Comments on: Question to the readers – β€œIn recent years there has not been a better time to buy a home, so what are people waiting for?” http://woodhillhomes.net/blog/woodhill-homes/question-to-the-readers-%e2%80%93-%e2%80%9cin-recent-years-there-has-not-been-a-better-time-to-buy-a-home-so-what-are-people-waiting-for%e2%80%9d/ Woodhill Homes in Central Oregon (Bend & Redmond) Wed, 7 Jan 2009 02:04:59 +0000 http://wordpress.org/?v=2.2.3 By: Darris http://woodhillhomes.net/blog/woodhill-homes/question-to-the-readers-%e2%80%93-%e2%80%9cin-recent-years-there-has-not-been-a-better-time-to-buy-a-home-so-what-are-people-waiting-for%e2%80%9d/#comment-62 Darris Wed, 21 Nov 2007 21:21:01 +0000 http://woodhillhomes.net/blog/woodhill-homes/question-to-the-readers-%e2%80%93-%e2%80%9cin-recent-years-there-has-not-been-a-better-time-to-buy-a-home-so-what-are-people-waiting-for%e2%80%9d/#comment-62 Thanks for all of the great comments. I will be responding to these comments soon in a new post that will address some of the specific issues that have been brought up. Thanks for all of the great comments. I will be responding to these comments soon in a new post that will address some of the specific issues that have been brought up.

]]> By: Heather Henderson http://woodhillhomes.net/blog/woodhill-homes/question-to-the-readers-%e2%80%93-%e2%80%9cin-recent-years-there-has-not-been-a-better-time-to-buy-a-home-so-what-are-people-waiting-for%e2%80%9d/#comment-61 Heather Henderson Wed, 21 Nov 2007 18:39:55 +0000 http://woodhillhomes.net/blog/woodhill-homes/question-to-the-readers-%e2%80%93-%e2%80%9cin-recent-years-there-has-not-been-a-better-time-to-buy-a-home-so-what-are-people-waiting-for%e2%80%9d/#comment-61 While there are several factors contributing to the growing number of homebuyers riding the fence, there are three very common reasons I encounter when working with buyers. First, income to debt ratio. Buyers of all economic strata, but more palpably first time home buyers, are continually suprised by the overinflated cost of purchasing a home. When looking at the average income of people in various income brackets, you can easily see the home that each respective group tends to, or has purchased, is usually (sometimes obviously) more than they can really afford. In reference to first time home buyers, many really struggle to get financing for even the most "reasonably" priced homes in the area. The reason is because sellers have an overinflated idea of what there home is worth which raises the average home sales price to levels that aren't in line with salaries. As a result, their income to debt ratio makes it difficult for lenders to finance them Second, down payment. While there are some programs still available that help first time home buyers with this issue, many come with stipulations. For example, PMI, prepayment penalties, etc. When it comes to those of us that are looking to buy a second home but still need financing, there are even more roadblocks. Non owner occupied rates are always higher (even with outstanding credit), there are virtually no 100% financing options which forces investors to tie up cash (at least 10%) in a downpayment and then likely turn around and still have to pay PMI. All this to purchase the home for a rental. Third, credit, credit, credit. This makes and breaks so many buyers. As previously mentioned by another responder, young folks are accumulating more and more debt along with seriously compromised credit ratings. We all know the affects of credit on one's ability to get favorable financing. Who wants to pay $2000 a month for a $150k property? You are better off renting. While there are several factors contributing to the growing number of homebuyers riding the fence, there are three very common reasons I encounter when working with buyers.

