http://www.bankrate.com/brm/news/real-estate/20041018a1.asp

If we didn’t have kids, we’d sell right now and rent.

My SO and I have been renting for the last 3 years and it was absolutely worth it. While our friends and family have been stressing over the value of their homes, we’ve been able to save enough cash for a wedding, 2 cars, mini-vacations and even fund a handful of hobbies.

Oh yea, we will even have a chunk of money ready for a downpayment.

I started off my working career making less than $40k a year and my friends are wondering how it is possible I can afford these things; let alone racking up 0 debt. There’s not much I can tell them but the truth:

Living a comfortable long-term life has very little to do with how much money you make and everything to do with how you spend it. The more you’re willing to sacrifice early on will magnify the payoff at the end (i.e. by renting, saving, giving up Starbucks, ect.).

That being said, I am definitely a home buyer waiting on the sidelines. There is a time to buy and a time to rent. As of today’s market conditions, it is the latter!

A home should not have to be a stretch on a family budget. A home is supposed to be a wise decision and a good alternative to paying rent. Not some pimped out loan where you need to put every last cent you have into the house payment.

If I never own a home in my life I don’t feel I will have missed out on the “American Dream”. In fact I think many people are finding the dream can be quite a nightmare when you worry about money every month.

On the other hand many “renters” are NOT living in equivalent homes, we are living in small 1-2BR apartments paying much LESS. So instead of buying that 800K home for $5000 month (incl prop tax and insurance), I’ll spend $1500 on rent.

Honestly, I am quite content with the extra $3500 cash in my pocket each month, lower utilities, and less worries. I know $42K a year is not a lot to save if a home is going up 100K year, but those gains are only realized when and if you buy and sell at the right time.

Once that same home hits $400K and the payment $2500 month then it makes more sense.

Very interesting and spot on.

I think the one thing that people can’t grasp, or dont’ want to grasp is the magnitude of what is going on. The numbers are so large that they almost start losing meaning, because we have no reference point to compare this too.

The scale of what is going on is off the chart, there is no infrastructure to deal with this size of economic disaster. Katrina and the Tsunami sort of come to mind, compare it to a economic nuclear bomb going off in Florida and California. One can argue that this economic disaster is going to have the same end result as if a Nuclear weapon went off in LA county, etc. I would also argue that this may be even more difficult to deal with because this is happening over 18 plus month period vs. a nanosecond. Sure, what I am saying can be dismissed as so much hyperbole… but when you begin to think of what is happening now, and try to plot possible event futures you begin to see that the future is very scary. We are in a “System of a Down”, or a negative spiral…. the energy needed to pull us out of this is so massive that it is beyond comprehension, and most likely beyond possibility. One almost can come to the logical conclusion, “well I better get mine, before the whole @@@@house goes up in flames”… thank you Jim Morrison…

Doubt me.. Just look at the chart…. then think of possible scenarios of what could pull us out… $600 rebate check… Bear Stearns bail out… The chinese gov’t buying every foreclosed upon house, and creating the worlds largest property management company… a small investment of 1 to 2 trillion dollars would do that…

In any case, it doesn’t matter what we say here or on any of the housing blogs. The correction will continue on regardless of what bloggers say.

Perhaps I’m way off and there isn’t a decline in Arcadia - who knows? But all the data I’ve seen points to a crash that’s unfolding before my eyes. I rather wait and see than jump in too soon and get burned. Buying at a slightly higher price than whatever the bottom ends up to be is better than buying before the bottom and hoping that it’s indeed well…the bottom.

Markets hit the boom at different times so it’s not surprising that they tip the scales during a decline at different times. Beaches gave you legitimate data that shows a decline in La Canada home prices. Be it median price on 10 properties (and I agree median price may not be the best way to go about it), but it’s the same method used to track sales/volume during the boom. Using averages isn’t any better. The 10 properties that sold shows severe drop off in sales volume, which preceeds declines in home price.

If you’re not convinced prices will continue to fall, then I suggest you go buy that house in the Oaks right now. If you wait, you might get priced out forever ya know.

In your situation, it would makes sense to just roll over the equity than to pay capital gains on that $500k.

Because you are a move-up buyer, then the decline of home values will affect you either way. That is unless you rent and wait. But then you’re stuck with a big tax bill and the declining value of the dollar.

I can think of a few reasons why that might be the case.