Our financial system is crumbling this week.

[TimeForGuinness]

were the economy better, we might be contemplating a move consistent with the empty nest phase we're moving into.

This is what I don't understand. Why does the economy being bad prevent you from moving? If you have job security and good/decent credit you should be able to get a loan, especially having the equity from the house you're in now as a downpayment. (If you have any after the hit you take) Granted, you won't be able to sell your house for what you could have 3 years ago, but then again, you won't have to pay for a new house what you would have 3 years ago. And, chances are if you are willing to fix it up a little bit, you can get an absolute steal right now from a foreclosure....

This economy is going to get worse before it gets better...that's why people are worried.

I would agree, especially the housing market, but that's why if you can find a buyer for your house now (as prices are going down) and then buy using the falling market as your leverage in negotiations (basically say you're not going to pay market price b/c in 2 years the house is going to be worth 20% less, so that's where you'll start) you could come out much better than what you started. This obviously is contingent on 1) finding a dumb buyer and I don't know if the market is as flooded with those now as it was 3 years ago and 2) being a good negotiator and getting a very good deal on the house you're going to buy.

I guess that is always true, but buyers definitely have the upper hand when negotiating right now making the first step of finding a dumb buyer all the more difficult. But, if you want to move, I wouldn't use the economy as a reason not to......

Yes, but I'm talking overall market/economy...there are going to be a lot of layoffs in the coming months...more than what we've seen in a long time. The cost of the war, banks seizing up, high debt, falling profits, low federal rates not helping, American industries in freefall...this is like the perfect storm of crap that is hitting.

Our whole economy was based on borrowing money easily...now we can't do that anymore...it's gonna get rough.

[Radbird]

were the economy better, we might be contemplating a move consistent with the empty nest phase we're moving into.

This is what I don't understand. Why does the economy being bad prevent you from moving? If you have job security and good/decent credit you should be able to get a loan, especially having the equity from the house you're in now as a downpayment. (If you have any after the hit you take) Granted, you won't be able to sell your house for what you could have 3 years ago, but then again, you won't have to pay for a new house what you would have 3 years ago. And, chances are if you are willing to fix it up a little bit, you can get an absolute steal right now from a foreclosure....

This economy is going to get worse before it gets better...that's why people are worried.

I would agree, especially the housing market, but that's why if you can find a buyer for your house now (as prices are going down) and then buy using the falling market as your leverage in negotiations (basically say you're not going to pay market price b/c in 2 years the house is going to be worth 20% less, so that's where you'll start) you could come out much better than what you started. This obviously is contingent on 1) finding a dumb buyer and I don't know if the market is as flooded with those now as it was 3 years ago and 2) being a good negotiator and getting a very good deal on the house you're going to buy.

I guess that is always true, but buyers definitely have the upper hand when negotiating right now making the first step of finding a dumb buyer all the more difficult. But, if you want to move, I wouldn't use the economy as a reason not to......

Yes, but I'm talking overall market/economy...there are going to be a lot of layoffs in the coming months...more than what we've seen in a long time. The cost of the war, banks seizing up, high debt, falling profits, low federal rates not helping, American industries in freefall...this is like the perfect storm of crap that is hitting.

Our whole economy was based on borrowing money easily...now we can't do that anymore...it's gonna get rough.

Correct. More than just the housing end of it. Mrs. Rad's company is laying off 6,000 more people in January, and we need to know whether she makes the cut before any major decisions are made.

[AWvsCBsteeeerike3]

Our whole economy was based on borrowing money easily...now we can't do that anymore...it's gonna get rough.

Is it really that much tougher to get a loan now than it was 15 years ago?

[TheoSqua]

Our whole economy was based on borrowing money easily...now we can't do that anymore...it's gonna get rough.

Is it really that much tougher to get a loan now than it was 15 years ago?

A little bit, yes. Because there's less money in the market for housing loans. I think stuff like not knowing if you'll have a job is the hard part. Especially in this economy.

I don't anticipate getting laid off, but i'm well aware that if i ever did it would be incredibly hard for me to find another job in my career field and next to impossible to find one paying me what I make now. I think it'd irresponsible of me to spend willy nilly in light of that just because it's a buyers market.

[JCShutout]

I think stuff like not knowing if you'll have a job is the hard part. Especially in this economy.

That's the big thing AW. Sure, its a buyers market, but if you're uncertain you will still have income next May, you won't be buying much.

[AWvsCBsteeeerike3]

Our whole economy was based on borrowing money easily...now we can't do that anymore...it's gonna get rough.

Is it really that much tougher to get a loan now than it was 15 years ago?

A little bit, yes. Because there's less money in the market for housing loans. I think stuff like not knowing if you'll have a job is the hard part. Especially in this economy.

I don't anticipate getting laid off, but i'm well aware that if i ever did it would be incredibly hard for me to find another job in my career field and next to impossible to find one paying me what I make now. I think it'd irresponsible of me to spend willy nilly in light of that just because it's a buyers market.

