Buying a house in this Economy - Part 1

Hey folks, all 2 of you watching this blog, I want a place to vent when buying a house, and in this economy people are saying it is the best time to buy. I beg to differ in many ways but here I go!

First before we even attempted to buy a house, I have been tracking the Median and Average house prices for the past 100 years. If anyone looked at this chart you would see that the housing bubble that many mentioned on TV was absolutely true. Starting around the late ninetys houses began to inflate to almost double their value (see chart below),  it was almost a matter of time before stuff blew up andthe market attempted to correct itself and prices came back down. 

Click below to read the rest!

A major part of this came from the leniency of new laws allowing people that really couldn’t afford a house at that time to get adjustable rate mortgages. Predator lenders came out and preyed upon these people. Now this brings us to today, many houses are being foreclosed on and being sold short sale.

We are seeing houses in our price range that are steals, and some are laughable because those poor saps who are backwards in their mortgages now who owe more than the house is worth are trying to still think they can get what they bought it for, and not realizing the people right down the street are selling their house for 25k-50k less.

Today we ran into a fun yet disturbing after effect. 2 houses we went to see had tenants that did not want to cooperate. One was from an owner that was renting out the house on a monthly basis. The owner is being about to be foreclosed upon and they want to sell the house now before they lose it. The problem is the renter does not want to move and is doing anything in their power to not cooperate with the company hired to show the property, so there goes one house we were in love with and unable to see and possibly put in an offer. Now we have to wait until the tenant is kicked out at the end of the month, and maybe we can look inside. 

The other case is a lender owned house. On paper we saw, it was vacant and ready to be shown anytime, again with lockbox on the door. Come to find out, since they wrote that, they have rented out the house. Once again, a tenant did not want to cooperate and decided to HIDE the box while she went out of town.  So out of 4 houses, 2 were blocked by renters, almost a complete waste of our time today. A 3rd house had a renter also, and was completely cooperative, but we were really not that interested in the house and it was a family with 2 young girls, they had the rooms all decorated and would feel a bit guilty kicking them out of their home. 

2 other houses we really liked were also pre-short sale houses but had been snagged up by “investors”, isn’t that part of this whole problem with the flipper types? Both were beautiful and big especially for the asking price, we knew these would go fast, appearantly in under a week.

Which brings me back to the begining of the blog, the last house we saw they were originally asking $225,000 and have “reduced the price” to $179,000 for 2 stories and a screened in pool, sounds like a steal right? Well when the value of the rest of the houses in the direct neighborhood have fallen to about $150,000 (some houses in the $90,000’s!)  it still seems to be they still have wishful thinking, especially when the house has no garage or attic for storing goodies like holiday stuff. 

So the hunt is still on, we have till the end of the month before we can see the house we really like (maybe) and till the end of august till our lease ends.  Feel free to check back as I vent some more, I still have much more to say about how we became financally capable of looking at the house and the run around when it comes to applying to become pre-approved for a mortgage. And more than likely I will post more about  the run around with closing costs, redecorating and all those goodies that come along with houses.