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Old 12-31-2008, 03:20 PM
 
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Interesting! If prices of homes go down to 2001 prices minus 30%, what will happen to the cost of rent?

Ukok, you get it. Thank you.
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Old 01-01-2009, 05:45 PM
 
Location: Los Angeles Area
3,306 posts, read 3,331,151 times
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Quote:
Originally Posted by Philip T View Post
Point being – If people are going to stop being harmed by following mindless “advice” whether BUY NOW! -- or just as stupid -- DO NOT BUY NOW! They are going have to stop avoiding thought and instead think their situation through.
The vast majority of situations are going to cry out "do not buy now", overall if you're going to stick to something right now that should be it.

In almost every area, the downside risks are just too great. Sure, I suppose some people may be willing to lose the money, but I would suggest perhaps they instead put it in my pocket.

People are just stuck on this idea that real estate is a great investment, so they do stupid things to own it.


Quote:
Originally Posted by homeowner35 View Post
Interesting! If prices of homes go down to 2001 prices minus 30%, what will happen to the cost of rent?

Ukok, you get it. Thank you.
Rents dropping would make a lot of sense in many areas. Rents have become inflated, although less dramatically, along with house prices. Here someone making minimum wage can hardly afford a room to rent, let alone a studio/1 bedroom apartment.
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Old 01-01-2009, 09:03 PM
Status: "happy again, no longer catless! t...." (set 15 days ago)
 
Location: Cushing OK
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Quote:
Originally Posted by Humanoid View Post
Rents dropping would make a lot of sense in many areas. Rents have become inflated, although less dramatically, along with house prices. Here someone making minimum wage can hardly afford a room to rent, let alone a studio/1 bedroom apartment.
In Riverside CA where I moved from rents are going up. It is among the most forclosed upon areas and if you lost your home, have a job you'd couldn't just go off somewhere else cheap and hope to find one. My brother in law is a site manager for a framing company and possibly the only reason he's working is they are building new apartments, and they are not quick and dirty versions.

Unless emplyment takes a major dive, apartment rents will keep steady or go up, because for a lot of people it has become the only way to keep their job. When they lose it and move in with the parents then apartment rents will be less of a hot market.

Based on Septermber figures, Riverside has the highest unemployment in the nation, at 9.1. I believe the current rate is roughly 10 or more. Perhaps the rents will stabalize soon with more people leaving or semi employed if things keep getting worse.
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Old 01-03-2009, 11:34 PM
 
Location: Earth Wanderer, longing for the stars.
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If people lose their homes where will they go? Either home with mom and dad, if they can, or they must rent, driving up the prices of apartments if the number of apartments stays the same.

At least a couple can trade down in housing and there are two people in the market, working or looking for jobs. Single people really have a disadvantage unless they double up with someone and help each other out.

I hope this will end sometime next year as some are saying, but will it?
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Old 01-04-2009, 02:13 AM
 
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
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Originally Posted by goldengrain View Post
...
I hope this will end sometime next year as some are saying, but will it?
maybe late NEXT yr... Dec 2010, but more likely 2012-2015. I lived through the last housing downturn, making payments on two places 2000 miles apart (early 80's). t was 5 to 7 yrs before stuff started to recover, but this one is more complex, and the USA is much weaker as a generator of wealth.

Someone may be able to pull a Rabbit out of the hat, but not sure what is going to drive economy in the future. Lots of valuable USA assets are owned by foreign interests, I expect they will be moving those assets that are transportable (companies) off-shore to save taxes, high need for tax revenue will crush those in USA who have something taxable. (income, property, assets, resources...) Retirees are at risk.
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Old 01-04-2009, 02:40 AM
Status: "happy again, no longer catless! t...." (set 15 days ago)
 
Location: Cushing OK
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Quote:
Originally Posted by goldengrain View Post
If people lose their homes where will they go? Either home with mom and dad, if they can, or they must rent, driving up the prices of apartments if the number of apartments stays the same.

At least a couple can trade down in housing and there are two people in the market, working or looking for jobs. Single people really have a disadvantage unless they double up with someone and help each other out.

I hope this will end sometime next year as some are saying, but will it?
Which means that apartment renters will have to turn to roomates and the ability to charge more since there are more renters will further drive up prices. And for those who can't get an apartment or use mom's couch... there is renting rooms. Which will also go up, especially as more people need more money to keep from losing their homes.

