I must say, I am getting a bit tired of some of my homeowner friends, reassuring me that it is a good thing we didn't buy a house 4 or 5 years ago, because (gasp), houses have gone way, WAY, down in value.
in fact, to be perfectly honest, I get a kick out of some of my homeowner friends informing me that they are thinking about buying a house to flip, like they are some sort of investor.
You see, while a lot of people understand the current housing market, a lot of people don't. And I am not saying I am some sort of expert (I am far, far, from that), I am saying I've had some experience in the last few months.
First of all, the people saying they want to flip houses are the same people who have heard some story about a neighbor, friend, relative etc. who bought a house for $40,000. It makes sense that someone else would want to do the same thing, because paying that little for a house is a very good deal. But unless you have cash, you aren't buying anything for that price. Basically if you decide that the house you want is in foreclosure, you better hope no one else wants that house. Then they will take the highest and best. Who has the best financing. Cash/mostly cash typically wins on these houses, and I don't have to tell you why.
Then comes the short sales. You put your offer in, the seller essentially co-signs on your offer, saying they are in agreement with it, then it goes to the bank. Usually some far, far away bank with thousands of houses just like the one you put your offer in on. They will assign someone to work on the case. Then they will send an appraiser out to your house in order to see if your offer is respectable. Depending on what price they get back on the house, the bank can either accept, reject, or counter your offer. That will usually happen within 60-90 days of the price opinion. Then another 3-=60 days to close. In short, short sales, can take months.
Finally, if you just want to buy a regular old house that is owned by someone other than the bank you will most likely run into 1 of 2 problems. The house will either be priced right, will fly off the market, for more than it was listed for, or the house will be over priced because they bought it 4 or 5 years ago when everything was over priced. The owners either need to get out what they financed the house for or what they put into it. Makes sense, who wants to write a check at closing? Those houses sit on the market because they aren't worth the high price tag, and who in their right mind will pay over market price in this market?
Overall, the market is crap. So, if you own a house, don't move! You won't find anything better unless you are willing to be very patient.
Tomorrow we are having the appraisal done on "our house."
I gave our 60 day notice today.
Step of faith? No, leap of faith.