No Responses to “Will first-time homebuyers come back to market?” »»

1. Q
   Comment by Q | 12/14/06 at 11:54 pm

   I’m a

   potential first-time buyer in the Metro Boston area and I was prepared to enter the market around

   May of 2006.
   However, like many others, I started noticing the softening of the market and

   opted to sit out and wait.

   I have the 20% to put down but I’ve decided to sit out and

   continue renting at a price that is less than half of what I’d be paying for a mortgage payment.

   I’ve decided to let my savings continue to earn interest and wait at least until early 2008 before

   entering the market.
   Many of my friends are in the exact same boat as me and they are all

   taking the same approach. I don’t see any of them buying in 2007.

   Great blog and I

   appreciate the fact that your content is some of the most objective I see out there in a

   blogosphere filled with spin and half-truths. I think it gives you a lot of credibility in the RE

   industry.

2. John A Keith
   Comment by John A Keith | 12/15/06 at 1:40 am

   Nine tenths of life is just showing

   up.

3. Chris
   Comment by Chris | 12/15/06 at 9:18 am

   I can totally understand this situation. If I were a first time

   buyer, I would probably do the same unless I saw something I loved for the right

   price.

   However, letting money sit in savings is certainly not going to earn you any real

   interest. I would assume you are not tying it down into IRA or what not- in case you do find the

   right place to jump in – so the basic savings account is a total non-factor in the grand scheme of

   things.

4. Mike
   Comment by Mike | 12/15/06 at 9:44 am

   I’m doing

   the same thing as Q — I have the 20% downpayment just sitting in a bank, but I’ll be starting a

   new lease in 2/07 instead of purchasing a home like I had planned earlier this year. If house

   prices remain flat like most economists are predicting, then at least I’ll be earning an extra

   $5000 bank interest over the next year on my money.

5. AC
   Comment by AC | 12/15/06 at 10:49 am

   Maybe

   I’m not as pessimistic as others, but I too have the 20%, yet I think the spring will be a great

   time to start looking. I plan on staying for at least 5 years wherever I buy, so even if there’s a

   further dip in 07 and things start to recover in 08, I don’t see it affecting me enough to put off

   buying for another year.

6. Q
   Comment by Q | 12/15/06 at 11:34 am

   I keep 70% of my savings in an Emigrant Direct

   savings accountm, yielding about 5% annually. The other 30% I let ride in index funds. My hope is

   that the net gain will be somewhere in the 6.5%-7% range.
   I figure getting that return on my

   money is better than possibly taking a loss or a small gain in 2007.

   At the end of 2007, if

   things have really taken a dip, I plan on testing the waters a bit and possibly making some lowball

   offers. I know sellers often find this insulting but I would go out and make several offers 20%

   below asking price and see if anything sticks. If not, no worries.

   By the time I buy, I

   could potentially have 30-35% to put down. I would sleep quite well at night knowing I have that

   much equity to start with.

   I honestly don’t know how people can live paycheck to paycheck

   simply paying for their home. That would give me ulcers.

   I hear a lot of people say banks

   encourage you to overextend yourself on a mortgage. Personally, I would never go beyond the 28% of

   gross income threshold. As a result, I may be forced to move out of the area I’ve lived in my

   whole life.

   Based only on my own observations, a lot of young intelligent people are

   getting the hell out of Boston lately. I personally worked with 4 people in their 20’s who fled

   the state for more affordable areas.

7. Fever
   Comment by Fever | 12/15/06 at 3:23 pm

   Chris:

   Based on the way home prices are moving under your mattress would provide a better

   interest rate than investing in real estate.

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