Why renting is better then buying right now

[thorne]

hawk they were before. The problem is they pushed way to many people into houses they could not afford.

 

MY parents moved in when the house area was the shit. There house gained 10-20K the first year. Now it's down hard. Like I said 28 of the last 29 sales were low balled. Does anyone understand what im talkinga bout.

 

MI build an area lots of them. They moved alots of people in on BS terms. They lost ther ehouses (28 alone in parents area). Therefore the houses around it went way down in price.

[Bam]

Bull shit it was not, Let me show you my parents house? All of these defaults on loans it hurting anyone in the already over priced communities.

 

 

Look up anything in alkire lakes compare the purchase price with the value now and they've lived there 3 years, And did upgrades.

 

 

My old house did the same thing, MI/Dominion fucked Everyone, They got people to buy houses beyond what they could afford based on lies. They wanted me to get a house @ 250K. I got one for 150K and my payments had rose to a point that I was very happy I did not choose 250K.

 

That's not inflation right there, that's what happens in a majority of new neighborhoods, especially ones that aren't finished when you buy in.

 

Just because a builder "fucked everyone" does not equal inflation. People could have negotiated on the house prices, people didn't have to buy the houses, but the point is they did, and they are now reaping the benefits, aka losing their ass.

 

But it won't stay like that, it will come around, and their houses will appreciate over the years, no one said your new house will appreciate the next year you buy it.

 

It sounds like you got fucked because of an adjustable rate mortgage, WHICH HAS NOTHING to do with your house/area/builder/anything.

[Bam]

hawk they were before. The problem is they pushed way to many people into houses they could not afford.

 

MY parents moved in when the house area was the shit. There house gained 10-20K the first year. Now it's down hard. Like I said 28 of the last 29 sales were low balled. Does anyone understand what im talkinga bout.

 

MI build an area lots of them. They moved alots of people in on BS terms. They lost ther ehouses (28 alone in parents area). Therefore the houses around it went way down in price.

 

but again, that's not the builders or the area or the houses fault, that's people not protecting themselves enough to make a smart purchase. Of course home builders want to sell there properties and of course anyone will sugarcoat pure shit, but in reality its only a bad deal if you go in blind and without reason.

 

It sounds like and its true that millions of buyers ONLY purchased a home because they were told they could afford it, no one ever took the time to think about it in depth, or research anything or hell, probably even read the damn purchase contract.

 

It sucks, I agree, but it isn't a blanket statement for the housing market in general.

[Bam]

The point is, none of this would have happened if people that couldn't afford a house didn't buy one.

 

I guaruntee that if all these people bought homes they could afford they there would be no such epidemic going on, because everyone would not be forced to sell their homes or be evicted because they are going into foreclosure, it would be all good.

 

It's all the BUYER's fault.

[Tractor]

Interesting angle, but no...

 

You posted that there is a 7 month surplus of new builds, that doesn't even factor in all the foreclosures AND the regular sales. There is probably close to a 1+ year surplus of houses on the market in central ohio. Some of the top agents and agents with an angle are the ones getting all the business just because there is so much out there that you aren't seeing the middle level agents getting all the business

 

Of course I didn't factor the others in. I was simply stating the fact as the fast was stated. Nothing else, nothing more. Of course there are more houses, but since there is a 7 month supply of "new builds" there is basically no point in buying a house that is 10+ years old that is also in a sub division and all that. Of course if your looking for an acre or more and maybe some unattached buildings and stuff then thats different.

 

I do see what your saying though and yeah the people I talk to are pretty sure we haven't even hit rock bottom yet and are looking at at least 2 years out before prices can stablize. Of course changes in any number of things could effect that time line in either way.

 

I agree with the superhawk here. its the buyers fault for not understanding that their loan payment was going to double or triple after a number of years. Wow I just built a house and read the whole contract. Of course it helps that my wife sells loans too, but I don't think I'd be that stupid anyway. I guess everyone watched "Flip this House" and got greedy:-) I even have a buddy that bought a $250K house and he makes like $12 an hour. Thats just pure BS right there.

 

Evan

[LJ]

Bull shit it was not, Let me show you my parents house? All of these defaults on loans it hurting anyone in the already over priced communities.

