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Tilted Cat Head
Administrator
Location: Manhattan, NY
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Quote:
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Originally Posted by jorgelito
The economy is going great right now!! 2006 and 2007 are slated to be the best in years in terms of jobs and job growth for new graduates. The Fortune 500 are fighting heavily over new grads right now. Employers are offering more incentives and bonuses than ever. The future looks bright.
Didn't the stock market grow like 2000 something points in the past 4-years before last weeks temporary lows?
The real estate market will always ebb and flow, just like anything else. Up and down, up and down. Now and then, now and then. If houses are too expensive or rates too high, then just rent and wait for it to come down. I have missed many "booms" (dot com, stock markets, real estate) but I never panic cause I know I will get my opportunity soon enough. Deferring gratification, patience, making wise decisions will pay off in the end (in my opinion). I never had a chance to capitalize on the low interest rates of the past few years, nor did I get in on the tech boom stocks. but hey, more opportunities will arise.
By the time I will be ready to buy a house, rates will either fall again, or due to the previous frenzy, there will be lots of awesome foreclosures to be had at fantastic prices.
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That is what your hope is. I have collegues who thought that as well and seem to be chasing something they may never attain in NYC, SF, LA because the cost of housing is outpacing the pay scales. So some of my friends who make good salaries have 2-3 hour commutes in order to have housing that they can afford.
Also, start looking into the rules of foreclosure purchasing and you'll find that a) most of the best foreclosures never hit the streets and get sold to those inside the market first, b) must be purchased sight unseen, so you cannot even look inside and walk the premises and see structural faults/issues, c) must pay cash up front since most foreclosures don't accept financing.
Lastly, even if prices become "good" keep in mind interest rates fluctuate and also affect how much "house" you can buy.
As far as Grads are concerned, most grads are heavily debt laden in order to get that education. While yes, they can be deferred for some time, they do still have to be paid back and can never be defaulted on. Some people I know have educational debt in excess of $50k. This does not include their credit card debt for their "lifestyle" that they lived in college which could also be an additionaly $20k. All that gets factored in when qualifying for a mortgage, again affecting how much "house" you can buy.
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