Why aren't YOU buying a home?

[atlrvr]

To carry over from several threads, I'm curious as to what its going to take before people start buying again? Prices bottoming out? Unemployment rate going down instead of up? Return of more "normal" lending? The recession ending?

I asked at the start of the year in a separate thread what % of forumers would buy this year, and I think over 30% said they would. Obviously things have changed since then, and I doubt 30% truly did. What will it take to make potential buyers commit?

The poll has 2 parts. What is the primary reason for not buying (or in case you did, you can select that). Also, if you didn't buy, what are all the reasons that are factoring into your decision.

[Bled_man]

I bought my house in January of 07 and we love it, so we won't be buying again for a while. I might look into refinancing though, if the rates continue to drop.

[RiverwoodCLT]

My house is paid off, no need to buy a new one.

[Charlotte_native]

This is VERY representative of what is happening in the market right now. I know of a half dozen examples very similar to what you've outlined. Additionally I've had two friends get almost to closing and have their lender (big local bank) tell them that because they feel the property was in a 'declining' market that they no longer would give them the 90% loan promised and then required 15%. These weren't investors, these were homebuyers.

Not that there are a lot, but there are more people out there wishing to buy but dealing with finicky (to be nice) lenders, lenders who change terms last minute, or lenders that simply say no after saying yes. Obtaining a simple loan with good credit and money to put down does not insure that you will be able to buy right now. If lenders would loosen up for these folks, not shaky deals but good ones, the housing problems would be less than what we are seeing right now -- not a whole lot less, but look at your example, ready-willing-able buyers turned away for no real reason at all. Look at everyone caught in that one situation who can't move on and doesn't get paid (the sellers, closing attorney, paralegal, title company, agents, home depot post-sale, etc, etc). This isn't the single problem by any means of the market today, but it is a big one -- the grinding halt of many homes sales that otherwise would be happening.

And for me on this thread, we bought a year and a half ago so no need to buy now! I actually wish I could, though, considering the interest rate and the potential great price that is probably out there.

[InitialD]

1) I'm too poor to buy house

2) I don't want to be tied down to one place for years and years. I want to be a nomad as soon as part 1 improves.

[JBGB]

We bought our house almost 2 years ago in Wilmore. My wife is pregnant and we would love to have a bigger home. The market in Wilmore is awful right now so we are going to make due. Hopefully Ikea will help with some space saving furniture. We want to stay in the area and like it here just whish we could buy something bigger instead of living threw an addition to the house.

[Windsurfer]

Not that there are a lot, but there are more people out there wishing to buy but dealing with finicky (to be nice) lenders, lenders who change terms last minute, or lenders that simply say no after saying yes. Obtaining a simple loan with good credit and money to put down does not insure that you will be able to buy right now. If lenders would loosen up for these folks, not shaky deals but good ones, the housing problems would be less than what we are seeing right now

[49er]

Sold my house in 12 hrs at asking price back in April which was great. However, the house we bought in May has probably dropped 7 or 8% in value since so I'm not happy about that. Unfortunately, appraisers are doing the opposite of what they used to do. Instead of over valuing homes they now have unreasonable time frames for comps. If its more than 3 months old, they usually dont consider it and are generally under valuing property.

[suburban george3]

I would love to buy a historic home at the moment, but my current house is working for me, plus I have 6 years of established credit with my lender and I am actually looking at refinancing at a lower rate and combining notes on the property into one. (When I bought, I had slightly less than 20% to put down, I believe I had like 16%. They wanted me to pay Points and Mortgage Insurance and I balked. They busted my note into two pieces, an 80/20 note it was called so I wouldn't have to pay those fees.)

I have noticed homes that sat over the summer for sale in my neighborhood have suddenly been selling, plus they have been going thru closing fairly quickly. I don't know what the difference is, but it looks as if there is a lil bit of activity starting to pick up. There weren't many ARM's in my neighborhood, and the only foreclosures (3 out of 77) have been due to divorce. They are still building in the new neighborhoods surrounding my development, but at a much slower pace. Plus Ryan homes abandonded a 400+ unit, Centex handed a development over to another builder, and other developments have been 'traded' around or abandoned.

I think with interest rates as low as they are for mortgage rates, that this is an excellent time for people with stable jobs and the savings to get a good deal. Some friends that I know in the mortgage industry are also saying they are seeing increased activity over the past couple of weeks.

