Monday, June 29, 2009

Proof It Really Is a Buyer's Market

We went to a party a couple weeks ago at the home of one of DH's grad school classmates, who lives in one of the towns where we're househunting. DH's friend bought the house one year ago this month. So when a listing came into my email for a home in the same neighborhood, I decided to check public records on the friend's home. I knew prices had come down quite a bit from last year, but it's really something to see it.

DH's friend paid $881.5k for a 3 BR/2.5 BA 1608 sq ft home with a pool, or roughly $550/sq ft.

This current listing is for $725k for a 4 BR/2 BA 2012 sq ft home with a pool, or roughly $360/sq ft. Now I've not actually seen the inside of this house in person, but the photos look similar to the one owned by DH's friend.

Unfortunately, we've had to postpone our purchase due to difficulty finding attractive financing. Although we've got excellent credit and a good, stable income, all the lenders we've talked to won't touch us because we have <20% to put down. A couple of the lenders we talked to want 30% and one even said 35%. So we're staying in our current rental townhouse as cramped as it is and trying to save up a larger downpayment.


Henry Cate said...

Good luck with the house buying. It is hard to know if we've hit bottom and now is a good time to buy, of if it will continue to drop. said...

Whoa, $250K for a downpayment? That's a lot of money. Here in Fresno you could buy a whole house for that kind of money.

Barbara Frank said...

This could be a blessing in disguise. Some are predicting another 20% drop in house prices over the next few years. We sold our house in 2007 and are still renting, waiting to buy until prices really bottom out.

As long as wages continue to drop or stagnate, it makes no sense for house prices to stay where they are. If/when we hear that wages are going up and unemployment is down, it'll be time to act :)

Can you tell we talk about this a lot at our house, LOL?

Crimson Wife said...

Yeah, Bay Area prices really are nuts. Not quite as insane as a couple years ago, but crazy compared to almost everywhere else in the U.S.

There's a home in the affluent neighborhood where I grew up in MA that's 5 BR, 2800 sq ft, and on a 2 acre lot- it recently sold for $430k. The home in a nearby neighborhood that recently sold for $720k is 4700 sq ft and on 5 acres.

Barbara Frank said...

My sister sold her house in Lafayette, CA last winter for $750K; it's only 1800 s/f on an acre. Luckily, she'd owned it for a while and made a modest profit on it. But a few years earlier it was appraised at $1.2 million---crazy!