Background info, kind of long, but I am a bit excited!
My husband and I own a "track house" that we bought from the estate from a dead family member. It was a slight fixer upper, but it was a great price- way lower than it's appraisal.
The house is 3 bedrooms, 2 and a half bath. It is about 1,650 sq ft and has a very small backyard that is pretty much a large concrete patio. There is no front yard at all, just a driveway- and there's traffic behind and to the side of our house, not safe for kids outside of our yard. The bedrooms are a good size, but the "living spaces" are small (apartment sized kitchen, small living room ) and we feel a bit crowded with just us and the baby. We plan to have another baby next year. We have talked about possibly having 3 kids total.
We live in southern California and the prices are dropping like crazy and foreclosures are popping up everywhere in our area (2 just on our street). We have no plans to sell our house- we plan to either live in it or use it as a rental. We have updated the house (spent about $30,000) since it is 20 years old, we also paid off our mortgage last year. We didn't get a penny from anyone to do this all.
Our dream is to move to a bigger house with an actual backyard. We never thought it would happen now that we have started a family. We kind of accepted that this is where we would stay forever since we won't be able to afford the houses here.
My husband's grandparents made a lot of money by building up a business in Los Angeles. They sold it and have been passing down the family's inheiritance down to their children only (my mother in law and her 2 siblings). My mother in law has a large amount of money from investments and family money, she is divorced and has no other children other than my husband. She has him on all her docs as the sole heir to her entire life savings (and even more when his grandmother passes away).
She told us yesterday that she plans to give us up to $100,000 to put down on a new house so we can move when the house prices have hit bottom. She wants us to keep our house in the family for our kids/retirement income, so we will rent our current house and use that money to cover our new mortgage (we would have to pay insurance and property taxes out of pocket). She pretty much said it would be an early inheritance for him since she knows we are getting cramped with our new family.
Needless to say we are shocked, but very happy! My parents have never offered to help us with anything and we never expected anyone from my husband's family to help us out. His mother said she had to struggle with a young family and doesn't want her son's family to struggle too.
Now it's a waiting game, I have read articles where they say experts expect the housing market to hit bottom around 2010, but it could be a little later. It's nerve wrecking not knowing how low the prices will go, because if they don't go a lot lower than the current prices, then it doesn't make it worth it for us to move from our current home. I am hoping the houses that are appraised at $450,000 (standard 4 bedroom homes) now will be $250,000 to $300,000 in 2 to 3 years. We could wait longer than 3 years if needed since we already have a home to live in.
Has anyone watched the market to buy a house at a lower price? Has anyone here bought when the market was bad? Anyone ever been a situation similar to ours?
We have awesome credit (750), an income to afford $200k-$300k priced house , a moderate amount of savings in the bank and a huge down payment (thanks to mother in law). I am hoping we will still be able to get a loan when the market is crap.
Any stories, tips or advice? Thanks!