[Batou]

There was no "I'm too poor/not really an option for me etc" option. I'm just fine with living in apartments but I'm still young and finishing up college and stuff. I don't know too much about buying a house but if I could I would try it seems like there's alot of cheap options right now, but like I said I'm no expert.

[krazeeboi]

1) I'm too poor to buy house

2) I don't want to be tied down to one place for years and years. I want to be a nomad as soon as part 1 improves.

[dxartist]

There are several reasons for me.

1. Just got out of debt 6 months ago and starting to fix the old credit score/ratings thingy, which leads to #2.

2. Can't qualify for a mortage and don't have a downpayment anyway. I'm pretty sure a bank isn't going to lend me any money.

3. Even if I did qualify for a home, I rather want to be tied down. I'd rather have to flexibilty to up and go if necessary since I have very few material things.

4. Uncertainty.

[InitialD]

Plus, I've found a house to rent, a very small house, but very cheap and with a good landlord who has somebody keep the yard cut and leaves raked. You can't find an equally sized (safe) apartment for this low.

[ohioaninSC]

There are several reasons for me.

1. Just got out of debt 6 months ago and starting to fix the old credit score/ratings thingy, which leads to #2.

2. Can't qualify for a mortage and don't have a downpayment anyway. I'm pretty sure a bank isn't going to lend me any money.

3. Even if I did qualify for a home, I rather want to be tied down. I'd rather have to flexibilty to up and go if necessary since I have very few material things.

4. Uncertainty.

[UPTOWNGIRL]

what I find most amazing about all of these posts -- and I agree with completely -- is the UTTERLY amazing retrenchment these "major" banks have gone through.

<B>THEY ARE A FREAKIN' JOKE !!</B>

Find yourself a good credit union, make a decent downpayment, and you'll be ABSOLUTELY FINE!

The two of us purchased our home in the late summer/early autumn in Charleston, SC -- a market arguably MUCH worse than Charlotte. Banks told us we'd "never get a loan," even though my significant other's doctor, here FICO score is 820; mine is high-700s and my income is $150k ++ per year.

We sashayed on over to State Employees' Credit Union, whereupon they said: " can you make the minimum, "old school 20% downpayment" and we said emphatically, "yes!" Then they said, "will you move most of your money over to us for our accounts?" and we said YES; moved my retirement, her retirement, over 100k in money-market and/or investment funds, etc. Before you know it, we're closing in fewer than twenty days' time, with a 3-7/8% mortgage, on a 30-year fixed.

We're not rich, nor are we "so old" that we have super-established credit or anything, but we got hooked up. YOU NEED TO SHY AWAY FROM THE MAJOR BANKS!

We put a ton of our money into the credit union.

One week after closing, I removed all of my cash from Bankschyster of America, and put it into not just the credit union, BUT -- I opened up 10k money market accounts at a bunch of our regional banks here in Charleston: Bank of South Carolina, First Charleston Bank, etc. Higher interest rates earned -- and I'd rather let them hold my money, anyway....

[MZT]

Unfortunately, appraisers are doing the opposite of what they used to do. Instead of over valuing homes they now have unreasonable time frames for comps.

[rockhilljames]

Got a house. Love it.

...I'm thinking about buying a second house now that prices are falling (for investment purposes...).

[Bynocerus]

I'm really surprised "house might decline in value" is not a more prominent reason.

My wife and I are moving to Tampa in April, and we plan on renting for one very simple reason: virtually every area we've looked at since finding out this was in the cards only two months ago has declined in value between 10 and 20%. And this comes on top of these areas already being down in value by almost 40% in some 'hoods.

By way of example, and for sake of round numbers, I gave a realtor our parameters back in October, and I get updates nearly every day for houses that have come on the market. One particularly nice one - originally listed for 200k this summer (again, not the actual value, but I'll be using 1:1 price ratios) - had dropped to 145k by the time I first saw it and is now down to 105k and listed as a short sale. And it's a really really nice home. The scary part: I narrowed the search parameters to just that street, and there are four other homes out of nine in the culdesac that have experienced similar declines.

I know Charlotte has not been hurt as bad, but do you really want to catch a falling knife here? I know in the stock market I always get really bullish when investors become incredibly bearish; the lack of bearishness on the housing market on this board suggests a bottom in housing is still nowhere nearby.

You might say, well, you're just looking in the suburbs, and it's true that some houses are new neighborhoods on the edge of the city. However, the above enumerated example is for an established, downtown-ish neighborhood that is very nice.

