Thursday, October 18, 2007

Then Again, Maybe Not

Talk about timing. I just put up the post about NaNoWriMo thinking I would have the time to put aside in November to write. Um, maybe not. In a totally non-sci-fi related topic....I don't know how many people who come here pay much attention to what's going on in California, but we've been in the middle of a massive boom/bust housing cycle. My husband and I decided to sit the thing out when it reached the manic stage around 2004-2005. Everyone was telling us "you gotta buy in or you'll be priced out forever." But we just couldn't reconcile what the market was doing with common sense. I knew people who were buying homes sight-unseen out of fear of not getting in. I knew people who were taking out loans at 8-9 times income, which just blew my mind. But my husband and I stayed firm. We were not buying in. Anyway, about two years ago the market started stalling. It took awhile before people realized it was going to come down. This boggled my mind because the Fed had been tightening rates for over a year, but some people are a little slow to see the writing on the wall. The fallout has been a lot of foreclosures. A whole lot. I won't go into details but my parents got caught up in the re-fi mania while interest rates were low and now they are losing their home. Oh how fun. The upshot is that a lot of good properties have been popping up and my husband and I decided we were going to start looking for a house. I think the market will go down for awhile longer so I haven't been in a big hurry to buy, but I want to see what's out there, right? So we contact a realtor and look at two houses. Damn if a remarkable deal didn't pop right up. I mean, a sweeeeeeeet deal. A big house that is easily priced $50k below the rest of the market and we might be able to negotiate more off. Right now the thing is priced at 2001 prices and we might be able to take it back a year or two more. It's also remarkable in that it's bank owned and in pristine condition. Spotless. So we're making an offer. If it goes through I will be packing and moving in November. Needless to say, I doubt I'm going to be writing a novel that month. In fact, I'm so boggled right now I can barely write a post. I don't know about everyone else, but to me this is kind of scary-- but cool. Of course, if our offer isn't accepted, I can still write a book.


Nuvein Foundation said...

Glad you didn't take the plunge in the refi mania. I didn't either and I'm not worried with my housing situation. Too bad about your parents.

Charles Gramlich said...

I think yoiu did the right thing with the housing market

Avery DeBow said...

I've known many people that bought way over their heads and are now in deep. It's good you avoided it. Sorry to hear you parents couldn't.

Lee said...

Great time to long as you can get the loan.

My exhusband contracted a new house to be built at the height of the boom out here and then tried to sell his (our) old house during the massive real estate downslide. Now he owns 2 houses and therefore 2 mortgages, with little hope of selling any time soon. Karmic retribution is the bomb-diggity.

SQT said...


I think we dodged a bullet.


I was hard to see it at the height. We kept thinking "what if we're wrong?" But it seems like fundamentals always win in the end.


I'm sorry about my parents too. But they've always had a gambling-rather-than-saving mentality.


Karma's beautiful isn't it? We've been talking to different mortgage brokers and they're telling us that they love us all day long (that's and actual quote btw).

Crunchy Carpets said...

Wow...yeah, I am HOPING that with the plan to put the MIL's house up for sale in the new year that we can start hunting too.

The prices here are still on the rise though, and people seem to be STILL be willing to sign their lives away....but hopefully we will find something we can afford.

Lee said...

love us all day long?

Are they Asian hookers?

SQT said...

Are they Asian hookers?

I sure hope not. I doubt the loan would end up being worth a whole lot.

Stewart Sternberg said...

I refinanced, interest only payments, with the intention of financing again into a fixed mortgage. Then values plummeted. Now? Now I am facing some ugly mortgage payments.

I love listening to the Fed and the Treasury talk about helping those poor banks and investment companies who are now suffering. No one is helping work with people and companies to negotiate an equitable and satisfactory way out of this mess.

Ah, but then, Republicans believe in free market activities. That must be why they keep allowing most media to be controlled by a handful of mega corporations.

Damn, SQT, look what you did. You made me get all political. I'll stop now before I call Bush a terrorist or before I say something unflattering about the lack of backbone the Dems have offered standing up to the tyrant.

Look what you made me do, SQT.

SQT said...

Sorry Stu.

You know what's really messed up? The banks aren't accepting short sales and they're forcing people into bankruptcy. I found this out when we started looking and there were two houses that were prices super aggressively. Turns out, they were short sales being offered by the owners prior to bank approval and our realtor told us that over 90% of short sales don't go through. The banks either reject them or allow them to expire, forcing the owner to foreclose.

This is really stupid because the seller is screwed worse than before and the banks lose even more money by taking the home back.

The realtor says it's mostly because the banks just can't handle the volume of foreclosures that are coming. That and the fact that some paper pusher in Ohio, who knows nothing about the market in Ca, compares what the house sold for 2 years ago and what's being offered now and rejects it out of hand.

I think this will change as the market worsens but a lot of people will be screwed before then.

Btw, we got the house. We ripped a deal. We payed $2000 more than the house that sold across the street from us a couple months ago but ours is 1000sqft bigger.

Alex said...

Haha! 50k under market. When I was living in Duluth, people were snatching up 5-bedroom homes from the bank for $20k, then turning them into rental properties for college students. The things paid themselves off in two years.

Nice to know there's another reason not to move to California. It's one of the least appealing states in which to live, and it's among the most expensive. lol

SQT said...

Yeah, but then you have to live in Duluth.

I've lived outside Ca but always moved back. It's expensive but the salaries can be very good. We didn't go over the 3x's income rule, so we're fine.

Besides, how good can anything that costs $20k be? You couldn't buy an outhouse for that around here.

Jocelyn said...

This is very cool--and, no matter the hit your blogging takes, I'm all for you packing boxes!

Alex said...

You've obviously never been to Duluth. Cool city.

SQT said...

It's a snow thing. I hate hate hate snow.