Phoenix - Investment

[Sizzler]

18 minutes ago, Sonu_Patel said:

I advised many people to buy within means anna... they went well beyond thier means and took over ~5K monthly mortgage payments and they are unable to balance expenses financially. 

Its a pain they have to overcome every month for a period of 30 years. 

Nobody is going to stay in the same home for 30 Years. When the rates go down, they will get some relief with payments. Income will go up as well. 
 

“House Poor” is a situation people get sucked into unfortunately. 

[jaathiratnalu2]

1 hour ago, Konebhar6 said:

What looks cheap today might look cheaper. I do not know the Delaware market. But make a comparison to prices in the last 5-10 yrs. 

I would wait for any home-buying decision. Naa friend ni konoddani nenni nooru mottukunna .. he still booked a new home in Dec. By Feb, it reduced by 100k+. He got an out due to some error and got his booking money back in March 1st week. He did not listen to me a 2nd time and still bought in April. He got 400 Sq Ft more and 30k less than the price he initially paid. His closing in 2-3 days, and worried it's 75k less now in total value. 

My reasons are -> 

1. High Interest rates. With a 10-year treasury yield at 5.1%, mortgage rates will go up.

2. High Interest rates are not good for Stock Markets. The possibility of a recession is still true. With a tariff pause coming nearby stock markets might tank again, taking people's liquidity.

3. High Cost of Ownership for a home -> High home Insurance rates, high property taxes.

4. Losses continue to mount. AI is taking jobs. IT is in a transition phase. Will continue to do so for some time.

5. Last 1 month, we started seeing a big drop in existing home prices. All it takes is a few homes to sell at lower prices, and the slide will start.

6. Once summer ends, demand (whatever is there) will reduce a lot, putting pressure on the market.

7. Investment homes will start coming into markets, making supply more, along with Homebuilders' new homes, which are at all-time high inventory levels. 

NOTE: Mature markets with good school districts may see a small drop, but these are the places to buy. The bounce will be fast in these areas. Think Frisco & others in Dallas, San Ramon/Dublin/Pleasanton in the East Bay. Others can add other places. 

Very Valid info, bro. really useful for everyone 

On the other side of the coin:

1)  The tariff will increase home prices 

2) The rate of interest will increase Mortgage payments 

3)  Inflation is increasing .. Home prices will increase sure in near future

4) Agree with your AI transformation, not sure how to phase this. Only keep updating ourselves 

5) it is my primary home and a good school district with the premium builder (Toll brothers) and its new Home

6) Minimal property taxes here (0.8)

 

I gave a deposit yesterday only. So, above all reasons now. Still, what you feel honestly. Do you need want me to go back on this deal?

 

Let me assume you're a close friend and give your suggestion, and I've already made my decision. Just asking for expert  inputs 

 

 

 

 

 

 

 

 

[jaathiratnalu2]

54 minutes ago, Sizzler said:

75K is a pretty good discount on $680K home. If this is your primary home, enjoy the home and congratulations on the 75K discount. 
 

Not easy to time the market but good discount even for an investment home. 

Yes Bro , I have been tempted for this and this with Toll Brothers and very few homes left  and they were closing community and in my area we are not getting Old homes (4 to 5 Yrs build) for this price. 

. Moving from a current Townhome to a Single home. Yes, it will be primary, and i want to rent townhome.

 

[Sizzler]

1 hour ago, jaathiratnalu2 said:

Yes Bro , I have been tempted for this and this with Toll Brothers and very few homes left  and they were closing community and in my area we are not getting Old homes (4 to 5 Yrs build) for this price. 

. Moving from a current Townhome to a Single home. Yes, it will be primary, and i want to rent townhome.

 

Good luck bro. Whatever decision you make will be fine. Are they providing any rate incentives as well? May be negotiate and see if they accept an offer around 580s. Builder will be motivated to sell the remaining homes. 

Worst case, the home price might drop little more and don’t regret if yo decide to buy the home. 

[jaathiratnalu2]

1 hour ago, Sizzler said:

Good luck bro. Whatever decision you make will be fine. Are they providing any rate incentives as well? May be negotiate and see if they accept an offer around 580s. Builder will be motivated to sell the remaining homes. 

Worst case, the home price might drop little more and don’t regret if yo decide to buy the home. 

