have a friend who bought a gigantic house for $300K in foreclosureville, and they're breaking even on rent vs mortgage (which means they'll be in deficit after taxes, fees, labor, and repairs).

I know apartments with HOA fees that can't be rented out because they ask for $500 above the market, and they've not been rented out for over a year (so instead of losing $6,000 by paying their own HOA, they lost an additional 18-24K by not renting it out)

Some people will say 'if you're in such a bind, sell it', sounds easy and probably smart, but nobody wants to lose money upfront, and many aren't willing to accept that they'll lose more. It's hard enough for many to accept that they've already lost money, so it's harder for some to believe they can lose even more.

Why not keep the profit for yourself as well as gain a share in a tangible asset? It may be less liquid than gold but is still a tangible asset you can hold, keep, and later resell.

I'm not a gold bug, I'm a utilities and food bug before I am a housing bug, before I'm a gold bug. I DO NOT value metals over housing.

"Why not keep that profit to yourself"?
That's exactly what I do by not leasing a car, or taking car loans, I buy depreciated cars. That's exactly what I do by buying movies, not renting them.
I'd do the same with houses if I could afford it and understand it more.

I am not against buying a house, I'm just not fit and ready for it myself, for now.

You can't get that from renting. Of course if you do not intend to stay in a property long then renting makes more sense. But since you know "exactly" what the housing market I guess I will look like a fool in three more years when my mortgage goes away, my effective disposable income goes up by about a third from losing that expense, and you will continue to pay rent while I have a valuable asset. But that was my decision and I will have to live with the consequences. Oh well. Things could be worse.

I've looked like a fool many times in my life, and I only make decisions with the worst possible scenario in mind. I remember buying my car a few years ago. Everybody said I paid $2000 for car that's worth zero. I was prepared to take that when I bought it, you have to live with the decisions you make no matter who is right, you ultimately have to justify it to yourself, because it's you living, and your money.

 

[WaltM]

Look at the chart I posted. It is clear from that alone that housing prices are in for another big hit, not to mention all the shadow inventory out there.

what is shadow inventory?

houses that are in denial of their foreclosure?

or apartments that haven't been marketed because they're afraid of hurting everybody at the same time?

I don't suppose you're talking about magically quick built houses that'll explode in a year.

 

[WaltM]

Now tell me again that now is a good time to buy. It's like going from being sixty feet under water to being 40 feet underwater and saying, "Well, now's a great time to take a nice, deep breath."

so, when it's all corrected and normal, what price would the house you want me?

$50k? $100k? $25K?
(what area are you eyeing?)

Why is it people are so pessimistic about the dollar, but in denial about the same for houses?

Paying for your own house repairs isn't too bad, it'll just feel expensive because you pay it all upfront, whereas if you rent, the landlord is less likely to charge you for it all in one payment (it'll usually be spread out in many months, or billed on the next tenant)

 

[Zippyjuan]

Sorry for the cofusion on that one Walt. The gold bug quote refered to Tmosley who I quoted in the box right above where I wrote it and the comments in that section were intended as a reponce to his post. As you note, I do say that everybody has to decide their own situation if it is right for them.

Since you do not like the TV analogy how about a car? Those are fairly expensive and next to a house, probably the second largest purchase a person will make. Say you borrow money to buy a new one. Within a very short time, the car has lost 30- 40% of its value. Does that mean you should not buy a car? You still need to get places (I admit I function without one myself but I am in a fairly unique situation as far as that goes). even a used car will lose value. If you buy a home or rent, you still need a place to live and will be spending money on it. Why not get something for that money? If it goes down in price after you buy it, so what? As long as you can still afford it and don't intend to sell it at that time, it does not matter. You still have a valuable asset. With rent you do not.

A fixed rate mortgage locks you into a price on your housing expenses (yes, property taxes can change but where I am in CA that is extremely limited as to how much they can change mine). Rents can and do go up. When was the last time a landlord offered to reduce your rent? Never happened to me. How many times has a landlord raised your rent (not all raise rents- maybe, as Tmosely points out they have the property paid for or just want to keep their good and reliable tennants) but in general rents do go up over time. Once your property is paid for that goes to zero (again there are property taxes). Rentals can't do that for you either.

