Has anyone decided NOT to buy a house? (Riverside, London: foreclose, condo)

[user_id]

Houses 21 years ago in LA were pretty cheap.....

[msdmoney]

I decided not to buy a house until it makes sense. Where I live market rents are much cheaper than the cost to buy, so it makes sense to rent and keep/invest my down payment plus save/invest the difference in payments. This is local to the high priced area I live at in LA, for many places across the US housing is an entirely different story.

If the artificial props to the market are ever removed
1) artificially low interest rates=cheap money which encourages speculation
2) removal of temp government increases in loan limits
3) the mortgage interest deduction
then it will probably make sense to buy again without signing my life away to overwhelming debt.

Renting currently gives more flexibility in an uncertain job market, I don't think 30 year mortgages make sense anymore in the mobile economy we live in now. Jobs just don't have the permanence or stability that they had years ago.

I also don't think the market is the same as it was when boomer demographics combined with growing credit made for ever increasing yearly housing prices.

[CA4Now]

Originally Posted by Mathguy

My first loan in 1995 was at 9%.....so there are some younger folks out there or people that haven't owned before that have NO idea just how much worse the housing market could actually get if not for the support of unbelievably low interest rates.

Our first loan in the 1980s was at 17%.....which means that even if homes were then relatively reasonably priced by today's standards, mortgage payments were HUGE. We paid around $2700 for a $200 home. And it was a basic 3 BR tract house.

[jackie100]

Originally Posted by genjy

It also means a stable shelter--knowing the house is ours, and we won't get kicked out for whatever stupid reason.

As long as you are making payments, it is not stable shelter. Do you know how many people have faced foreclosure? If you lose your job you could lose your house. Also, some people are in underwater mortgages and lost like $100k in the value of their homes. It's not stable unless you paid the entire mortgage off.

Nothing in life is ever stable or secure. People get evicted by the Sheriff's out of the house every day because they fell behind financially and foreclosed.

[bigdumbgod]

Originally Posted by jackie100

Never understood why owning a house is important to people.

Because it's yours to do with as you please, on your terms. Don't need to answer to some slimy psycho landlord and behave as s/he sees fit, you can redesign to your heart's delight, have space for vehicles, make noise if you please, and not have to put in earplugs to block out the loud sex, radios, TVs, arguments, and screaming kids of adjoining annoying neighbors.

That, and you can put in a hot tub in back. Which is really what matters.

[jackie100]

Originally Posted by bigdumbgod

Because it's yours to do with as you please, on your terms. Don't need to answer to some slimy psycho landlord and behave as s/he sees fit, you can redesign to your heart's delight, have space for vehicles, make noise if you please, and not have to put in earplugs to block out the loud sex, radios, TVs, arguments, and screaming kids of adjoining annoying neighbors.

That, and you can put in a hot tub in back. Which is really what matters.

It is not yours unless you paid it off. If you are making payments still it belongs to the BANK. You cannot renovate to your heart's delight; if you want to add an extra room or something major like that you will need to get a permit. You might STILL hear your neighbors kids playing on the street....

I could care less about a hot tub. All I need is a computer. I am not the type to bbq or hang out in the tub ever. Don't see the point.

[genjy]

Originally Posted by jackie100

As long as you are making payments, it is not stable shelter. Do you know how many people have faced foreclosure? If you lose your job you could lose your house. Also, some people are in underwater mortgages and lost like $100k in the value of their homes. It's not stable unless you paid the entire mortgage off.

Nothing in life is ever stable or secure. People get evicted by the Sheriff's out of the house every day because they fell behind financially and foreclosed.

It's been pretty stable to us--We are actually 2 months ahead in the mortgage schedule PLUS we are paying a significant amount of extra principle every month. At this rate, we will likely finish the 30 year mortgage in about 14 years (I will be about 45 years old). After that, we will only pay the yearly property tax and pocket everything we earn--No worries about mortgage or rent for basically the rest of our life.

If either my wife or I lose employment, we can still do pretty well for a while on a single paycheck--enough time to find new employment. Maintaining or finding jobs hasn't been a concern for us at all (knock on wood).

No one should buy a house if he or she can't afford it. That's pretty much a given.

[Sealtite]

Originally Posted by AD1985

In a thread on here about affordability I read an interesting suggestion. Someone mentioned that if you decide not to buy a house, then LA suddenly becomes easy to afford again.

I live in San Diego, but I think this topic is relevant down here as well. To someone who's lived in southern California for their entire life, $300,000+ in a down market for a little house with a tiny yard might seem justifiable. To a transplant such as myself, it isn't. I wouldn't pay that much just based on principal alone, so no....I will never buy a house here.

If you buy a home here now even at these prices, you're basically betting against the economy (and for yet another bubble) to achieve any substantial equity in your new home. I highly doubt that home prices are going to skyrocket anytime soon, so the days of being about to "flip" houses and live the leisurely life that Carlton Sheets was promising every American back in the early 2000's....are over.

[katnip kid]

Another point to consider in home ownership is taxes. If you can't pay 'em, you will lose the house. The tax collector can and will foreclose on you. I don't know what the law is in CA on this, but it nearly happened to a pal who inherited a home but was low income. So, home ownership is no guarantee of a permanent place to live. Also, there is the issue of eminent domain. Remember what happened in New London, CT a year or so ago. Again, I don't know what the laws in CA are regarding this.
Sad. So much bs over 4 walls and a roof and a bit of green space all your own.

[mlb]

Originally Posted by user_id

Houses 21 years ago in LA were pretty cheap.....

We were young and poor and didn't want to have to live in in Riverside and commute hours and hours to jobs.... and have some semblance of a homelife.

Our first house outside the state cost $92K. Five years after that we moved up to a 2200 sq ft tri-level home for $172K. We are not underwater. Our property taxes are south of $1700 a year

We've never looked back.

I think when you live in an expensive place - you choose that...and justify not wanting to buy based on that choice.

Just different strokes.