Good luck. Home ownership is key to family and community. if a hardcore pessimist like you is buying now...that only gives me hope that many others will a well...and provide the turnaround we need.

Sounds like a prudent move on a desirable property at a reality-based price. Under those circumstances, how bad can you get hurt? Congrats. I want to own a house some day.

Does it need painting?

You have to live somewhere. I have made more money on houses than almost anything else in my life and in the end you either have to buy a house or pay someone elses morgage. I prefer to pay MY morgage.

Glad to see you got a 3 car garage. Thats my only downside to the current house, could use more garage space but thats life. I have everything you mentioned and love living on the cul-de-sac. Did you check out the school district beforehand? Hope so as that really makes a house worth it for families...

Now before you move in, either put new carpet and paint there, or do a "spring cleaning" and do it right, then let it air out for a day or so. Also now might be a good time to bring someone in and run Cat5 network cable to most of the rooms AND the office. Also put it in the entertainment room for the TIVO and get everything done BEFORE you move in so its ready to enjoy.

Joe

Actually...I consider you quite reasonable and believe that you tend to slightly lead trends...so this is a confidence builder for me. I have to admit that you were ultimately right about Las Vegas...your prediction was just very early for my old Las Vegas neighborhood which has only recently started to weaken significantly.

I am pretty bullish on real estate myself now...rates and prices have improved...and rents seem to be gradually improving in the areas where I own rentals (first time in a while)...but I am fully invested at the moment.

if you love the place and think you're going to live there for awhile, no worries.

I think people get too hung up on home as "investment". It only matters if you want/need to move and whether or not you can afford the payments.

And I still think that certain areas of LA aren't going to tank a lot more than they already have. Location matters. Depending on what source you believe, my ex house has dropped hard from its peak in Oct '06, but still is significantly over what we paid in '02. And I just don't see it dropping back to what we paid in '02. Location is too desirable and there are still people making money in the area. Unless we head into a depression or *really* deep recession, it should hold relatively steady.

My ex again suggested I run the numbers for buying a place (looks like she's not taking an offer down south), but in my case I don't have enough down to make an affordable monthly payment. The tax benefit is significant, but I'm living in a rent controlled apt at the moment, so it is hard to get close to that with a mortgage payment.

The "free fall" has stopped in my part of Phoenix and values are now steady for a couple of months now. A bit longer and hopefully things will start going back up.

A friend of mine living 20 miles West of my place has started to see values increase steadily the last 3 months so if you are in a good location at least part of the market is doing better.

Cool! Congrats Wayne! Pick up a Dwell magazine subscription for great design ideas.

Ho, Ho, Ho; I'm loving this!

Seriously, Congrats to you and your family buddy, YOU're a Winner!

Still, might want to spend a few bux and get every room steam cleaned, then open the windows and let it air out and it will be a lot fresher when you move in. You never know whats happened while the house was empty and you have kids so it needs to be cleaned.

Also a good time to get the garage floor painted or coated if its not already.

Cat5 cable is a lot more secure than sending a signal all over the place, no matter how secure WEP is. Now that its in you are set.

Wayne, I think there is always something about HOME. My 22 y/o daughter has her own place and a good career and right now she still wants to come out and visit us and stay for a night every month or two. She has a place in downtown LA only about 25 miles away. If you're time horizon is 10+ years you're going to make a good investment. I'm in Boston today for two of my feature, and I have a reason for being up at 6:30 AM here, GO TO BED. It was 2:38 AM at your last post.

No mea culpas needed. You and wife made a decision that is right for your family's circumstances and needs. What a great house! Good luck with it, I sure with your study and sober consideration of all the issues you have made the right choice. Plus you wife said "now!" :D Glenn

When I moved out to San Diego in 2001, you could purchase rental property and break even by renting it out. That is "just about right". If the price is near 2001, including some inflatation at 3% per year, you will not get hosed. I think you waited and jumped in at the right time. And you are realistic, that you will not have any appreciation anytime soon.

Now if inflation kicks in....this is really a good move.

Sounds like you got a great deal on a house you really wanted.

Good luck:D

Wayne. It's a home. You have a family. Figure out a way to make the numbers work and go with it. You wife probably doesn't care about the charts, reversion to the mean, and all that other jazz.

