The two-year housing decline is worsening

[w¡n9Nµ7 §£@¥€r 123]

Property taxes are much lower than interest payments in the first years of mortgage.

Depends on how much your taxes are and the terms of your mortgage.

In my case, during my first year of mortgage my monthly interest was about 55% of my total monthly payment (PITI) while my taxes were 30%.

Today, my taxes are higher (both nominally and as a percentage).

[brtlmj 0]

Property taxes are much lower than interest payments in the first years of mortgage.

Depends on how much your taxes are and the terms of your mortgage.

Also depend on your down payment and the length of your mortgage. How much you save on that deduction depends also on your marginal tax rate.

Anyway, my point was that property taxes are a significant part of the total cost of owning a house.

[Artegal 1]

All I know is I was paying tax in April when I was renting, and now since I own a house I itemize and get a nice refund each April.

[Fandango 1,439]

The ONLY time renting is not a waste of money is in the instance of just moving to a new area, and you're unsure of where you want to be.

Let me give you a real-life example. My own.

Where I live a median house costs $557,000. If we took a 30-year mortgage at the jumbo rate of 6.9%, we'd be paying 3,668.40 per month. Actually, we'd be paying more, as mortgage insurance would be necessary. Anyway, we could afford it.

Now, let's consider renting. The average rent around here seems to be about $1,700 per month (that's based on local newspaper ads - I might be a hundred or two off). So, if we rent instead of buying, we can save $1968 per month. That's $24,165 per year assuming 5% return.

In other words, by renting we save as much money in a year as we would build equity in almost four years of "owning" a home. And that's assuming that prices do not fall further.

Additionally, right now we do not have kids and do not have to buy or rent a house. A $900 apartment is fine, so we save even more.

Sure, in a few years the situation will reverse. The we will buy - with a large down payment. But now? No way.

By the way, it's kind of funny how realtors tend to tell you that you are going to get a tax break on your interest payments, but conveniently forget to mention property taxes.

Generally speaking, renters pay property tax...it's just called rent. Of course HO's pay property tax....that's a given. And if you were buying a home, any realtor in FL would estimate your taxes so that you don't go in 'blind'. You'd also get this estimation from your mtg co....so please don't make assumptions about all 'realtors tend to not tell you'. I'm talking in this thread as a person, not a professional realtor giving advice to anyone in any real estate transaction.

If your going to post something of mine to pick apart, post the other bits that make your whole reply to me a superfluous one:

when I said renting didn't make sense, I truly believe that. But I also didn't clarify that in certain places, it's impossible to buy.

Obviously one cannot generalize and cover every location in the country. Obviously some areas are different.

I'm sure there are places in this country where renting makes better sense....we all know our own areas, and cannot know every specific place in the country. And I stand by what I've said earlier.....As for whether or not a private rental is cheaper because the investor bought before the boom is a big part of it IMO. Yes, there's the occassional investor that I've come into contact with who bought too high, and is now taking a loss each month to rent it out. But they're only holding on right now on the speculation that x amt of loss each month will be a short term loss only. But generally speaking, investors are not in business to lose money...so ask yourself why it's financially condusive for a person to buy a house purely on the notion of renting it out...if owning is not a good option???

The juice has to be worth the squeeze, or else why do it in the first place?

[mawilson 2,133]

All this talk of real estate is turning me on.

[Fandango 1,439]

All this talk of real estate is turning me on.

Mark's gonna go home and tell his wife 'Amoritize me, baby!'

meanwhile, I cannot believe I used 'your' instead of 'you're' up there. omG the shame!

[trailmix 77]

meanwhile, I cannot believe I used 'your' instead of 'you're' up there. omG the shame!

[Fandango 1,439]

meanwhile, I cannot believe I used 'your' instead of 'you're' up there. omG the shame!

Yes, I will live with it all the days of my life!

[russ 1]

GaryC will come out a winner no matter what. If his mortgage payments

are the same as his rent, he simply cannot lose. The choice is "flush the

money down the toilet" vs "pay off his mortgage."