First, income to debt ratio. Buyers of all economic strata, but more palpably first time home buyers, are continually suprised by the overinflated cost of purchasing a home. When looking at the average income of people in various income brackets, you can easily see the home that each respective group tends to, or has purchased, is usually (sometimes obviously) more than they can really afford. In reference to first time home buyers, many really struggle to get financing for even the most “reasonably” priced homes in the area. The reason is because sellers have an overinflated idea of what there home is worth which raises the average home sales price to levels that aren’t in line with salaries. As a result, their income to debt ratio makes it difficult for lenders to finance them

Second, down payment. While there are some programs still available that help first time home buyers with this issue, many come with stipulations. For example, PMI, prepayment penalties, etc. When it comes to those of us that are looking to buy a second home but still need financing, there are even more roadblocks. Non owner occupied rates are always higher (even with outstanding credit), there are virtually no 100% financing options which forces investors to tie up cash (at least 10%) in a downpayment and then likely turn around and still have to pay PMI. All this to purchase the home for a rental.

Third, credit, credit, credit. This makes and breaks so many buyers. As previously mentioned by another responder, young folks are accumulating more and more debt along with seriously compromised credit ratings. We all know the affects of credit on one’s ability to get favorable financing. Who wants to pay $2000 a month for a $150k property? You are better off renting.

]]> By: Aaron http://woodhillhomes.net/blog/woodhill-homes/question-to-the-readers-%e2%80%93-%e2%80%9cin-recent-years-there-has-not-been-a-better-time-to-buy-a-home-so-what-are-people-waiting-for%e2%80%9d/#comment-57 Aaron Tue, 20 Nov 2007 05:29:17 +0000 http://woodhillhomes.net/blog/woodhill-homes/question-to-the-readers-%e2%80%93-%e2%80%9cin-recent-years-there-has-not-been-a-better-time-to-buy-a-home-so-what-are-people-waiting-for%e2%80%9d/#comment-57 I will defer much of this to my realtor wife, but what we are seeing is the inability for first time home buyers or those with less than stellar credit to get into loan programs that work. This is not a matter of interest rates, as those are still relatively low, it is more a matter of down payment requirements tightening. The days of interest only loans or 0 down offers are almost impossible to get now according to loan officers my wife works with. I think the mortgage "crisis" right now is keeping potential buyers on the sidelines. I will defer much of this to my realtor wife, but what we are seeing is the inability for first time home buyers or those with less than stellar credit to get into loan programs that work. This is not a matter of interest rates, as those are still relatively low, it is more a matter of down payment requirements tightening. The days of interest only loans or 0 down offers are almost impossible to get now according to loan officers my wife works with. I think the mortgage “crisis” right now is keeping potential buyers on the sidelines.

]]> By: Ben http://woodhillhomes.net/blog/woodhill-homes/question-to-the-readers-%e2%80%93-%e2%80%9cin-recent-years-there-has-not-been-a-better-time-to-buy-a-home-so-what-are-people-waiting-for%e2%80%9d/#comment-55 Ben Mon, 19 Nov 2007 22:41:19 +0000 http://woodhillhomes.net/blog/woodhill-homes/question-to-the-readers-%e2%80%93-%e2%80%9cin-recent-years-there-has-not-been-a-better-time-to-buy-a-home-so-what-are-people-waiting-for%e2%80%9d/#comment-55 My live-in girlfriend & I recently decided to stay put for a couple more years rather than buy a new home. We currently own, so maybe your questions is geared more toward people who haven't yet bought a place, but I'll give you my 2 cents anyway. WHY WE HAVEN'T TAKEN ADVANTAGE: -We followed good advice and bought what we could afford during the real estate boom, and we haven't really outgrown it and we love our part of town -We got a pretty good deal and the financing is great and we LOVE our place. However, our condo hasn't really appreciated since we purchased because the market has softened, and while there weren't many condos at all in our neighborhood at the time, there are several projects happening right now that will make selling tough for the next couple of years. -The neighborhood has changed SO MUCH in the last 2 years, and we're really excited about the continued investment and developments that are making it more attractive all the time. Even though more condos are coming into our neighborhood, we're generally very optimistic that our part of town will continue to appreciate, and we feel like our investment will really pay off in a couple of years. We CAN afford a condo in our neighborhood, but we CAN'T afford to buy a home in our neighborhood, which are generally over $650K to start -we don't have any kids, and don't plan on having any time soon. If we were, we would probably transition out of a condo and into a traditional home HOW WE PLAN TO TAKE ADVANTAGE -refinance. We only took out a 5-yr ARM at the time, and we're nearly 2.5 years into it. Since we've decided to stay, we're going to take advantage of the still-low interest rates out there & refinance the loan -Buy a 2nd home? With the buyers market, we have seriously started considering a 2nd home out of town for weekends / leisure / rental My live-in girlfriend & I recently decided to stay put for a couple more years rather than buy a new home. We currently own, so maybe your questions is geared more toward people who haven’t yet bought a place, but I’ll give you my 2 cents anyway.

