I don't want to die of frustration before we buy our first house; can you help? Please?
June 26, 2006 7:11 PM Subscribe
Tucson, AZ real estate filter:
Trying to buy our first house in central Tucson, AZ (I find the whole process intensely painful for reasons outlined below). Should we wait a little longer for the prices to go down a little more?
Background: My wife has been looking actively for 2 months. I joined 3 weeks ago. I went into about 20 houses with realtors; she's seen probably 40-50. Almost bought one, it fell through when the seller rejected to fix the roof. Another offer we made yesterday was rejected (no counter offer, seller flat out rejected our offer). I don't know if it is true for everybody, but both my wife and I seem to change our minds by the hour about a place when we get close to make decisions (making an offer, counter offer etc.). We unintentionally change roles; one minute she thinks we should go for it and I resist, next minute the opposite happens. Weird.
The central neighborhoods are very patchy in curb appeal and taste. It is not unusual to see a gorgeous, well-kept house in the same street with another house where a wheel-less car sits in the front yard. A good percentage of the houses for sale in central are bought by "flippers" last year, who performed cheap, rudimentary renovations. Now, they are charging $70K-$130K more for the houses (I understand this is the way it goes). So, the ones we like (and can afford) are not at the right location; the ones at the right location (and we can afford) are dumpy, which could potentially turn into major money-pits. Also, most houses in central have these weird additions that are counted in the sqft area. They do not match the original house - in some cases they are made of different materials (e.g. brick house with a wooden added room, bright green painted outside), they have window AC, sometimes you can see through where it attaches to the original structure (and many more drawbacks). However, they "add" to the value of the house, which is reflected in the price. So, preferably, we would like to buy one with either no additions or with additions done properly. This constraint reduces the number of candidates out there. But, all things considered, we still want to stay in central and not go into one of the developments.
The real estate prices took a dive after Feb. 2006 in Tucson according to www.zillow.com (I certainly don't take the actual price estimates at face value, but I believe the trends and comps provided have merit). It looks like the prices will continue to drop, albeit slower. Also, there is talk about interest rates going up (altough refinancing in 4-5 yrs when the rates are low again reduces the importance of this item).
What is your opinion on the right time to buy a house in Tucson, AZ if you're looking to buy soon?
Based on what I described above, do you have any advice for me?
Thanks a million!
Background: My wife has been looking actively for 2 months. I joined 3 weeks ago. I went into about 20 houses with realtors; she's seen probably 40-50. Almost bought one, it fell through when the seller rejected to fix the roof. Another offer we made yesterday was rejected (no counter offer, seller flat out rejected our offer). I don't know if it is true for everybody, but both my wife and I seem to change our minds by the hour about a place when we get close to make decisions (making an offer, counter offer etc.). We unintentionally change roles; one minute she thinks we should go for it and I resist, next minute the opposite happens. Weird.
The central neighborhoods are very patchy in curb appeal and taste. It is not unusual to see a gorgeous, well-kept house in the same street with another house where a wheel-less car sits in the front yard. A good percentage of the houses for sale in central are bought by "flippers" last year, who performed cheap, rudimentary renovations. Now, they are charging $70K-$130K more for the houses (I understand this is the way it goes). So, the ones we like (and can afford) are not at the right location; the ones at the right location (and we can afford) are dumpy, which could potentially turn into major money-pits. Also, most houses in central have these weird additions that are counted in the sqft area. They do not match the original house - in some cases they are made of different materials (e.g. brick house with a wooden added room, bright green painted outside), they have window AC, sometimes you can see through where it attaches to the original structure (and many more drawbacks). However, they "add" to the value of the house, which is reflected in the price. So, preferably, we would like to buy one with either no additions or with additions done properly. This constraint reduces the number of candidates out there. But, all things considered, we still want to stay in central and not go into one of the developments.