You're doing the right thing.
Jurgen

You don't have to apologize to anyone over this.

If you have a lot of $$$ liquid cash right now, can secure financing (in other words, actually find someone who will underwrite you, which it sounds like you've done), and are convinced you're able to stay put for at least 10-15 years using CONVENTIONAL terms, you'll be fine. Good on ya'. I wish there were more (including myself) so fortunate.

I do agree the "best" deals are coming. If you're playing this game strictly from a left-brained/financial perspective. The "bottom" per-se is not going to happen for at least 2-3 more years. So in that sense, can you get more for your $$$ by waiting? Absolutely. However one cannot discount the emotional, "irrational" component to this. Your wife wants a home for her family that you guys own. Understandable. As long as you ride out the decline in values of the next 3-4 years and don't pay attention to it (and assuming you still have the $$$ coming in to make the payments), there's nothing to worry about. Neither gains nor losses are realized until you sell. If you wait 20 years to sell, I doubt you'll lose. . . The only way you'll get shelled on it is if you end up in a situation where you have to sell in the next 5-10 years.

PV is an awesome area. I love it up there and would move there in a heartbeat given the chance. It's about as culturally removed from the L.A./SoCal ratrace as one can be without leaving the state, or at least the region. Great choice for one's sanity. The one thing I would caution is that if you're going to El Segundo every day, the commute "off the hill" is a bit of a pain. Not totally soul-crushing, but not great either. Crenshaw and the arterials to PCH/405 can get U-G-L-Y at certain times of day, but if you go off-peak it's reasonably okay.

Hope it all works out. Congratulations!

All the other stuff is just "number crunching" when all is said and done imo. You "did good", 'cause if "mama" ain't happy, NO amount of $$$ saved/made will make up for it :)

edited: ps: Jurgen beat me to it :)

You will look back at this as your best personal financial decision ever. Rates are an anomally now. The housing market is in a deflationary mode. But inflation is just about ready to take off (justwait until those tax rebates hit theeconomy this summaer and fall). Real estate will inflate along with everything else. Meanwhile you'll be paying back a mortgage based on the currenty interest environment with dollars that are worth a fraction of what they are today. Besides, that place is a mansion. You'll love it there, you'll use it while it appreciates in value. There isn't a better investment in the world.

A house and a home for your family right now. Kids grow up fast, the longer in any one place the better. Congratulations and good luck.

You can rationalize and rethink the pros and cons about issues like home ownership, but these is something to be said about having a place to live that you own. Sometimes thats hard to put a pricetag on. Whatever you do, it will be the right choice. Just don't over analyze it.;)

Wayne, your an extremely smart man. You sound like you have a wonderful family, and some pretty neat cars as well. Their are a few Pelican's that I wish I could have just one or two of their goals, but you sir are the whole package.

Congrats on the house! Absolutely love the kitchen.

As a guy who has bought & sold several times, my realtor has a firm rule:

"If it's been on the market for more than one day, it's not a good enough deal"

The true bargains are scooped up the day they hit the market. You did good.

My wife absolutely loves our home. Hard to put a price on that. With your wife being happy about being able to plant roots again, and you happy that it was financially wise, I'n convinced you did the right thing. And it was worth the wait, wasn't it?

Approach it this way: Is being (financially) right worth putting strain on your family?

Congratulations! You made the right decision.

Now if you had told us that you were getting a negative-amortizing, interest-only loan and were planning on "flipping" the house in two years, you should rightfully be called and idiot.

You said it yourself that you can't time the peak. You can't time the nadir either.

A lifestyle call is different from an investment. I just did a similar thing. 25 years from now it won't matter, you and family will have enjoyed the house and lifestyle, you cannot put a price of 10 or 50% on this.

Most home buyers are not like you and your wife (or me and my wife) in that you are always looking and know what you want. Then when a decent house comes along and you know the market, you are in a good position to buy.

Don't ever think you "own" the house. You don't. Until it's paid in full, the bank owns it - and owns you by extension. I chuckle when people talk about "ownership societies" and stuff like that. What % of RE is actually owned by someone other than the underwriter/lender? Probably a very, very low percentage. . .