When I see that "might decline in value" number start to creep up I'll think harder about buying. Until then I can get a 2,400 sf home with an indoor pool and a hot tub for less than $1,200/mo, and I plan on doing just that.

[rockhilljames]

Well, I think the point is that in a down market like this there is money to be made IF (and it's a big if) you can afford to sit on the property until the values start rising again. You would also have to be very choosy in what you buy. The equity to be gained is in older homes, custom built homes, or in being able to pick emerging areas of the next 5 to 10 years. I think the era of having a cookie-cutter, low quality home appreciate by 20% over 5 year time frame is gone for good (as well it should be).

Al Atlvr pointed out in a previous post, Charlotte's poised a little better than most for the eventual recovery since MOST areas aren't too built out.

[Bynocerus]

Well, I think the point is that in a down market like this there is money to be made IF (and it's a big if) you can afford to sit on the property until the values start rising again. You would also have to be very choosy in what you buy. The equity to be gained is in older homes, custom built homes, or in being able to pick emerging areas of the next 5 to 10 years. I think the era of having a cookie-cutter, low quality home appreciate by 20% over 5 year time frame is gone for good (as well it should be).

Al Atlvr pointed out in a previous post, Charlotte's poised a little better than most for the eventual recovery since MOST areas aren't too built out.

[palmetto75]

Well, I think the point is that in a down market like this there is money to be made IF (and it's a big if) you can afford to sit on the property until the values start rising again. You would also have to be very choosy in what you buy. The equity to be gained is in older homes, custom built homes, or in being able to pick emerging areas of the next 5 to 10 years. I think the era of having a cookie-cutter, low quality home appreciate by 20% over 5 year time frame is gone for good (as well it should be).

[Charlotte_native]

Bottom line is do your best to buy wisely and hedge your bets against a drop that is always a possibility. All investment is subject to rise and decline as part of the cycles that are going to occur. There has never been a guarantee that real estate will appreciate.

As for the suburban cookie-cutter demise, those areas have traditionally been slower to appreciate due to scarcity (or lack thereof). If you go to some random 'out there' neighborhood and buy in phase 3 of 20, and the builder is going to be building adjacent to you for 10 more years -- offering new buyers the choice to customize and buy brand new, don't expect much appreciation for quite some time. This is what nailed a lot of what they called 'starter home' neighborhoods with the current foreclosure crisis. Foreclosures are happening everywhere -- not a single market I can think of that isn't being affected, but when you aren't able to dump your house for less than the builder one street over is able to dump their home for...there isn't much you can do. Same happened, actually, for a couple larger condos in Courtside uptown.

Right now there are just a couple scenarios where it might make sense to buy -- IF you are very secure in your job, IF you have found a great deal in an area where prices have either had their drop or aren't showing signs of dropping, IF you have money to put down and money to put aside, and IF you plan on being there for a few years.

[rockhilljames]

One of the best reporting jobs I've seen on the recent housing bubble was done by SoCal Connected. You can watch it at kcet.org/socal . One of the most heartbreaking episodes was this one: Foreclosure Alley.

It highlights more than anything I've seen how unsustainable these multi-phase developments became once they got priced out of realistic prices.

[49er]

I'm a big fan of credit unions too. BUT, back in 2006 I bought a home and financed through a local credit union here in Charlotte, Sharonview Federal. They've been around for a long time. They did what they called an "online" appraisal of the house so no one with the bank ever actually saw what it looked like. All they knew was that some sort of online fannie mae or freddie mac appraisal software similar to Zillow told the mortgage broker that the home was worth more than we were financing. They also didn't provide escrow services, so you were in charge of paying taxes, etc...a risky proposition when the applicant is putting less than 20% down. When I refi'd the following year the standards were far more strict and they had begun to require escrow and physical appraisals, but it just goes to show that even credit unions were getting pretty lackadaisical with lending practices. Anyway, the best thing about credit unions is often times no pmi.

I too am looking at buying another investment property if the bank will lend to me, but you have to look at it this way. You may have the most secure job in the world, but will the tenants you rent the home to have a secure job? Will you find yourself providing free housing to someone who has been laid off and then end up fighting the eviction battle? I think those are some of the things potential home buyers/investors probably consider.

[Charlotte_native]

I too am looking at buying another investment property if the bank will lend to me, but you have to look at it this way. You may have the most secure job in the world, but will the tenants you rent the home to have a secure job? Will you find yourself providing free housing to someone who has been laid off and then end up fighting the eviction battle? I think those are some of the things potential home buyers/investors probably consider.