FallenHero
Diamond Member
- Jan 2, 2006
- 5,659
- 0
- 0
I have yet to have the cops called on me or a neighbor pounding on my door because I am walking too loudly or my dog is barking at me.
There is value in a home that is not measured by money.
I have yet to have the cops called on me or a neighbor pounding on my door because I am walking too loudly or my dog is barking at me.
There is value in a home that is not measured by money.
Way too many people look at houses as investments vs places to live.
First, it's a place to live and MAYBE a good investment down the road....just don't count on it.
I love how people say "i bought my house 20 years ago for 50% of what I sold it". That's fine, but once you add up the interest/taxes and repairs over those years, chances are you probably LOST money.
I guess one can say "it's still better than renting"....
First, it's a place to live and MAYBE a good investment down the road....just don't count on it.
I love how people say "i bought my house 20 years ago for 50% of what I sold it". That's fine, but once you add up the interest/taxes and repairs over those years, chances are you probably LOST money.
I guess one can say "it's still better than renting"....
Capt Caveman
Lifer
- Jan 30, 2005
- 34,543
- 651
- 126
And I would never buy a house in cash. Fuck that, I'll take my sub 4% mortgage with deductible interest and invest in the market and get a much higher return.
Capt Caveman
Lifer
- Jan 30, 2005
- 34,543
- 651
- 126
its a hell of a lot easier to move though, and you can itemize that big time.
Texashiker
Lifer
- Dec 18, 2010
- 18,811
- 198
- 106
I say buy now.
As for the housing market making a recovery, I doubt a full recovery will ever happen.
Wages for working class families have been stagnated since the 1990s, if not since the 1980s. The middle class has not a standard of living raise in what, at least 25 - 30 years.
Until the middle class makes what they were making in the 1970s, adjusted for inflation, then the housing market will not recover.
yes thats true but we were talking about money. and if you live in a college town like me, good lucks on the cops doing anything
HendrixFan
Diamond Member
- Oct 18, 2001
- 4,646
- 0
- 71
It depends on the math of the situation and also needs to take into account how well someone saves or utilizes their spare income.
For example, in most traditional 30 year mortgages and in a high property tax state like Texas, the majority of the money you pay doesn't go towards principle. Not even close.
For a small but nice starter home, you can reasonably expect to pay around $150k in my area. If (big if...and the numbers get worse without it due to PMI and amortization) you put 20% down then the loan amount is $120k. From there with the all time low rates we have now you will still pay $90k in interest, roughly $90k in property tax, plus you would likely pay another $75k or so in repair/maintenance costs (2% of the value of the home).
The total cost of the $150k home is a little over $400k at that point. If you don't qualify for the best interest rates and/or rates fall back into a more normal range then you can add on another $70k or so to that total. Basically you are looking at dropping around $450k out of pocket to buy a home valued at $150k. That money goes into a pit and disappears forever.
Now you do have the advantage of property value increasing, but with interest rates so low at this time and the shadow inventory being held back, don't expect anything close to traditional growth in value for quite some time. When the new bubble does pop values will fall once again. That equity you paid a 200% surcharge for will shrink.
When you rent an apartment, if you are savvy with the money you save over a home you can keep and invest the difference. It should be able to reliably come out to a value higher than that $150k in equity you have after 30 years.
Buying a house does make sense versus renting when you can get an amazing deal (you get ahead on equity), get an amazing rate on a normal deal (current amazing rates are for mostly shitty deals that will crash with the new bubble), put a significant chunk down, or finally if you pay it off sooner than 30 years.
Texashiker
Lifer
- Dec 18, 2010
- 18,811
- 198
- 106
In 1991 my wife and I bought a 3 bedroom home for $45,000. Minumum wage was $4.25 an hour.
$45,000 divided by 4.25 = 10,588
In 2012, according to bloomberg.com, the average family home cost $158,100. Minimum wage is what,, $7.25?
$158,100 divided by $7.25 = 21,806.
In the past 20 years, the number of hours someone making minimum wage needed to work to buy a home doubled.
The housing market will never recover, because working class families can barely afford the basics, much less buy a home.
ViviTheMage
Lifer
most people I know only move because the renters nearby suck, or they have more money and need more space...not very often do I see them move out of the state/county though...not after college that is.
renting or owning a home, neither REALLY is a money making investment ... but at least a home has a chance of returning something.
also, at least you're in a house instead of an apartment!
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cheezy321
Diamond Member
- Dec 31, 2003
- 6,218
- 2
- 0
I have now already seen 5+ posts in here about a 'shadow inventory' and its almost always a naysayer mentioning it.
Can anyone provide substantial proof that a 'shadow inventory' exists and how it could be unleashed? It seems like more 'sky is falling' BS from the negative crowd.
