buying a house

“that is something that should have been known when you picked the realtor out to start with”

“He still showed us everything we wanted to see. The biggest problem we had was my wife had unrealistic expectations about what we would find in the area she wanted.”

“Well, you can tell the realtor what you're willing to spend, but they will still show you more expensive stuff and try to talk you into it, until you #&%!$ slap them, lol...”

“dat true”

“My house went up 3 times in value after 9-11 & tons of folks moving out of the city. Made it tough for my (school teacher) to buy a home nearby. Ended up taking out an equity loan to help. Guess I won't retire.”

“why is this a gear question. ice tea, do you go camping with your house?”

“Maybe it's where he plans to store his gear?
last edited: 3/10/05 6:11:21 AM”

“House and car are the ultimate pieces of gear. Without the car you don't get to bp, and the house holds the computer, which lets you get on to thebackpacker.”

“Birch,

You are a good man and I respect your opinion on this immensely. Kathy and I are working towards our 20% down payment. We should be there by the end of the year.

We'd like to take you and Joy out to lunch sometime.”

“RL, awww shucks man (shuffling his feet) thanks. We'd love to do lunch too!

I wish we had 20% to put down. With hindsite being 20/20 I look back at our years of dual income and how we wasted $$ and now how we make in on mine alone, I think of all that coulda been done...Oh well.”

“One of my coworkers is in her 3rd house in five years. She has been moving into new developments after her two years is up in each home, and she has some serious equity to show for it.

If you're willing to move every few years and put the time in, I guess it really can pay off in a good housing market like Sacramento.”

“The biggest question is NOT the house of your dreams NOR the finances.

Who are your neighbors???

Will you be living next to Ozzy Osbourne wannabes?

Regardless of how nice the house is, urinarily deficient neighbors can be a huge downer!!!

Caveat emptor.

Okay, I'm done.”

“Hindsight being what it is I wished we’d stretched our budget further with our first home. The value nearly tripled in the 8 years we were there. If we’d started with twice the house (which we could have afforded) we’d be that much better off now.

The market in our new neighborhood has been going gangbusters. If we sold now, after 8 months, we’d realize more than a $100,000 profit. We could take our equity and buy a really nice home in many other markets- cash.

I’m not saying that the same thing will happen in your area (I’m still waiting for the crash) but I just wanted to point out that cautious isn’t always the best strategy in real estate.”

“Vio, we're in much the same boat. I've seen the my house's price increase by 140k in two years here. When I get out of this house, I can buy a house outright (barring a major collapse) in Albuquerque, or buy three times the house for the same money.”

“We went and looked at a gorgeous house today. Great price, beautiful Victorian home, #&%!$e neighborhood. In five years it might be acceptable, but I wouldn't be comfortable leaving Kamper there by herself four nights a week. Hell, I wouldn't be comfortable there by myself four nights a week.
Oh well, we're only a week or so into the search.”

“thats one of the problems in looking at some of those homes in bad areas. If the whole neighborhood has been restored it is ok. Normally though you have a run down house with a tree growing out of its gutter right next to one you like”

“Yeah, Angie said she'd much rather own the worst home in the best neighborhood than the best house in the worst neighborhood.
The neighborhoods get real expensive real fast.”

“I hear you, Violin, but I'm not sure we need to be very wealthy.

Kathy and I are pretty low spenders and I figure that if we cover all of our bases and continue to save regularly, we'll have more than enough money to be happy.

I'm not sure I'd want to risk overextending. But it probably is the best time to buy all the house we'll ever need. I don't think this is the time for a starter home.”

“If you're handy, Angie's idea is a good one. Bring the house up to the level of the neighborhhod and you should earn yourself some equity real quick.”

“I missed your post rl.

More than enough money to be happy?

Is there such a thing? ;)”

“Getting out of SoCal. House prices here are beyond over-inflated. They're absurd. Even for condos. They're selling, but we're not buying. So, we're leaving family and friends behind (who have homes) and we're relocating to Central California. We're located 10 minutes from HWY 180 (the road into Kings Canyon NP; Western Sierra).

