[moon]

Originally Posted by ken0042

I'm going to use houses like mine as an example; as it's new enough and there's lots on MLS. Last summer I saw houses like mine selling for $380K. This year they are listed for $350K. I think the point was that instead of buying a house last year it would have been smarter to "throw away money" on rent for a year to buy for $30K less. Even with $1500/month rent you are still up by $12K, plus another $1500 in taxes not paid.

Yes, hindsight is 20/20, and the people who bought last year will still make money if they keep their house for another 20 years. But the time to buy would have been now and not then.

Originally Posted by Claeren

"Long term" is not a very specific term, but if this market tops out the way it is looking to be topping it out and you were one of those buying at the top of the market last summer, then the 'long term' necessary to have been better buying than renting is VERY long term.

Outside of purchasing at the top of the bubble, i do agree though, it is generally better to buy then rent. The problem of course is that we have just gone through a major bubble in pricing so...

I realize that there are better times to buy than others and hindsight obviously shows us that waiting could have made more financial sense in some cases.

I guess it seems you could have this type of mentality forever then and always be waiting for a drop off in prices. At some point you have to bite the bullet. Since there are no guarantees that prices will drop/rise/stabalize its seems a little odd to be blaming the housing market for people's situation in buying houses and being in debt.

I know plenty of people who bought in that same time frame and are not in trouble because they did not overextend themselves and planned for anything that might have happened.

Perhaps because I already own my home and do not have these worries it is easier for me to be less sympathetic, but it does seem that lately everyone feels that they have some right to buy a house for $1,000 and sell it off for 1 million. Sure in buying a house you don't want to end up losing money but if you make sure that you are buying quality than you are most likely going to end up positive at the end of the day.

Again perhaps it is seeing people with this flipping mentality and the idea that they are all going to make millions with little work and then whinning when that doesn't happen that has jaded me to the whole complaints about real estate issue at all.

Anyways it seems that there are others with much more specific knowledge about this anyways so I will get off my tiny little soapbox and allow those others to get back to their graphs, numbers, percentages and whatnot to argue over the real estate climate in a city in which I don't even live.

As for "affording" what they purchased. Yes, by stretching young professional-type power-couple friends were able to buy their suburban dream homes. Of course they were willing to stretch because they hoped or were told that the price appreciation would take the long term pressure off and make it all worth while - and that inversely, if they didn't stretch now they would be priced out of the market 'FOREVER'. When that $440,000 starter home or $310,000 560sq-ft condo drops even a few precent in value, all the sudden they are stretching for nothing. Even this coming year, where prices should stay flat, that means a ~4%+ drop relative to inflation.