Join Early Retirement Today
Thread Tools Search this Thread Display Modes
Old 01-24-2011, 04:58 PM   #21
Full time employment: Posting here.
Lusitan's Avatar
Join Date: Jan 2006
Location: Boston
Posts: 620
Originally Posted by donheff View Post
Sounds like a lot of us FIRE'd folks
Heck yeah -- the FIREd are the ideal group that fits that category. But it doesn't fit the bill for most Young Dreamers.

Lusitan is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 01-25-2011, 02:55 PM   #22
Recycles dryer sheets
Pete's Avatar
Join Date: May 2008
Posts: 350
Housing prices are still falling in many areas, even with interest rates so low and banks not releasing numerous empty homes onto the market(at least here in SoCal). Historically bubbles have not been reinflated.

U.S. Home Prices Slump Again, Hitting New Lows - Yahoo! Finance

Pete is offline   Reply With Quote
Old 01-25-2011, 03:07 PM   #23
Recycles dryer sheets
figner's Avatar
Join Date: Jan 2007
Location: Los Angeles area
Posts: 328
Slight topic derail (and mods, feel free to split this into a new thread if appropriate):
With rates so low, it may be a great time to get a mortgage/refi. But if paying cash
for a house, does that mean it's one of the worst times to buy?

As rates go up, the same loan amount will result in higher monthly payments,
and it seems like many (most?) buyers look at monthly payments to gauge
what they can afford. Seems like that will put downward pressure on prices.
If you were considering paying cash for a property, would this influence
your timing?
figner is offline   Reply With Quote
Old 01-25-2011, 05:26 PM   #24
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
Join Date: Apr 2003
Location: Hooverville
Posts: 21,831
Originally Posted by Pete View Post
Historically bubbles have not been reinflated.
If it's housing bubbles you are talking about, there really isn't any history. And stock market bubbles-aren't we right now seeing a pretty good re-inflation?

haha is offline   Reply With Quote
Old 01-25-2011, 10:27 PM   #25
Moderator Emeritus
Nords's Avatar
Join Date: Dec 2002
Location: Oahu
Posts: 26,564
Originally Posted by figner View Post
As rates go up, the same loan amount will result in higher monthly payments, and it seems like many (most?) buyers look at monthly payments to gauge what they can afford. Seems like that will put downward pressure on prices. If you were considering paying cash for a property, would this influence your timing?
That's one effect, but perhaps it's minor in comparison to the effect of (unemployed) potential homeowners being unable to obtain a mortgage at just about any interest rate. Other potential upgrading homeowners might still be underwater in their home mortgages and unable to sell at a price that would let them go shopping for a "better" home.

I think you base a real estate decision on a couple other factors:
1. Would I want to live here for a long time without worrying about landlords and rent increases?
2. Can I rent this property out at an attractive cash-on-cash return?

I wouldn't be counting on the real estate market making the home's value appreciate much faster than inflation. Even if that happened, if you were in either of the above situations then you'd still be reluctant to sell.

The book written on, "The Military Guide to Financial Independence and Retirement", on sale now! For more info see "About Me" in my profile.
I don't spend much time here anymore, so please send me a PM. Thanks.
Nords is offline   Reply With Quote
Old 02-12-2011, 02:44 AM   #26
Dryer sheet aficionado
Join Date: Feb 2011
Posts: 34
Just a comment, since original poster seems very comfortable with the "immediate" equity of a short sale.

As other people posted, this may or may not be the case. I think realtors and people in the industry try to suggest that shorts are priced below market (I've heard 15%, I've heard 10%). On any case by case basis though, you really don't know for sure.

Don't forget the closing costs to buy.

And don't forget the costs to sell (realtor fees amongst other things that will pop up).

Equity isn't a number that you can easily calculate. If you get into a house and decide its not for you, or your employment picture changes (Referring to Nords words of caution), you are probably going to come out a loser in the short term.

Keep playing with numbers, you sound like you are approaching this very sensibly. Just try not to have too optimistic of an outlook, it could bite you.
verygoodthings is offline   Reply With Quote
Old 02-12-2011, 06:13 PM   #27
Thinks s/he gets paid by the post
Join Date: Jan 2004
Posts: 2,049
Get a roommate. That'll split the utilities and give you a little extra cash each month for the inevitable repair.
eridanus is offline   Reply With Quote
Old 02-21-2011, 07:44 AM   #28
Recycles dryer sheets
In-control's Avatar
Join Date: Mar 2007
Posts: 319
Location, Location, Location. Some places are very depressed and purchasing a home may be a bargin compared to renting. Others not such a good deal. If you are married and starting a family you will quickly find that you will be considering things like schools, nieghborhoods etc over a tax deduction. Those things may be mutully exclusive as a depressed area has lower tax revenue and are cutting services like school programs. For us it is was hard to find a 3 bedroom rental that was less then a morgage, espeically when you want to stay put for 20 yrs.

We found it hard to retire early with a morgage and the many unforseen expences that home ownership can bring. Are kids are almost all in college and we will be renting a 2 bedroom that includes heat and hot water in an area with a low population. That way we can utilize the equity in our house and have the flexibilty that retiring early can bring.

I also like the idea of having a consistent expence that is all inclusive to control your budget.

Just Trekking thru!
In-control is offline   Reply With Quote

Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off

Similar Threads
Thread Thread Starter Forum Replies Last Post
Rent vs. Buy House Mysto Life after FIRE 21 06-24-2010 09:47 AM
Should we buy a house - in cash? Gillette Young Dreamers 5 09-30-2008 03:22 PM
House Survey- Did you build or buy used? jIMOh Young Dreamers 52 03-25-2008 03:24 AM
How can I buy a house w/o feeling stupid? toofrugalformycat Other topics 18 01-31-2008 08:36 PM
Buy my first house? Deetso Young Dreamers 21 02-22-2007 01:33 PM


All times are GMT -6. The time now is 01:50 AM.
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2016, vBulletin Solutions, Inc.