We built the house to our spec and bought it for a fraction of the cost of less than half the house here in SoCal. =)







We can move in two weeks from now. And we shall live among the mountains, among the orchards, and among fruit stands that shall fill our bellies.
last edited: 3/11/05 2:17:28 AM”

“Actually rl - if I were a first time buyer in this market, I'd have a tough time justifying a purchase. It's pretty hard to find any house around here under $300,000. That's a lot for a starter home.”

“I am sure glad I live in the south. $300,000 can buy you a big house down here.
If you move a little out of Nashville you can get and even bigger house for that much money.”

“300k here will get you a two bedroom condo.”

“In Franklin, which is a short commute to Nashville you can get a 5 bedroom, 3 full bathrooms,living, dining,den,rec,1 other room and a 2 car garage for under 300K. The home is brick. Now the lot size isn't that great but that means less to take care of.

People who have moved here from Calif are shocked at the size of the home they can buy compared to what they had there.”

“I know Ewker. My wife's cousin just sold his modest house in a crappy NJ city and bought a beautiful 5,000 square foot home on 8 acres outside of Memphis with his equity. It is similar to the homes being built near me that are selling for a little more: http://davisrealtors.net/apps/listings/ListingInfo2.aspx?ListID=452488”

“Here's a pretty typical place around here. 3 bedroom two bath...

http://realtor.com/Prop/1043364678”

“Currahee, are you looking for a house or a condo?”

“est house payment $ 2000.00 or 7000.00 a month...yikes

Vio and Phad, how do you guys live there with those high prices. Is the pay that much greater or do you work 3 jobs.”

“I sell drugs Ewker. Lots of em.”

“Ewker, I just buy drugs and try to forget the prices.”

“Like I said - I don't know what I would do if I hadn't gotten in when I did. I wouldn't have been able to afford this neighborhood as a starter but my starter home tripled in value which gave me enough equity to live in a much nicer neighborhood. My house is much more modest than the one I linked to, but it's within sight distance. That's one of the reasons the value of this one has gone up so much since we bought.”

“Violin paid cash.


He used the settlement money he received from finding a turd in his backpack.”

“You lawyers have all the inside dope.”

“Hey Chili, how is it up your way for home prices.”

“Single family detached house. We've shared walls with our neighbors for long enough.”

“Trading Places: Real Estate Instead of Dot-Coms

By MOTOKO RICH and DAVID LEONHARDT

Real estate-crazed Americans have started behaving in ways that eerily recall the stock market obsession of the late 1990's.

In Naples, Fla., some houses have been bought twice in a single day, an early-21st-century version of day trading. Buying stocks on margin has morphed into buying homes with no money down. The over-the-top parties of Internet start-ups have been replaced by flashy gatherings where developers pitch condos to eager buyers.

Five years ago, the cable channel CNBC sometimes seemed like a backdrop to daily American life. Its cheery analysis of the stock market played in offices, in barbershops, even in some bars. Today, "Dude Room," "Toolbelt Diva" and other home-improvement shows are the addictive fare that CNBC's exuberant stock shows once were.

"It just seems like everyone is doing it," Laurie Romano, a 26-year-old self-described real estate investor, said with a giggle as she explained why she was attending an open house this month for the Nexus, a 56-unit building going up in Brooklyn's chic Dumbo neighborhood. She and her fiancé, a dentist, had already put down a deposit on a Manhattan condo earlier in the week and had come to look at another at the Nexus.

Nobody can know whether the housing boom of the last decade will end as the dot-com frenzy did. But the parallels are raising alarms among many economists, even those who acknowledge that there are important differences between homes and stocks that significantly reduce the chances of another meltdown. For one thing, houses are not just paper wealth: you can live in them.

Still, perhaps the most troubling similarity, some analysts say, is the claim that the rules have somehow changed. In an echo of the blasé attitude that "new economy" investors took toward unprofitable companies, the growing ranks of real estate investors are buying houses they never expect to be able to rent at a profit. Instead, they think the prices of houses will just keep rising.

Indeed, the government reported yesterday that sales of new homes jumped sharply in February, in the biggest monthly increase in four years. A strong economy and an improving job market contributed to the gain. But many buyers were also trying to beat rising mortgage rates, which could eventually cool the market.

Adding to the parallels between stocks and housing, some of the doomsayers from the 1990's have returned with new warnings.

