double post

[chrissyk]

double post

 

[Christine]

It just depends where you live. I live in the Washington, DC metro area and while I do expect to see things "chill" a bit (I think they are starting already), I don't think we will EVER see "firesale" prices here. The demand for homes is still high as we have a fairly hot job market. As long as that continues, the houses will still cost a lot. But, they have gotten to the point that average people cannot afford them and that's why we are seeing a slow down.

But I do think in some areas where there is not a booming economy--well, there will be some changes.

 

[chrissyk]

I agree with you that the demand in DC isn't going to let up anytime soon. That area essentially has the economy to support the high housing prices, though. I just look at my area and wonder who is buying these houses and how they will be able to afford them on a going-forward basis

We could buy one of these houses (and we are certainly tempted to do so), but I don't want to live in a neighborhood full of forclosures and constantly changing neighbors. That's not good for the property values. I've lived in a place where all of my neighbors were teetering on forclosure in any given month, and it was not fun to watch. I loved my neighbors to death and I miss them a lot, but they were perpetually stressed-out!

I also don't want to live in a house that I suddenly can't resell for what I paid for it because #1 I overpaid and #2 there are loads of new homes being built, loads of existing homes on the market, and no incentive to buy an existing home over a new home. That has happened in parts of TX, and I feel like it could happen here. Maybe I'm wrong, though.

 

[Rozzie]

you know I was having this whole thing on my mind. Our house, new construction, went up almost 25k equity in 8 months. Another house we were going to buy went up 35k in 8 months. It is mind boggling. After Ivan last year, Pcola went up almost 30% in housing prices. I believe this area is in the middle of that also (Eastern Shore, Al) after Katrina. Maybe not as strong as Pcola, but it is crazy how it is taking off.

Do I think the prices are going to go down? I really don't, just level off. I have a DSIL that wants to move into this area and I am really trying to urge her to move sooner than later. If we would have waited we would not been able to afford the house we have. Is this a bubble? always a possibility for sure. Some areas *I think* are , like South Florida, etc. But who knows? I want to move down there, and feel like if we don't move now, we will never be able to. Very stressing...

Best wishes to you. these are always hard decisions.

 

[bananiem]

The cost of houses seems to have gone up a bit here too. But there are some factors as to how people can afford them. When we built our starter house 13 years ago dh made x amount of money. The starting salary for that job now is higher than it was then. Some of the buyers may have had a lot of equity in their last home, making their payments not as much as you'd think. And I'm afraid that Katrina could affect the price of future housing materials. There's going to be a need for them so the price will go up. The builders will pass that increase on to the buyers.
Like Christine said it depends where you live as well. It's kind of a catch-22 but if there is a shortage of a certain price range house, they jack the prices.

 

[Rozzie]

I also don't want to live in a house that I suddenly can't resell for what I paid for it because #1 I overpaid and #2 there are loads of new homes being built, loads of existing homes on the market, and no incentive to buy an existing home over a new home. That has happened in parts of TX, and I feel like it could happen here. Maybe I'm wrong, though.

very good point. This is a concern of mine also.

The economy in our area is one of the lowest pay scales in the nation. DH is on the dreaded "tier 3" for his salary. Yet the housing market is going up and up. very intresting points. How will people afford this payments????

 

[Laurajean1014]

If you bought a house 2-3 years ago and were to sell it now in my area; you would have made about 140% on your investment.

If you wait 2-3 years in hopes that prices will go down, you may be pricing yourself out of home.

 

[Texan Mouseketeer]

We live close to one of those masterplanned communities with the water park, golf course and everything else you can think of. When you drive through it, it is full of foreclosures and homes for sale. I think prices where we live are going up like crazy and then people are qualifying for higher loans which can hurt people. When we bought our house 2 years ago, we got a good deal. Now, we can't find anything even close to our house for the price we paid. We are trying to move outside of our school district but not too far. One builder we liked and considered buying a new home with them. In less than two months the home we had picked had gone up over $15,000 in price. Then, there was no way we could buy it. Why do it when you know you could have had it for so much cheaper? Also, when we got 'prequalified', I just about died when they told us how much of a home we could qualify for. It was so high that I knew right off the bat we'd be sunk if we had that kind of house payment. - It was pretty much my husband's entire monthly check. We are so stuck we're not sure what to do...

 

[wendy1974]

I live 50 miles northwest of New Orleans and due to Hurricane Katrina there is a huge demand for houses where I live as everyone from New Orleans fled here. My condo jumped $12,000 in value literally overnight and I am seriously considering selling as I have wanted to get out from under it for a long time now. The only problem is there are no apartments available to rent because everyone from New Orleans is renting them and the prices for homes in the area that I would want to move to just jumped about $30,000 higher than the already high prices

 

[chrissyk]

One builder we liked and considered buying a new home with them. In less than two months the home we had picked had gone up over $15,000 in price. Then, there was no way we could buy it. Why do it when you know you could have had it for so much cheaper?

That's my biggest peeve with this entire building situation! I have no desire to buy a house that goes up 10K in price by the week. That's artificial inflation on the part of the builder, and it's bound to catch up with the buyer sooner or later. I'm leaning towards waiting it out. The fundamentals just aren't there to support the current building prices. I don't think that we'll be "priced out" as we already own a home here.