Only 10K on closing costs with preferred lenders 

Some offers are there: 2/1 arm but those are with 20 % down payment, closing until June end only, and mine is not falling into it

I tried for 590 and bargained a lot on this. Simple rejected my offer, and if I don't accept, others are waiting for this deal. So, I have to go to. This is meeting all my requirements except one (Direction)

As per my analysis and the desi people in that community, I got the second-best offer ( as per county records, also verified other homes) in the entire community 

[Sizzler]

13 minutes ago, jaathiratnalu2 said:

Only 10K on closing costs with preferred lenders 

Some offers are there: 2/1 arm but those are with 20 % down payment, closing until June end only, and mine is not falling into it

I tried for 590 and bargained a lot on this. Simple rejected my offer, and if I don't accept, others are waiting for this deal. So, I have to go to. This is meeting all my requirements except one (Direction)

As per my analysis and the desi people in that community, I got the second-best offer ( as per county records, also verified other homes) in the entire community 

If you have been looking for a primary home and this is the perfect home for your family, don’t sweat over 10K.
 

Someone else might get a better deal for another home in that community later and don’t let that bother you. At least you are not buying at the peak value (680K) of the property and imagine losing 11% equity after buying the home. 

Good luck bro.

[Konebhar6]

3 hours ago, jaathiratnalu2 said:

Very Valid info, bro. really useful for everyone 

On the other side of the coin:

1)  The tariff will increase home prices 

2) The rate of interest will increase Mortgage payments 

3)  Inflation is increasing .. Home prices will increase sure in near future

4) Agree with your AI transformation, not sure how to phase this. Only keep updating ourselves 

5) it is my primary home and a good school district with the premium builder (Toll brothers) and its new Home

6) Minimal property taxes here (0.8)

 

I gave a deposit yesterday only. So, above all reasons now. Still, what you feel honestly. Do you need want me to go back on this deal?

 

Let me assume you're a close friend and give your suggestion, and I've already made my decision. Just asking for expert  inputs 

 

 

 

 

 

 

 

 

For a primary home its a different decision. Make sure you are comfortable with the overall payments. Take an excel sheet, and put together one time costs (Closing costs) & the total cost of ownership of the house (Recurring payments). Do not assume mortgage payments are going to go down. If they do its a bonus. 

One-Time Costs

• Down Payment
• Closing costs like loan origination fees, appraisal fees, title insurance, recording fees, etc. 2-5% of loan amount
• Home improvement and renovations - Appliances, Blinds, Garage upgrades, Furniture, and other decor.
• Moving expenses

Recurring Payments

• Mortgage Payments
• Property Taxes
• Home Insurance
• Private Mortgage Insurance (in case downpayment is not > 20%)
• HOA fees
• Utilities - Electricity, Gas, Water, Garbage, Internet, TV 
• Maintenance & Repair (If old house)

The most important point you need to understand is - Let's say the Mortgage interest rates have dropped from 6.5 to 4.5 in another 1 year. Most probably the price of your home must have reduced by some price. Let's say it dropped from 500K to 450K. Your initial loan was 400K (20% down). You will get a loan only for 450K - 90K which is 360K. You will be required to pay the additional 30K. 

My advice - Make sure you are comfortable with payments. I do not know about the inventory in your area. Also, you have to plan for School year for kids. Otherwise, I would wait till winter and buy next January-February. 

[jaathiratnalu2]

4 minutes ago, Konebhar6 said:

For a primary home its a different decision. Make sure you are comfortable with the overall payments. Take an excel sheet, and put together one time costs (Closing costs) & the total cost of ownership of the house (Recurring payments). Do not assume mortgage payments are going to go down. If they do its a bonus. 

One-Time Costs

• Down Payment
• Closing costs like loan origination fees, appraisal fees, title insurance, recording fees, etc. 2-5% of loan amount
• Home improvement and renovations - Appliances, Blinds, Garage upgrades, Furniture, and other decor.
• Moving expenses

Recurring Payments

• Mortgage Payments
• Property Taxes
• Home Insurance
• Private Mortgage Insurance (in case downpayment is not > 20%)
• HOA fees
• Utilities - Electricity, Gas, Water, Garbage, Internet, TV 
• Maintenance & Repair (If old house)

The most important point you need to understand is - Let's say the Mortgage interest rates have dropped from 6.5 to 4.5 in another 1 year. Most probably the price of your home must have reduced by some price. Let's say it dropped from 500K to 450K. Your initial loan was 400K (20% down). You will get a loan only for 450K - 90K which is 360K. You will be required to pay the additional 30K. 

My advice - Make sure you are comfortable with payments. I do not know about the inventory in your area. Also, you have to plan for School year for kids. Otherwise, I would wait till winter and buy next January-February. 

Thank you so much for your patience and for providing all the required information , Really it will be very useful info bro. Appreciate for your efforts.