I'm sure Wayne is smart enough to see that distinction. That said, it's still nice to have some ownership stake in the property.

Damn it Wayne, stop putting that MIT education to use!:p You bought a beautiful home for a great price. Most importantly, you make the wife happy. Unless you're a single guy or a house flipper, purchasing a home is far more than a rational investment decision. It's about family, and a place for them to call HOME. Houses can be a very emotional purchase, smart buyers manage to balance the emotion and investment. Sounds like you did well, congrats!

I own more of my house than you do your rental.:pSmileWavy

Maybe, but the worst that can happen with a rental is you get forced to move. The "worst that can happen" with buying is far, far worse and destructive.

FWIW, I know a lot of people out here (several friends, co-workers, wife's friends, etc.) who "own", have payments 1.5-2.5X what my rent payment is and have exactly the same amount of equity in their places - zero (either due to i/o loan terms, declining market value, or both).

Buying is important yes, but buying at the right time, for the right terms and most importantly for LONG ENOUGH of a time is critical. Wayne's got it all correct.

Plus you have to live in Kansas. Nyahh!!! ;)

You think you own it then? Stop paying property taxes.

Lovely house. This thread is much less sinful than that god awful M1 you were looking to buy.

Hey, now you're hitting below the belt!

What, no pics of the garage?

man wayne, your RE agent is way hotter than mine. i think you made a great purchase. the house looks GREAT!

Wayne, analysis and timing and forecasting is one side of life, and family plus spouse needs are another. You have to do the best you can to balance the two. You sold pretty well, and bought pretty well, and didn't push your wife too far - that's a good balancing act.

I had to do the same thing when I moved to Portland. No way my wife was going to move to a rental house. So I bit the bullet and bought, preparing to lose money - which I am.

LA is poised for a rebound!

http://www.housingbubblebust.com/OFH...aphs/SoCal.PNG

analysis leads to paralysis. put down the slide rule Wayne... :p

I thinks Wayne's prior posts were a compelling argument against speculating in real estate, not a reason to rent rather than buy a home.

It's difficult to define the huge advantages of raising kids in a traditional family home. It's the place they will build a lifetime of memories. Hard to put a price on that.

Even in an overpriced market the decision to buy seems sort of basic to me.

1) Do you like the house?
2) Are you certain that circumstances will not make you leave the area any time soon? (Job transfers, etc can leave you in the red in a down market.)
3) Can you afford the home? (If you need an interest only loan, you probably should not be buying)

The decision to buy a home does not have to pencil out optimally for it to make good sense. As an investment, it may not be the most efficient use of your money, but it may be the best thing in the world for you and your family.

Congratulations, Wayne! Beautiful home.

I'll second Moses' analyses. I've never viewed a home (as opposed to a "house") as an "investment" in the traditional sense. Especially when people who are "house rich" and broke otherwise think they're flush because their equity is substantial resulting in a distorted net worth. That type of thinking where homeowners used their front door as an ATM via HELOCs to fund lifestyles has gotten a lot of people in trouble.

Put down the MIT analysis and the spreadsheets, Wayne. Admit there are intrinsic benefits to your decision that cannot be quantified;)

Heh, the interest only will help on your taxes. I guess the net costs will be pretty good.

I saw a pic of this house from Google Maps and it didn't look half as good as it does from the ground. Looks like a winner.

"I fully expected a bidding war to erupt, but for some reason,"

When you make an offer don't they have to accept or reject it before entertaining other offers? otherwise its like an auction, I didn't think they could just hold your offer out there waiting for others? this could take months!

Buying when the market is in the tank seems to be the best time to buy..... I figure you to be a very smart man and one that is probably critical of his own decisions.... Whether or not you caught this house at the very bottom of it pricing cycle is a moot point in your situation with the family and all..... If value does drop in the near future it won't hurt that much because now (if you are renting) you are not investing in yourself. If this does happen the pendulum will eventually swing back and the investment side of this purchase may look a little more appealing and make you feel a little more positive about your purchase in those regards.... Just try to get a fixed rate mortgage that satisfies you and then fire up the pit and call us up!!!!..... Enjoy the new house Wayne!!!!SmileWavy