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Okay - So, I really want to buy - I am in So. Cal. and want to buy in the inland empire. I've been watching a condo now in Chino go from 430K brand new, down to a resell of 245K... I really want to buy it, but I know that will equate to about $1500/mo. with HOA, insurance, taxes, etc... But, my problem is that I know it'll keep going down in value. But, I am tired of renting, and a comparable rental would be $1700-1900... What would you do?Please help me make sense of this - I know that throwing $400 more away in rent is only $4800/year thrown away, and that the home will probably slide another 40-50K... But, it is just so hard for me to justify the rational side from the emotional side...
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I'd say wait because not only will they get cheaper and cheaper you will also have far more to choose from as inventory goes TO THE MOON!
What do you believe the property is worth? How long do you plan to live there? Ideally, you want to buy before the market hits bottom. If it has hit bottom, that means it's already going back up... Maybe start with an offer 10% below asking?
The payment makes sense, but if you truly believe prices will drop that much, you need to consider a few things. One of the most important is how stable your living conditions will be. If you have the possibility of moving in the next couple of years, you could wind up in a bad predicament. If you are going to be there long term, you should take into consideration of what you truly feel the value will be in the coming months/years and make an offer reflective of that.
Let me guess. Yo are thinking about buying a condo in the Preserve. Well don't do it. First off, if you are contemplating catching a knife, catch a knife and not a machete. Condos are a horrible way to go down in a declining areas such as the Inland Empire.
You waited this long renting and NOW you want to buy a property in the IE? In the middle of a major $hit storm?? Please. Be patient. End of this year or next you will see 3/2 HOMES going in the mid 200s. I alreasy see one in the preserve area for about 300k! patience is the key.
'' Ideally, you want to buy before the market hits bottom. If it has hit bottom, that means it's already going back up..'No. Ideally you want to buy at the bottom. You make it sound like the bottom will turn around over night. The bottom in the IE will be around for a long time.
Buying a condo for long term depends on a lot of things, whether or not you plan on turning it into a rental when you decide to either start a family or need to move because of a job relo.........ditto what SoCal says, but also take the emotional need out of it it will make much more sense not to buy.
okay - you're right - the preserve... I was going to buy at the 430K and now it's at 245K... and as far as waiting for it to go back up - I predict it'll be like the last crash and stay at the bottom for many years before the next run up... But, I am really tired of the renting game... Any other options besides buying? I mean, renting a condo is fine, but then I am just covering someone elses costs...
Do not buy the condo in Chino area. The $200 HOA & 1.9% tax rate kill all.
"I am just covering someone elses costs"
Are you expecting to live rent free?
not another one!... plz do not post later "how i should have waited and lost $300k in equity".... have a nice day...
deedee- do you actually read the posts first? I agree that luge should wait until prices at least stablize for several months if they are on the fence about it. But I doubt luge is going to post about losing $300k in equity on a property under $245k. LOL
"not another one!... plz do not post later "how i should have waited and lost $300k in equity".... have a nice day..."
not another one... plz find something constructive to do with your life, deedee.....have a nice day...
Buying a home is not just about investment and buying at the right time. Homes are bought for utilization, the investment should be the secondary consideration. If you can afford the payment comfortably and intend to occupy for a long time, then don't outsmart yourself by trying to buy at the best possible moment.
In your calculation for monthly budget, you expect $400 savings from comparable rental. This does not account for the fact that your mortgage interest will be tax deductible, so your actual savings will be greater.
You can't put a price on the pride of ownership. It sounds like you are ready.
So what if the value goes down. Some years it will go up, some years it will go down. If the payment is less than the rental, worst case scenario if you decide to move, you convert it to a rental and you still cash flow positive on the property.
''So what if the value goes down. 'What an idiot. Of course it matters. Luge is considering buying in an area of Socal that is declining rapidly in value and all evidence points to a further drop. We dont want him to pay 300k for a condo when he can get into a home soon for that price. What horrible advice!
Glad you have it all figured out Socal. You must be extraordinarily rich if you can know with certainty what prices will do.
Did you try LISTENING to what this poster is saying? He's sick of renting, he can afford the property, he likes the property. If he is going to stay there for 15 years, does it matter if he times the market exactly right? He is going to gain immediate benefits and stay within his budget. I encourage him to follow his heart as long as he doesn't try to bite off more than he can chew.
1. The whole "tax deductible interest" is not all it's cracked up to be...especially with a low interest rate. I doubt it's going to add up to a $4800 check back from the IRS next year.
2. Who lives in a starter condo for 15 years?
Just another side of the coin to think about
Well Luge, keep watching! Just look back at the http://images1.zillow.com/is/image/i0/i0/i2931/ISy2wvc9ykgzab.jpg?op_sharpen=1&qlt=90&00K prices tag and feel sorry for suckers
that paid that much and have a good laugh! You think they are sleeping better at night than you?
Look at what homes in that area sold for in 1998 and add 30% (or 40% if you feel generious).
You have your answer there on what price point to buy. BTW! No reason you cant offer less.
and the realtor tell you he/she feel insulted. Give them a 10 minute rehash of what has been happening in RE lately...and how they feel lucky talking to you....
Keep the faith brother, and take no prisoners!!!
Luge, I'm in pretty much the same boat you are. I've have been looking for a home in the Chino Hills area for at least 2 years now. I have come close many times to accepting a counter offer, but luckily, I did not make it a emotional decision. Instead a financial decision and have waited.
With the rapid decline of prices in the IE, I could have easily lost 100K had I bought earlier. financially I could have afforded the home 2 years ago, and it was a really nice house. But I don’t care what any realtor or lender tells you about pride of ownership, and tax write offs. I would still rather have 100K.
I’m currently still actively looking, but my budget has gone down while my house requirement has gone up. I also normally would offer at least 10% lower than the asking price and it is pretty much A “Take it or Leave it Offer”. I have no remorse if I lose out on a home, as I’m confident that that house in 6 or more months will probably be worth what I had offered or less.
Im in socal as well, are you trying to buy a condo because you dont want a house????? The reason I bring this up is because, prices of houses will soon be in the 250K range...... in my opinion. Also, I dont know how in the world are you going to get a 245K loan and only have a $1500 payment...... especially with HOA, and taxes, and dont forget repairs....if needed... If I was you , I would wait some more... you've waited this much, a couple months more wont hurt, but only possibly save you thousands...... good luck... and take the emotion out of it.
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