Housing bubbles, bursting, growing...

[BeTheChange]

Okay.. so my husband and I have found a house. It is in a fairly rural area that is however developing quite rapidly. It's a little over an hour outside of Seattle, which makes the commute not the most pleasant. The house is on an acre of land, which is plenty of land for us and so much better then the urban sprawl of .11 acres, houses built with no yards. etc..

I guess my concern is that since the area is building up, is that likely to decrease the value of my house? We are first time home buyers and dont trust real estate agents as far as we can throw them at this point...

If the market crashes, to people generally move farther and farther out, inflating, or actually leveling prices in line with the closes urban area? Or do they just start renting because all the costs are being squeezed so tight that the extra gas isnt worth the 50k savings?

Any sage advice anyone would like to offer is highly appreciated. This is a pretty daunting process and I just want to make sure we are going into it as well prepared as possible.


TIA!

[Oeditpus Rex]

1. All I know is what's happened around here

This town nearly doubled in population over 10 years as it became an auxiliary bedroom community for the overflowing Silicon Valley bedroom communities. I bought a four-bedroom home here in early 1998 for $199,500; the average home price is now $600,000 and change, and in rural areas it's even higher.

Note, though, that we're in the midst of a building moratorium because in the '90s homes were built faster than the infrastructure could maintain. Demand is greater than supply, and that drives up prices.

As for the real estate market crashing, I've heard some "experts" say if that happens — and they're skeptical about whether it will — it's not likely to last long. AFAIK, land is still the safest investment there is, and even if its value did go down, it wouldn't be very much or for very long.

[BeTheChange]

2. Thanks...

....what I wouldnt give you be 10 years older and have gotten in when Cali prices were bearable. Im scared to death of getting priced out of the greater Seattle market.

Do you have any opinions on what happens if the economy crashes? With dimwit at the wheel it seems more and more depressed every day...

[nini]

3. If the area is building up - you'll most likely make money

If you plan on being in that home for some time don't worry about the crash. Those will correct themselves over time. If you're in this purely for an investment over a few years then you need to be more cautious.


My concern would be is the commute going to take it's toll on you over time.


Good luck.. buying that first house is scary!

[BeTheChange]

4. We both telecommute..

I never have to go into an office since I brought my job from Cali. My hubby has to drive into Seattle once every two weeks, always during off times, for team meeting.

We worry about what happens if he looses his job, but we have picked a house that costs half of what they are trying to loan us, so we hope that over the course of the next decade we can mostly pay it off.

Buying your first house is definately scary!

[nini]

5. You have ALL the fears I did

I waited and waited because I was afraid I'd lose it if I got sick or couldn't work for some reason. Every homeowner has the same concerns.

At the very least you make a bit of equity and get some tax breaks if that happans. Odds are everything will be just fine so jump on in and enjoy it. You'll be glad you did once you see the investment paying off.

[LSK]

6. if you plan on staying there for a while, dont worry about a crash

Any crash will not be that drastic and the value will come back over time no matter how bad it gets. And if you can afford the payments and are not moving, you will not notice a crash. The only way it could possibly hurt you is if you need a home equity loan latter on for some reason. Also try and put down 20%. That would help insulate you from a crash too.

Try to lock in a rate because rates might go high in a few years.

One thing you should be concerned about is taxes thou. In new areas, real estate taxes can grow really fast as they need money to build schools, roads, etc.