Originally posted by: PrinceofWands
Originally posted by: w00t
ummm you don't buy a house that expensive you buy a house for how much you can afford in a new upcoming area than you sit on it than when the price goes up you sell......
buy low sell high it's commmon sense
How about you buy someplace to make into a home, where you can raise a family and gain a measure of connection to a place, then keep the home in the family and pass it on to later generations who will have some history as well as a paid off home, instead of making everything about money.
Just a thought.
Exactly. Sorry to say this, but most people here must be either too young or too financially unexperienced.
First: Stop Comparing Real Estate to other Investments. Houses are not fungible items! Each product in the market is different from any other... in a sense there is no Real Estate market in classic economic terms. For every house, the seller is a monopolyst, and you only need one buyer to determine the correct price. If you sell a house today, you can't just buy it back tomorrow like you could with any other investment.
Second: Real Estate markets have very irregular utility functions. Somebody would be unwilling to sell property no matter what the offer is. Home is home, and relocating to a new property could mean changes in one's life having implications no money can cover. When feeling enter the picture, market distortions are so big it's hard to quantify them.
Third: stop blaming real estate for the current foreclosure galore. If you buy things being uneducated about what variable interest rates imply, or overshoot your paying possibilities, or gamble with flipping it's not anybody else's fault. I don't think anybody taking a variable rate mortgage in the moment when interest rates were at an all-time low has any basic economics knowledge. You could have told what was about to happen just by looking at the interest rate curve. Every newspaper talked about that. They wouldn't listen, they get screwed. It happened before in every possible market... actually if anything, real estate is safer because it's much less volatile than more liquid markets.
Fourth: It's the place where you live. Sometimes, living in a place you love and feel cozy/safe/nice for you and your family has no price, and money can pay for that feeling. As I said different people have very different utility functions when dealing with real estate.
Example me vs. my father:
I am in my 30s, living and working in manhattan. I own a few properties in manhattan and brooklyn. I would accept an offer equal to market estimate+50% on any property I own, and an offer of market estimate+100% for the property I currently live in. I don't want to sell, so I need a premium to do it, but eventually none of these properties is really my "home" and I am young enough to bite the bullet and accept the stress of relocating, if the deal is good enough.
My father is 82, retired and living in europe.
He would not accept ANY offer for the house he is living in. A few years ago a german real estate group offered his lawyer a 3*market price for his house cause they wanted to develop the property into a golf course/club. He didn't even return the call. A few months later the same company asked his lawyer to just set a price, no matter how high and they would consider if there was any margin to negotiate. Again, my father wouldn'e even consider it.
Why? Because he is 82! No money can pay the fact that it's your home, you love it, know your neighbors, have your routines etc etc The stress of having to start a new life being 82 would probably kill him, or at least make him so sad he wouldn't enjoy any money coming from the operation. What would he do with the money anyway? When you're 82 things look different...
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