You’re young, engaged and you’re talking to your fiancée about buying your first home. The only problem is—you live in Southern California! So here’s your option: save!
And take a long-term view to buying a home in a region where $500,000 to $600,000 allows you to purchase a “starter” home in the Pasadena neighborhood where my wife and I bought our first home for $140,000 in 1989.
We moved 5 years later into our current home which we purchased for $253,000 in 1994. Today, our 2,300 square foot home with separate tw
o car garage and loud teenagers appraises somewhere around $700,000.
“I know buyers right now who are staying out of the market because they think prices will still drop,” Juanita Cobb of Keller Williams Realty told me. “But interest rates are going up and so as the rates climb you’ll notice your purchasing power becomes slightly less. Plus, the prices won’t drop so much they’ll offset the recent increases of the past few years.”
So – for the people who have a down payment saved up, Juanita advises getting ready to buy and not to think prices will drop much more.
But if you don’t have a down payment saved up, then start saving and don’t worry about prices or interest rates rising or falling.
“I don’t recommend 100% financing,” said Juanita, who specializes in foreclosure properties. “I’ve seen too many couples during the past 2-3 years get in trouble because they mortgaged everything, then their circumstances changed and now they have no equity when they need to sell.”
Younger homebuyers need to set long range saving plans, and for people in their 30s who have been setting aside money for retirement then their 401Ks may be an option for funding a down payment.
And, there is another possible funding source – you know, the people who used to give you allowance – hopefully, you saved some of those dollars, too! Thanks, mom and dad!
And take a long-term view to buying a home in a region where $500,000 to $600,000 allows you to purchase a “starter” home in the Pasadena neighborhood where my wife and I bought our first home for $140,000 in 1989.
We moved 5 years later into our current home which we purchased for $253,000 in 1994. Today, our 2,300 square foot home with separate tw
o car garage and loud teenagers appraises somewhere around $700,000.“I know buyers right now who are staying out of the market because they think prices will still drop,” Juanita Cobb of Keller Williams Realty told me. “But interest rates are going up and so as the rates climb you’ll notice your purchasing power becomes slightly less. Plus, the prices won’t drop so much they’ll offset the recent increases of the past few years.”
So – for the people who have a down payment saved up, Juanita advises getting ready to buy and not to think prices will drop much more.
But if you don’t have a down payment saved up, then start saving and don’t worry about prices or interest rates rising or falling.
“I don’t recommend 100% financing,” said Juanita, who specializes in foreclosure properties. “I’ve seen too many couples during the past 2-3 years get in trouble because they mortgaged everything, then their circumstances changed and now they have no equity when they need to sell.”
Younger homebuyers need to set long range saving plans, and for people in their 30s who have been setting aside money for retirement then their 401Ks may be an option for funding a down payment.
And, there is another possible funding source – you know, the people who used to give you allowance – hopefully, you saved some of those dollars, too! Thanks, mom and dad!
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