To rent or own, that is the question

[ragani]

The last couple of weekends have been taken up with the great apartment search. I love where I live, but it really is not big enough for me, my lovely roomies and chaosloom. And really, in align with that "starting our new lives together" thing that we are embarking on, it seems like a good time to strike out on our own. Timing wise, we should probably move out by the start of September, because that is when one of the roomies returns from abroad, and things will get much tighter here.

We have looked at a range of places, some decent, some ridiculous. We even found a great one right across the street from where we are now and thought we had ended the search, only to be turned down because of chaosloom's credit. One friend, who just finished law school, pointed out that is was illegal for them to have turned us down when my credit and income is enough for me to take on the lease on my own, but we are not sure we want to pursue that "fight back" route at this time. Sigh...

Meanwhile, we have also talked about the possibility of owning. My step-mom thinks this is the perfect time for us to look for a place to buy because of the the current market conditions. There are any number of first-time home owner assistance programs in the towns where we are looking to live. There are even ones that are based on low-income, for which we might qualify for now (based on 2007 income), that we might not qualify for next year.

But really, is it a good time to buy? If so, why? And, what is the first step?

Comments

Trust your feelings...Luke.

[philosophertone.livejournal.com]

On Buying:
I tend to think the market has more down before up.
You've got to do some reasoning, then take your best guess as to when the "bottom" is, and how you feel about what you can find and afford at that time.

If you're investing for the long haul, what matters to you is getting a place you would want to stay in for the long haul, and buying value (a property that will appreciate relatively more than others).

In the South Bay, schools are really important to property value. Sometimes it's smart to get a smallish home on a big lot in a good location, on the theory that you can expand it later, and the added square feet will be at a high value because of the good location.

I'm big on quality of life...so I don't like long commutes. Your time and energy are precious.

Is there a chance you will want kids someday? Schools matter more, then.

I think what may be a challenge for the two of you is that your income history doesn't look great, and his credit history doesn't look great. Do everything you can to repair his credit. Live frugally, and sock away as much seed money as you can. More than you think you need is usually almost enough.

All of that said, if you get prequalified and know what you can afford, in this market you may be able to negotiate an awfully good deal. In some more downtrodden parts of the Bay Area, the default rates are high and you may find your unreasonable offer accepted. These are not the best investment properties...just less expensive.

Stay away from condominiums.
Stay away from condominiums.
Stay away from condominiums.

Finally, try to be really clear with yourself about what is most important to you, and that it's a wise thing, and stick to it. These are very big complex decisions, so you really need to know what your top ranked criteria are, so you can boil it down to the essence.