I guess that's my point. You don't need a job if you can have a couple moves go your way right off the bat. I make it sound easier than it is, and it's not easy, I fully understand that. I'm not advocating going out and buying the first house that you stumble upon because it is a buyer's market. I'm saying, if there is an oppotunity that is a good investment and you can do it (ie, if you can make that mortgage right now with your current income) and you can make money off of it, then why wouldn't you? There are great opportunities out there right now. And, imo, life is all about taking full advantage of what you're given. If you don't take advantage now, don't complain in 25 years that you never had a chance. You do.

You will always have a reason or excuse to not do something (in this case possibly not having a job in a year, though you fully anticipate having one). And, that reason is fabricated largely by the fear of failing.

[AWvsCBsteeeerike3]

I think stuff like not knowing if you'll have a job is the hard part. Especially in this economy.

That's the big thing AW. Sure, its a buyers market, but if you're uncertain you will still have income next May, you won't be buying much.

If you don't have your job in may, then you will be out on the street regardless, there are houses for sale right now, at least in my area, where the mortgage is two-thirds of what you would be paying to live in the same house, only renting.

[Popeye_Card]

I think stuff like not knowing if you'll have a job is the hard part. Especially in this economy.

That's the big thing AW. Sure, its a buyers market, but if you're uncertain you will still have income next May, you won't be buying much.

If you don't have your job in may, then you will be out on the street regardless, there are houses for sale right now, at least in my area, where the mortgage is two-thirds of what you would be paying to live in the same house, only renting.

Just curious, do you own a house? And/or have you tried to take advantage of the down market yet?

The market is down for a reason, and people are right to be cautious. If there's a good deal to be had, it's good to consider it as long as it makes prudent sense for you. But real estate is usually a gamble, even in better markets. You should only make the gambles you're comfortable with.

[AWvsCBsteeeerike3]

I think stuff like not knowing if you'll have a job is the hard part. Especially in this economy.

That's the big thing AW. Sure, its a buyers market, but if you're uncertain you will still have income next May, you won't be buying much.

If you don't have your job in may, then you will be out on the street regardless, there are houses for sale right now, at least in my area, where the mortgage is two-thirds of what you would be paying to live in the same house, only renting.

Just curious, do you own a house? And/or have you tried to take advantage of the down market yet?

The market is down for a reason, and people are right to be cautious. If there's a good deal to be had, it's good to consider it as long as it makes prudent sense for you. But real estate is usually a gamble, even in better markets. You should only make the gambles you're comfortable with.

I rent right now. I have an offer out on an investment property and am in full search mode for a house to live in, like I said, I'm not advocating buying a house just because it's a buyers market.... As far as the investment property, getting a loan was relatively easy as well for the investment property. When you're offering pennies on the dollar, banks see that as a good investment apparently and will back you. If the seller declines, that's fine, I have two others I've talked to the bank about that they'll keep the line of credit open for. I'm not going to overpay for something by any means.

And, if one of these deals goes through, I'll have to work on it for about 3 months before I can sell it. If I sell it for 3/4 of what they are selling for now, I'd make 50-60K. Of course, that is contingent on the bank selling it to me, which they have every right not to. But....whose ass is it skin off of if they say no? Certainly not mine. I paid $0 to do that....though I did spend time researching it....of course, the alternative was getting hammered on weekend days and watching TV/[expletive]/not really doing anything.

As far as the house goes, I'm looking, though most of my time got caught up in the investment properties right away. But, I'm definitely looking. The main problem is I want to live on the lake, and those prices haven't dropped yet.... And, they may never drop, who knows, but I"m not going to rush into it/pay what they are asking simply b/c it is a buyer's market and the price has dropped a little bit.

Anyway, back to the investment property business. There are a couple major companies that would be over all sorts of deals like this, but they are broke. They got in too deep anda re now having to make layoffs, cutbacks, everything. They're struggling big time because they're assets have lost so much value. Then there are the little guys who 4 years ago bought investment properties when values were soaring and are now just making the mortgage with the rent.....so they're cashflow is not exactly great. And, a lot of them aren't looking right now b/c of that.....which doesn't really make sense, but whatever.

I don't know, I guess I could buy this property and the value drops to zero in which case i'd be stuck paying off a worthless property w/ no one living in it. And, after doing that, I'll have a duplex that cost 30K after repairs and is in a subdivision less than a mile away from two factories, two schools and two grocery stores and a lot more than that within 5 miles. And, it is possible, but I'll take my chances.

Edit: And, I'm not exactly all sunshine on my job security. I'm not going to lie. I asked my boss the other day if he foresaw laying me off in the next year and told him I was thinking of buying a hosue. He said if he were me he would buy the house, but that obviously isn't money in the bank. If I do get laid off, I hope to God that I have one of these properties so I will have a source of income other than my job in the near future though.... I guess that's where a lot of us differ, you all see it as an expense, which it is upfront, but I see it as income, which it is if you get everything right.....

[docellis]

I grew up with my dad owning rental properties (and working a full time job, and owning several businesses) and I don't think it is possible to put into words just how badly people will destroy your rental property. It is a much bigger job than it sounds.