The real estate prices took a dive after Feb. 2006 in Tucson according to www.zillow.com (I certainly don't take the actual price estimates at face value, but I believe the trends and comps provided have merit). It looks like the prices will continue to drop, albeit slower. Also, there is talk about interest rates going up (altough refinancing in 4-5 yrs when the rates are low again reduces the importance of this item).
What is your opinion on the right time to buy a house in Tucson, AZ if you're looking to buy soon?
Based on what I described above, do you have any advice for me?
Thanks a million!
This is an interesting datapoint. According to this, Tucson home inventory numbers have really climbed over the last 9 months, but prices have been flat.
I don't have a link to support this, but today I read a consultant's survey of Phoenix homebuilders--roughly 16% thought housing prices would increase over the next 24 months, 47% thought prices would be flat and the rest thought prices would drop (I can't remember the break down b/t a small drop and a big drop though). Yes, I realize Phoenix is not Tucson (believe me, I know, I grew up in Phoenix), but I thought I'd share the datapoint.
posted by mullacc at 7:31 PM on June 26, 2006
I don't have a link to support this, but today I read a consultant's survey of Phoenix homebuilders--roughly 16% thought housing prices would increase over the next 24 months, 47% thought prices would be flat and the rest thought prices would drop (I can't remember the break down b/t a small drop and a big drop though). Yes, I realize Phoenix is not Tucson (believe me, I know, I grew up in Phoenix), but I thought I'd share the datapoint.
posted by mullacc at 7:31 PM on June 26, 2006
I'm sure you've heard of the phrase, "buy low, sell high", right? If a $5 stock suddenly shot up to $50 a share based on nothing more than speculation, would you buy it? Of course not!
Don't buy right now. Just wait. Don't get someone else's half-assed attempt at a house-flip, complete with new paint!, shoddy workmanship, substandard materials, complete neglect of the important things like roofs (or other no-see-'ums like foundation, chimneys, electrical layout, etc.--expensive stuff, but no curb appeal). Those assholes who drove up the market have to pay mortgages every month they don't sell the house.
It's like the prisoner's dilemma: as long as everyone else is holding out, the prices will stay high. But eventually someone's pocketbook is going to run out refinancing money, and then it's time to pay the piper. Once a few people start lowering prices, everyone else will have to follow suit if they ever intend to unload their investment. You could potentially save yourself tens of thousands of dollars if you can just wait for another couple of months. Don't be a sucker. Don't bail some jerk out of their own dumbassery and get stuck with a huge mortgage on an ugly house in a bad neighborhood that needs tons of work.
posted by Civil_Disobedient at 8:06 PM on June 26, 2006
Don't buy right now. Just wait. Don't get someone else's half-assed attempt at a house-flip, complete with new paint!, shoddy workmanship, substandard materials, complete neglect of the important things like roofs (or other no-see-'ums like foundation, chimneys, electrical layout, etc.--expensive stuff, but no curb appeal). Those assholes who drove up the market have to pay mortgages every month they don't sell the house.
It's like the prisoner's dilemma: as long as everyone else is holding out, the prices will stay high. But eventually someone's pocketbook is going to run out refinancing money, and then it's time to pay the piper. Once a few people start lowering prices, everyone else will have to follow suit if they ever intend to unload their investment. You could potentially save yourself tens of thousands of dollars if you can just wait for another couple of months. Don't be a sucker. Don't bail some jerk out of their own dumbassery and get stuck with a huge mortgage on an ugly house in a bad neighborhood that needs tons of work.
posted by Civil_Disobedient at 8:06 PM on June 26, 2006
Four steps in any big decision are (1) get the information (2) get the understanding (3). avoid false temptation (4) wait for the right choice to appear.
posted by zackdog at 9:33 PM on June 26, 2006
posted by zackdog at 9:33 PM on June 26, 2006
You could potentially save yourself tens of thousands of dollars if you can just wait for another couple of months.
Emphasis mine.
