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Wednesday, June 16, 2004

Doin' the Crazy

See, I don't do the whole spending money thing very well. Few things wrack me with more angst and uncertainty.

Then Rob says:
""Never test the depth of the water with both feet," the old saying goes, and usually I endorse such an approach. But not now. For the next two weeks, Gemini, you're exempt from that and just about every other cautionary rule. As far as I can tell, your future is so wide open that the only guiding principles you need are those that give you permission. Here's an example you might like, formulated by sex researcher Alfred Kinsey: "The only unnatural sex act is one you cannot perform.""

And yes, future wide open, take the plunge, but darn it if the whole thought of spending nearly half a million dollars on a townhouse doesn't leave me reeling. And then there's the whole issue of whether or not this is the perfect place for us. We love the place. The only thing it needs is a bit of paint and a new kitchen counter and we'd be ready to move in. The space feels great. We love the floor plan. The backyard is great. It's in Santa Clara, thus promising us wonderful utility rates. We love the community. The only question is whether or not we'd love a place in Willowbrooke more. It's right near Campbell, backs up to the Los Gatos Creek Trail, is walking distance to the Pruneyard, is completely adorable, and the only problem is that we don't want the one that's currently for sale. We want a different one to come up for sale, but they seem to do that with some regularlity there.

So do I take the bird in the hand, or continue to wait, not knowing how expensive it will be the next time a bird flies out of that bush? And darn it, $400,000 was supposed to be my spending limit, and up until the last month or so, both of these could be had at or much nearer that limit. The last time we bid on a Pomeroy West place, I offered $390k. The last time we bid on a Willowbrooke place (less than 2 months ago), it was a 3 bedroom, 2 1/2 bath that I offered full price for at $399k. Okay, so that one went for $20k over asking price, but still, that's not the same as $445k by a long shot. What crazy thing has the market gone and done now? What's a girl to do?

8 Comments:

  • As someone who has his house up on the market right now (Zip 89052 and mls# 406892) in Las Vegas, I feel the market here is about to soften just a bit. One way you can tell is by looking at how many homes were on the market last month and how many of those had offeres vs how many are on the market this month and how many of those had offers. In Las Vegas last month there were 1400 resale homes for sale and 5000 buyers in the market, there are now 5000 homes on the market. Who says supply never meets demand.

    Don't know if that helps you at all

    By Blogger John, at 2:14 PM  

  • John may be right. There's a column in the SF chronicle business section, that says that rising interests will cause house prices to fall as less people either can afford to buy or are interested vs renting. The hard part is whether that fall in prices will make up for the rise in interest rates.

    http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2004/06/17/BUGND776191.DTL

    By Blogger Chris S, at 5:33 PM  

  • Now is a very, very bad time to sink money into real estate, unless you don't care about equity or ever selling it.

    The market is going nuts because people are trying to jump in while "affordable" mortgages are still around. That bubble will pop.

    By Blogger mythago, at 10:01 PM  

  • This comment has been removed by a blog administrator.

    By Blogger Kevin, at 12:57 PM  

  • This comment has been removed by a blog administrator.

    By Blogger Kevin, at 12:57 PM  

  • You know, I've been saying South bay housing prices should be going down since 2001, due to the poor local economy and job layoffs. It never happened. Now that interest rates have gone up a little, property is more expensive than ever. The lesson I've learned is to not try and predict what this crazy housing market will do.

    My advice, look for something you can afford to make payments on and buy it. Eventually, even if the value dips a little soon, it will go up again. In the meantime you will build equity, save on taxes, and never have to worry about rent increases again.

    By Blogger Kevin, at 12:57 PM  

  • The problem is that you may NOT build equity. That's where all this refinancing mess is going. If the Fed monkeys with interest rates, your mortgage can go up--and people who bet on higher equity may lose that equity.

    Rent, by the way, is not increasing much if at all. I know that our rent has dropped about a third since 2001. People buy houses as investments and rent them out. The dot-com carpetbaggers leave and they owned apartments. So rent increases are pretty flat.

    Housing prices are not going to crash dramatically, but that doesn't mean they'll always go up and it's a wise buy.

    I will say that friends I know who've sold houses are being told by experienced realtors, "Don't turn around and buy again now. Wait until September or so."

    By Blogger mythago, at 4:56 PM  

  • Short term, who knows. When I'm talking about building equity and rent not increasing, I'm speaking longer term, like 5+ years. I have no doubt that the migration to California will continue, and more housing will be needed, despite what the economy does. Rent will go up. Housing prices will go up.

    By Blogger Kevin, at 12:49 PM  

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