New home buyers?

[BRM]

Not to get totally off-track but you already have a low cost home with a fixed mortgage, I'd be looking hard to buy land or precious metals.

Not a particularly creative move, but with where this thing is headed I'd want tangible assets.

Land is the reason I'm not in too bad a shape right now. My house is worth less now than last year but I'm not upside down, thanks to the land the house sits on. Of course, I could be upside down in 6 months.

[wolfboy]

Well, I'm a little surprised by the responses in this thread. I started this thread because I was interested to see whether anyone else was a first time buyer. If so, I wanted to see whether the stimulus/tax break played into the decision. If this thread is any indication, then there aren't many first time buyers out there.

While I appreciate the input on housing, the economy, and life in general, it's a moot point. We put in an offer, they countered, we accepted. Every single consideration in this thread was weighed heavily by my fiancee and I. We feel completely confident that we've made the right decision. We also know that if we have not, we are prepared to live with the consequences.

[bucksfan2]

Well, I'm a little befuddled by the responses in this thread. I started this thread because I was interested to see whether anyone else was a first time buyer. If so, I wanted to see whether the stimulus/tax break played into the decision. If this thread is any indication, then there aren't many first time buyers on redszone.

While I appreciate the input on housing, the economy, and life in general, it's a moot point. We put in an offer, they countered, we accepted. Every single consideration in this thread was weighed heavily by my fiancee and I. We feel completely confident that we've made the right decision. We also know that if we have not, we are prepared to live with the consequences.

Congrats.

[westofyou]

Some markets are prime for good buys, Portland is one of them, I know my house hasn't lost a dime in worth and even if now is a bad time to sell I'd still be sitting pretty because I spent a lot of time targeting the neighborhood and the type of home I wanted s well as the price I wanted to fit in.

It's not just the house that has its worth it's the area that it exists in and the areas history, future and amenities that add value too. I would also say that value is found in craftsmanship and most newer homes that are purchased (especially in the exburbs) tend to lose value as soon as a newer area pops. I'd try and purchase an older home, they tend to be made with more care.

[SunDeck]

Well, I'm a little surprised by the responses in this thread. I started this thread because I was interested to see whether anyone else was a first time buyer. If so, I wanted to see whether the stimulus/tax break played into the decision. If this thread is any indication, then there aren't many first time buyers out there.

While I appreciate the input on housing, the economy, and life in general, it's a moot point. We put in an offer, they countered, we accepted. Every single consideration in this thread was weighed heavily by my fiancee and I. We feel completely confident that we've made the right decision. We also know that if we have not, we are prepared to live with the consequences.

Well, I was a first time home buyer in 1995 and I can say that my wife and I set out on a plan to build equity, one house at a time. We started with a 2BR $93,000 home in Raleigh that we thought had a potential to resale at a good profit after five years and after some cosmetic improvements. We were right and we sold the house for $145,000 three years later. Then we did the same thing in Cincinnati, buying a place for $105K and selling it three years later for $145K. And finally, we bought a place in Bloomington for $108K and sold it five years later for $152K.

I've painted, I've installed new flooring and kitchens each time and now I have a modest, four BR home with twice the square footage of our first home in Raleigh. Luckily, the housing market has been relatively kind to us and we have been able to use the positive equity growth to have this nice place with a mortgage that costs the same per month as our original $93,000 home.

We have been very fortunate, and I don't put myself out there as a standard bearer. In fact, I'm pretty sure we would not be able to do that in today's market. But you asked for a 1st time home buyer outlook and my response is that the first home is only one part of a longer range financial picture. If I have any advice at all it is to think modestly. We have found a niche with homes in the $100-$150 price range in the midwest and it's worked out nicely for us. We have learned that there is no shortage of people who will pay at the high end of that price range for a home that is clean, updated and "move in" ready.

Good luck!

[Rojo]

Oneupper is exactly right. Inflation is coming and coming in a big way. Guess what, money is going to go from 5%ish to 10+%. And at the same time, rents are going to increase as landlords fight to keep pace with inflation. So there's a huge advantage to locking in your housing costs now with low-cost money. Low fixed long-term costs always beats out rising variable short-term costs.