We're in the same position of really needing to get a house when it feels very effed if you do, effed if you don't. The only sensible advice I've received is to make sure you get a house you can live in--and afford the payments--for quite awhile (ten years, maybe). Short term prices are probably going to be very weird one way or the other. Don't count on rates to go down in five years; it's more likely they will be trending higher for a long, long time.
posted by _sirmissalot_ at 9:40 PM on June 26, 2006
Emphasis mine.
We're in the same position of really needing to get a house when it feels very effed if you do, effed if you don't. The only sensible advice I've received is to make sure you get a house you can live in--and afford the payments--for quite awhile (ten years, maybe). Short term prices are probably going to be very weird one way or the other. Don't count on rates to go down in five years; it's more likely they will be trending higher for a long, long time.
posted by _sirmissalot_ at 9:40 PM on June 26, 2006
I think all the advice you have been given upthread is good. I actually just moved to Tucson and have been thinking about the same issues. I have also heard that inventory is increasing but prices have stayed fairly stable. The reason for this is that real estate prices do not move as quickly as prices in other sectors in response to demand. People are stubborn and are very reluctant to lower the price of their "great" house, and so it takes a while with their house sitting on the market before they face the facts and lower the price. Also, you are right that interest rates are likely to rise. However, I doubt they will increase astronomically in the next few months. I think it is wise to wait and see how things shake out.
posted by bove at 11:00 PM on June 26, 2006
posted by bove at 11:00 PM on June 26, 2006
Here in Tucson, a coworker of mine just bought a house about two months ago, another about eight months ago, and I got mine about two years ago. Lessons we've learned? You will always find something dumb that the previous owners did- don't expect perfection. Second- don't be swayed by the pretty ones- remember, most people will jump at the first freshly painted house they see, when that paint is just dressing to hide the imperfections. It's a lot easier and better for you to request a carpet allowance, fix the roof on your own terms (I've heard good things about Roofsavers, but don't know from personal experience) or replace landscaping than have it done for you.
Also, remember- a good inspector will find any little bargaining point (mine found noisy toilets!). My house had hideous paint and carpet, but it was a great layout and had potential- we paid the asking price. My coworkers both paid the asking price for their houses- after negotiating. There's no awesome bargains to be had right now, but if you're willing to do a little work, you can probably find something that will work for you. And don't listen to your agent too closely, most of them are clueless, and just looking for the fastest commission possible.
For history on a Tucson property (was it a quickie flip?), search http://www.asr.co.pima.az.us/APIQ/index.aspx
posted by andeluria at 11:20 PM on June 26, 2006
Also, remember- a good inspector will find any little bargaining point (mine found noisy toilets!). My house had hideous paint and carpet, but it was a great layout and had potential- we paid the asking price. My coworkers both paid the asking price for their houses- after negotiating. There's no awesome bargains to be had right now, but if you're willing to do a little work, you can probably find something that will work for you. And don't listen to your agent too closely, most of them are clueless, and just looking for the fastest commission possible.
For history on a Tucson property (was it a quickie flip?), search http://www.asr.co.pima.az.us/APIQ/index.aspx
posted by andeluria at 11:20 PM on June 26, 2006
My guess is that you are looking for a bargain which you fall in love with. You will wait the rest of your lives to find this house.
Read this over until you believe and assimilate it. I've bought two houses in the past few years (and sold the first to pay for the second), and I understand much better now the weird psychology of house-buying. You have to try to get rid of that "dream house" idea; it's like wanting to find the perfect partner for marriage. What you want is a house that you can live in reasonably happily without spending too large a chunk of your income on, either for mortgage payments or upkeep. As UnSane said, you should seriously consider any house that doesn't have a dealbreaker. And my personal advice would be not to try to buy at the top of your price range; not only will the payments be onerous, but if you take a financial hit for any reason you'll be in much bigger trouble. My wife and I bought a small brick house on a back street in one of the less attractive Berkshire towns; the regret at not living in Lenox or having a porch or whatever is more than balanced by the thought that our mortgage payments our low enough it shouldn't be hard to keep them up.
