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Old 11-03-2018, 07:12 AM
 
Location: Indianapolis, East Side
751 posts, read 369,091 times
Reputation: 1724

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Quote:
Originally Posted by Ultrarunner View Post
Thank you... the newspaper headlines were banner saying when will it end... the crisis of falling real estate...

It was in fact the buy opportunity of a lifetime... and some regular everyday people did just that...

My thought is the country is nuts.... first the crisis is high prices and then the crisis is low prices and now it is high prices... guess we are always in a state of crisis.

Or maybe human nature to want what everyone wants and shun which what has fallen out of favor?
Bingo. A house shouldn't be thought of as an investment unless you're flipping it or renting it out. Otherwise, it's just something you own--that has carrying costs of maintenance, taxes and insurance. Of course, equity is better than being under water, but about all it does for most people is look good on their balance sheet. The only ways to get to the equity are to take out a mortgage (which has to be repaid with interest) or sell the house (and pay for another place to live) or rent the house (and pay for another place to live).

Some "investors" have bought abandoned houses here in the Rust Belt and just let them sit vacant. I don't think they're part of a conspiracy, I think they're amateurs who don't know what they're doing. The state and local government here in Indianapolis has gotten serious about collecting property taxes, enforcing vacant and unsafe building laws, and making it harder for out-of-towners to scoop up cheap properties in the first place. It's working.

In other areas, it could be that speculators (not global conspirators) are driving up prices. Their idea is to buy and sell quickly (before the bubble bursts) instead of buying and holding. If you're wanting a place to live in, it's best to sit out such a market instead of buying in a bubble.

If buying a home is out of reach even if someone is willing to move, it's best to just pass it up instead of cobbling a shaky deal together. All those foreclosed mortgages, all those people who ended up under water, all those people who ended up tied to a house in a depressed area--all those mortgages were approved.

Last edited by sheerbliss; 11-03-2018 at 08:04 AM..
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Old 11-03-2018, 09:54 AM
 
25,971 posts, read 50,014,106 times
Reputation: 19484
There are ways to reach ownership even with modest means...

As young as I can remember I was taught to save so I could buy a house... just saying that is how it was...

Started paying into Social Security at age 12... by age 22 I had bought a home in the SF Bay Area...

I did have to keep lowering my sights... I ended up buying the least expensive single family cottage built in 1910 on a postage stamp 25x100 lot.

The home was scheduled for a condemnation hearing... but had utilities on.

It was really bad... I have posted pictures here before... didn't think it was for me... the Broker just kept fishing for an offer and I blurted out a range... she wrote it up right in the middle... I signed and the next day congratulated me!

I had told no one and then the fun started...

My point is if the goal is owning a home... there are plenty of less then ideal or perfect properties...

The idea of a starter home was very popular at one time... several of my friends did the same...

I notice now that many want a home that is done... and willing to borrow the money to buy it.

Feudalism... Mom side of the family are farmers... the land is everything... it is a value engrained...
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Old 11-03-2018, 10:09 AM
 
Location: 5,400 feet
2,243 posts, read 2,304,568 times
Reputation: 2940
Quote:
Originally Posted by 2Loud View Post
...and in spite of all the hand wringing, more people own homes today then the last 70 years.

1950's = 32%
1970-80's = 28%
2000's = 34%

The Census Bureau estimated US home ownership is 64%+.
https://www.census.gov/housing/hvs/f...nthvspress.pdf


As someone else posted, there are always people who have to find or create a crisis to indicate that things are going to <bleep> in a handbasket.
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Old 11-03-2018, 10:16 AM
 
Location: Loudon, TN
4,999 posts, read 4,286,987 times
Reputation: 16671
Anchor man sitting behind desk...."This just in ....The sky is NOT falling."
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Old 11-03-2018, 10:37 AM
 
25,971 posts, read 50,014,106 times
Reputation: 19484
Well… the Shadow knows...

Part of it could be needing validation as in following the herd... so jumping on the bandwagon because it seems to be a good idea at the time with considering individual situation.

Just used two expression from my childhood... Grams would say bandwagon and dad Only the Shadow Knows.

What I have also found is not much happens when a couple is not on the same page... and all bets are off when they are.

Property has fantastic potential but also many pitfalls...
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Old 11-03-2018, 11:19 AM
 
Location: Indianapolis, East Side
751 posts, read 369,091 times
Reputation: 1724
Quote:
Originally Posted by Ultrarunner View Post
There are ways to reach ownership even with modest means...

As young as I can remember I was taught to save so I could buy a house... just saying that is how it was...

Started paying into Social Security at age 12... by age 22 I had bought a home in the SF Bay Area...

I did have to keep lowering my sights... I ended up buying the least expensive single family cottage built in 1910 on a postage stamp 25x100 lot.

The home was scheduled for a condemnation hearing... but had utilities on.

