The two-year housing decline is worsening

[AnaAndDaniel 0]

It would be YOUR house. You could paint it purple if you wanted.

This coming from the guy who painted his house Magenta?

oh really! way cool.

i've painted the interior(living/dining areas) with a color my mom likes to call 'pumkin orange'.

Daniel

:energetic:

[mawilson 2,133]

Thanks guys, I was never very good figuring out mortgages. I was told by the bank that they would be glad to make me the loan at any time but they suggested that I wait until winter. They said the market always softens then and I could get a better deal on a house.

It will likely be "softening" for the next few years. Thats why its hard to say if you will be better off. You may not get what you paid for your house when you sell it.

He will get what he paid for, unless his house is worth less than $38k in 13 years,

which - let's face it - is not gonna happen.

It would be YOUR house. You could paint it purple if you wanted.

This coming from the guy who painted his house Magenta?

oh really! way cool.

i've painted the interior(living/dining areas) with a color my mom likes to call 'pumkin orange'.

Well, he married Mags, didn't he? Hence Magenta

[Dan J 277]

Thanks guys, I was never very good figuring out mortgages. I was told by the bank that they would be glad to make me the loan at any time but they suggested that I wait until winter. They said the market always softens then and I could get a better deal on a house.

It will likely be "softening" for the next few years. Thats why its hard to say if you will be better off. You may not get what you paid for your house when you sell it.

He will get what he paid for, unless his house is worth less than $38k in 13 years,

which - let's face it - is not gonna happen.

It would be YOUR house. You could paint it purple if you wanted.

This coming from the guy who painted his house Magenta?

oh really! way cool.

i've painted the interior(living/dining areas) with a color my mom likes to call 'pumkin orange'.

Well, he married Mags, didn't he? Hence Magenta

He may not get as much as he paid for. If the house sells for exactly what he bought it for, He will end up with with the same amount of money he put into the principal, however, due to inflation, that money will be worth less than it is now. $45,000 in todays dollars, wont be $45,000 in 13 years from now. Taking into account 3% inflation, the $45000 left over from selling the house in 13 years, will be equivalent to about $23,000 today.

[mawilson 2,133]

He may not get as much as he paid for. If the house sells for exactly what he bought it for, He will end up with with the same amount of money he put into the principal, however, due to inflation, that money will be worth less than it is now. $45,000 in todays dollars, wont be $45,000 in 13 years from now. Taking into account 3% inflation, the $45000 left over from selling the house in 13 years, will be equivalent to about $23,000 today.

So? He's not saving ANYTHING by renting - today, tomorrow or 10 years from now.

So if he gets $45,000 in 13 years or $23,000 or even $1,000, it's still more than 0.

[Fandango 1,439]

Sorry, but with the amt of pre-foreclosures out there and with prices the way they are, it's a GREAT time to buy.

Mtg ins many times can be paid up front, sometimes for 1%. Which will save THOUSANDS.

And while no one has a crystal ball, buying a house is quite like buying stock. Are you better off waiting til you could possibly get in at the ROCK bottom...sure I suppose if you have to get in at the lowest. But you're still losing the rent money while you wait anyway!

Whether ppl sell in 7 years or not is moot....if you buy another home, then you're still on that property ladder and you're still holding a huge asset. Again, it's merely a transfer of your equity. Let alone all the tax breaks that come with home ownership! 1031 exchange for investors, capital gains, etc.

Or by buying now, your getting a mortgage for more than the house will be worth in 5 years. If you have to sell, what if the sale price doesn't pay off the mortgage?

Can I borrow that crystal ball of yours?

We could 'what if' til the cows come home.

How about in my circumstances? I plan to retire to PI when I reach 62. (13 years from now) I rent for $725/month. There are nice houses here that can be bought for $80,000 that are equivalant to where I live now. I talked to the bank and I can get a mortgage for 30 years for about $800/month INCLUDING taxes and insurance. It seems to me that I would be money ahead if I bought a house and then sold it 13 years from now when I move. I don't know enough about all this to really work out the numbers. Someone?

Personally, I'd say that's a helluva plan.

Make sure you go with a reputable lender, Gary.

What an exciting time for you! Congrats!!!!

