This is the time and place to post observations about your local areas, comments on news stories or the New Jersey housing bubble, open house reports, etc. If you have any questions you wanted to ask earlier in the week but never posted them up, let’s have them. Also a good place to post suggestions, requests for information, criticism, and praise.
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Some suggestions for discussion:
1. 2007 Predictions – Let’s hear them!
2. The following post written by Clotpoll.
Although our friend writes with the subtlety of a flying mallet, he’s probably one of many recent homebuyers who has realized that- despite the nonstop predictions of disaster around here- the sun keeps coming up every morning.
He is also dead-on in his assessment of the plethora of arbitrage and relentless minutiae-crunching within many threads here. It’s like a pack of vultures picking at a dead rabbit…not much meat there. And what a way to assess owner-occupied RE! Call me stuck in the ’50s, but I contend “home” is supposed to be about family, comfort and good times. The market goes sour? Stay in your home thru the down cycle. Nobody just wakes up one day and suddenly realizes NJ is expensive. And, even though there are thousands of the proverbial “500K POS Capes” out there, there are affordable, nice places to live all over NJ…if one is willing to compromise just a tad. RE is a game of compromise, because not even millionaires can “have it all”…there’s always a tradeoff among the three factors of price, location and amenities of homes buyers consider (I contend the best anyone can do is get 2 out of 3 of those factors…the third factor will be out of the buyer’s control and must be accepted). No matter how bad things get in NJ, a 450K 4 BR Colonial in a top school district on the Midtown Direct line ain’t in the cards. Sorry; location DOES matter.
I have tried to grasp the merit in the idea of renting, hoarding cash and waiting for the big market crash in order to swoop in and obtain maximum value. However, I can’t help but think that the element of putting your life on hold that this strategy requires also has significant costs. Renting- in and of itself- implies transience, impermanence and absence of commitment (please don’t read this as an accusation of renters being shiftless drones who have 400 FICO scores, leased Escalades and closets full of $300 jeans). You can be in a beautiful place…great landlord…below-market rent…but you are essentially “on hold”.
And on hold for what? It seems that for many here, the only x-factor left is when to call the bottom of the market. All but the blind agree it’s down; the only question is how much further it will fall. 5%? 10%? 20%? Is the benefit of catching the absolute bottom worth the wait and uncertainty? And, what if the bottom is in…and you’re missing it now? Are you so invested in the “big crash” theory that you can’t pull the trigger in a rising tide?
Cost/benefit analysis requires an evenhanded assessment of both sides of a proposition. I, for one, see a lot of attention here to the cost side…while the benefit side of the ledger gets lip service (or worse). This blog doesn’t get the attention that comes its way because homeownership isn’t highly desired and valuable.