My Personal Finance Journey

Hello and Welcome!

My name is Jacob, a husband to a wine-blogger wife, father to two bouncy-boy toddlers, and I'm the owner/author of My Personal Finance Journey. By day, I am a scientist working in bio-pharmaceutical development. Personal finance has been my hobby since 2007 when I started teaching myself through books (that finance B.S. degree didn't teach me much!). Learning how to save, adopt a frugal mindset, and invest my own money soundly has allowed me to have a savings rate > 50%, increase my net worth by > 20 times, grow my career, and always do what I love. Check out the About Me page to learn more!

Categories

Groups I Am a Part Of

Proud Member of the Yakezie Network

Keeping Your Sanity as the Housing Market Heats Up

————————————————————————————————————————
Welcome to My Personal Finance Journey! If you are new here, please read the “About” or “First-Time Visitor” pages to find out more about us. If you would like to receive free updates on articles like this by email, then sign up here or you can subscribe to the RSS feed. Also, check us out on Twitter or Facebook. Thanks for visiting! Keep on learning!
————————————————————————————————————————

The following is a post by MPFJ staff writer, SK. SK writes about the reasons we get into debt, changing the patterns that get us into debt, and examines small business ownership and real estate investing at her blog, American Debt Project.

Well folks, it’s back. Not the economic recovery. Just the part where California home prices start going crazy again. In Los Angeles and Orange County alone, prices increased 12% in January and marked seven straight months of housing price increases (and we just finished the eighth month of that trend). Although some incredibly biased news sources claim this is no bubble (but they’re heading Realtor.com and Trulia, no conflict of interest there, amirite?), I beg to differ. I don’t want to get hosed in this crazy housing market, especially considering this is my first real estate purchase, so here are some tips on keeping your sanity in an insane housing market.


Do Your Due Diligence

Realtors are pushy. So pushy! I’ve been a few times now to check out homes, and thanks to the market conditions, realtors are back to their old ways. They want you to make an offer after 5 minutes of looking at a home. They’ll push you to waive inspections, and make offers that are either over asking price, or, if they come in above the appraised value, that you will maintain your offer. 

These are bad ideas, my friends. You should take your time to look at the home. Check the cabinets. Run the water. Measure the rooms. Consider the exterior condition. If someone else offers $30,000 over appraised value, let them have it. Do you have $30,000 in cash that has no better use? I don’t see the value in getting a home for the sake of just getting a home. Check out Khan Academy’s Renting vs. Buying videos to understand when it makes sense to rent versus buy.


Don’t Get Into a Bidding War

You can certainly make an offer even if other people are bidding, but don’t allow your emotions to take over and bid way over your original budget. If there are 10 other bidders, there may be cash buyers who have an advantage. But just make the offer and get the experience. Remember, you won’t buy the first house you put an offer on (hopefully!).


Consider Other Neighborhoods

 


I know that I have my heart set on 3 neighborhoods in Orange County. But to be realistic, there are 3 neighboring ‘hoods’ that would work out just fine. If you can expand your search and increase the inventory available to you (I know, inventory is at an “all-time low”), you can increase the odds of finding a home you like and can afford.

Ugly Homes Need Love Too

Many buyers are wising up to the standard staging tricks in real estate. Granite countertops and new carpet and paint do not make a good home. It’s the structure, layout, and location that matter most. So, if there is an OK home on a great lot in a nice neighborhood, consider it just as seriously as the fully-renovated home in an almost-as-nice neighborhood. You’ll get a better value with greater long-term appreciation potential.

So, if you’re looking to buy a home right now, I want to know: Are the market conditions affecting your decision? And how are you adapting? Is the housing market only “hot” again in California?  

Share your experiences by commenting below!

    ***Photo courtesy of http://www.sxc.hu/photo/1394960

    About the Author Jacob A Irwin

    Hi folks! My name is Jacob. I am the owner and operator of My Personal Finance Journey. I started this blog in January of 2010 and have enjoyed the journey ever since. Since finishing up graduate school in Virginia in 2014, I have been working in biopharmaceutical development in Colorado. You can read more about me and this site here​. Please contact me if you have any questions!

    follow me on:

    Related Posts

    14 Feb, 2023

    Is Your Employer’s Group Life Insurance Enough?
    14 Sep, 2013

    How To Save Money When Buying A House
    03 Apr, 2013

    Surviving Your First Mortgage Application
    31 Aug, 2023

    Maximizing Your Nest Egg: How to Make the Most of IRA Investments
    31 Aug, 2023

    Lifetime Income Strategies: Leveraging Annuities for a Comfortable Retirement
  • BarbaraFriedberg says:
    April 6, 2013 at 1:56 pm

    Because we have set a budget for our next home, the market condition indeed affects our decision which house to purchase. We have established the amount for our monthly amortization that will meet our required minimum number of rooms and floor area.
    My recent post AMASS $70,000 BY CHANGING ONE LIFESTYLE HABIT

    Reply
  • Newlyweds ona Budget says:
    April 5, 2013 at 10:45 pm

    I live in Orange County and my husband and I are fearful of getting priced out, but I am hoping this is a bubble and just ignoring the whole “buy now!” advice because I know fully well we cannot afford to buy a house right now. A year or two down the line may be different though.
    My recent post Side Hustle Income: How I earn money online

    Reply
  • myfijourney says:
    April 5, 2013 at 3:16 pm

    I'm thinking about buying a home. My major consideration is how much of my net income will be spent on housing. Currently, my one bedroom apartment consumes about 25% of my net income. That would shoot up to 50% if I bought a starter home here. Another consideration of mine is maintenance. Since houses in this area are so old, endless expensive maintenance seems to be guaranteed.
    My recent post Portfolio Status: April 2013

    Reply
  • FrugalRules says:
    April 5, 2013 at 1:04 pm

    I think it's starting to make a come back in many areas. I know we're seeing it somewhat in our area, though we live in an area that was sheltered from quite a bit of the downturn. If we were looking to buy now I would make sure to do my due diligence and to be careful with your upgrading.
    My recent post Frugal Friday: Missing From a Wal-Mart Near You Edition

    Reply

    • Popular posts

    Is the Infinite Banking Strategy Using Whole Life Insurance Right for You?
     Invest & Retire
    Apr 29, 2013
    CarMax’s MaxCare Extended Service Plan Dissected and Other First-Hand Account CarMax Car-Buying Experiences
     Saving Money & Frugal Living
    May 22, 2012
    Debt Free Direct Tour de Personal Finance 2013 – Final Championship Sprint on the “Parisian Champs-Élysées” of Personal Finance
     Blogging
    Jul 21, 2013
    $141.20 Giveaway – Community and Charity 10% Monthly Blog Income Give Back # 5 – February 2012 Edition
     Blogging
    Feb 11, 2012
    >