Well, today the owners of the place we are renting made us another offer.. You see when we first agreed to rent this place we were in the middle of contract negotiations and we were interested in buying a home but were not finding anything at the right price.
We agreed to rent on a month to month basis while they still listed the house as for sale. Since August the house has been for sale, we have been showing the house as interested people come along but for the last 2 months nobody has been interested in seeing the house. Also, since we began renting the selling price of the house has been dropped about $50,000.. Yep our rented 2 bedroom 2 bath home in Flagstaff, AZ was initially listed @ $299,000!!
Like I said we just got another phone call, another price drop on the house…. $248,000 is the offer with a lease to own option. We would still need to make a down payment and the money we have paid till this point would not apply to the purchase. We are still not interested, here is why:
Do you think we are headed for a recession? We sure do and I know many economists are denying it but the bottom line is that our economy has always gone through it’s ups and downs… It’s inevitable. The economy has been doing considerably well for a while but things are taking a turn… With oil prices rising, the surplus of houses, number of places for sale, lack of buyers, the amount of debt people have and with all the foreclosures and variable rate mortgages people aren’t doing that great financially and neither is our country.
We aren’t buying a 2 bedroom, 2 bath house for $248,000 thats $248 per square foot. If a recession is on the way this in not the time to be buying a home because what if we can’t afford it later? What if home prices drop even more? Besides $248 per square foot is still above the average selling price per square foot in our area.
We have been working hard to clean up our credit and to get our finances in order since about may of last year. Our credit scores have each jumped about 49 points in that time and it’s continuing to improve.
Unlike some Americans we are doing good financially, we don’t have any current debts we are defaulting on, we have credit available to us that we aren’t using, we have not over spent and do not owe more that we can pay and our credit scores are continuing to improve.
Basically we are just not spending and we are trying hard to stay within our budget, we are living off of one measly income right now and any supplemental money I can earn… Things are tight but it feels better to go without than to rack up tons of debt we can’t pay off.
What are your thoughts on buying a home and on the economy? Do you think rough times are around the corner or will it all stay the same?
5 thoughts on “The economy and house prices….”
I think all your reasoning is sound. If you don’t HAVE to buy something right now, then don’t. Besides, you never said you were living in your dream home – and there are exceptions to be made when it comes to a dream home. LOL. But seriously, I think you are right to not jump to buy the place you are renting. I’m glad to hear you are living within your means. I think so many people would do better if they were more patient to purchase things, did not buy everything on credit and lived within their means. It’s hard to go without some hi tech gadgets once you are used to them but people need to remember they don’t NEED to have the latest and greatest cell phone or cable channel or television. But they do need to have food, clothes, heat, etc. Sorry – didn’t mean to ramble in your comments section but my thoughts just started to run away with me (as usual). 😉
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No worries about the long comment I appreciate reading what others think.. You are so right about what we need.. We do tend to get so wrapped up in what we want and we forget that would could actually do without it and probably should because we honestly need completely different things like food, shelter, insurance and money in the bank for unforeseeable emergencies…
Sounds like you guys are in a good spot if a recession does hit…good for you! We are on the west coast of Canada, and house prices in this area are 4-500K. Our landlord recently offered to sell us the townhouse we are renting for 300K, but like the above poster said, it’s not our ‘dream home’, and if we were going to invest that much, I would definitely like some land … 😉
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