Monday, May 16, 2005

Buyers In Concord Feel "Powerless"

The Concord Monitor has a story on the trials of local home buyers. "'Today, $150,000 is typically a very run-down ranch on a very small lot outside of town,' Jim Knowlton, an agent in Concord said. 'You're looking at an old farmhouse that's ready to fall down in Andover, a New Englander in Franklin. There's a Grizzly Adams home on 40 acres in Danbury that sold for $110,000.'"

This is what most folks are doing today. Settling. "The alternative to paying what you can't afford is to consider a condo or give up on Concord, real estate agents say. The median sales price for condominiums today is what the median home price was five years ago."

"Anukem said at least three of her recent homebuyers decided to use an 80/20 mortgage. 'That's becoming more and more common. I've only seen it for the last year and a half. It's just an option that keeps their payment cost down so it helps them afford a little more house. Not that it doesn't scare me.'"

"Was he surprised by the high-priced housing market? His first thought was frustrated. Then he passed the question to his wife. 'What adjective would we use describe our experience looking for a house?' he asked. 'Powerless"was her answer. We feel powerless,' he said. 'Powerless, that's a good adjective.'"

8 Comments:

At 3:56 PM, Anonymous Loren said...

Why it really is different this time:

As interest rates go to 0% principal amounts go up. Interest is tax deductable, principal isn't. As prices go up it gets harder and harder to repay the principal even though the total payments are not rising as fast.

My mom bought a house at 14% interest. She did OK because the principal amount was pretty reasonable - i.e. real estate is a good buy only if the price is right. The best time to buy is when rates are high, not when prices are high.

It's true, if you're trying to buy with your own money you're bascially powerless, priced out of the market by borrowed money.

 
At 4:54 PM, Anonymous Anonymous said...

I have been a follower of the Massachusetts real estate market for 3 years now. My wife and I make very good money (Biotech professionals), have plenty of cash, and no debt. We cannot touch a reasonable home in the northern part of the state for less than 350K! I have given up on home buying, I just cannot justify buying in this frenzy!! I keep waiting for things to turn, but i am beginning to believe that i have just been wrong for too long about a bubble and have missed the boat. Anyone as depressed as I am?!

 
At 5:55 PM, Anonymous East Bay Renter said...

Yup. Time to take a few days off.

 
At 6:06 PM, Blogger John Law said...

the dark side of the bubble is that people are angry they can't afford a decent house in a nice neighborhood.

 
At 7:55 PM, Anonymous Anonymous said...

I JUST HAD A FRIEND SIT ON THE FENCE FOR 3 YEARS AND HE JUST THREW IN THE TOWEL AND BOUGHT...THE TOP IS NOW IN.

WHEN CAPITUALATION IS WIDESPREAD THE PEAK IS BEHIND US...I REMEMBER THIS CLEARLY WHEN THE SHORTS THREW IN THE TOWELS AFTER THE PRICE OD DOT COMS PEAKED MANY MONTHS PRIOR.

 
At 8:51 PM, Anonymous ChrisH said...

4:54 Anon,
WAIT WAIT WAIT!! Don't buy!

I am currently trying desperately to talk myself in to selling my house.

 
At 8:55 PM, Anonymous frank said...

Only 350k? I figure it would be worse than that by now. In Brookline there is no SFH under a million.

The Boston Globe had a feature of some really nasty, dated POS house that was on the market for a million in Brookline.

I still regret not buying that 250k condo in Brookline in 1999. The owner was an old time investor who was selling because of the price appreciation! He was renting it out at the time. If he had held on to it....

 
At 10:01 PM, Anonymous boulderbo said...

the worm will turn

i lent in new england in the 80's and watched the rocks of gibraltar (bank of new england, etc.) drop like flies when the s*** hit the fan. your time will come to buy massachusetts real estate, just let the market run its cycle.

 

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