thorne Posted September 21, 2007 Report Share Posted September 21, 2007 http://efinancedirectory.com/articles/This_is_Why_I_Rent%3A_Median_Incomes_Do_Not_Support_Median_Home_Prices.html I was talking about this a while back to people. They said I was Full of shit. Well tell me what you think guys. I will stick to renting my Nice house in Worthington for now. Quote Link to comment Share on other sites More sharing options...
V8 Beast Posted September 21, 2007 Report Share Posted September 21, 2007 There have been homes for sale in my neighborhood for over a year. One of them is a $275k house that they cant sell for $185. I still think renting is a bad idea though. If you rent a house rather than buy it, yes you can walk away... but the people that do sell their homes at least get some of it back (it may not be a lot with the way things are, but its better than nothing). You never know whats going to happen when you get a new president in office. Things could get better, or they could get worse. Either way I dont like answering to a landlord. Quote Link to comment Share on other sites More sharing options...
thorne Posted September 21, 2007 Author Report Share Posted September 21, 2007 my point and the article also reimburses it is that if your drop in value you really lose money. the house for 185 might easly fall more after you but it. Allot of these prefab communities are falling apart. Notice at 185 its still not sell. My landlord has yet to bug me once. My stompers(Dogs) have a nice yard to play in and I don't have to worry about this artifcial inflation of house prices. but do look at the price someone is losing there ass onit. There are still some good deal out there but it still coudlg et worse. Quote Link to comment Share on other sites More sharing options...
V8 Beast Posted September 21, 2007 Report Share Posted September 21, 2007 Home builders are messing it up. Why buy a used house for $185 when you can have a new one for $190.... On the other hand the person selling may lose, but doesnt that mean the person buying is getting a better deal. If you buy a $275k house for $185 you may turn over a huge profit if/when the market gets better. Quote Link to comment Share on other sites More sharing options...
thorne Posted September 21, 2007 Author Report Share Posted September 21, 2007 The point is the market may not get better as it is artificial inflated. Also buying a new house in a communities is bad as people get these sup prime loans loser there house now you have a sec8 house. Or a short sell. My parents NEW house has dropped from a 200K to 180K. Quote Link to comment Share on other sites More sharing options...
hotcorvmamma Posted September 21, 2007 Report Share Posted September 21, 2007 I see both views on this issues... at least if you own your home your money is going towards an investment of your own. When renting your really just throwing money away. When I bought my house there was a house in my neighborhood that had been on the market for 366 days. I paid more for my house than what she was asking for hers.... and it is the EXACT same house!! Because it is true why pay X amount for a 5 yr old house when you can get a brand new one for a couple thousand more. The funny thing is i'm back to renting and right now that is ok with me. Until we get someone else in the white house and see what happens I'm good with renting..... Quote Link to comment Share on other sites More sharing options...
thorne Posted September 21, 2007 Author Report Share Posted September 21, 2007 I'm curious hwo something can be a investment if purchased at the current inflated prices? But yeah i'm renting for a few more years. Quote Link to comment Share on other sites More sharing options...
hotcorvmamma Posted September 21, 2007 Report Share Posted September 21, 2007 Even with the inflated prices it is still an investment... the market is up and down all the time!! Whose to say what it will be like in 2 yrs... could be worse than it is now or could be much better. It's hard to tell. Quote Link to comment Share on other sites More sharing options...
V8 Beast Posted September 21, 2007 Report Share Posted September 21, 2007 Like she said things change all the time. Its not just a monetary investement, it's a family investment. If it gets worse, you already have a house... if it gets better, you already have a house. Most people dont buy houses with intent to sell. They buy houses so that they can live in them. They can inflate the prices all they want right now, I have my house and I'm happy where I live. BTW, If I do decide its time to move I can rent out my house to people like you that dont want to buy.... Quote Link to comment Share on other sites More sharing options...
verse Posted September 21, 2007 Report Share Posted September 21, 2007 I'm curious hwo something can be a investment if purchased at the current inflated prices? But yeah i'm renting for a few more years. B/C prices are always going to go up. History shows this is true. 10 years ago houses in Cali were under 300k, now you can't find anything for that price as they have jumped in value. That's just how economics work. The prices are going to get higher on everything. Prices aren't ever going to go back down, so quit your bitchin'. Quote Link to comment Share on other sites More sharing options...