It was really bad... I have posted pictures here before... didn't think it was for me... the Broker just kept fishing for an offer and I blurted out a range... she wrote it up right in the middle... I signed and the next day congratulated me!

I had told no one and then the fun started...

My point is if the goal is owning a home... there are plenty of less then ideal or perfect properties...

The idea of a starter home was very popular at one time... several of my friends did the same...

I notice now that many want a home that is done... and willing to borrow the money to buy it.
People can still do this in Indianapolis--and probably lots of other unfashionable cities. There are hundreds of houses here for less than the price of a new car. They need work, they're not in trendy neighborhoods, and they're not going to impress your friends. But they CAN be a home of your own at a reasonable price--and someday you'll have the pride of having fixed it up. So it drives me bananas when young, healthy, otherwise intelligent people complain about the cost of housing. MOVE! You're not feudal serfs tied to the land and your home doesn't have to look like a magazine cover.
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Old 11-03-2018, 11:43 AM
 
4,812 posts, read 1,912,186 times
Reputation: 4887
Quote:
Originally Posted by pdw View Post
Population increase is not the driver of this. It's increasing wealth disparity and property hoarding by the rich. Population growth has slowed dramatically in the West, and is only kept up by a relative trickle of immigration to keep it from actually shrinking. When you look at the dramatic population growth in much of Canada and the United States during the first half of the 20th century, the cost of housing remained attainable despite the need for housing to be built very rapidly for an exploding population and with less technology than today. Housing is no longer affordable for the middle class, how is this not a crisis? If you're one of the lucky one's and don't think it effects you look at it from this perspective: where's the motivation to work when even full time work can't provide the basic shelter necessities for your family? This could cause a complete economic collapse.
I think you're pretty close to the mark here. I wonder what role inherited wealth and imported wealth play in this?
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Old 11-03-2018, 12:06 PM
 
Location: Loudon, TN
4,999 posts, read 4,286,987 times
Reputation: 16671
In my opinion, the problem is that folks want to buy way more house than they can afford. There's a reason they coined the term "starter home". There are affordable starter homes in most areas of the country. Not in most of LA, or the bay area of CA, or Manhattan, but in medium size cities all over the country you can get into a 2 to 3 bedroom home of about 1000-1400 sq feet that might need some fixing up for a doable price for a couple with both parties working. Now for a single, you might have to look at a condo, townhome, or halfplex, and when that appreciates, sell and move up to a single family home. No, you're not going to get a large (or any) master bath, granite counters, the exact cabinets or appliances you want, like those picky folks on House Hunters. You will get a modest, 20+ year old home with possibly the original cabinets, floor coverings, and a "plain flat grass plus a tree" yard in a working class neighborhood. You start there, and move up to a better place when your salary goes up and you can afford it, or when the market goes up and you can make a profit.
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Old 11-03-2018, 01:49 PM
 
25,971 posts, read 50,014,106 times
Reputation: 19484
When my brother bought his first home... it was original 1948 bungalow with the water heater and washing machine in the kitchen...

We built a new kitchen, moved walls, garden window cabinets… all new dropped appliance from Sears warehouse... new designer lino that was rem... etc... spent 2k for ALL materials... and had a kitchen the envy of the neighbors... the home has sold twice since but the kitchen has not changed except counter tops.

A friend was so impressed he decided they could afford to remodel... they spent just under 14k... no seconds or markdowns in that kitchen and the counter top cost more than all the materials for my brothers and except for the countertop... I think they were robbed.

Expectations.... see this a lot at work... co-workers complaining for years the rent is going up and buying is hopeless... just this week I let a co worker know of a townhome in her building that is going to be listed... it is turn key... owned by a Doctor we both know.

I ran the numbers with her and when it was all said and done she needed 15k and $500 more per month to own... she said she had to think about it... it was under contract on Thursday... she got a rent increase notice on November 1 saying her rent was going up $200 Jan 1...

Even having a deal laid out before you will not change some people... again... it is a nice building with all the amenities and where she is very happy except the rent keeps going up... 83% owner occupied which is very good.

Unless a person says... I can not afford the House I want... they are just blowing smoke...

There are homes in every city that a working couple can afford if they make it their goal...

Buying that tiny home on a postage stamp lot was the best single financial decision of my life... it gave me a leg up and that was the end of my days paying rent.
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Old 11-03-2018, 03:24 PM
 
773 posts, read 418,035 times
Reputation: 1125
No real economic growth and no meaningfull wage growth, only debt growth instead. Corporations had never been so rich. Workers had never been so poor, and so indebted.

Where do we think this leads?

I'd have to be blind not to see the pitchforks coming. Workers forced out of their homes, forced to live in the streets - because we refused to let deflation do it's job in lowering prices and making life manageable for the working poor. Bernanke's plan was the preserve the inequality of wealth by preserving the debt bubble - to hell with everything else. Let prices rise; and let workers pay for these rising prices, not with more wages, which would trigger inflation, but with more debt, which essentially made debt-slaves of the working poor.
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