We are "early" retirees who are now renting as we sold our house 2 yrs ago.

[Peregrine Took]

Before we lose EVERYTHING we've invested from the sale of our house (!) would it be in any way a wise idea to pull out what we have left and plunk it down on a little house somewhere?

At least we would have a roof over our heads that we would own outright and could get out of having to make mortgage or rental payments each month.

My husband thinks I'm insane and 'says we should "ride it out" but I don't want to lose anymore -we've already lost about 1/3.

[dana_b]

1. oh Peregrine... that's a tough one

I'd be inclined to go your way but I'm pretty conservative with money. At least a small house is something tangible. You can always sell it later if the market comes back. I don't know - talk some more with the hubby.

[pnwmom]

2. Your husband's not going to care what any of us think.

But, as for me, I'd go for the little paid-up house, assuming you'd have an adequate income to support yourselves otherwise. The house might go down in value, of course, but it's solid, a real thing, and you need to live SOMEWHERE.

As far as the stock market is concerned, I just read today that during the Depression, stocks fell 89%. The Depression lasted 10 years. Is your husband prepared to ride that out?

[kstewart33]

3. Don't do anything yet.

You're panicking, and as bad as it looks now, it's not the time for panic.

The main question is whether you have enough funds to pay the bills for the next year or so. I'm thinking it will be a year before things begin to turn around in the economy. Not the stock market, but the economy.

As bad as it looks now, things will get better. But it will take some real time this time.

So my advice FWIW is to focus on the question of whether you have enough liquidity (cash) to ride it out for the next year. If you do, sit tight.

[Clovis Sangrail]

4. buy a bar or a liquor store

people drink when times are good... and they drink more when times are bad.

In 8 - 14 months buy a home/property... not now.

[Hekate]

11. Not a good atmosphere, and less so in poorer neighborhoods where resentment will run high.

I had the chance to go in that direction with my ex, and am eternally glad I did not.

Hekate

[Hekate]

Pippin, I am ALWAYS in favor of owning the roof over your head, but I am not an economist

Good luck and gods bless. :hug:

Hekate

[eilen]

5. That's what I would do. If I was retired,

I would find some place that has great discounts for senior citizens on property taxes, that has inexpensive homes and easily accessed quality healthcare, free public parks and good libraries--maybe somewhere near a quality university.

A small ranch on 1/4 acre (large enough for a garden) close enough to a bus route.

[On the Road]

6. If You Don't Mind Some Renovation

Check out foreclosures -- there are some real bargains around. You could wind up selling high and buying low. On Edit: Or there are some which are in good shape. It's worth checking out.

The market is likely to have farther to fall. I would suggest a stable fund like Fidelity 2010 which has a mixture of conservative stocks and bonds.

[Donnachaidh]

7. NO.

We haven't seen the prices drop to the bottom yet. The only real reason to do so would be to have a roof over your head. Buying now would only work if you could buy it and PAY for it at once. Then you would have something to live in. But buying it for future sale now isn't a wise thing to do.

[kestrel91316]

8. I would go buy (cash) some teeny weeny little toad abode in some

small town with cheap older places on big lots. Plant some fruit trees, plant a big garden, get some chickens (that's why I said SMALL town). Walking distance from essential services would be wise.

I am a bit of a doomer, if you hadn't guessed.

[barb162]

19. I like your idea.

Growing your own food these days...excellent, with the way prices are rising.

[Newshues]

9. in general - wait. Property still has 10 - 20% to lose

in value before it's done falling. Depends on where in the country you are - like Maine, property values have held up well because Maine never had a big bubble but that's due to other economic factors over the last 10 years. Yet down in south Florida you could probably pick up a hell of a foreclosure deal at rock bottom prices.

You may be able to find a situation that splits the difference - a cheap enough house that you don't clean out the investments.

Alternatively, in order to get your husband to go along, you may want to look at rental property. Buying the right 3 unit property would give you a place to live while the tenants pay most of the bills. Would be cheaper than paying rent yourself and at the end you'd have something with some value. There is risk in this. If you don't have the heart to throw out a single mom with 2 kids......

You have options that can address your concerns as well as your husbands. Trick is finding the right match for your particular situation.

Keep at it, keep tossing ideas around with your husband and when the right idea comes up for the both of you you'll know it.

[Cronus Protagonist]

10. Do not sell when the market is down - Econ 101

Simple.

[REACTIVATED IN CT]

12. self delete

I'm Brain dead

[mizzuzmojorizin]

13. There are small towns that are not full of inbreds and the houses are only around $100,000 (+ less!)

I don't know how much you received for your place, but I always thought that it makes sense for people who are retired and don't need to live near a big city to work, to settle in small towns. You get more space, quiet, safe communities, fresh air...I guess it depends how much money homeowners must pay for upkeep. I have never owned a house so I wouldn't have the faintest.

[RollWithIt]

14. At this point in time, if you have the means to do so, BUY A HOUSE

Go out and start offering 25% of the asking price on a home you like, see what happens. Foreclosure sales too. Contact the county courthouse of an area you want to live in, tell them you are looking to buy a home and wanted to check into foreclosure sales, and ask them how to keep track of the sales dates.

Just my 2 cents.

[bhikkhu]

15. Look at your diversification - more Econ101

There are plenty of resources and recommendations on how to best diversify your investments to weather a variety of market conditions. I'd look at this from a definitely non-panicked perspective, regardless of how things look in the short term. The one big risk I would say, if your have a portfolio weighted too much toward a few stocks, is you could loose chunks of your nest egg to possible company's failing. This would be worse than simply losing share-value, which could turn around tomorrow or next year.

Different types of holdings spreading into various economic sectors should provide enough safety. Whether to buy or rent has been an equation that comes out pretty even for many years, except that renters save expenses and enjoy flexibility, while owners build equity. Retirement isn't really a time to build equity, so you may as well enjoy the freedom to move, and count on always being able to find reasonable rent.

[upi402]

16. I wanted to sit on the RE sidelines with cash (gold)

and wait for the market to dump hard. It will, I think. And there will probably be desperation buys that will escaspe the money elites due to sheer volume.

That my think. But I couldn't sell it in time, and I have family resposibilities where I am, so I stayed with one remaining house.

Either way may turn out to be best, but I'd bet on prices dipping even more.

[Celebration]

17. it is not an either/or situation

You might look into making your portfolio more defensive, at least over time, and just watch the housing market carefully. There is still a large inventory out there, and financing is not easy to get, so I would not expect a quick turnaround in prices of houses--you have time. But you could still slowly start making your portfolio more defensive. I like to ladder CDs with most of my investments. But this may not be the opportune time to sell.

Again, this is not all or nothing. You could slowly shift your portfolio while you just wait out the housing market.

[barb162]

18. Buying a small house for cash would be a good idea

You can pick up housing really cheap these days, espeically a cash sale. Just make sure you find a good house inspector so you don't get a lemon needing lots of repairs.

[question everything]

20. Plus, if things get bad, you can always do a reverse mortgage (nt)