The reality gap in real estate prices continues. Although I would love to have a backyard for my kids, dog and garden, I'll wait a while to start house shopping. Sticker shock is still a real issue in my area.For sure, the drop in prices is huge in my neighborhood. From my affordable rental apartment, I've seen prices drop from the $1 million-range to $600,000-- and still there are very few buyers or offers. Hmmm. I remember when some of those homes were selling for only $200,000 to $300,000 and my memory is not that long.
Oh well. Based on the inventory that I see in my local market, I'm willing to sit on the sidelines for the next two years or so. I'm looking for advice:
So, please drop me a note (email) or a comment with your estimate about the length of the housing slump. When do you think the market will hit bottom?
In the meantime, I will continue to get my fiscal house in order. Due to a few new opportunities, I will be saving more money. These tips from CCCS make sense to me, especially the recommendation about considering the total costs of home ownership.
"CCCS suggests that all consumers consider the following before buying a home:
- Know why you want to buy. There are many advantages to owning your own home, including the building of equity and the potential tax savings. Current housing prices and mortgage rates may also make it more appealing. It is important to understand why you want to buy a home and why now is the right time for you.
- The big picture-what owning your own home really costs. It is easy to get so caught up in the excitement of buying a home that we don't take the time to investigate the real costs associated with purchasing and maintaining it. The down payment, closing costs, and insurance are all significant investments you will make before you even get to move in. Once you move in, there may be repairs that need to be made or necessities that need to be purchased, such as appliances or window treatments. Once you move in, there are other costs to consider. You may need to outfit your shed or garage with a lawnmower and other maintenance tools. If you live in a neighborhood with a clubhouse, a gated entrance, or other community amenities, you will likely have monthly or quarterly association fees. Utilities may be higher in your new home. You are now responsible for property taxes and homeowners' insurance. By taking a realistic view of the costs of home ownership, you will be better prepared to determine how much you are prepared to spend on your new home.
- Shopping for a home. Identifying what you need in a new home is an important first step. If you aren't prepared to make repairs or changes to a house yourself, you might consider a newer home. While you might not easily add another bedroom, don't ignore the perfect house because it doesn't have a fenced yard or swimming pool-these can always be added later. If you have or are planning to have children, you might want to focus your search around a particular school or family-friendly community. A real estate professional can help you narrow your search to homes that fit your criteria. Before purchasing any home, plan for a thorough home inspection.
- Shopping for a loan. There are many different ways to finance your home, including fixed and adjustable rate loans and varying terms. Familiarize yourself with mortgage options and consider pre-qualifying for a mortgage before you start shopping. While you may qualify for a higher mortgage amount than you thought, set a payment limit that you will be comfortable with. If you haven't checked your credit report recently, now is a great time. You can request a FREE copy of your report once every 12 months online at www.annualcreditreport.com or by calling (877) 322-8228.
- Getting started. CCCS offers free pre-purchase counseling and homebuyer education workshops for consumers on the path to homeownership. A private one-hour counseling session can help prospective homebuyers learn the basics of the process. A six-hour homebuyer education workshop will help consumers assess readiness for homeownership, take a realistic view of the costs involved in purchasing and maintaining a home, and evaluate their credit and financial situation to determine how much house they can really afford. Workshop participants will also learn about the various mortgage options and what to look for in a lender, and explore the tremendous benefits of home ownership, from stabilized housing costs and appreciation, to the many tax benefits. And for first time home buyers, the certificate you will earn may qualify you for down payment assistance or special mortgage products available through participating lending institutions.
"Whether you are buying your first home or moving to a new one, the time you spend preparing to become a homeowner is as important an investment as the home you purchase," said Jessica Cecere, president of Consumer Credit Counseling Service (CCCS) of Palm Beach County and the Treasure Coast. "Realistic goals and careful planning are essential to making the best choices for you and your family."
source: www.cccsinc.org
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