How about in my circumstances? I plan to retire to PI when I reach 62. (13 years from now) I rent for $725/month. There are nice houses here that can be bought for $80,000 that are equivalant to where I live now. I talked to the bank and I can get a mortgage for 30 years for about $800/month INCLUDING taxes and insurance. It seems to me that I would be money ahead if I bought a house and then sold it 13 years from now when I move. I don't know enough about all this to really work out the numbers. Someone?

In the current market conditions, the house price will likely go down.

Dan, the house prices will NOT go down where he lives. In that part of the country,

the prices never went up and are already as low as can be.

They probably wont go up either.

They don't have to go up. Even if the mkt stays the same for 10 years...which I would find hard to believe, but for the sake of argument let's say it's so....even with a horizontal mkt he'd still get SOMETHING back...which is a helluva lot better than 'you've been a great renter these past 15 years! Thanks for payin my mtg, chief!'

I am not sure why most ppl look at a house as an investment.

As russ pointed outed, ther are number of reasons for this. Big one is you just can't and sell it right away. But more importantly, it is where you live.

For me, it was a case of where do you want to live? Buy a house there. If circumstances change, then you do what must be done (eg, sell and buy another).

all other financial activity is seperate. If you save some money, you have the option of investing in some kind of investment vehicle (this could include real estate by the way).

Anywhos, buy a house because you want to own a house, not for the "investment" part of it.

Daniel

:energetic:

Everyone pays for housing.

Wouldn't it be great to use a house and then get your money back? Or even SOME of your money back? hell, it's a lot better than never seeing your rent pymt again.

Barring some great deal of a lifetime, no one walks into a home with no money down and gains instant equity. The expectation for a big windfall in a relatively short pd of time is unrealistic - in any mkt.

However, in the mkt down here - people who bought their homes 5 years ago are sitting pretty with some decent equity, so long as they didn't refi. I say that's a helluva return on your money.

Even before the 05 spike, my parents had several homes in several states. They held them for varying amounts of time & sold them before the boom. The lowest sale was around 150% - and that's not including the rent they collected while they owned them

My parents renters! lol

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. And whoever here mentioned a rent controlled apt....hell, I wouldn't leave rent controlled! One of my bff lives in NY in a rent controlled apt V centrally located and she pays a pittance!

[one...two...tree 2,762]

The housing market is a scam. People should be able afford to own their own home.

[mawilson 2,133]

The housing market is a scam. People should be able afford to own their own home.

And in 30 years, they can.

[Caladan 19]

It's not a bad time to buy if you're planning to live in the house. Might be a better market in a couple years, depending on your area. Bad time to buy if your plan involves the home gaining 40% of its value again in the next couple years.

[one...two...tree 2,762]

The housing market is a scam. People should be able afford to own their own home.

And in 30 years, they can.

Call me a communist pig, but I think there should be a cap on how much the value of home can be at. Letting a market decide that means those on the bottom are more or less excluded from ownership.

[AnaAndDaniel 0]

I am not sure why most ppl look at a house as an investment.

As russ pointed outed, ther are number of reasons for this. Big one is you just can't and sell it right away. But more importantly, it is where you live.

For me, it was a case of where do you want to live? Buy a house there. If circumstances change, then you do what must be done (eg, sell and buy another).

all other financial activity is seperate. If you save some money, you have the option of investing in some kind of investment vehicle (this could include real estate by the way).

Anywhos, buy a house because you want to own a house, not for the "investment" part of it.

Daniel

:energetic:

Everyone pays for housing.

Wouldn't it be great to use a house and then get your money back? Or even SOME of your money back? hell, it's a lot better than never seeing your rent pymt again.

Barring some great deal of a lifetime, no one walks into a home with no money down and gains instant equity. The expectation for a big windfall in a relatively short pd of time is unrealistic - in any mkt.

However, in the mkt down here - people who bought their homes 5 years ago are sitting pretty with some decent equity, so long as they didn't refi. I say that's a helluva return on your money.

Even before the 05 spike, my parents had several homes in several states. They held them for varying amounts of time & sold them before the boom. The lowest sale was around 150% - and that's not including the rent they collected while they owned them

My parents renters! lol

LisaD,

you make some good points.