This is absolutely not true. If values decline 10% and he must move, he will take a 10% loss, in addition to the costs of selling.

If prices stay flat for 13 years, he will still have realatively little equity and a small gain. This will be outweiged by the lost money to maintenance and taxes. He will still lose against inflation. He will also lose the savings of renting for every year over those 13 years where rents were lower than his ownership costs. And whatever money you could save during those 13 years would certainly make a better return in equities or bonds, which probably only carry a 5% long term capital gains tax at current rates. (assuming you weren't saving in a 401k or IRA)

That being said, I think buying a house is reasonable if the price is less than 4-5x median income, you have 20% down, and a FICO over 700, and the sale price is less than 3X your income. You should still be saving in stocks, as a house is a prime example of an investment that is not diversified.

Florida homeowners can tell you that while a fixed rate mortgage has predictable payments, insurance and taxes can increase substantially in a short period.

[peejay 327]

The two-year housing decline is worsening, "much lower prices" coming to a hood near you. Eleven pages of thread condensed into one cartoon that 'splains it all.

[Addie_Goodvibes 0]

I paid off my house in 1994. It's doubled in price since then. Prices have a long way to fall before I say "ouch".

It's all fake money as far as I'm concerned. It just suckered people into borrowing money with home equity loans to buy ####### they didn't need with money they didn't have. Now some of them owe more than their house is worth and they'll be in debt till they die. The joke's on them and the Fat Cats are laughing.

My house was always just a house to me...not an ATM machine. Prices can fall as they may and I'll still have a roof over my head. Less value = less taxes. So bring it on.

Yep, and those of us that are buying soon will get more house for their money.

We are in the process of buying in the most expesnive market on the west coast, we ahve been waiting for this time.

it is still sad to see what 300K gets you in Southern Ca.

At least it is a step up from a cardbox in Reseda.

[w¡n9Nµ7 §£@¥€r 123]

You could always move to Arizona like all the other priced out SoCal'ers

[AnaAndDaniel 0]

You could always move to Arizona like all the other priced out SoCal'ers

why have him stop there? I heard the south has some very affordable areas.

eg, Arkansas/Alabama/Louisiana/etc..

Daniel

:energetic:

[brtlmj 0]

Generally speaking, renters pay property tax...it's just called rent.

Renters pay property tax, included in their rent. "Owners" pay their mortgage AND property tax.

And if you were buying a home, any realtor in FL would estimate your taxes so that you don't go in 'blind'. You'd also get this estimation from your mtg co....so please don't make assumptions about all 'realtors tend to not tell you'. I'm talking in this thread as a person, not a professional realtor giving advice to anyone in any real estate transaction.

What I said is based on - admittedly limited - sample of local real estate agents trying to convince me that "the best time to buy is now".

If your going to post something of mine to pick apart, post the other bits that make your whole reply to me a superfluous one:

when I said renting didn't make sense, I truly believe that. But I also didn't clarify that in certain places, it's impossible to buy.

Obviously one cannot generalize and cover every location in the country. Obviously some areas are different.

My apologies. I did not notice that you contradicted yourself later

But they're only holding on right now on the speculation that x amt of loss each month will be a short term loss only. But generally speaking, investors are not in business to lose money...so ask yourself why it's financially condusive for a person to buy a house purely on the notion of renting it out...if owning is not a good option???

In general (and I am talking about 100-year averages here) owning makes a perfect sense, no question about it. The problem is, we are nowhere near the long-term trend now. Investors who bought recently in "hot" areas will either sell at a loss or rent at a loss.

Just found a nice link: http://efinancedirectory.com/articles/This...ome_Prices.html

[Ban Hammer 13,364]

Generally speaking, renters pay property tax...it's just called rent.

Renters pay property tax, included in their rent. "Owners" pay their mortgage AND property tax.

and mandatory to pay house insurance too.

when i was renting i had a really old house - fine for living by myself. buying a house saw my utilities remain the same but the house payment (mortgage, insurance, taxes) caused the payment to double.