Why aren't YOU buying a home?

[suburban george3]

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.

[MZT]

The general assembly watered down the eviction code a bit in the 1980s, but NC is little more landlord-friendly than New England states are.

The most important thing is to use a rental contract that conforms to N.C. statutes. The judges don't care if "your lawyer" drew it up and it looks fancy. Deviate from the statutes at all, and the judge can throw out the case, and even award treble damages to the tenants. YOU MUST HAVE A CLAUSE IN THE CONTRACT THAT SAYS EVICTION IS A REMEDY FOR NONPAYMENT. It's amazing how many times this is left out, because it seems obvious. If it's not there, the judge will just shrug - and tell the owner he needs to talk the tenant into leaving.

[davidals]

Too poor to buy, and prices are still going up in Chapel Hill, so if I buy, I will be doing it somewhere else. My employer is going through a rough patch as well, so I'm in my grungy abode for a while yet.

[CLTMichael]

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.

[johnpro318]

I'm too young and too poor. I'll just do the roommate thing til after college.

[Charlotte_native]

Here is a reason some people aren't buying homes. A friend has a contract on a home near the whitewater center in what was a 'starter home' neighborhood. Homes were selling in the $140's a couple years ago, his home (which is in great shape and is 2 years old) is a foreclosure and he is buying for $86,000. Great deal, right? BofA has strung him out for almost 2 months verifying more and more and more. He has an 800+ credit score, 10% to put down, and savings. They first turned him down because the home was in a declining market. No shiite...what isn't now.

He worked that out (he is now 3 weeks past the date he was supposed to close). Today they email him and let him know that they won't close his loan because he changed status from a W2 employee to an Independent contractor within the past 2 years even though it is the same employer and he's been in the same carreer field for 10 years. Absurd. Banks got us into this and they are doing a damned good job of keeping us there. They look more now for reasons NOT to give a loan no matter how qualified you are.

Not saying there are tons, but there are plenty of want-to-be buyers out there but this is what happens to them.

[rockhilljames]

He'll thank them 5 years from now when he's not stuck in a declining neighborhood. Sounds to me that with his credit he should save up more money for a down payment and look in a more established neighborhood.

My first house was in a similar starter neighborhood. While everything was great at first, once the initial owners started moving out, the neighborhood went to pot. Rentals started springing up, people began parking on the road, some houses were abandoned. It was terrible. We managed to get out and sell the house for what we had in it.

Lesson learned.

[illinijazz]

There is a big difference between a declining neighborhood and a declining market. Banks are not lending, even to primo qualified customers. And don't even try to talk jumbo loan to any of them. Banks were given truckloads of money in that big bailout bait and switch with no accountability or requirements for use. The big banks, that didn't need the money, are buying smaller "in distress" banks for cheap, with your tax dollars. They aren't making mortgage or any other type of loans.

The only person I know that is having any luck right now is my sister who is in the middle of a divorce and is two months delinquent on her mortgage. She is being told by her bank that in a few weeks there will be a program "for people like her", so they are not forcing her into foreclosure. Gee, didn't we all think that was the point of the bailout back in July ???

Please, don't ever say someone got what they deserved or should have known better. Everyone got on the magic carpet ride and no one should end up homeless because of some securities-based bundle greed. The flippers in places like Florida, Nevada, Arizona, etc - that's a different story.