And I would also urge you to fight the temptation to obsess about where the market is going. People have held off for years on buying a house because they worried that the market would crash right after they signed the papers. You know what? Nobody knows where the market is going (no, not even Civil_Disobedient, even though he's cocksure about it). And it doesn't matter, because you're not buying the house as an investment (I presume), you're buying it as a place to live. If you can afford it and like it, buy it. So what if it turns out it would have cost $20,000 less if you'd waited six months? Do you want to spend an indefinite period of time agonizing over the housing market and looking at houses until they all merge into one multiwinged monster that haunts your dreams? Do you obsess about whether the price of eggs will go down before you buy a dozen? You want a house, buy a house. And don't look back.
posted by languagehat at 6:36 AM on June 27, 2006
Read this over until you believe and assimilate it. I've bought two houses in the past few years (and sold the first to pay for the second), and I understand much better now the weird psychology of house-buying. You have to try to get rid of that "dream house" idea; it's like wanting to find the perfect partner for marriage. What you want is a house that you can live in reasonably happily without spending too large a chunk of your income on, either for mortgage payments or upkeep. As UnSane said, you should seriously consider any house that doesn't have a dealbreaker. And my personal advice would be not to try to buy at the top of your price range; not only will the payments be onerous, but if you take a financial hit for any reason you'll be in much bigger trouble. My wife and I bought a small brick house on a back street in one of the less attractive Berkshire towns; the regret at not living in Lenox or having a porch or whatever is more than balanced by the thought that our mortgage payments our low enough it shouldn't be hard to keep them up.
And I would also urge you to fight the temptation to obsess about where the market is going. People have held off for years on buying a house because they worried that the market would crash right after they signed the papers. You know what? Nobody knows where the market is going (no, not even Civil_Disobedient, even though he's cocksure about it). And it doesn't matter, because you're not buying the house as an investment (I presume), you're buying it as a place to live. If you can afford it and like it, buy it. So what if it turns out it would have cost $20,000 less if you'd waited six months? Do you want to spend an indefinite period of time agonizing over the housing market and looking at houses until they all merge into one multiwinged monster that haunts your dreams? Do you obsess about whether the price of eggs will go down before you buy a dozen? You want a house, buy a house. And don't look back.
posted by languagehat at 6:36 AM on June 27, 2006
Languagehat, do you live in Pittsfield? :)
OP: It's always a trade off when you're buying a house. But what's the rush? Are you selling another house? Or renting? If you're renting, go to a month-to-month lease and relieve yourself of some of the pressure you're imposing on yourself. Just because everyone else seems to find a house in 2 weeks doesn't mean that will be your experience.
It took me and my husband about 4 months to find the house for us. Plenty came up in the neighborhood we wanted, but they just weren't right. Our house came up, we loved it and made an offer, which was accepted. But this was after an entire summer spending weekends and week nights looking at house after house.
A bit of buyer's remorse is inevitable--this is probably the largest purchase you will make. But lots of people do it and are fine. If you're used to paying rent, you will do fine.
Stick to your guns about what you want in the offers you write. If the sellers are good people they will work with you. If they're not good people, forget it and walk. You shouldn't comprimise yourself in this situation.
About prices... everything evens out. Prices get higher when mortgage rates go low and everyone sells. If you're in an insane market, you may have to pay above what the seller is asking to close the deal because of competition from other buyers. Prices get lower when the number of buyers fall, because/but mortgage rates get raised, which leads to people thinking they are better off renting. So, you can have a slightly inflated price with low rates, or higher rates with a lower price. I don't have any evidence for this, but I think it's a wash if you itemize your taxes and deduct your mortgage interest. Whew.
posted by FergieBelle at 9:55 AM on June 27, 2006
OP: It's always a trade off when you're buying a house. But what's the rush? Are you selling another house? Or renting? If you're renting, go to a month-to-month lease and relieve yourself of some of the pressure you're imposing on yourself. Just because everyone else seems to find a house in 2 weeks doesn't mean that will be your experience.
