Monday, October 6, 2008

The housing crisis - such a slippery spiral

These truly are musings. But, here you go. Right now my family of four lives in a townhouse in the DC burbs of Northern Virginia. My mother in law rents a one bedroom apt. 3 miles away. When we moved here, it was 2004 and prices were up and houses sold in a minute and a half. The asking price was the STARTING price. In the next 18 months we watched the house values grow another 100,000 for our house and in the last 2 years, watch it drop to where we bought the house and now we will watch it drop even lower.

My Mother in law wanted to buy a house when she moved, but everything was out of her price range, so she invested it.. So here we are, house prices finally come down so she can buy, but even in her SAFE investments she's lost a LOT of money this year (so far)... so is it a good time to take it out to buy a house that STILL might drop in price even more? Maybe she should wait and hope.

And here we are. We would love to buy a bigger house with a garage and space, but while we have good credit and the means to do it - even absorbing a small loss on our current house, we DON'T have the funds to buy a house without selling ours first. our house could sit on the market for a year or MORE.

We've thought about buying a house together (mother in law and us four as MIL is getting older and needs our help more and more), but again... her funds are dropping like mad, we are stuck with a house that needs selling.

Nearly EVERYONE is just like us - either their saved money for a down payment has dried up in the stocks, or they can't sell their house to get a new one! The ONLY people good to go are those who are first time buyers with money in the bank... And how many people is that? And as a new home buyer, are they seen as risky and do they have a harder time getting loans?

Any way I look at it, in my very uneducated ways, I see this as a very slippery slope that just spirals out of control... people wait out of fear and because they are waiting, the problem just gets worse...scary times! So, I guess I just better get used to the idea of living in this townhouse for a few more years! And just be thankful for what we have!

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