I Could Buy my Old House for One-Third of the Price?
A Lot can Change in the Housing Market in Two Years!
Two years ago I sold my previous home FSBO for $140K (that’s it in the picture and more pictures below). Just out of curiosity, I was looking at home prices on Zillow for my old neighborhood. To my surprise, I found a house right down the street that is an identical twin to my old house selling for a mere $49K!!
I couldn’t believe it. It is literally the same exact structure as my old house at almost one-third of the price. It looks like the house is a real estate owned (REO) property. This means that it went to foreclosure and was not sold at an auction. The bank took ownership of the property and is now trying to sell it at a fraction of its value.
Granted, it looks like this house is not quite as nice as my old house and needs a little TLC – but not THAT much TLC. With about a $15-20K investment, it would probably be in better shape than my house was. Then you’re still looking at about only half price.
What can you Take Away from this Example ?
1. Barring major structural damage, I am positive that it would be hard to lose money on this house. For $50K, I have never seen a house this nice. 3 bedrooms, 2 baths, 2 story home in a desirable neighborhood. I might even consider this as an investment opportunity. There are bargains to be had in the market right now. If there in my neck of the woods, they might be in yours too.
2. If you’ve been on the fence about buying a home and come across opportunities like this, why wait any longer? I can’t imagine prices getting much lower than this. And if lower, how much lower could they go? Many experts are now predicting that prices will bottom in the first half of 2010. But why wait until they rebound?
3. If you’re a first time home buyer and can take advantage of the first-time home buyer tax credit on an opportunity that is this cheap, it would be kind of crazy not to. In this example, it would equate to almost 20% of the purchase price. That’s enough for the entire down payment!
4. 30-year fixed mortgages are still near a historical low of 5%. It’s a great time to lock in a low interest long-term loan.
My Advice on Looking for Homes
I’m not telling you to go out and buy a house, but what I am telling you is that depending on the market that you live in, there may be some true bargains out there and it is a great time to look for them and ask yourself if prices could get much lower and the timing better than this.
Home Buying Discussion:
- Have you bought a house recently?
- Are you considering buying a house?
- Has the 1st-time home buyer credit given you incentive to buy?