The economy and house prices….
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?