Again, none of us knows what the future will bring but a 75% collapse does seem overly pessimistic. I cannot convince Tmosley or Walt to buy a house- you do not see that as a good idea at this time and that is fine. Obviously it would not be apropriate for them given their future expectations.

 

[WaltM]

Since you do not like the TV analogy how about a car? Those are fairly expensive and next to a house, probably the second largest purchase a person will make. Say you borrow money to buy a new one. Within a very short time, the car has lost 30- 40% of its value. Does that mean you should not buy a car?

Go back and read.

I agree with you.

That's exactly why I avoid buying NEW cars, they'll ONLY lose money.

You still need to get places (I admit I function without one myself but I am in a fairly unique situation as far as that goes). even a used car will lose value. If you buy a home or rent, you still need a place to live and will be spending money on it. Why not get something for that money? If it goes down in price after you buy it, so what? As long as you can still afford it and don't intend to sell it at that time, it does not matter. You still have a valuable asset. With rent you do not.

I agree, and with cars, the choice is much more obvious because cars ONLY depreciate. But as long as it drives, it's always worth something.

Houses can appreciate because of location, and vice versa. That's the ONLY reason houses are unique, otherwise, it'd depreciate with age like anything else. (We're not talking about artwork and collectibles)

When was the last time a landlord offered to reduce your rent? Never happened to me. How many times has a landlord raised your rent (not all raise rents- maybe, as Tmosely points out they have the property paid for or just want to keep their good and reliable tennants) but in general rents do go up over time. Once your property is paid for that goes to zero (again there are property taxes). Rentals can't do that for you either.

My parent's had to do that this year. Not often, but it happens.

Those who have not, have noticed that they've lost many more months of rent.

Again, none of us knows what the future will bring but a 75% collapse does seem overly pessimistic. I cannot convince Tmosley or Walt to buy a house- you do not see that as a good idea at this time and that is fine. Obviously it would not be apropriate for them given their future expectations.

You don't need to convince me to buy a house, you need to convince me when is the best time. I agree, that 75% does sound a bit much, but I am NOT an expert by any standards.

 

[tmosley]

what is shadow inventory?

houses that are in denial of their foreclosure?

or apartments that haven't been marketed because they're afraid of hurting everybody at the same time?

I don't suppose you're talking about magically quick built houses that'll explode in a year.

Shadow inventory refers to the homes that are in default and have been abandoned by the former owners, but have not been foreclosed upon because the banks don't want to book the loss in their sale (nor do they want to pay for their upkeep).

They are able to avoid taking the loss because they have been bailed out.

so, when it's all corrected and normal, what price would the house you want me?

$50k? $100k? $25K?
(what area are you eyeing?)

Why is it people are so pessimistic about the dollar, but in denial about the same for houses?

Paying for your own house repairs isn't too bad, it'll just feel expensive because you pay it all upfront, whereas if you rent, the landlord is less likely to charge you for it all in one payment (it'll usually be spread out in many months, or billed on the next tenant)

I don't have a target price, because there is no way to know how much prices will fall. Rather, you just need to look at what the market price is after the next wave of resets has pushed people out of their homes.

I'm not sure about what you mean about being in denial for "the same" about houses. The housing market is being propped, plain and simple. It is not a bargain to buy now any more than it was a bargain to buy beachfront property in Mississippi as the eye of Katrina passed over, with only half of the damage having been done. No matter what your circumstances, it is better to hold gold for now until those resets hit, just like it was preferable to hold cash until after Katrina had passed. The storm is only half over!

And yes, I do own my own home. I bought it near the peak of the bubble, which happily didn't inflate too much here. I have since paid it off, and turned it into a homestead. If I had it to do over again, I would have continued renting. The only kind of land that is really worth buying right this minute is either farmland (or other physically productive land, like timberland) or bailout property. If you are looking for a home, just wait a couple of years, and you will be able to buy one with the cash you saved, with no need to waste money on interest.

 

[WaltM]

I'm not sure about what you mean about being in denial for "the same" about houses. The housing market is being propped, plain and simple.

Yes, and so is the dollar.

Seems like ROn Paulers know this more than anybody, but if they were victims of the housing manipulation, they're in denial that they're suckers, so will continue to defend the housing market.