Oneupper touches on a big argument right now: inflation vs. deflation. Its a tough call. Government pump-priming and low interest rates spell inflation but Depression and unemployment spell deflation.

Interest rates might be forced up. But, at this point, they're not rising and home prices continue to fall -- rapidly. IOW, inflation is speculative and deflation is a reality.

[Rojo]

Well, I'm a little surprised by the responses in this thread. I started this thread because I was interested to see whether anyone else was a first time buyer. If so, I wanted to see whether the stimulus/tax break played into the decision. If this thread is any indication, then there aren't many first time buyers out there.

If you're in the midwest the stakes aren't quite as high because houses are so cheap, and generally they don't spike up or crash as much.

As a point of contrast, where I'm from 26 isn't even close to the age for first time homebuying, that's the age where you might be able to loose the roommates.

[westofyou]

As a point of contrast, where I'm from 26 isn't even close to the age for first time homebuying, that's the age where you might be able to loose the roommates.

Yep, I was able to shake them by 31 myself.

[Rojo]

Yep, I was able to shake them by 31 myself.

I was 37. And the way things are going I may end up looking for roommates in my 40's.

[pedro]

I shook roommates (for the most part) when I was 26 but didn't buy my first house (which was a financial disaster btw) until I was 31. I bought my second house when I was 35 and it has appreciated to the point that I can't ever see it dropping down to where it was when I bought it. Location, Location, Location.

[wolfboy]

I am 31. My fiancee is 33.

[Ltlabner]

Oneupper touches on a big argument right now: inflation vs. deflation. Its a tough call. Government pump-priming and low interest rates spell inflation but Depression and unemployment spell deflation.

Interest rates might be forced up. But, at this point, they're not rising and home prices continue to fall -- rapidly. IOW, inflation is speculative and deflation is a reality.

Will be interesting, in a sick way, to see how it plays out. My money, so to speak, is on inflation being the bigger issue.

Home prices (especially) and job losses (somewhat) are a more geographic issue.

[Rojo]

I am 31. My fiancee is 33.

My bad, don't know where I got 26.

[MWM]

Bought my first home at 25 years old in suburban Cincy. Just a little starter we didn't pay a lot for. Sold it 4 years later for about 19% more than we paid. Unfortunately, I didn't buy the next one until 2 years later (grad school in between). It was more than a starter, but I made sure to stay within what I could afford. So I'm not stuck with a payment way too high, but if I had to move any time in the next few years, it would be a tough hit to take. And the Twin Cities market has seen an accelerated drop in the past 4 months. MSN had it as the 4th worst market in the country behind Vegas, Phoenix, and Detroit; and right in front of San Francisco. Not a good place to be. Right now we're at April 2002 prices.

In hindsight I should have rented. I'll never buy another home unless it's somewhere where I know I'll be for a long time. When we moved here, we figured we'd be here 3 years minimum, and 5 years most likely. If we fell in love with it, it would be long term, but even then it wouldn't have been in this area (I'm out quite a ways from the city because it was more affordable). If I knew I was going to be living in this house for the next 10-15 years, I wouldn't worry at all about it. But that was never our intent. But it's a good house and we like it. So again, I'm not spending a lot of time feeling sorry for myself here. But I do wish things were different.

The only other way i'd buy is if I had some kind of protection against this kind of thing. For example, my former boss is being transferred within the company (down to Cincy, of all places). He'll be there 2-3 years before coming back here. The company has him protected both in selling here and buying there. So while he might only be there 2 years, he's going to buy a home because he's at no risk of losing money over it. Now THAT is what I wish would happen to me.

[bucksfan]

I do find this an interesting discussion as we are approaching paying off our house this July. We do have a home-equity loan right now (most of which was incurred with improvements to the house) that we will begin attacking next.

IMO home ownership is an entirely personal choice. It is never the right time for some people who either want flexibility in location or simply flexibility in living environments or less responsibility (in that life aspect) or for possibly other reasons. For me it is an obvious choice. I have no desire to move and, warts and all, love our old farmhouse. But it is entirely understandable to me why some people will always rent.

By the way, somewhere in this thread it appears I was quoted, but I have had no previous posts in this thread. It was probably a quote from bucksfan2 (I figured it would happen someday!), but just want to be clear that we are and always have been 2 different and AFAIK unrelated posters.