TTQ B4U Posted September 21, 2007 Report Share Posted September 21, 2007 Interesting reads. I do agree the housing market is in a bad spot and values will be leveling off or correcting. I wouldn't blame the housing market entirely though. People created their own financial problems over the past few years and now everyone is trying to point fingers. The population as a whole in the last 10 years has overspent and continues to live well beyond their means. I mean when folks are going belly up because interest rates are rising and they can't afford a mere $500 to $750 per month bump in their budget, that's a key sign they had issues well before they bought a house. People absolutely feel it's acceptable to have to live off both incomes and that carrying credit card debt is an okay thing to do in life. My wife's practice has been booked 90 days out with Bankruptcy appts. for the past 2-3 years. While there are a number of reasons for folks going belly up, living beyond their means still remains the top reason. They have two car payments, very often are upside down on one or both, have too big of a home and live on plastic. Personally, finding a reasonably priced home to buy is still better than renting. Just looking at it from a tax standpoint a typical $800 mo. rent payment is about equal to $1,100 home payment...and there are still areas where home values are likely to stay even or go up. I mean traditionally what 3-6% per year is expected. There never were days of having a home jump $20k in value by the end of phase one. That was and is all BS. The problem however is that with folks spending all they have and not saving anything is that they can't afford the down payment. I think the population as a whole feels they should be able to buy a house with only 5-10% down and still be able to easily afford it. Now it all depends on how long they saved, but many work 2-3-4 years to save up even just 10%. Not much really so it doesn't surprise me that they are among the many that got caught up in the poor lender craze. Most all of those folks had no business buying a house in the first place, let alone overpriced ones. At least not until they had decent savings and a family budget that was more in line with reality. We also have a trend of folks buying way too much home and treating it like their retirement package. Again, crazy moves. Tons of my wife's clients make decent money but save near nothing and live in homes that cost $350-$500k with mortgages that are between 90-95% of the price they paid. Crazy...but they couldn't do like their parents likely did and actually save and "earn" that level of house. Quote Link to comment Share on other sites More sharing options...
V8 Beast Posted September 21, 2007 Report Share Posted September 21, 2007 True, people are trying to buy $300k starter homes when they should be in a $150k house. Debt is a way of life, and very few live without somekind of debt following them. To a lot of people a paid off car means money is free to get a loan for another car Its a materialistic world. I guess a good looking house is worth working so much that you dont get to enjoy it. Quote Link to comment Share on other sites More sharing options...
hotcorvmamma Posted September 21, 2007 Report Share Posted September 21, 2007 A sad reality is that if you own your home your in debt, if you own a car your in debt, if you have credit cards your in debt... really your never fully out of debt!!! Is it EVER a good time to buy a house,car, send your kids to college... no, there will always be something but these are all things that need to be done!!! Quote Link to comment Share on other sites More sharing options...
Sam1647545489 Posted September 21, 2007 Report Share Posted September 21, 2007 Its a buyers market right now, if you can afford to buy the houses now you will make out in the future.. Quote Link to comment Share on other sites More sharing options...
TTQ B4U Posted September 21, 2007 Report Share Posted September 21, 2007 yep and we're all guilty of it.....but as the saying goes, "you don't need best, just make the most of what you have" I gotta run....going to buy a new Blue Ray for the basement Its a materialistic world. I guess a good looking house is worth working so much that you dont get to enjoy it. Quote Link to comment Share on other sites More sharing options...
HotCarl Posted September 21, 2007 Report Share Posted September 21, 2007 B/C prices are always going to go up. History shows this is true. 10 years ago houses in Cali were under 300k, now you can't find anything for that price as they have jumped in value. That's just how economics work. The prices are going to get higher on everything. Prices aren't ever going to go back down, so quit your bitchin'. Yes prices may get higher but so will inflation. Thats his point. If you bought your house in 1980 and it raised in value 1.5-2% every year since then it will be worth the same amount than it was in 1980 simply b/c the value only raised with inflation. Yes buying a home can pay off if you keep it for a length of time and dont sell after 3-5 years after JUST paying off the interest of the loan. Buying a home can be a sound investment. Thorne, I agree with you to a point. Personally I think that the length of time you plan on spending in your house will dictate whether or not its worth buying over renting. Tim made a good point that having 800$ in a rental is equal to paying an 1100$ mortgage payment every month after tax benefits. But I would argue that after maintenance and all the BS associated fee's with buying a home that margin is cut signifigantly. Quote Link to comment Share on other sites More sharing options...
jeffmeden Posted September 21, 2007 Report Share Posted September 21, 2007 A sad reality is that if you own your home your in debt, if you own a car your in debt, if you have credit cards your in debt... really your never fully out of debt!!! Is it EVER a good time to buy a house,car, send your kids to college... no, there will always be something but these are all things that need to be done!!! I hear this all the time and no offense, but it's a rather ignorant view on economics. You are in debt if your assets don't outweigh your liabilities. If you have a 100k mortgage on a 110k house, you are NOT 100k in debt; you have 10k in net assets. Conversely, if you borrowed 20k to buy a car that can only be resold for 15k, you are 5k in debt. Of course, it's not that simple when you consider the cost of borrowing, taxes, fluctuating market prices, etc. but you either need to see the whole picture or you need to pay someone else to do it for you. It irks me when this sort of thing comes up, since I am apparently the only one who paid attention in finance class! Quote Link to comment Share on other sites More sharing options...
