No, I am not psychic, although it would sure make life easier if I were.
:-) I am a 30 year veteran in both the Mortgage and Real Estate Industry, as well doing a daily Rate Forecast for 22,000 viewers.
This knowledge made it easy to see the facts.
The most significant fact is that in 2006, the housing affordability index dropped to historic lows.
People could not afford the homes they were buying, at least not if they told the truth.
People were squeezing into homes they could afford, by lying about their income.
millions of people lied and bought homes they could afford.
While all of this was going on, suddenly rent prices seemed incredibly cheap.
Rent payments in comparison to mortgage payments fell to lows I have never seen.
This and many other smaller factors, signaled the end, in my opinion.
We listed our home and we sold it near the top.
My wife, myself and my 6 year old daughter, then set off on two years of traveling.
I had just finished writing a book and it seemed like a great time to start promoting the book.
It was a great time, because there were NO jobs in Mortgage Industry during that time and it looked to me as if the industry still had far to fall.
Now it 2009, and we are ready to integrate back into a "Normal" life.
The school year was about to start and we were in a hurry to find a place to live so that my daughter could register for school.
We decided to rent a town home in an area I'd long dreamed of moving to.
The town home was located in a beautiful gated community of Newport Beach, CA I was amazed that we could rent a place in this area for $3300.
00 per month! I know people from many other areas are thinking that is a crazy high amount to pay in rent.
I suppose it is, but not when you consider that the AVERAGE price of a home in the zip-code was $2.
Fast forward 4 years...
we have moved, but only a couple of miles away.
Our new home is in a quaint yet upscale village called Corona Del Mar.
We love it hear.
We can walk to the beach, restaurants and even the super-market.
We rented in this neighborhood because prices were still falling and I did not want to guess at where the bottom was.
For two years I gloated about selling my home at the top and staying out of the market while it dropped over 30%.
Well, I guess I was too busy gloating to notice the market had hit bottom and had begun to swing back up.
Prices are now near the highs that we saw in 2006 and it is again far cheaper to rent and we don't have to risk buying at the top.
The morale to the story is that we learned to enjoy renting and in fact found some benefits.
Although we enjoyed renting, we have not felt fully settled.
Owning a home brings a feeling that cannot be replaced while renting.
Be careful trying hit the top or the bottom of the market, or you could miss the opportunity to experience the feeling of Home Ownership.
We are now looking to purchase a home and have decided to stop trying to guess which way things will go.
Mortgage Rates are great and that has made our decision easier.
Happy House Hunting!