It took me and my husband about 4 months to find the house for us. Plenty came up in the neighborhood we wanted, but they just weren't right. Our house came up, we loved it and made an offer, which was accepted. But this was after an entire summer spending weekends and week nights looking at house after house.
A bit of buyer's remorse is inevitable--this is probably the largest purchase you will make. But lots of people do it and are fine. If you're used to paying rent, you will do fine.
Stick to your guns about what you want in the offers you write. If the sellers are good people they will work with you. If they're not good people, forget it and walk. You shouldn't comprimise yourself in this situation.
About prices... everything evens out. Prices get higher when mortgage rates go low and everyone sells. If you're in an insane market, you may have to pay above what the seller is asking to close the deal because of competition from other buyers. Prices get lower when the number of buyers fall, because/but mortgage rates get raised, which leads to people thinking they are better off renting. So, you can have a slightly inflated price with low rates, or higher rates with a lower price. I don't have any evidence for this, but I think it's a wash if you itemize your taxes and deduct your mortgage interest. Whew.
posted by FergieBelle at 9:55 AM on June 27, 2006
Response by poster: We are renting. We are buying to live in, not as an investment.
I appreciate the comments. They are all very helpful. Thanks for taking the time.
Civil_Disobedient's post pretty much sums up my psychological state - thanks. However, I think unSane's post (and others with similar sentiment) put it in good perspective and it (they) represent(s) the practical view; I will definitely keep those thoughts in my mind when we continue our search tonight and tomorrow night and ...
posted by eebs at 10:26 AM on June 27, 2006
I appreciate the comments. They are all very helpful. Thanks for taking the time.
Civil_Disobedient's post pretty much sums up my psychological state - thanks. However, I think unSane's post (and others with similar sentiment) put it in good perspective and it (they) represent(s) the practical view; I will definitely keep those thoughts in my mind when we continue our search tonight and tomorrow night and ...
posted by eebs at 10:26 AM on June 27, 2006
Languagehat, do you live in Pittsfield? :)
Why yes, yes I do. It ain't pretty, but it's cheap!
Civil_Disobedient's post pretty much sums up my psychological state
That's what I figured, but it's not a helpful state to be in. Be practical, make decisions, don't dither, don't look back. And good luck!
posted by languagehat at 11:18 AM on June 27, 2006
Why yes, yes I do. It ain't pretty, but it's cheap!
Civil_Disobedient's post pretty much sums up my psychological state
That's what I figured, but it's not a helpful state to be in. Be practical, make decisions, don't dither, don't look back. And good luck!
posted by languagehat at 11:18 AM on June 27, 2006
no, not even Civil_Disobedient, even though he's cocksure about it
You can scoff all you like, but it was here on AskMe two years ago that I advised someone looking for a good investment to buy precious metals, and a few months later, the same advice again. Gold -- Dec 04: $460/oz., May 06: $725 oz., platinum -- Dec 04: $875 oz., May 06: $1340/oz.). Even the most cursory analysis of global and national trends could have revealed this, if the dissenters had just taken off their blinders for a moment.
The housing market is doomed. If you have loads of cash to spend, sure, buy a house. Hell, buy three: one in San Francisco, one in Las Vegas, and one in Miami. You know, last year the median prices for used homes in Las Vegas rose 52 percent (ref: National Association of Realtors: "the biggest quarterly increase of any city, ever.") Shit, housing prices during the dot-com boom years only rose an average of 6%. Anyone suggesting that this sort of thing is normal needs to have their head examined.
That's what I figured, but it's not a helpful state to be in.
Hogwash. You got lucky turning over your first house in a good market and you're now proclaiming in hindsight the virtues of carpe diem.
posted by Civil_Disobedient at 6:40 PM on June 27, 2006 [1 favorite]
You can scoff all you like, but it was here on AskMe two years ago that I advised someone looking for a good investment to buy precious metals, and a few months later, the same advice again. Gold -- Dec 04: $460/oz., May 06: $725 oz., platinum -- Dec 04: $875 oz., May 06: $1340/oz.). Even the most cursory analysis of global and national trends could have revealed this, if the dissenters had just taken off their blinders for a moment.