 

 

Look up anything in alkire lakes compare the purchase price with the value now and they've lived there 3 years, And did upgrades.

 

 

My old house did the same thing, MI/Dominion fucked Everyone, They got people to buy houses beyond what they could afford based on lies. They wanted me to get a house @ 250K. I got one for 150K and my payments had rose to a point that I was very happy I did not choose 250K.

 

Once again, Columbus is not in an inflated pricing bubble. People got fucked on loans. Columbus is actually artificially under priced right now.

 

And people buying houses they couldn't afford do not equal a bubble. A bubble is something like out west where someone bought a house for $850,000 and it is only worth $500,000 in a strong market, because that is all it is really worth. A bubble, by definition, is a non-sustainable pattern of price changes or cash flows. We had a MORTGAGE bubble in Columbus, yes, but never a housing bubble. There was never a large pattern of price changes.

[Bam]

^^^I agree 100% with this man.

[Conesmasher]

Once again, Columbus is not in an inflated pricing bubble. People got fucked on loans. Columbus is actually artificially under priced right now.

 

And people buying houses they couldn't afford do not equal a bubble. A bubble is something like out west where someone bought a house for $850,000 and it is only worth $500,000 in a strong market, because that is all it is really worth. A bubble, by definition, is a non-sustainable pattern of price changes or cash flows. We had a MORTGAGE bubble in Columbus, yes, but never a housing bubble. There was never a large pattern of price changes.

 

I was waiting for the right wording LJ, not a housing bubble, but a mortgage bubble.

 

The price increases were all just a big pendulum, if they were artificially pushed up a little bit, they will artificially be pushed down for a little bit. It's just like a stock market with a "correction".

 

Right now is a great time to buy a house..........and a horrible time to be selling one!

[thorne]

That's not inflation right there, that's what happens in a majority of new neighborhoods, especially ones that aren't finished when you buy in.

 

Just because a builder "fucked everyone" does not equal inflation. People could have negotiated on the house prices, people didn't have to buy the houses, but the point is they did, and they are now reaping the benefits, aka losing their ass.

 

But it won't stay like that, it will come around, and their houses will appreciate over the years, no one said your new house will appreciate the next year you buy it.

 

It sounds like you got fucked because of an adjustable rate mortgage, WHICH HAS NOTHING to do with your house/area/builder/anything.

 

 

I did not do a adjustable rate mortage. I acutally had a 6% fixed. I had a 2 1 buy down which was cool with me but allot of eppople could not afford thing after th buy down. I did not get fucked I choose the sensible solution. As did my parents but there neighbors got fucked.

 

Now all the houses in there area went dirt cheap and will stay cheap because you can go to any 01/02 built area right now and buy houses cheap.

 

Your telling me that not inflation.? The price of there house is higher then every other house in the hood. Why would you not consider that inflation.

[thorne]

Once again, Columbus is not in an inflated pricing bubble. People got fucked on loans. Columbus is actually artificially under priced right now.

 

And people buying houses they couldn't afford do not equal a bubble. A bubble is something like out west where someone bought a house for $850,000 and it is only worth $500,000 in a strong market, because that is all it is really worth. A bubble, by definition, is a non-sustainable pattern of price changes or cash flows. We had a MORTGAGE bubble in Columbus, yes, but never a housing bubble. There was never a large pattern of price changes.

Perfect ! that does describe it well.

[Science Abuse]

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).

Incorrect.

Purchase price: $275,000

Downpayment: $10,000

24mo of payments: $25,000

You owe $240,000

 

 

You sell for $185,000

Not only do you not get anything back, you still OWE $55,000 on a house that you don't even live in. This doesn;t even take into account the repairs/upgrades you;e done, or the taxes you've paid. The real number would be closer to a $75,000 loss. So guess what, you now live in an apartment with 3 kids and 2 dogs, you've sold all of your stuff that doesn't fit in the aprtment, you're paying $600mo in rent and $1000mo in a failed mortgage (real story from a neigbor). If you'd rented the same house for 24 months, you'd be out $24,000, period.

 

Homes are a horrible invenstment right now, so any arguements based on making money off the property are lost. You may be fortunate enough to find a pocket of appriciating home, but chances are 95% that you won't. The historical magical 4% number doesn't apply in this post-boom slide.