"We're going through something very similar in real estate that we did with stocks," said Robert J. Shiller - a professor of economics at Yale, whose prescient book on stocks, "Irrational Exuberance" (Princeton University Press, 2000), appeared just a few months before technology stocks began their slide. "It's driven by the same forces: that investments can't go bad; that it has the potential to make you rich; that you'll regret it if you don't do it; that it looks expensive but is really not."

A new edition of Mr. Shiller's book will be published next month. The cover promises an "analysis of the worldwide real estate bubble and its aftermath."

Premonitions of a bubble on the verge of popping do not ruffle those who are bullish on real estate. In Miami, Ron Shuffield, president of Esslinger-Wooten-Maxwell Realtors, predicted that a limited supply of land coupled with demand from baby boomers and foreigners would prolong the boom indefinitely.

"South Florida," he said, "is working off of a totally new economic model than any of us have ever experienced in the past."

The can't-miss aura of real estate has also helped nudge many families to invest more of their personal wealth in real estate by buying more expensive homes and taking on riskier mortgages - much as ordinary workers used their 401(k) plans to bet on company stocks.

There are certainly serious reasons to believe that house prices will not suffer the fate of technology stocks. Not only are houses more tangible, but people do not sell their homes as quickly as stocks, making a panic much less likely. Because of tax advantages, few owners are likely to sell and rent something else simply because local house prices start to decline.

As high as they might seem now on the coasts, home prices nationally have not quite doubled over the last decade; during the 1990's, the Standard & Poor's 500-stock index more than quadrupled.

"I just don't think we have what it takes to prick the bubble," said Diane C. Swonk, chief economist at Mesirow Financial in Chicago, who was an optimist during the 90's. "I don't think prices are going to fall, and I don't think they're even going to be flat."

Such confidence about real estate has created a 1990's-like stampede of new investors. The night before the Nexus party, Patrick Cullert, 31, and Jennifer Mathews, 29, who are engaged, camped out to ensure they would be near the head of the line for one of 16 condos to be sold at the party. It was today's version of pestering a broker for shares in a hot public offering.

And many former stock market enthusiasts are now turning to housing. Douglas Paul, a 46-year-old former analyst, left AT&T in 2002 to buy and sell stocks on his own. But he soon decided that real estate could be another way to make quick profits. Mr. Paul owns two condominium units around Fort Lauderdale and one in Miami Beach, all bought during the last year, in addition to the one where he lives. He plans to sell one of the Fort Lauderdale condos in June for what he believes will be double his investment.

"It really is a very hot real estate market, and I don't know how long it's going to continue," he said. "But in the short term, why not profit from it?"

Mr. Paul's path is an increasingly common one. The National Association of Realtors estimates that nearly one-quarter of home purchases last year were made by people who thought of the house as an investment rather than a place to live. Seminars promising to teach amateurs the tricks of real estate speculation have proliferated.

Even at Harvard Business School, where students have traditionally gravitated to careers in investment banking and corporate marketing, real estate is suddenly hot. About 25 graduates have taken real estate jobs in each of the last two years, up from only six in 2001.

It is not quite the gold rush of 2000, when about 200 Harvard M.B.A. graduates flocked to technology companies. But even if they are not working in real estate, some of those graduates are now investing in it.

Andrew Farquharson, a member of the class of 1999, said he recently teamed up with a high school friend to buy a home in the Central Valley of California "out of pure speculation." He knows of other classmates who have made similar investments.

"I look at this as a short-term investment," said Mr. Farquharson, 36, who works for a venture capital firm, "and plan to unload it as soon as things look dangerous."

In addition to the flood of investors, the parallels between real estate and stocks extend into mainstream culture.

Real estate bulletin boards and blogs like Curbed.com and Real Estate Pimp have taken the place of financial chat rooms like Tokyo Joe's. ABC has a breakout hit in "Extreme Makeover: Home Edition," and Home and Garden Television, a once-obscure cable channel, now draws an average of 827,000 viewers in prime time.

The seemingly inevitable how-to guide inspired by Donald Trump - "Trump Strategies for Real Estate" (John Wiley & Sons) by George Ross, one of Mr. Trump's assistants on his hit show "The Apprentice" - is a strong seller, already hitting No. 177 on Amazon.com's list in March, less than a month after its release.

At the Nexus party in Brooklyn, Steve Nguyen, Ms. Romano's fiancé, said he was heeding Mr. Trump's advice. "He says buy, buy, buy," Dr. Nguyen said.