hotcorvmamma Posted September 21, 2007 Report Share Posted September 21, 2007 I hear this all the time and no offense, but it's a rather ignorant view on economics. You are in debt if your assets don't outweigh your liabilities. If you have a 100k mortgage on a 110k house, you are NOT 100k in debt; you have 10k in net assets. Conversely, if you borrowed 20k to buy a car that can only be resold for 15k, you are 5k in debt. Of course, it's not that simple when you consider the cost of borrowing, taxes, fluctuating market prices, etc. but you either need to see the whole picture or you need to pay someone else to do it for you. It irks me when this sort of thing comes up, since I am apparently the only one who paid attention in finance class! Your right, your not in 100K debt, but you are in "some" kind of debt you dont own your house out right...(which in that case you wouldnt have any debt). You own your car... with no payments=no debt. I personally dont like the term IN DEBT.. you go to work everyday and pay your bills when they are due your doing better than most! Quote Link to comment Share on other sites More sharing options...
jeffmeden Posted September 21, 2007 Report Share Posted September 21, 2007 you go to work everyday and pay your bills when they are due your doing better than most! That's the take-home message. If you have an income, coverage for disaster (via insurance or otherwise) and have a plan for managing your finances, you should not think of yourself as in debt just because you borrowed money to be where you are. You are only truly in debt when you can't afford to pay it back. And I might add, if it weren't for borrowers, saving money would be pointless. Of course, the opposite is true but the point is that you can NOT have one without the other. Quote Link to comment Share on other sites More sharing options...
V8 Beast Posted September 21, 2007 Report Share Posted September 21, 2007 That's the take-home message. If you have an income, coverage for disaster (via insurance or otherwise) and have a plan for managing your finances, you should not think of yourself as in debt just because you borrowed money to be where you are. You are only truly in debt when you can't afford to pay it back. And I might add, if it weren't for borrowers, saving money would be pointless. Of course, the opposite is true but the point is that you can NOT have one without the other. 1 cent of debt is still debt. Just because you can pay it does not mean that you are not in debt. A debt is created when a creditor agrees to lend a sum of assets to a debtor. If you owe money you are in debt. You are looking at the word negatively, when the word itself just means someone loaned you something and you agreed to pay them back. Quote Link to comment Share on other sites More sharing options...
hotcorvmamma Posted September 21, 2007 Report Share Posted September 21, 2007 1 cent of debt is still debt. Just because you can pay it does not mean that you are not in debt. A debt is created when a creditor agrees to lend a sum of assets to a debtor. If you owe money you are in debt. You are looking at the word negatively, when the word itself just means someone loaned you something and you agreed to pay them back. Thank you! My point exactly! DEBT is a very negative word and people get jumpy when it is said. Quote Link to comment Share on other sites More sharing options...
Bam Posted September 21, 2007 Report Share Posted September 21, 2007 But there is good debt and bad debt. A mortgage is considered "good" debt to an extent, where as credit card debt is always considered bad debt. I think that's what he was saying. I dunno, I'm buying a house this fall, in worthington for under $150k and i'd say 75% of the houses I've looked at are foreclosures or whatever, and while some good deals are to be had, housing prices ARE not the same as they were 20 years ago like Hotcarl seems to think. I plan to stay in this house 7-10 years, and the housing market will ALWAYS rise, its just recessive now and could be for a few years, but its just a cycle. Quote Link to comment Share on other sites More sharing options...
HotCarl Posted September 21, 2007 Report Share Posted September 21, 2007 I dunno, I'm buying a house this fall, in worthington for under $150k and i'd say 75% of the houses I've looked at are foreclosures or whatever, and while some good deals are to be had, housing prices ARE not the same as they were 20 years ago like Hotcarl seems to think. . When did i say housing prices are the same as they were 20 years ago? Quote Link to comment Share on other sites More sharing options...
OSUGT Posted September 21, 2007 Report Share Posted September 21, 2007 . Until we get someone else in the white house and see what happens I'm good with renting..... I'm not sure how to take this. Do you believe Bush is to blame for the subprime disaster? Quote Link to comment Share on other sites More sharing options...
TTQ B4U Posted September 21, 2007 Report Share Posted September 21, 2007 Credit card debt isn't always bad...it all depends on the situation you're in. My wife sees people all the time that forgo paying on their house to pay off credit cards. She also has folks that use their equity line to pay off cars....again, crazy....the interest savings isn't worth the risk....and one doesn't have cash to pay off a car, then they are taking a risk....and they almost never pay down the equity line like should. Instead they take on $20k in debt and watch the car depreciate in their driveway using the money that would normally go to a car payment on other things....but again, they tend to avoid paying down the equity line. But there is good debt and bad debt. A mortgage is considered "good" debt to an extent, where as credit card debt is always considered bad debt. Quote Link to comment Share on other sites More sharing options...
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