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Sunday, February 18, 2007
4 open houses in our complex of 80 units, just today!!!!!!

On our way back from grocery shopping today, we saw numerous open houses along the street outside a condo complex we are staying. Once we drove into the complex, there were another 2 open-house signs, and once we get into the parking areas in our small circle, there were again 2 open-house signs!!!

Yannick did an online research right after. Our landlord purchased this condo 1 year ago, for $400K. Its listing price was $420K, because of the messy condition; while a comparable unit in good condition was listing for $440k in the same complex. The dirty kitchen, bathrooms and walls took my landlord a month and lots of resources to rehab.

Now the condo on the other side of the road is listed for $370, 000, with exactly the same structure, size, age, neighborhood, view ... And it has been on the market for over 7 months, still not sold.

Overall, Yannick's conclusion: Good that we did not buy a house!

Since I started my new job, Yannick and I have been looking at the housing market, locally, nationally. To save for our down payment, we rented a tiny place in a condo. It is a nice condo, and all our roommates are nice. However, it’s really not that convenient to share the condo with the landlord couple and a single guy. We have to take turns to cook; we can only watch TV shows on computers; when both of us work, one of us has to sit on the bed; when there are grocery deals out there, I can't buy because the fridge is full; when there is a deal with rebate, I have to ask whether my roommates have taken the deal... let me say, lightly, that this type of "sharing" is "not ideal".

I wanted a space of my own, even a tiny one. Actually, I was very happy with my cozy room in the graduate housing of my school. I have to admit that at that time "having a house of my own" is not in my agenda, and I never had time to dream it. Now, it becomes a possibility ... it also becomes pressure.

Despite my emotional attachment to a space of my own, Yannick is so "rational" that my "emotion" could not win. He predicted that the house price will come down even futher very soon (not really his prediction, who does not say this these days?), and he insisted that we hold the cash rather than putting it in some real estate.

We use majority rule in our family. Yannick controls 50% of the votes, I control 50% of the votes. However, in my 50%, 25% is controlled by my emotional attachment to a private, cozy space of our own, 25% is influenced by those warnings from the rational economists, those scaring housing statistics, and those who regret for their stumbling in the housing bubble ... final votes: 75:25 -- NOT buy.

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posted by Jacqui @ 3:27 PM   |

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5 Comments:
  • At February 18, 2007 at 5:01 PM, Blogger Yannick said…

    Make no mistake, this is a very nice and mature neighborhood in a great school district. It took only one year to drop the listing price 15%! If we had put down $50k as the 10% down payment, we've had lost all of it plus this house is worth less than what we owe the bank. Who says real estates is safer than stocks?!!

     
  • At February 19, 2007 at 10:59 AM, Blogger mOOm said…

    Having a place of your own doesn't mean you have to buy it. As soon as I was out of grad school I started renting my own apartments. Sounds like you are in a very expensive area where it is likely that renting is a lot cheaper financially than buying assuming that there won't be significant near term price appreciation. If you can't afford to rent a whole apartment it doesn't sound like you can afford to buy.... Unless you are in the middle of a house price boom buying doesn't make sense in these high price markets.

    Especially if I was a couple I would not think of sharing an apartment. Even in Los Angeles there are cheap places to rent.

     
  • At February 24, 2007 at 1:18 PM, Blogger mOOm said…

    Yannick - you are wrong and Golbguru is right. I do understand these issues as I've been an F1 a J1 and and H1B. It's very straightforward when you read the relevant IRS publication. The software is wrong. Yes unfortunately non-resident aliens have to pay more taxes unless they have big investments.

     
  • At February 24, 2007 at 4:57 PM, Blogger mOOm said…

    I know it has nothing to do with the immigration rules. But if you read the "Tax Guide for Aliens" it says that you don't count any day you are an F1 student towards presence in the US for the substantial presence test.

     
  • At February 24, 2007 at 5:13 PM, Blogger mOOm said…

    hmmm you might actually be right. It's pretty complicated though... seems that after 5 years you have to prove to the IRS that you don't intend to immigrate... otherwise you revert to resident status. So up till 5 years you must file as NR and after 5 you file as resident unless you make the claim to be NR.

    Still Cintax only allows NRs to file so looks like I will still be doing her taxes.

     
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Name: Jacqui
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About Me: I am a 30 something, married woman, no kid yet. My husband and I are late starters, on jobs, on personal finance, on blogging... But we believe that we will catch up!
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