Long time readers may remember a post last July from our friend Puravida. Puravida had a "near homeownership experience" which he decided to back out of. Our thanks to him again for this update:
I just wanted to give you an update on the post you did of my story back in July. A little summary, we would have closed on our home a year ago, $216K, but we cancelled the contract. The home finally sold for $176k six months later…. Now the base price for the same model is $151K…ouch.
Again, thanks for your website and all the information provided and other links to become better informed. People say that if you stay long enough in a home, things will recover and you will be fine. Well in this case, I don’t think that we could have made up the loss in decades when I take inflation, devaluation, and fuel costs into account.
I agree with Puravida’s assessment. Sometimes buy and hold long term is a good strategy- but there are times when waiting before buying and holding is even better. Happy renting and thanks for the update!
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Puravida,
glad to see things worked out for you. Being an educated consumer is imporant. Being an educated investor is essential.
– Open House
I’m no economist by any stretch, but its amazing to me how many people just did not use their heads and say ” NO…I am not going to overpay for that house”.
The value of something is determined by how much someone else will pay for it. Its funny how people (in CA especially) are just standing back now and saying ” Thanks, but I’ll wait till the price comes down”.
I love it.
congrats.It just goes to show that one should never use emotin when buying.A little commonsense,some research,and there it is,the right choice.Kudos to you.I just wish that half of everyone that bought in 05″ would have done what you did.
The more amazing thing to me, is that educated people…. faced with the biggest financial decision of their lives… entrust it to some high school dropout/ former bartender / come realtor.
And yet, people like us get ignored when we say, ‘You bought a house? Noooooo!!”
Or something.
Watch the markets absolutely get slaughtered tomorrow… check mish’s global economics blog… has the best run down. Hint: Dow Futures are down 514 points at this writing.
Be good. Buy a cute Realtor a cup of joe and some ramen noodles later.
Oh, and what about those planned condos anywhere in Phoenix? Toast… you’ll see empty, half constructed buildings in Phoenix for decades. Airline pilots will navigate by the wreckage.
Rant off…. boy that felt good.
Coffee?
Yossarian,
514 points at this writing? Wow!!!
I am glad that PV avoided this loss. And there are obviously no taxes incurred by avoiding a significant loss. Well, I better not give the Commissioner any ideas.
I know a couple of folks who were so mentally manipulated by the “renting is always bad” mindset that they could not resist shoveling their bubble windfall into another house. I tried to lead by example by selling and then renting.
One sold her Phoenix area residence about 5% below the peak price and the other sold his about 10% below the peak price in early to mid 2006. They both just “had” to buy again, paying below peak, but still high prices.
The first person, who upgraded, is now completely underwater but can afford the mortgage. She will probably ride it down a couple of more years, and then eventually walk away as it becomes more commonplace and her 2006 price becomes a distant memory.
The second person, who downsized a bit, has a value that is significantly below his 2006 purchase price, but is not underwater on his loan because he put a significant amount down.
Monitor the futures as we go. Great bookmark for daily use:
http://www.bloomberg.com/markets/stocks/futures.html
– The Judge
As of 11:30 p.m. Pacific, Dow futures down 631. Hold on tight. Even if the Fed tries to come to the rescue in the morning, it’s not going to stem this panic. Not this time. The exits are getting crowded.
– The Judge
The cautionary guidance on this site is great and should be a heeded by those still interested in buying into this market. Please wait if you can cause its got a lot further to fall. Look at this post fron San Fran one of the suposedly bullet proof housing markets.
Stunning jump in foreclosures
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/01/22/BUTEUJN7I.DTL&tsp=1