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February 20, 2009

Reasons why I shouldn’t even think about purchasing real estate

  1. In the areas I want, I could only get something tiny
  2. I have exactly $0 designated to home purchase (I could shuffle stuff around and make that more… but not enough for 20% down)
  3. I don’t know where I want to live long term
  4. How bad is this recession going to be?  Will it affect my job?
  5. I want to live abroad for awhile
  6. A condo going for half a million still looks like a bargain to my eyes.
  7. Have some other unknown $$ expenses coming up
  8. Would have to give up other priorities that make my life happy
  9. I have my whole life to buy property and settle down

(image by Locator)
Reasons I should:

  1. $8k tax credit!!!
  2. Historically low mortgage rates
  3. A condo for a half million?  What a steal!! (sarcasm… sort of.)
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12 Comments leave one →
  1. February 20, 2009 7:28 am

    Tough decision, no doubt. Our family is going through the same process. I think the tax credit is going to tip us this year though.

    Here’s our plan (still need to check with the tax guy if this a good idea or not): jack up our withholding so we don’t pay any taxes throughout the year. Save the money we would have paid in taxes in a saving account. If we buy a house later this year, use this money towards the down payment. If we don’t buy a house, pay it back with our 2009 taxes. Any thoughts? Essentially, we’d be taking our tax credit throughout this year instead of waiting till we file our ’09 taxes.

    Details here: http://www.federalhousingtaxcredit.com/

  2. February 20, 2009 7:28 am

    Well if you want westside it will always be more pricey. If you’re willing to come east you could probably afford a bit more, silver lake might once again be affordable or hollywood has a ton of condos so I bet the price will come down a lot. But I say wait, if you don’t have money you’re probably not ready. I’m going to do a first time homebuyer series soon and step one is determining if you’re ready to own a home. It’s not that great, it’s really expensive and if prices fall, you can’t move.

  3. February 20, 2009 7:34 am

    I won’t ever buy where I live right now. Too expensive.

    Am going to move. Haven’t settled down yet.

    And as for prices, it’s the same deal as you – half a mil for a condo and then condo fees on top of that mortgage!?

    They be crazy.

  4. February 20, 2009 8:32 am

    It isn’t just the money–it is also the fact that I have no idea what my long term plans are. If I was certain I want to live her forever, I’d feel way more in a rush to think about this. But I’m not.

    @KDB – if you don’t buy a house and want to pay it back with taxes, you better be careful of having to pay a penalty for under withholding. Your tax guy can probably help you avoid that.

  5. February 20, 2009 10:46 am

    Haha, I was excited when a condo right near my apartment was on sale for $700,000! It’s seriously RIGHT NEXT TO the beach. They’re still building a lot of new townhomes, too, and they’re going for $1.5mill.

    I’m tempted to buy, but since I’m not even sure If I’ll still be here by the end of the year, it doesn’t make much sense.

    You’re right, though, that tax credit is mighty tempting!

  6. February 20, 2009 12:24 pm

    i think you’re leaning towards not buying. that’s what i would do in your situation. you’re unsure how long you’re going to be in l.a. you desire to live overseas, possibly some time soon. you don’t need a house tying you down to one place that you’re not sure you want to be. i know real estate is on sale, but it may not be a good deal for you.

  7. February 20, 2009 12:28 pm

    I think i should have been more clear.

    I’m not leaning towards not buying. I know that buying makes absolutely no sense for my life right now. I’m not buying.

    Those 3 little things are tempting me, but not in a way that I’m actually considering it.

  8. February 20, 2009 12:32 pm

    It’s tempting, isn’t it? I nearly did the same thing 2 years ago when things were still healthy and happy in real estate, thinking I could make a killing fast. Glad I didn’t. Great list of reasons WHY NOT to buy.

  9. February 20, 2009 2:08 pm

    Yeah that temptation thing is contagious. Luckily, we’re not completely insane or impetuous. I keep reminding myself I’m out of a job soon, and that I love my money right where it is: in my grubby little hands.

  10. elcheapofinance permalink
    February 20, 2009 6:55 pm

    No hurry. I think all your reasons (against) are legit. My co-workers have been hassling me since 2005 to purchase in SoCal using, at the time, some funny adjustable loans I did not fully understand. Now that many of them have seen their houses equity wiped out by 40%, they’re still pushing me to buy, buy, buy. But I’ve learned to stick to my guns and though I might be able to afford a place, its just not the time/place in my life where I want to do so.

  11. February 21, 2009 11:23 am

    “A condo going for half a million still looks like a bargain to my eyes.” haha…it’s totally sad but i’m w/ ya 😉 And i can tell you that after buying myself 2years ago, i sorta kinda wish i hadn’t. I’m not good w/ stability and/or fixing things around the house. I’d second your wish to wait it out and go full speed ahead once you’re totally ready….or you find an extreme bargain!

  12. February 21, 2009 2:59 pm

    Definitely a tough one. We’re actually thrilled to be selling our house in the near future to get back into an apartment. We’ll definitely get another house in a few years, but it’ll be nice not to have the expenses and stresses of home ownership on our shoulders for a few last years before we plunge back into home ownership.

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