 

Do not buy now unless you need a house and intend to be there for a few decades. Prices ahave slipped, but they're not done. We're still on the downward slope and any money spent will be lost. We'll never see another rediculous housing boom like wa saw over the last 10 years. The market will swing back up when:

-Median house prices more closely resemble median income

or

-Something else similar to the "credit revolution" of the late 90's happens (pray it doesn't)

or

-Every new house build in the last 5 years burns tot he ground without killing anyone, leaving them to need homes.

 

I would love to own a home right now, I need a place for my stuff and freedome to work on my hobbies....but I'm not stupid enough to buy right now. I'll be renting for a few years, patience will pay off.

[jeffmeden]

Incorrect.

Purchase price: $275,000

Downpayment: $10,000

24mo of payments: $25,000

You owe $240,000

 

 

So, you are putting down $1041 in principal every month plus the $1325 a month for interest at 6% apr... If you can afford a $2366 house payment I am not worried about you. Nope. Not one bit.

[Science Abuse]

So, you are putting down $1041 in principal every month plus the $1325 a month for interest at 6% apr... If you can afford a $2366 house payment I am not worried about you. Nope. Not one bit.

No, that was a rough figure (round number) based on the commonly advertised range of monthly payments. $1041 being intrest and principal, if any principal is actually paid. The math was meant to show total money in the toilet, including what the bank gets from you.

Where exactly did you get $1325 + $1041 from 6%? That doesn't make any sense at all.

[Cougar1647545494]

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....

 

Ftw. I like my house. I like living in it. I hate moving. I like where I'm at. A house is a good deal as I now OWN a piece of land and house. No matter what.

[LJ]

Incorrect.

Purchase price: $275,000

Downpayment: $10,000

24mo of payments: $25,000

You owe $240,000

 

 

You sell for $185,000

Not only do you not get anything back, you still OWE $55,000 on a house that you don't even live in. This doesn;t even take into account the repairs/upgrades you;e done, or the taxes you've paid. The real number would be closer to a $75,000 loss. So guess what, you now live in an apartment with 3 kids and 2 dogs, you've sold all of your stuff that doesn't fit in the aprtment, you're paying $600mo in rent and $1000mo in a failed mortgage (real story from a neigbor). If you'd rented the same house for 24 months, you'd be out $24,000, period.

 

Homes are a horrible invenstment right now, so any arguements based on making money off the property are lost. You may be fortunate enough to find a pocket of appriciating home, but chances are 95% that you won't. The historical magical 4% number doesn't apply in this post-boom slide.

 

Do not buy now unless you need a house and intend to be there for a few decades. Prices ahave slipped, but they're not done. We're still on the downward slope and any money spent will be lost. We'll never see another rediculous housing boom like wa saw over the last 10 years. The market will swing back up when:

-Median house prices more closely resemble median income

or

-Something else similar to the "credit revolution" of the late 90's happens (pray it doesn't)

or

-Every new house build in the last 5 years burns tot he ground without killing anyone, leaving them to need homes.

 

I would love to own a home right now, I need a place for my stuff and freedome to work on my hobbies....but I'm not stupid enough to buy right now. I'll be renting for a few years, patience will pay off.

 

 

You are so far off from reality of the market I have no idea where to start, so I am not even going to touch this

[Science Abuse]

'fraid not. But we're all entitled to our opinions. As long as markets are driven by consumers, my statements stand.

[LJ]

'fraid not. But we're all entitled to our opinions. As long as markets are driven by consumers, my statements stand.

 

If you knew anything about consumption you would know that the prices are artificially low due to an overwhelming supply in relation to the demand, and with Columbus being a very fast growing service based industry, the market will correct itself and real estate will be priced at or above the actual value. With interest rates being low, right now is a great time to purchase property. In reality in most cases, property is so under priced due a the overwhelming supply and stagnant market in Columbus, it would be hard to get hurt on a medium length property purchase (7-10 years).