WHY WE HAVEN’T TAKEN ADVANTAGE:
-We followed good advice and bought what we could afford during the real estate boom, and we haven’t really outgrown it and we love our part of town

-We got a pretty good deal and the financing is great and we LOVE our place. However, our condo hasn’t really appreciated since we purchased because the market has softened, and while there weren’t many condos at all in our neighborhood at the time, there are several projects happening right now that will make selling tough for the next couple of years.

-The neighborhood has changed SO MUCH in the last 2 years, and we’re really excited about the continued investment and developments that are making it more attractive all the time. Even though more condos are coming into our neighborhood, we’re generally very optimistic that our part of town will continue to appreciate, and we feel like our investment will really pay off in a couple of years. We CAN afford a condo in our neighborhood, but we CAN’T afford to buy a home in our neighborhood, which are generally over $650K to start

-we don’t have any kids, and don’t plan on having any time soon. If we were, we would probably transition out of a condo and into a traditional home

HOW WE PLAN TO TAKE ADVANTAGE
-refinance. We only took out a 5-yr ARM at the time, and we’re nearly 2.5 years into it. Since we’ve decided to stay, we’re going to take advantage of the still-low interest rates out there & refinance the loan

-Buy a 2nd home? With the buyers market, we have seriously started considering a 2nd home out of town for weekends / leisure / rental

]]> By: Kelly http://woodhillhomes.net/blog/woodhill-homes/question-to-the-readers-%e2%80%93-%e2%80%9cin-recent-years-there-has-not-been-a-better-time-to-buy-a-home-so-what-are-people-waiting-for%e2%80%9d/#comment-54 Kelly Mon, 19 Nov 2007 22:01:55 +0000 http://woodhillhomes.net/blog/woodhill-homes/question-to-the-readers-%e2%80%93-%e2%80%9cin-recent-years-there-has-not-been-a-better-time-to-buy-a-home-so-what-are-people-waiting-for%e2%80%9d/#comment-54 The same reason the Dow fell by more than 200 points today, the fear of uncertainty. It has verry little to do with fundamentals. The irrational fear of uncertainty provides excellent buying opportunities. The same reason the Dow fell by more than 200 points today, the fear of uncertainty. It has verry little to do with fundamentals. The irrational fear of uncertainty provides excellent buying opportunities.

]]> By: Dana Griggs http://woodhillhomes.net/blog/woodhill-homes/question-to-the-readers-%e2%80%93-%e2%80%9cin-recent-years-there-has-not-been-a-better-time-to-buy-a-home-so-what-are-people-waiting-for%e2%80%9d/#comment-53 Dana Griggs Mon, 19 Nov 2007 19:57:55 +0000 http://woodhillhomes.net/blog/woodhill-homes/question-to-the-readers-%e2%80%93-%e2%80%9cin-recent-years-there-has-not-been-a-better-time-to-buy-a-home-so-what-are-people-waiting-for%e2%80%9d/#comment-53 This is a very good question especially since 2008 an up and coming election year with a tremendous focus to go "Green" and this is the kind of company/projects those with environmental concerns should support. I find it surprising that people aren't jumping n the chance to buy these great homes. I think you guys are the cutting edge for developers across the nation and it's nice to be in Oregon where its the most "Green State". Responsible living is a great tagline. Green homes lessen our eco-footprint, its the right thing to do. This is a very good question especially since 2008 an up and coming election year with a tremendous focus to go “Green” and this is the kind of company/projects those with environmental concerns should support. I find it surprising that people aren’t jumping n the chance to buy these great homes. I think you guys are the cutting edge for developers across the nation and it’s nice to be in Oregon where its the most “Green State”. Responsible living is a great tagline. Green homes lessen our eco-footprint, its the right thing to do.