The housing market is doomed. If you have loads of cash to spend, sure, buy a house. Hell, buy three: one in San Francisco, one in Las Vegas, and one in Miami. You know, last year the median prices for used homes in Las Vegas rose 52 percent (ref: National Association of Realtors: "the biggest quarterly increase of any city, ever.") Shit, housing prices during the dot-com boom years only rose an average of 6%. Anyone suggesting that this sort of thing is normal needs to have their head examined.
That's what I figured, but it's not a helpful state to be in.
Hogwash. You got lucky turning over your first house in a good market and you're now proclaiming in hindsight the virtues of carpe diem.
posted by Civil_Disobedient at 6:40 PM on June 27, 2006 [1 favorite]
Hogwash yourself. I'm not claiming any special investment wisdom (unlike yourself), just pointing out that nobody knows the future of the market (not even you, despite the fact that you got lucky with gold), and my advice is to ignore it and buy the damn house. I stand by that advice. You're free to advise him to sit tight, slavering and twitching as he waits for the fabled bubble to burst. It's a free country.
posted by languagehat at 6:58 PM on June 27, 2006
posted by languagehat at 6:58 PM on June 27, 2006
My point was that it doesn't take any "special investment wisdom" to not be a fool with your money.
You're free to advise him to sit tight, slavering and twitching as he waits for the fabled bubble to burst.
No, I advised him to sit tight, smugly smiling to himself while he watches those with itchy wallet-fingers get burned, burned, burned because they couldn't resist the urge to satisfy their inner Veruca Salt.
posted by Civil_Disobedient at 7:49 PM on June 27, 2006
You're free to advise him to sit tight, slavering and twitching as he waits for the fabled bubble to burst.
No, I advised him to sit tight, smugly smiling to himself while he watches those with itchy wallet-fingers get burned, burned, burned because they couldn't resist the urge to satisfy their inner Veruca Salt.
posted by Civil_Disobedient at 7:49 PM on June 27, 2006
Tucson No. 7 on Forbes list of overvalued housing cities
(another link because the star's article goes behind paywall after 7 days)
posted by Hat Maui at 3:25 AM on July 18, 2006
(another link because the star's article goes behind paywall after 7 days)
posted by Hat Maui at 3:25 AM on July 18, 2006
This thread is closed to new comments.
In this position you are unlikely to find a house which you fall in love with. In which case you should try to make a rational decision. I've found it helpful when looking at houses to consider what I call the 'ah -- shit!' factor. This is the thing that, when you are looking round an otherwise nice house, makes you go "ah -- shit!" and you realize it is a dealbreaker. You know the kind of thing -- no yard, opposite a crack house, stairs emerge in the master bedroom etc.
Any house with an "ah -- shit!" factor, you can immediately reject. Even if you can live with it, other people may not be able to, which will be hell when you come to resell.
Any house without an "ah -- shit!" factor, and which is in your price range (and if it isn't, why are you looking at it?) and it doesn't seem radically over-priced, you should IMMEDIATELY consider buying.
If you get a homebuyer's report and it checks out clear you are highly unlikely to have made a financial mistake. The absence of the "ah -- shit!" factor means resale should be easy and you will probably make a bit of money, or not lose very much, when you resell, depending on which way the market has headed.
This absolutely relies on the homebuyer's report, obviously.
My guess is that you are looking for a bargain which you fall in love with. You will wait the rest of your lives to find this house. You MAY find a bargain, but you will not fall in love with it. You MAY find a house you fall in love with, but I can promise you it ain't going to be a bargain. But if you simply HAVE to find a place to live, be hardheaded and look for the "ah -- shit!" factor. Assume that every house has one, and find it. 95-99% of houses do. The day you find a house that hasn't got one, you will know it is a goody.
posted by unSane at 7:29 PM on June 26, 2006