 

And yes, based on your opinion, you bascially know what is going on across the country and not Columbus. The rest of the country, specifically the east and west coasts, with some of the southwest tossed in there, is experiencing the burst of a housing bubble. Which if you read my earlier posts, Columbus did not experience. We never saw a rapid non sustainable change in prices. We had something different, a mortgage bubble. With the defaults and the massive supply of houses, there is such an overwhelming supply, that prices of all the houses in the area are low so that they will move on the saturated market.

 

Now, in other parts of the country, where it is bad to buy right now, they had this massive increase in prices over the past 10 years or so that was artificially created by the hysteria of wanting to live there, forces that can't be controlled by the consumer, etc. People were gobbling up houses for $900,000 when in reality they are worth $500,000. Then with the defaults of the mortgages, then is creating more supply on the market than these areas are used to, lowering their prices once again. Now yes, these areas may never see those types of prices again, but that is because the prices were bogus. Columbus is not in that boat.

[TTQ B4U]

Reading the general impression of what he said, I wouldn't say he's too far off base, but he's also throwing in an over top view to make a point.

 

The problem recently outside the market is that many folks have been treating their home as a retirement piece and that shouldn't be the case. In general folks are also buying way too much too soon too and just tossing away money in interest.

 

A good friend of mine bought a house in Powell and had a $367k note! He put down as little as he could so he could "live the lifestyle" and then sold it just over 3 years later claiming he made a killing. He sold it for $465k and was loving life and moved into yet another big home. yeah, he pulled down close to $100k in equity, but he paid over $60k in interest during his time there and when the realtor's got their piece, he wasn't left with much of a profit...maybe $10k if that. In the mean time, he couldn't afford to furnish the thing and could barely afford to go on vacation. What sense does that make? He'd have been way better off saving that $60k and paying it down on a smaller house or just plain investing it. He still doesn't get it though.

 

It's just my opinion, but when I hear of friends and even family buying huge homes without a decent size chunk of money & equity down it make me think they really don't understand or care what they are doing with their money. They certainly aren't investing it in a home....at least not wisely.

 

My wife and I have a number of friends and family with $275k-$450k homes. All but two put down the minimum and have mortgages of 90-95% of their purchase price. IMO, that's dumb as it gets. They are paying so much in interest per month that they are preventing themselves from getting ahead in life and simply enjoy the nicer house at the expense of disposable income and extending their days of actually having a mortgage and calling it normal. Crazy.

 

I'm so happy my wife and I didn't do that nor do we think that way. We have less than 9yrs left on our mortgage and pay 1.5-2x the bill every month. We'll actually be paying off our 30yr note in no time. We're so far ahead of one of my other friends who bought at exactly the same time only in a house much more expensive than ours. Now he's literally stuck in it with a for sale sign in his yard going on the second time in 120 days. We plan on buying a high $400k or so house too, but we don't plan on having a mortgage for more than $175k when we do it. No way. It wouldn't make sense for us and would impact the lifestyle of travel and fun we're way to used to. I think we're unique though in that we're willing to wait to achieve this, unlike many that don't.

 

Any interest you're paying is basically just rent. It's money gone and wasted just to live in a home. The friend I just mentioned has paid $1,175 per month more than we did in interest...now of course that drops off over time, but still....without having an amortization table in front of me, it doesn't take a math whiz to figure out how much over the past 10 years he's paid in interest that will never be made up from the sale of his house. We've paid interest too, but no where near that amount.

 

A house is pretty much an expense as is a car. The difference being a house doesn't usually drop in value like a car of course but it also won't be a huge money maker like a good investment account could be. One has to look at the very bottom line dollar after the sale take place in order to see this. I think that's part of the point Benz is trying to make. Maybe I'm wrong, but that's how I see things.

 

Personally, I'm 37 and like I said, we plan on having a nice new home in a couple years, but I sure as hell don't plan on having a mortgage after I retire and even more so, I'm not working my ass off until I'm old and gray either. Life is way too short and I intend to make the most of what I have during my prime income years. I wonder how many of the folks losing their home now took the time to think beyond just the this home and into the next and then weighed it against their age vs retirement or kids education if they have kids? Hopefully they will next time.

 

 

 

You are so far off from reality of the market I have no idea where to start, so I am not even going to touch this

[LJ]

Reading .... time.

 

I read your whole post, no need to quote it all..

