Zillow Advice: Rent vs. Buy - Why thinking you'll be okay if you're in it for the "long term" could be a Bad Mistake.

Lyndie,Thanks for the appreciative ...

Fri, 13 Feb 2009 03:39:00 GMT

Lyndie,
Thanks for the appreciative comment. I had to write that since so many posts I've read strongly suggest that people are grossly uninformed about the severity of our current situation. While we desperately want to live the dream and buy a place we can call our own, now is absolutely not the time. Whatever you do with your money until the economy turns around, keeping most of your savings in cash equivalent forms is, in my opinion, a very good idea. There are now banks recinding credit cards once people pay their balances off, or increasing the interest rates to 30%. Imagine what that would do to your ability to live if you are cash poor - my 2 cents, for what it's worth. Again, a little more about us so you know where we are coming from: we both work in an industry that is "recession proof", and I'm still worried.

lyndie, That is a sad ...

Fri, 13 Feb 2009 01:40:00 GMT

lyndie,
That is a sad statement, but true. While I might agree with some of the things said by agents, most of the stupid things about the market that I have been told was by agents. In a field of so many poor agents, the few good get lumped in with the bad.

sunnyview, "Really all I ...

Fri, 13 Feb 2009 00:24:00 GMT

sunnyview, "Really all I want is for people to be able to ask questions, get links they can use and research as much as possible to try to make a good choice. I am a simple person. If the posters that come here leave more informed about their market or their possible choices, then I am happy."

That's how I feel about it, too. Some (most?) of the realtors I see posting here are blatantly self-promoting, and maybe you're right, they don't mean to be dishonest but are simply not all that well-educated themselves and boy howdy have I met some of those. A few are working at the supermarket now, because they didn't know anything more about real estate, maybe less, than the potential homebuyers they were supposed to be representing, especially the ones who were exercising their own due diligence before shelling out 10s of thousands of dollars, not realizing the market was in the process of taking a nosedive. You can tell when some newcomer realtor shows up here, stating things so authoritatively as though they really know what they're talking about, and after a bunch of Zillow oldtimers chew them out, you never hear from them again.

i definitely think you are ...

Thu, 12 Feb 2009 23:17:00 GMT

i definitely think you are right regarding detroit. Unemployment caused the problem. The sad thing is that if that is the case here, prices will continue to drop for a long time, because without homeowners to improve their houses, construction will hurt. That is a major sector here in riverside county

I guess I would say no. I ...

Thu, 12 Feb 2009 23:05:00 GMT

I guess I would say no. I think employment must be stable before housing is stable. Otherwise, all you get is a pool of cash strapped or unemployed renters and few others that can/will buy. I look at Detroit. There are some screaming deals there in beautiful areas, but with no one willing to buy them or rent them they are sitting for now. Investing in an area where employment is good at least means you have tenant that can pay the rent if you can't sell in the future. The other route is renting to blue collar or low income tenants that can pay below market rents fairly regularly based on some govt help or fluctuating employment situations. I am a bad landlord for those folks though so personally I have to pick a different kind of rental. Also, the nicer areas tend to go up faster and earlier in a market turnaround because those people get their money back first and buy in those areas.

"who cares if prices keep ...

Thu, 12 Feb 2009 22:54:00 GMT

"who cares if prices keep falling if your in it for the long term?"

It is the same thing as was in the bubble market. You dont realize a gain until you sell, you dont realize a loss until you sell.

sunnyview,I agree unemployment ...

Thu, 12 Feb 2009 22:52:00 GMT

sunnyview,
I agree unemployment has the highest factor on what will happen. But dont you think that housing has to stabilize before employment can stabilize?
Most jobs lost here were due to the drop in home prices. No one wanted to buy a new house, and developers laid off the masses. Lenders went out of business, because there were no loans to make. Agents were unemployed because nothing sold. All this unemployment rolled over to retail.
If purchases increase, many of these bank owned have to be repaired, helping with employment in construction(which I have noticed an increase of work for my company recently). The increased sales will help agents, and with low rates now, loan apps should be high(although I dont know how it compares to historical apps). Eventually, it should help with retail and the other sectors.

Again, Titan, I wonder what ...

Thu, 12 Feb 2009 21:56:00 GMT

Again, Titan, I wonder what kind of people you hang out with? You even wrote that a lot of the people you know who went under were "white collar" professional types pocketing their $6000 month mortgage payments. Maybe they were the "smart" ones, and the blue, white, striped, plaid collar people I hang out with are just too stupid to think of that, I don't know? But I prefer the kinds of people I hang out with better, and I don't know anybody who went through foreclosure who didn't do everything they could to prevent it from happening first. I think that's an absurd premise.

Ok, I admit it. You have ...

Thu, 12 Feb 2009 21:54:00 GMT

Ok, I admit it. You have defeated me with my own dislike for spam. I think some folks truly believe what they are saying and really do not mean to mislead. Others I wonder about and try to reserve judgement as long as possible. Really all I want is for people to be able to ask questions, get links they can use and research as much as possible to try to make a good choice. I am a simple person. If the posters that come here leave more informed about their market or their possible choices, then I am happy.

especially the ones with ...

Thu, 12 Feb 2009 21:37:00 GMT

especially the ones with [removed for being self-promotional]