Ok, maybe I'm wrong maybe I'm not but wouldn't this housing downturn only make a modest home

[madokie]

like ours worth more money, after all the people having to move out of their too big homes will have to live somewhere. Also wouldn't a slowdown in the construction of new homes also lower the price of materials used to build a house? If these two are factual then I wonder if we should wait a while longer then sell our house and build a new one more suited to us on a couple of our other lots. Back through the years I have worked in and have become proficient at all the trades necessary to build a good quality home so I could do my own construction, plus I would have our son and all my brothers too, to help where and when needed. We really enjoy having our son and his family living next door to us now so we are thinking of building a duplex where we would be back to back but sharing the same building. Am I crazy???

[SoFlaJet]

1. In our very modest

neighborhood there has been a police presence for a couple of weeks due to 2 drive by shootings and last week someone a couple of blocks away firing off 38 shots from both windows-I'm afraid to take my grandkids for walks anymore

[xchrom]

2. i think it sounds like a great plan.

this will all be bad for a while -- but it will change again.

and go back up.

not the same of course -- but it will go back up.
we all look forward to sensible regulation that will help to get us all back on firmer footing.

[madokie]

3. If I play my cards right and with the equitity we have

and with us doing the work, we would be able to come out of this with no or very little of a mortgage.

[xchrom]

7. i have something of a similar situation --

i want to sell and move to durham -- and although i'm in a place where home rates have stayed strong -- it's slow.

so i'm putting off seeling now -- i want to move with as much cash as possible -- buy a house outright and cash left over -- and reduce my footprint and hopefully start my own furniture/homefurnishings biz.

you are in a great position having the ability to do a lot of the labour yourself -- the cost savings would be terrific.

also i imagine the tax write offs for building your own would be good.

you can probably in alternate years take write offs for the duplex with your family.
i have family members who co-habitate and they all put their names on the house and take turns taking it off on their taxes.

[madokie]

11. good ideas, I hadn't thought about the tax write off angle.

We really enjoy our kids and being able to help them in the process of starting their own family by sharing all the tools and such for maintaining a home place. No need for two sets of home and yard tools and on and on. Plus this way we get to keep our grand child, hopefully as time goes by, grand children near to us where we can share with the duties of raising them.

[zazen]

4. depends on the geo area, but somewhat true in Triangle area

I sold my house above appraisal by owner in 4 days back in October, for a little less than 300K. I knew I had to get out and liquidate all debt before things got any worse (thanks to news I found on the Internet, since had I listened to the mainstream press and realtors I'd have "waited until Spring when the market is always stronger and this brief downturn is over.")

I priced it at 299K (a 30% increase in value since I bought it in 02) and was bombarded by calls, mostly by Northerners looking to relocate. I'm in Cary, where the prices have skyrocketed and where they bulldoze farmland halfway to Fayetteville (and then annex it) to put up 800K homes, which are increasingly difficult to sell.

So, yes, homes 300K and under have retained their value or barely decreased, while 450K and up and are sitting on the market a long time and some of the new developments seem to be, well . . let's just say the rest of the lots don't have houses springing up overnight like 4 years ago, and the landscapers haven't shown up in four months.

Reports still indicate that the Raleigh/Durham/Chapel Hill area is one of the strongest in the nation, not just because of the climate, the mountains/beach proximity and RTP jobs, but because of the college town effect. But even here, and it's hard to see how it'd get much better than this, it doesn't matter if 40 people want to bid up my 300K house to 350K. The BANKS WON'T LOAN ON IT. I knew of two houses in good condition in a great neighborhood (mine) under 200K where the deals fell through 2 weeks before closing because the loans wouldn't go through. So, unless you think people have full cash with which to buy your home (or mortgage lenders change their practices), I wouldn't count on the values going up that much.

I'm in no position to give advice. . . just sharing my experience, for what it's worth.