]]> By: Cheryl http://woodhillhomes.net/blog/woodhill-homes/question-to-the-readers-%e2%80%93-%e2%80%9cin-recent-years-there-has-not-been-a-better-time-to-buy-a-home-so-what-are-people-waiting-for%e2%80%9d/#comment-52 Cheryl Mon, 19 Nov 2007 19:04:29 +0000 http://woodhillhomes.net/blog/woodhill-homes/question-to-the-readers-%e2%80%93-%e2%80%9cin-recent-years-there-has-not-been-a-better-time-to-buy-a-home-so-what-are-people-waiting-for%e2%80%9d/#comment-52 With all of the publicity about the slow down in the housing market, the perception is that prices will fall further. Buyers may be afraid of over-paying at this time, so are observing the market. Buena Vista, a large home builder, just announced that they will auction their inventory. That may only add to the fear of falling values. You have some interesting perspectives, Christian, some of which I hadn't considered. With all of the publicity about the slow down in the housing market, the perception is that prices will fall further. Buyers may be afraid of over-paying at this time, so are observing the market.
Buena Vista, a large home builder, just announced that they will auction their inventory. That may only add to the fear of falling values.

You have some interesting perspectives, Christian, some of which I hadn’t considered.

]]> By: Christian http://woodhillhomes.net/blog/woodhill-homes/question-to-the-readers-%e2%80%93-%e2%80%9cin-recent-years-there-has-not-been-a-better-time-to-buy-a-home-so-what-are-people-waiting-for%e2%80%9d/#comment-51 Christian Mon, 19 Nov 2007 18:24:31 +0000 http://woodhillhomes.net/blog/woodhill-homes/question-to-the-readers-%e2%80%93-%e2%80%9cin-recent-years-there-has-not-been-a-better-time-to-buy-a-home-so-what-are-people-waiting-for%e2%80%9d/#comment-51 Tough, tough question. I have my thoughts about the subject (which could be entirely false, but hey, I'm not claiming they're true): - The growing amount of young people with debt. Purchasing a home will only add to their growing amount of debt and they're scared of this. - The divorce rate in America. Now, you might be thinking, "Why would this factor in to homebuying?" Well, I think it does. When young people get married, I think possibly in the back of their mind they're thinking, "Well, if we purchase a house and this marriage goes nowhere... what'll happen with house payments and such?" - Lack of job security. My retired father has never understood why people go through many jobs in their lifetime. He was an air traffic controller for 30+ years. Simply put, I think the times of obtaining a job and staying in the same locale for a set amount of time just isn't what it was like 10, 20 years ago. Anyway, just my thoughts... Tough, tough question. I have my thoughts about the subject (which could be entirely false, but hey, I’m not claiming they’re true):

- The growing amount of young people with debt. Purchasing a home will only add to their growing amount of debt and they’re scared of this.

- The divorce rate in America. Now, you might be thinking, “Why would this factor in to homebuying?” Well, I think it does. When young people get married, I think possibly in the back of their mind they’re thinking, “Well, if we purchase a house and this marriage goes nowhere… what’ll happen with house payments and such?”

- Lack of job security. My retired father has never understood why people go through many jobs in their lifetime. He was an air traffic controller for 30+ years. Simply put, I think the times of obtaining a job and staying in the same locale for a set amount of time just isn’t what it was like 10, 20 years ago.

Anyway, just my thoughts…

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