Buying a house?

I was looking in the Anderson Mill area about two months ago and prices there were around $100/sq. ft. IMO, Austin has been one of the least-affected housing markets as of yet.

 

Depends on the area. Also if you have the cash to do it. It'll be nice to pick up a house and pay it off instead of having a mortgage.

You'll see how much the mortgage company really makes in the truth and lending during closing.

 

I've been watching the market very closely for about three years. If you can stand to wait six months, the prices will get even lower, IMO. Then there will be a 'land rush' to snap up all of the super-depreciated property.

 

Don't know about Austin, but now is a great time to buy just about anywhere. I just got a new house in the exact area I wanted here in Houston for about $30k less than it would have cost me a year ago.

 

If you can pay off a house, do it. The majority of your mortgage note will be interest. Principle is practically non-existent until the latter years of the loan.

 

"Effective" interest rates for first year mortgages are about 500%...'

It's a racket.

 

I think unless you're getting some desperate forclosed deal for amazing bargain prices, it's still not that great of a time to buy from an investment standpoint. Domestically, credit is squeezed on all levels, and inflation is making spending harder. New homes and new mortgages are at a many decade low. Globally, the US used to be a perennial top X place to live, regardless of what category. But times have changed and you have people preferring to settle in Australia, places in Europe, all over Asia etc... now that they have caught up and in many different ways surpassed the standard of living and daily conveniences the US has. Watch for the housing market to continue to suffer and decline for at least 2-3 years and not have a real rebound til many more.

 

Turbo you live in austin?

I almost closed on a house in that area a year ago. i'm living in the west side now. good area.

 

My wife and I just bought a house and got a $150k, 30 year loan. If we pay the minimum payment every month for the next 30 years, we'll be paying about another $150k in interest ALONE. If you can somehow buy a house without having to get a loan, DO IT!

 

US News & World Report says not to buy but rent.

http://promo.realestate.yahoo.com/rent-dont-buy-your-home.html

Real-estate agents have been pushing the virtues of homeownership since homes were invented. Or since real-estate agents were invented, anyway. Paying a mortgage, they insist, is a can't-miss investment (the tax breaks, the appreciation, the thrill of fixing your own roof!). Renting is for simpletons who don't like keeping their own money.

But does owning a home really trump renting? With the economy stumbling, house prices falling, and credit tightening, many housing experts are questioning the conventional wisdom. "Over the last decade, it may have been true," says W. Van Harlow, an economist at the Fidelity Research Institute. "Clearly, there are periods where [the housing market] will dominate. But give this market correction another 18 months, and it may not be true anymore."

Not so hot. The housing boom produced endless stories of homeowners getting twice what they paid for their homes. But "prices don't always go up," says Jay Butler, director of realty studies at Arizona State University. Even a boomtown like Phoenix has seen median rates of appreciation climb only 4.6 percent a year since 1981. According to a Fidelity study published this year, the return on a dollar invested in real estate in 1963 barely beat that of a low-risk treasury bill.

When the housing market slumps—as it has every 10 or 15 years for the past several decades—homeownership becomes little more than renting, from a bank. Without appreciation, buying a $400,000 house—instead of renting the same property for, say, $2,000 a month—can turn into an expensive, potentially money-losing proposition. Assuming home prices come out of their death spiral (prices fell 4.5 percent in the third quarter compared with last year), they would still have to appreciate at 4 percent every year for a decade—even if rents climbed well above the rate of inflation—before a family would save more owning than renting. An $80,000 down payment could be invested instead in a mutual fund earning 8 percent, and housing comes with myriad other expenses, from maintenance to insurance to taxes, none of which build equity. Tax breaks do ease the pain. But with the average family staying in a house only six years, homeownership during a slump (especially in foreclosure pits like Las Vegas and Tampa, where prices have dropped more than 9 percent since last year) can look less and less like the American dream.

Renting, meanwhile, has its virtues. It's cheaper in the short term, it offers maximum flexibility, and it pushes the headaches of maintenance and taxes onto landlords. It can also be a sound long-term investment. According to Fidelity, if renters save even $300 a month—the difference, say, between their rent and a monthly mortgage payment—that money, invested in stocks growing at only 4 percent, could add up to $114,000 in 20 years. (And that's on top of earnings on a down payment that never had to be made.) "Over long horizons, if you reinvest the savings," Harlow says, "you're probably not going to find that much difference between renting and buying." Saving hasn't proved to be the national forte, of course. But with the bloom off the homeownership rose, it may have to be soon.

 

Sure, if you can find a deal like that, you're far better off renting.

In my neighborhood, people pay more to rent than they would if they purchased the property (usually by at least 10% to 20%). Even renting a two-bedroom apartment near my house is more than the mortgage on my three bedroom house (and we bought this place in 2005, so it's not like we've been here long enough to have seen significant appreciation).

By the way, every apartment I've ever lived in had rents rise far faster than the rate of inflation, as much as 50% over the course of three years.

 

There is no way you rent a $400k house for $2000 in the Houston market. Maybe in other areas where housing prices are inflated, but sure as hell not here.

 

Of course, there can be tax benefits to paying interest. The $7,700 in interest and property taxes I paid last year was fully deductible, which at least lowered my taxes a little bit.

Sure, it's not like I get the whole amount back or anything that way, but at least it lessens the sting a little bit.

 

Are you saying it would be more or less than $2000 in Houston?

 

More. A $225,000 house would cost you around 2k a month in rent.

 

Oh, OK.

All I can say is I am renting a 3 bedroom 1.5 bathroom house in a nice neighborhood with a new ac unit, a new water heater, and new plumbing for only $400 a month. I am in no hurry to buy.