Once upon a time, "Frank" was as grumpy a housing bear as they come.
Frank wasn't just waiting around until the final collapse of home prices in Greater Boston - a popular conviction among diehard housing bears.
Frank was out there aggressively low-balling, making offers to sellers based on what he believed their homes were really worth, which, typically, was tens of thousands below the listing price.
But our IT guy got tired of low-balling - and getting one rejection after the other from often not very happy home sellers - even as the rent on his Woburn condo escalated.
A year ago, he threw in the towel and decided to "go for it."
Writes Frank of his epiphany:
All the "Props" that the Gov/Fed is giving to housing, are NOT going to be removed anytime soon, atleast until the economy has a more sustained robust recovery. So anyone waiting for the market to "normalize", circa 2000, you are going to be waiting for a long time.
Here's Frank's story and why he decided to make a major change in how he was going about looking for a house. He also learned some valuable lessons along the way as well - look for more on that next week
Its been about a year now since we decided to "go for it," and make the purchase of our home and become a FTHB, so its interesting to look back on this past year, and see what the decision looks like in retrospect, and what I've learnt in the past year about home ownership.
I detailed our 3+ year search for the right home for us, in a BREN post last year (http://www.boston.com/realestate/news/blogs/renow/2012/12/long_a_housing.html) so I wont repeat the details in this one.
We pulled the trigger THE day after the Fed announced QE3-to-Infinity, basically throwing in the towel on the hope that that the Gov/Fed "Props" were ever going to be removed in a manner that allowed nominal prices to fall another 10%+, and the Fed's actions last month in not starting their "easing" of QE3 (when everyone expected them to) due to weakness in the economy/system, I feel vindicates my decision to finally buy last year.
We locked in our purchase of our home at measurably under $200/sq ft, and at 3.25% for 30yrs on our Primary mortgage. Since that time, prices have gone up about 10-15% per sq ft on average, with higher end/New Construction going for 20% per sq ft more. AND Interest Rates are about 1.25% higher, which adds another 10%+ to the monthly cost of servicing the mortgage. Given the increase in monthly servicing costs, I honestly can't say what I would do, buy or keep renting, if I was faced with the choice this year (though the rent on my Woburn condo has gone up as well, this year).
My wife adored new construction look/feel, but there was no way I (the bargain hunter) was going to pay the "New Construction Premium" of about 10%, that seems to be prevailing in this market. And while I would have liked to be able to buy a "Diamond in the Rough" and fix it up, I know that wouldn't have made my wife very happy.
I wish we could have found our dream home earlier, but in 2009-10, there simply was not any decent inventory of either New Construction or completely rehabed 4RB/2B+ houses in the towns that we were looking at, within our budget ($400-450k), as we only started seeing such houses coming on the market in 2011, and even then, the pickings were slim. There is STILL a shortage of such properties on the market, and those that do come on the market, get snapped up fast and/or at a premium (I still get my Redfin feeds, on the towns we were looking at, so I know what's being priced/sold).
The author is solely responsible for the content.