Those who can't rent a room are simply out of luck
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Old 01-04-2009, 12:51 PM
 
Location: Rockland County New York
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I don't know why anyone would want to buy now. Here in the suburbs of New York it is no secret that baby boomers are retiring and want to sell their home so the can live out their last days in Florida. On my block alone they own the majority of home built in the 1980's. With many Xers and Yers moving to where they can live the competition is pretty tough. Homes have been inflated for years and since Boomers are tired of paying New York taxes the younger generations has them by the throat. They may have purchased their homes for $105k in the 1980's and thought they can sell them for $600k a year of two ago but that is now a dream. With Wall Street giving out pink slips along with other jobs losses, their homes will be priced back under $250k. Besides there are home foreclosures all over Rockland County and banks are not giving out mortgages because the younger generations simply doesn't earn the salaries needed to buy them at such a ridiculous price. Doesn’t life stick when you’re greedy.
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Old 01-04-2009, 01:49 PM
 
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I don't think that we can make a generalization about the entire U.S. real estate market. There are too many factors to consider. Don't get me wrong, things are bad, very bad, but some areas might have more stability than others. I believe if you are ready to buy and find a home you like, you should get it. If you only plan on living in an area for a couple of years, then you may want to reconsider but if you are going to be living in the same house long-term I don't see any reason why you shouldn't purchase a home. At this point in time, I don't think it's fair for anybody to predict what's going to happen to real estate prices in 5 or 10 years. It's all speculation. I'm no expert ... just a soon-to-be-first-time-home-owner. I will say this - it's is definitely a buyers market so the ball is in the buyer's court on selling price!! My only problem is I don't know how low I should go!

Last edited by foma; 01-04-2009 at 01:50 PM.. Reason: spelling
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Old 01-04-2009, 09:44 PM
Status: "happy again, no longer catless! t...." (set 15 days ago)
 
Location: Cushing OK
14,430 posts, read 16,724,550 times
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Quote:
Originally Posted by Stac2007 View Post
I don't know why anyone would want to buy now. Here in the suburbs of New York it is no secret that baby boomers are retiring and want to sell their home so the can live out their last days in Florida. On my block alone they own the majority of home built in the 1980's. With many Xers and Yers moving to where they can live the competition is pretty tough. Homes have been inflated for years and since Boomers are tired of paying New York taxes the younger generations has them by the throat. They may have purchased their homes for $105k in the 1980's and thought they can sell them for $600k a year of two ago but that is now a dream. With Wall Street giving out pink slips along with other jobs losses, their homes will be priced back under $250k. Besides there are home foreclosures all over Rockland County and banks are not giving out mortgages because the younger generations simply doesn't earn the salaries needed to buy them at such a ridiculous price. Doesn’t life stick when you’re greedy.
If the boomers are not so picky they can still do well. Here for 40k you can get a nice reasonabley sized house with a big yard. If the boomers want to get out of the city many many are taking the 250k, finding places that are cheaper and buying with cash. If the boomer has a big morgage or is determined to go to a choice location they will have to deal with their greed.

The people who bought the 700k houses expecting to get 800k in a year are the ones who have no options.
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Old 01-04-2009, 10:07 PM
 
28,393 posts, read 68,085,348 times
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Default Time-line is huge...

Quote:
Originally Posted by foma View Post
I don't think that we can make a generalization about the entire U.S. real estate market. There are too many factors to consider. Don't get me wrong, things are bad, very bad, but some areas might have more stability than others. I believe if you are ready to buy and find a home you like, you should get it. If you only plan on living in an area for a couple of years, then you may want to reconsider but if you are going to be living in the same house long-term I don't see any reason why you shouldn't purchase a home. At this point in time, I don't think it's fair for anybody to predict what's going to happen to real estate prices in 5 or 10 years. It's all speculation. I'm no expert ... just a soon-to-be-first-time-home-owner. I will say this - it's is definitely a buyers market so the ball is in the buyer's court on selling price!! My only problem is I don't know how low I should go!
With a ten year horizon there are so many factors that start to just go "off the charts" in some situations that nothing looks trustworthy. Consider only one factor.There are lots of reason to believe that inflation should be higher in 2018 than it was in 2008, but looking over the past 20 years or so the "trends" are much harder to pin down U.S. Economic Data - Economic Data - FRB Dallas

If you are conservative in how much you borrow, and keep your overall debt to manageable levels you can do fine. Granted, I suppose the same could be said for renting for the next decade too, but the practical downsides of such of lifestyle in most of the US would rule it out for most...
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