[madokie]

8. And that advice is what I'm looking for, thanks

We live in an area, Northeast Oklahoma, that is building up. A very good industrial park nearby that is bringing in new businesses all the time, for instance like Google and Pepsi/Gaterade in just this last couple years alone. Lots of lakes for the water sports type, good hunting for the hunting crowd, pleasant weather and all the good ole homegrown hospitality that one could ever wish for. The setting for what we're thinking of doing is perfect with all the right ingredients in place. The courage to do it is what I'm looking for. As it stands now we can go into retirement and be able to afford what we have but by taking this step we could be way better off and be setting our son and his family on firmer ground all at the same time. The hard part for me is going to be waiting a few more months, maybe even a year so the market will be even more conducive to my scheme.

[spinbaby]

5. It probably depends on where you are

In some parts of the country, notably Michigan, even very modest working-class neighborhoods are in trouble. Even here in the far suburbs of Pittsburgh where there has been no housing crisis to speak of, our very modest neighborhood has a couple of houses where the owners can't afford to keep up their houses. This affects property values.

[gollygee]

6. Very true

Here in Michigan, no houses are selling. People go to open houses and say, "I'll come back when it's in foreclosure." And most houses do seem to end up in foreclosure.

One house in our neighborhood sold after about 8 or 9 months and the owners were very relieved that it sold at all. A sale after that long is considered very good luck.

[madokie]

9. Our house here is one we bought at a sheriffs auction and that I've totally

remodeled and upgraded. The only thing left of the old house is the outside frame, all else in here is new.

[live love laugh]

10. People still have to live somewhere--I am selling but plan to buy as well.

It's more sensible to buy than to rent IMHO because rents that I've researched exceed mortgages.

Therefore, I choose the mortgage--carefully though.

[librechik]

12. The Monster McMansions that millionaires have been building as tax shelters

seems like the market for those (especially in non-glamorous areas) may be nil. Entire housing development of too-expensive homes sit empty. I read an article by an economist who said our entire economy is real estate-based in the sense that it used to be gold-based. This could get very tricky, since real estate values vary so much from market to market.

[peace frog]

13. My modest home has lost value

because it was purchased less than three years ago. It's no McMansion by any means, just a 3 BR 2 BA home, but I could not sell it today for what I paid for it then.

[conflictgirl]

14. Same here

My house is a very modest 40-year-old ranch style house, also 3 BR 2BA with a 2 car garage. We bought it 3 years ago and are desperately looking to move because I can't find a job, but our taxable value on the house has gone down about 10 % and the actual selling prices have gone down about 15%.

[peace frog]

20. Best wishes, conflictgirl

Here's hoping you are able to sell with minimal loss.

[madokie]

16. Sorry to read that. What makes ours look better is we bought it at a very low price

Foreclosed on and bought at a sherifs auction, that would maybe allow my plan to work.

[peace frog]

19. There were literally zero foreclosures

in my neighborhood at the time we bought, and actually we offered less than asking price so got a good deal relative to home sales at the time. But that was then, this is now. Fortunately we still have jobs in the area - for now. That could change as well.

[Orsino]

15. A modest home will appeal to different people in a downturn, sure.

For every upper middle class prospective buyer gained, though, I suspect that more than one lower middle class buyer might be lost.

[madokie]

17. Thats where the hesitation comes from for me

If the value doesn't go up much then all bets are off. I'm thinking timing will be the most important aspect of this whole deal. I don't want to sell too quick if the price is still going up and not wait too long until it starts dropping. I'm not a glambler at all and this plan is doing just that so I'm uneasy to say the least.

[pitohui]

18. yes you're crazy

what part of sub prime lending do you not understand? lower income people can't get loans to buy modest homes

so my house has lost value and so has yours

and a duplex, wonderful, THAT really adds value to a neighborhood, look, once you get the renters in in any numbers, it's downhill from there -- and renting to family is always a lose/lose since at the end of the day family members no matter how wonderful think they don't have to pay the rent after awhile -- and they don't, are you going to evict them? ever? i just never see this turning out well in real life

[madokie]

21. at least we got that settled huh

me being crazy that is. I don't think you are following me when I say that the people who are having their homes foreclosed on will have to downsize. Thats where I come in. I never intended to try to sell to someone who is barely making it now with hardly anything, I'm talking about the old boy who has a good job but just not good enough to pay the big house prices like he had just lost. ;-)
Oh, your advice is no I take it.