The same message is being trumpeted by David A. Lereah, chief economist of the Realtors association, who argues in his new book, "Are You Missing the Real Estate Boom?" (Currency), that real estate investors will "experience substantial and satisfying wealth gains" into the next decade.

The question that looms over these books is whether they will suffer the fate of another optimistic talisman, "Dow 36,000" (Times Books), which was a best seller in late 1999. Its authors, James K. Glassman and Kevin A. Hassett, argued that stock prices, despite five years of roaring gains, "could double, triple or even quadruple tomorrow and still not be too high."

The Dow Jones industrial average hovered around 11,000 when "Dow 36,000" was published. It dropped below 8,000 in 2002 and closed at 10,442.87 yesterday.

Another lingering echo of the stock market boom is the role of the Federal Reserve, the nation's central bank. In the 1990's, the Fed kept interest rates relatively low because it saw little risk of rising inflation despite a booming economy, helping feed a fever for stocks. Alan Greenspan, the Fed chairman, famously asked aloud in 1996 whether "irrational exuberance" was driving the stock market, but then backed off from second-guessing investors.

After the market plunged and the economy weakened, the Fed pushed interest rates down to 50-year lows, helping to fuel the housing boom. This month, Mr. Greenspan made some comments about housing that offered a faint echo of his 1996 musings.

"Analysts have conjectured that the extended period of low interest rates is spawning a bubble in housing prices in the United States that will, at some point, implode," Mr. Greenspan said in a speech in New York, adding that real estate speculation had shown a "marked increase." Nevertheless, he said he did not expect a "destabilizing" drop in prices, in part because home prices across the country have never fallen significantly.

But by one measure, houses in at least a few metropolitan areas are as expensive as telecommunications stocks were in 1999, relative to their underlying value.

The average house in San Jose, Calif., costs 35 times what it would cost to rent for a year, according to Economy.com, a research company. In New York and West Palm Beach, this ratio - a rough equivalent of the price-earnings ratio for stocks - is almost 25.

In March 2000, the price-earnings ratio of the Standard & Poor's 500 - the combined price of the stocks, divided by their profits per share - peaked around 32, and it was briefly even higher for telecommunications stocks. The S.& P.'s P.E. ratio has since fallen to around 20.

Still, no matter how expensive real estate might be, it continues to provide many owners a return worth boasting about.

Holly Peterson, who is writing a novel about the idiosyncrasies of New York's rich, said that at dinner parties in Manhattan, she frequently hears complaints about high home prices, followed by claims of quick profits. "They always hit you with their last jab: 'Of course my money's doubled three times over since I got married,' " she said.

Five years ago, she said, friends at parties were crowing about "making millions of dollars on paper with $25,000 and $50,000 investments." But "most of those people," she added, "got wiped out."”

“We finally made an offer on our future home. It turns out that the VA approach is the best financing deal. More later. Wish us luck!”

“good luck you guys”

“The major fear for me is that all of this investment is being made on margin. The stock market also had a high degree of margin investment back in the late 90's.”

“Good deal currahee!”

“Good luck!”

“currahee, any word if they took your offer.”

“Yes, now I have to get it inspected & appraised to make sure the VA will support the purchase. We hope to close before the end of April. It's a 1940 Tudor in Inglewood, and falls in the Riverside neighborhood. Nice yard and full basement, just enuogh little things to update, but not enough to drive us batty.”

“Congrats! Make sure you check out the insurance report for that house. I posted the link early in this thread.
last edited: 3/28/05 2:02:52 PM”

“Link to my post about that: http://www.thebackpacker.com/trailtalk/thread/23842,-1,1.php#1119826”

“congrats, good luck with the inspection and appraisel”

“thanks Tech, we're on top of that. Our Realtor is a friend & he's been looking after us on a grand scale!
Thanks Ewker, we'll see you @ the housewarming party, withthe rest of the Nashville TTers.”

“The inspection went well. There are a couple of small things that we want the seller to address before we purchase, but it looks like it is ours. Our VA application went through extremely fast, now we are waiting on an appraisal and a couple of other little things. I want to post pics, but Kamper says that'll put a hex on the whole damn thing, so maybe later.”

“Congrats!”