Can anyone provide substantial proof that a 'shadow inventory' exists and how it could be unleashed? It seems like more 'sky is falling' BS from the negative crowd.
true. im moving after just two years because my rent keeps going up. first year $25 a month, now a $40 increase per month? im not signing that lease!
the new place is just $150 more then this was, its twice as nice and its two bedroom. i found a nice girl to room with, so it will be a lot cheaper for me overall.
i wasnt talking about families either. if you have kids, then yes i can totally justify getting a mortgage for a house because time is of the essence there.
but for guys like me, single and no urge to have kids... why buy a freakin house that just holds me down in my own misery? i did that for a decade, no thanks anymore!
If the market was so good they wouldn't need to keep lowering the interest rates and making the rules easier again to get a loan. As mentioned the banks are holding inventory to give you an artificial demand. Eventually they have to release those houses and the interest rates have to go up. It's going to crash again after that. You can still find some good deals but I'd say be very careful. This is the exact mentality people had before in the huge bubble. "I have to buy now or you miss the market, everybody hurry hurry hurry!!.
Think of this. If interest rate were more realistic at 7-8 percent that would mean people could buy half the house they can now. That puts all these houses at 50% less what they are now. And the government knows this which is why they keep lowering rates to historic lows. Historic lows. That's damn scary. Not to mention that since the banks are holding them we don't have nearly as many houses to compete with. The huge house down the road is still sitting after 2 years after being foreclosed.
Still some good deals if you look but be careful. Don't get caught up in this facade they are making. There will always be more houses coming on the market. Just be patient, don't freak out just because it goes up a little for a bit.
Think of this. If interest rate were more realistic at 7-8 percent that would mean people could buy half the house they can now. That puts all these houses at 50% less what they are now. And the government knows this which is why they keep lowering rates to historic lows. Historic lows. That's damn scary. Not to mention that since the banks are holding them we don't have nearly as many houses to compete with. The huge house down the road is still sitting after 2 years after being foreclosed.
Still some good deals if you look but be careful. Don't get caught up in this facade they are making. There will always be more houses coming on the market. Just be patient, don't freak out just because it goes up a little for a bit.
HendrixFan
Diamond Member
- Oct 18, 2001
- 4,646
- 0
- 71
http://blogs.wsj.com/developments/2011/11/11/how-many-homes-are-in-trouble/
It does exist, but they don't really release the full numbers. If you have any real world friends you must certainly know someone who is a member of that group. They are living in a house that hasn't made a mortgage payment in a long time, in the case of my friend, over a year. They aren't being thrown out because the bank is backlogged and/or intentionally holding off on the paperwork to suppress vacant homes and prop up prices. In the meantime, banks don't have millions (yes millions) of homes to worry about upkeep with as they try and work through all the legal paperwork needed. The non-paying former tenants can mow the lawn and keep the lights on.
In general it is on the upswing in most markets. Prices are rising ever so slightly and home are moving very well. The bottom seems to have been fall 2011. If you look at 4th quarter sales of 11 compared to 12, 12 is setting records.
There's never been a better time to buy than now, you'll never have an opportunity like this in your life time. Rates at historic lows, prices at historic lows...
Because cost of materials is so high you can purchase more home for the money than new. That means prices are extremely good and aren't artificially low.
There's never been a better time to buy than now, you'll never have an opportunity like this in your life time. Rates at historic lows, prices at historic lows...
Because cost of materials is so high you can purchase more home for the money than new. That means prices are extremely good and aren't artificially low.
I'm curious, how did you lose everything when your neighborhood went to crap? did the neighborhood burn down your house? Or is there some other thing the neighborhood can do?
Even realestate agents will tell you this if you know one personally who keeps tabs on this stuff. Not to mention many people actually see the foreclosed but not for sale houses sitting on their streets for years now instead of months like it used to be.
Plus all the data is always available some place. Just have to know where to look.
HendrixFan
Diamond Member
- Oct 18, 2001
- 4,646
- 0
- 71
You got in on a great deal, but not everyone lives in KY. Prices are nowhere near historic lows, just recent lows. Home values should be roughly 3X the median income historically speaking. They are still overpriced, and that price is being propped up by the low rates and shadow inventory. As the inventory gets worked through and the rates return to normal, home values will fall. As that bubble pops the economy will cool again, dropping values further.
Not to get political or anything, but I think we can say those running the show are only looking at propping up a bubble to look good instead of trying for a real recovery. I know you of all people should agree with that.
Can you explain how in LA there are no less than 6 offers above asking for every effin house on the market?
There's a much larger percentage of sales for investment purposes these days given such low rates. It's like free money.
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