What I am trying to get across though is that most folks, if fortunate enough to be able to buy a house, do not fall into the investor category. At least not the purchase of their home.

Any equity they build up is just "theoritcal" gain. This gain will not be realized until they sell that home. If they die living their and the kids inheret the house, well, then it it is "tahnks mom and dad" time from the kids.

don't get me wrong, i much prefer to own a home. i do. i just believe it is an investment for most folks.

Daniel

:energetic:

[mawilson 2,133]

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. And whoever here mentioned a rent controlled apt....hell, I wouldn't leave rent controlled! One of my bff lives in NY in a rent controlled apt V centrally located and she pays a pittance!

I didn't mention it in this thread, but mine is rent-controlled. If I ever buy an apartment

here in NYC, it sure as heck isn't going to save me any money. B)

[mawilson 2,133]

Call me a communist pig, but I think there should be a cap on how much the value of home can be at. Letting a market decide that means those on the bottom are more or less excluded from ownership.

Only in places like NY or LA. Look at Peoria, IL - GaryC's home town - where you can

still buy a home for $80,000. It's a great price and I think most families in America

can afford it.

[Logres 0]

The housing market is a scam. People should be able afford to own their own home.

And in 30 years, they can.

Call me a communist pig, but I think there should be a cap on how much the value of home can be at. Letting a market decide that means those on the bottom are more or less excluded from ownership.

Should a cap be placed on a person's salary too? it's one or the other.......

[Dan J 277]

I am not sure why most ppl look at a house as an investment.

As russ pointed outed, ther are number of reasons for this. Big one is you just can't and sell it right away. But more importantly, it is where you live.

For me, it was a case of where do you want to live? Buy a house there. If circumstances change, then you do what must be done (eg, sell and buy another).

all other financial activity is seperate. If you save some money, you have the option of investing in some kind of investment vehicle (this could include real estate by the way).

Anywhos, buy a house because you want to own a house, not for the "investment" part of it.

Daniel

:energetic:

Everyone pays for housing.

Wouldn't it be great to use a house and then get your money back? Or even SOME of your money back? hell, it's a lot better than never seeing your rent pymt again.

Barring some great deal of a lifetime, no one walks into a home with no money down and gains instant equity. The expectation for a big windfall in a relatively short pd of time is unrealistic - in any mkt.

However, in the mkt down here - people who bought their homes 5 years ago are sitting pretty with some decent equity, so long as they didn't refi. I say that's a helluva return on your money.

Even before the 05 spike, my parents had several homes in several states. They held them for varying amounts of time & sold them before the boom. The lowest sale was around 150% - and that's not including the rent they collected while they owned them

My parents renters! lol

LisaD,

you make some good points.

What I am trying to get across though is that most folks, if fortunate enough to be able to buy a house, do not fall into the investor category. At least not the purchase of their home.

Any equity they build up is just "theoritcal" gain. This gain will not be realized until they sell that home. If they die living their and the kids inheret the house, well, then it it is "tahnks mom and dad" time from the kids.

don't get me wrong, i much prefer to own a home. i do. i just believe it is an investment for most folks.

Daniel

:energetic:

Yes, but in our current market, the average ownership of a home is 7 years. If you never plan to sell it, thats a different story. Because of the changing career environment, assuming that you will buy a house and never move is short sighted. While some people stay in the same city for years and never move out, many people move to different cities, or get relocated by their job. If you only owned a house for a short period of time, you wont have enough equity to come out of the deal with money in your pocket. In some case, you may come out of the deal owing the bank money.

[AnaAndDaniel 0]

Yes, but in our current market, the average ownership of a home is 7 years. If you never plan to sell it, thats a different story. Because of the changing career environment, assuming that you will buy a house and never move is short sighted. While some people stay in the same city for years and never move out, many people move to different cities, or get relocated by their job. If you only owned a house for a short period of time, you wont have enough equity to come out of the deal with money in your pocket. In some case, you may come out of the deal owing the bank money.

you too have some valid points.

the point i am trying to get acros though is that for most folks, regardless of how long they stay in the house, should not look at purchasing a house as an investment.

they should purchase it because it will make them happier because they own a home. The mtg payments are the cost of such happiness.

Daniel

:energetic: