| Real estate bubble,how much will houses drop? Worth to sell? |
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mcvg
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| Real estate bubble,how much will houses drop? Worth to sell? |
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Hi guys,
I need your opinion....I presently have about 400k in savings, own two townhouses which I currently rent out and own a house we live in. I have been thinking about selling our main house and living in one of the townhouses until the real estate bubble bursts and then jump in and buy something at a great price, preferably in florida along the beach.
The house we live in will sell for $250-275k. I did pay 1/2 that a couple years ago and fixed it up and would like to sell it before the market starts dropping. My main concern is will real estate go down that much to make it worth selling it now and live in a much smaller place with 3 kids and a wife? If the house was worth 750K and market went down min. 10%, then thats 75k or more, but on 250k, then thats only 25k.
My current mortgage on main house is only 25k left and on the townhouses another 25k/each. I get $850/month on each as income.
Would you guys do it, or not really worth the headache?
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Sun Dec 11, 2005 4:02 am |
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mcvg
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25 views and not even one opinion/comment? come on guys don't be shy!!
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Mon Dec 12, 2005 4:28 am |
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efflandt
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Location: Elgin, IL USA
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You have not even said what state the home is in, much less what city (just that you would like to get something on the Florida coast). How would anyone here know your home's current estimated value is fair or wishfull thinking?
It is still in a median range affordable for many people, so its growth in value may just slow instead of falling. When I bought my home in 2002 with interest rates still higher, anything under $200k was selling like hotcakes (many were sold in a week).
A $750k home is a totally different story (beyond affordable for most people, especially if property taxes are 5 figures).
If you are sitting there with 2 townhomes, a house, and $400k worrying about a bubble that may never happen, the name Scrooge might come to mind. Isn't the enjoyment of your kids worth something, instead of packing them up like sardines?
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Fri Dec 16, 2005 3:19 am |
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mcvg
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Thanks for the name calling....The townhouse is still good size for a family, the larger house is more spoilness. We just spend two months in a condo in florida and its much smaller than what we have now, but we were still comfortable.
All we are trying to do is be prepared and also at same time have the cash in hand to buy a new place in florida, when prices drop and become more affordable.
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Fri Dec 16, 2005 5:42 am |
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sam1000
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I have been following the chatter. There are a lot of extremely overvalued areas right now like SoCal, Vegas and Boston. But there are also some areas like Houston where there is absolutely no bubble at all since prices did not rise out of the ordinary to begin with. Prices are already beginning to fall in OC and LA counties. Inventories in LA are up 29% and the median price is falling rapidly.
Here is an interesting link that gives statistical data, make your own inferences from this 
http://www.benengebreth.org/housingtracker/location/California/LosAngeles/
Another link with projected data:
http://money.cnn.com/pf/features/lists/re_growth_forecast/?cnn=yes
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Tue Dec 20, 2005 7:32 am |
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mcvg
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bump
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Thu Jan 12, 2006 5:48 am |
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bong12187
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quote:
Originally posted by coaster
quote:
Originally posted by mcvg
...thinking about selling our main house and living in one of the townhouses until the real estate bubble bursts and then jump in and buy something at a great price,....will real estate go down that much to make it worth selling it now....All we are trying to do is be prepared and also at same time have the cash in hand to buy a new place in florida, when prices drop and become more affordable.
It sounds to me like you're trying to time the real estate market. What if instead of prices going down they just level off or go up slowly? What if you sell now and prices keep going up for another year? I don't know....you want to take a chance when your primary dwelling is almost paid for? The only thing I see you gaining is some net cash if everything works according to plan. But you can do the same thing without selling your home by selling one of your rental properties. After all, if you're planning on living in it, you lose the income anyway. So net, net it's about the same and you don't lose your home.
The main thing here is that as long as the seller is comfortable with the profit he will be making. It is really immaterial to think the "What if" since we don't have a crystall ball in front of us. MCVG will also not pay any taxes for any profit made since he lived in the house for two year. The only thing that concerns me is that MCVG already have 400k in savings and what would he be doing with the profit he will be making when he sell the house. Keeping it with the rest of the 400k savings earning him a puny 2% doesn't look too interesting for me. As for me, I don't have 400k in savings. I have some cash reserves to keep me afloat for a year. I often leverage my cash for downpayment as soon as I have enough of them. Good luck to you all...
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Sat Jan 21, 2006 9:11 am |
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