 

[bananiem]

In less than two months the home we had picked had gone up over $15,000 in price.

I have to admit I haven't seen that happening here. We had one new house in our neighborhood that went down $50,000 over a year. But it was a strange house on a HORRIBLE lot. Most houses around us are selling at the asked price, relatively quickly.

 

[chrissyk]

I have to admit I haven't seen that happening here. We had one new house in our neighborhood that went down $50,000 over a year. But it was a strange house on a HORRIBLE lot. Most houses around us are selling at the asked price, relatively quickly.

It's happening on the new construction in a lot of areas. This month it costs $500K, next month it costs $520K for the SAME HOUSE. These houses aren't built yet...they're just lots. The builder puts out a new "price sheet" weekly, twice-a-week, monthly, whatever, and the prices always go up significantly for the same houses vs. the last price sheet. IMHO it creates artificial demand to "buy NOW" so you don't end up paying more next month. I hate that kind of pressure.

 

['Canes Fan]

we've been waiting a year to make a move, but the Tampa area keeps building and building. now I'm worried about the price of materials after Katrina. concrete is going to skyrocket. building a house looked better than buying a pre-existing, but now who knows. we're not going to sink ourselves financially, and the loans you can qualify for are ridiculous. but the market is so hot. we sold our house a year and a half ago and it was pending after 3 days on the market.

 

[Christine]

On the road where I live, there were several small farms that sold last year. As soon as they sold to the builders last year, the signs went up saying that the houses were to start in the low-400s. One neighborhood was to start at 500,000. Well, something must have happened with county permits or the builders dragged their feet, who knows, but they did not even start to clear land until *this* summer. The signs changed and now the "cheaper" neighborhood that was going to start in the $400K range is now starting in the $600K range and the other neighborhood will start in the low-$700s. That was the jump from last summer to this summer--one year!

 

[WeirdEyes]

It is definitely a "seller's" market in my town. Houses are selling like hotcakes for the asking price and above. It is crazy!

 

[mrsltg]

It's happening on the new construction in a lot of areas. This month it costs $500K, next month it costs $520K for the SAME HOUSE. These houses aren't built yet...they're just lots. The builder puts out a new "price sheet" weekly, twice-a-week, monthly, whatever, and the prices always go up significantly for the same houses vs. the last price sheet. IMHO it creates artificial demand to "buy NOW" so you don't end up paying more next month. I hate that kind of pressure.

They're not doing this to put pressure on you to buy now. They are doing it because of the demand. If the market wouldn't/couldn't bear the prices, they would drop.

I live just up the road from Christine. I bought a new home a little over 2 years ago. It was a chunk and I worried (before closing) if we were doing the right thing. 29 months later I am thrilled that we took that very large step forward. My house has appreciated $250,000 in that time so I have no more PMI which has actually lowered my mortgage.

Good luck with whatever you decide!

Erin

 

[chrissyk]

They're not doing this to put pressure on you to buy now. They are doing it because of the demand. If the market wouldn't/couldn't bear the prices, they would drop.

That's true too, but I wonder how many of the people buying these rapidly-inflating places will be forced to sell when their "creative financing" becomes a burden. Some of these places actually have the housing plans on one page and "creative financing" options on the second page! I'm talking like 0% down, interest-only, negative-amortization, etc. kinds of mortgages

 

[Texan Mouseketeer]

That's true too, but I wonder how many of the people buying these rapidly-inflating places will be forced to sell when their "creative financing" becomes a burden. Some of these places actually have the housing plans on one page and "creative financing" options on the second page! I'm talking like 0% down, interest-only, negative-amortization, etc. kinds of mortgages

They wanted us to do a loan where you only paid the interest for the first two years and then you had to refinance. It freaked me out, so we passed on it. I hated the 'have to refinance' part because you don't know what interest rates will be in two years.

 

[AllyandJack]

That's true too, but I wonder how many of the people buying these rapidly-inflating places will be forced to sell when their "creative financing" becomes a burden. Some of these places actually have the housing plans on one page and "creative financing" options on the second page! I'm talking like 0% down, interest-only, negative-amortization, etc. kinds of mortgages

My friend's mother got snookered into an 5 year interest only with an interest rate of 7.5%. It was also adjustable after the first 2 years. It could go as high as 13.25%, but never go below the 7.5%.

This was for a $215,000 condo.

So, people are going to jump at these things no matter the price of the property.

It's sad....but, at the same time, when someone tells you your payments are going to DOUBLE in 2 years and this doesn't concern you, I can't have too much sympathy when they end up foreclosing.

When I refinanced, this company wanted to charge me $12,000 in closing costs. I told them to take a hike!

 

[Texan Mouseketeer]

When I refinanced, this company wanted to charge me $12,000 in closing costs. I told them to take a hike!

Ameriquest Mortgage tried to charge a $4000 fee on top of all the other closing costs. They hid it in the final paperwork and we kept trying to find what it was that was causing the final mortgage balance to go up so high. They kept telling us that it was standard for refinancing and that you get penalized for doing so. We had almost 20% in equity in our home and after refinancing, we would have had none. We found another company that just did the 1% origination fee and our balance barely went up at all - like $2000 or something.