 

Anyways, that is the problem. People are treating a home purchase like a high yield investment, which it is not. It is a tax shelter, and it is a safe place for your money. When you do the math, if you can budget correctly and spend the right amount on a house, you come out ahead of renting. You don't pay capital gains, etc.

 

Anyways, people who think right now is a bad time to buy in Columbus are just 100% wrong

[TTQ B4U]

What's going to kill the folks out west is the loan term they are typically in. There are so many 40 and 50 year mortgages out west that it's stupid scary. I'm seeing lots of friends in the IT space move to the Midwest so they can get out while they can or before they pay all that 'rent'/interest. Mainly sales folks that can live about anywhere.

 

One of my buddies paid $485k for his house in Southern Cali, a small 1,200 sq ft. 3 bed home with one bath. Sold that turd for $689 last fall and moved to Nashville, and bought a very nice 4 bedroom 3 car garage $290k home and now only has about $100k mortgage and is pig in shit happy. He pays less now total than he was in interest alone on his Cali. house with a 50yr note. Crazy shit. I'm happy as hell for him, but as he said, his joint family income was just under $200k and they were still living paycheck to paycheck due to the high cost of the Cali Lifestyle.

 

Now, in other parts of the country, where it is bad to buy right now, they had this massive increase in prices over the past 10 years or so that was artificially created by the hysteria of wanting to live there, forces that can't be controlled by the consumer, etc. People were gobbling up houses for $900,000 when in reality they are worth $500,000. Then with the defaults of the mortgages, then is creating more supply on the market than these areas are used to, lowering their prices once again. Now yes, these areas may never see those types of prices again, but that is because the prices were bogus. Columbus is not in that boat.

[LJ]

What's going to kill the folks out west is the loan term they are typically in. There are so many 40 and 50 year mortgages out west that it's stupid scary. I'm seeing lots of friends in the IT space move to the Midwest so they can get out while they can or before they pay all that 'rent'/interest. Mainly sales folks that can live about anywhere.

 

One of my buddies paid $485k for his house in Southern Cali, a small 1,200 sq ft. 3 bed home with one bath. Sold that turd for $689 last fall and moved to Nashville, and bought a very nice 4 bedroom 3 car garage $290k home and now only has about $100k mortgage and is pig in shit happy. He pays less now total than he was in interest alone on his Cali. house with a 50yr note. Crazy shit. I'm happy as hell for him, but as he said, his joint family income was just under $200k and they were still living paycheck to paycheck due to the high cost of the Cali Lifestyle.

 

Yes, but at the same time, they get that 50 yr mortgage on a house they paid $300,000 too much for and can't sell it for dog shit now.

 

Like I said, the bubble refers to a different portion of the country than Columbus.

[TTQ B4U]

Times to buy are good, but I'm still going to wait. our builder keeps calling us, but I'm going to get that $480k house for under for $400k before long. My gut tells me wait until it his $375k. Wife is ancy, but I'm not going to budge. They've already come down $25k and offered a free $18k sun room.....all since June of this year when we were real close to signing.

 

Anyways, people who think right now is a bad time to buy in Columbus are just 100% wrong

[TTQ B4U]

hey, they upside is they have a 50yr note

 

Yes, but at the same time, they get that 50 yr mortgage on a house they paid $300,000 too much for and can't sell it for dog shit now.

 

Like I said, the bubble refers to a different portion of the country than Columbus.

[LJ]

Times to buy are good, but I'm still going to wait. our builder keeps calling us, but I'm going to get that $480k house for under for $400k before long. My gut tells me wait until it his $375k. Wife is ancy, but I'm not going to budge. They've already come down $25k and offered a free $18k sun room.....all since June of this year when we were real close to signing.

 

I bought a house for $25,000 under list. Got it bank appraised last week because I was getting a HELOC to pay off some small CC debt from college, appraised $20,000 over what I paid, plus the huge downpayment I already had in it. I already have equity out the ass and I haven't been here a month. Now there is no way in hell i could sell this house for what it is worth without it sitting forever, but when I am ready to move, I am not going to lose anything on it.

[coltboostin]

If you plan on being dead before your 30, then renting is the way to go.

 

 

For everyone else-purchasing a home is the best investment you can make for you, and your family-period.