Saturday, January 24, 2009
I have to laugh. A couple of my neighbors here are stuck in this down market. One gal bought her place about three or four years ago. She was one of those flippers thinking she could move in fix the place and cash out with a fat wallet. She was all set to sell last year when the poop hit the fan. Now she's working part time and put her place up for sale just to get out from under the mortgage. The problem of course is that she owes more than it's worth. So now she's had to have her adult kids move back in just to make the mortgage. I tried to tell her about this but they just don't listen.
Then there's my other neighbor. He had a plan. He was going to keep his place until his son moved out then sell it and move to a bigger place. I know that sounds goofy but who am I to judge people's logic. He put his place up last spring after changing the carpets and flooring and redoing the kitchen and bath. When he originally listed it about a dozen people did the looky lou but no takers. He's lowered the price three times in the last seven months and I haven't seen but one or two lookers. The price is 40K less than the original asking price. It's kind of sad because they just built a bunch of places down the road here that are a bit bigger and they sell for 20K less than he's asking for his now.
So here's my advice on housing. As I've said before buy the cheapest place in the best part of town or area. It should cost no more than two and a half times your gross yearly income. It should be based on one income only. And I'm sure the banks will have some fairly strict terms as to down payment and income verification. Buy it to live in it.
When do I think this will turn around? It could be five years or ten or maybe never. Remember the demographics of this country are changing. There's more older folk than youngins. Who's going to afford the McMansions that were built during this past generation?