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Northeastern Pennsylvania Scranton, Wilkes-Barre, Pocono area
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Old 01-25-2008, 10:41 PM
 
Location: Wilkes-Barre, PA
1,481 posts, read 1,998,799 times
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Quote:
Originally Posted by poconosmama View Post
I'm with you hat I think we're in for a turnaround come spring. Many of the lake realtors here are already busy especially on weekends with people coming in from other areas. Let's hope we can all sell and move by summer...lol...
Where ya going? too nice here to give up a good thing.

P.S. I know you are all joking, err I hope.
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Old 01-26-2008, 02:10 AM
 
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just forget about the markets direction and enjoy the house NOW!

when you see the house you love buy it. a house is a consumption item if you are not buying it to flip. like fine art or jewelry you are buying it to enjoy and whether you pay 5 or 10 % higher or lower its really irrelavent . your buying it to enjoy. in fact if you live in it foever what its worth is a moot point.

we were putting off buying and putting off buying and in july we saw a home we loved. we bought it, got a good deal and have been enjoying it ever since. we dont regret holding out to save another dollar.
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Old 01-26-2008, 03:41 AM
 
3,756 posts, read 5,671,865 times
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Quote:
Originally Posted by mathjak107 View Post
just forget about the markets direction and enjoy the house NOW!

when you see the house you love buy it. a house is a consumption item if you are not buying it to flip. like fine art or jewelry you are buying it to enjoy and whether you pay 5 or 10 % higher or lower its really irrelavent . your buying it to enjoy. in fact if you live in it foever what its worth is a moot point.

we were putting off buying and putting off buying and in july we saw a home we loved. we bought it, got a good deal and have been enjoying it ever since. we dont regret holding out to save another dollar.
Math,
You are right. People do not understand how the market works. People will say you're crazy it is a buyer's market, and yet when I go to buy a new home it will work in my favor. If you wait, you lose. Good advice.

The Hat
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Old 01-26-2008, 05:07 AM
 
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over the years people have looked to a home as an investment and while it may be worth more some day as an investment its been pretty poor long term. in fact over 40 years it beat treasuries by a fraction of a point. its had a great run up only about 2 or 3x in history the rest of the time just staying a point or so above the inflation rate. to put it in perspective i live in one of the hottest areas ever, a borough of nyc. my house in 1987 was 169,000 ... i put dowwn 100,000 sold it 3 years ago for 445,000.. sounds like i did great until you see that the portfolio of funds i follow thru a financial newsletter for the last 20 years was worth for the same 100,000
investment 1.4 million. enough to buy almost 3 houses today.

the point is dont look at a house as you do buying investments. you dont wait until next year for a better deal on a car or a better deal on a painting or jewelry you love and dont wait on a house you want to live in.

a house costs you money, is basically a consuption item until the day comes you sell it.

what you paid if you enjoy it is a moot point and means nothing long term... just buy it today at a fair price and make sure you can afford it.
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Old 01-26-2008, 05:13 AM
 
28,631 posts, read 24,557,160 times
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interesting reading i saw on line



The dramatic run-up in real estate prices during the early part of this decade convinced some pre- retirees that they could count on home equity to finance a large chunk of retirement—and, conversely, that they did not need to worry as much about saving in retirement plans such as 401(k)s and IRAs. Nationwide, the housing market peaked in late 2005, but many real estate investors in certain regions of the country—particularly in certain areas along the East and West Coasts—have seen the value of their holdings stay relatively intact. A recent study by the Fidelity Research Institute indicates that even those investors would be wise to reexamine the role real estate plays in their long-term financial plans.

The reason: Real estate values don’t tend to rise much over the long term, especially when compared with stocks or even bonds. “While home equity presents some options for America’s retirees, this report… clearly shows that many investors shouldn’t count home equity as a significant retirement funding source,” says Guy L. Patton, the Institute’s executive director.

The Fidelity study took a long-term look at the performance of real estate prices. It found that the median price of a new house in the U.S. rose at an annualized rate of 5.9% between 1963 and 2006. But the market during that time experienced several sharp corrections—in the early ’80s, as housing prices got hit by a double whammy of high interest rates and recession; in the early ’90s, following another recession; and most recently in the third quarter of 2006, when the median home price dropped a full 10.7%.

The study also points out that examining national trends can blur the regional realities of buying and selling real estate. Real estate markets in the Northeast and the West appreciated far more rapidly, 6.91% and 7.06% per year, respectively, than those in the South (5.75%) and Midwest (5.89%) during the 43 years through 2006. The coastal markets were much more volatile, however.

The nature of home ownership makes housing price fluctuations especially dangerous for investors hoping to tap their accrued equity. For most homeowners, a house is a leveraged investment—that is, the homeowner has a mortgage that represents a significant chunk of the home’s overall value. That debt magnifies the effect of drops in the housing market. Take a $200,000 house on which the owner holds a mortgage with a balance of $100,000, leaving $100,000 in home equity. If the market were to fall by 10%, the homeowner likely would lose $20,000—representing 20% of his equity. The greater the debt, the more dangerous that dynamic can be.

The Fidelity study also compares real estate price appreciation to that of other asset classes. Property investors might be surprised to learn that between 1963 and 2006, a dollar invested in real estate gained only slightly more than the same dollar invested in Treasury bills—just about the lowest-risk, lowest-earning investment available anywhere. Altogether, real estate earned an annualized after-inflation return of only 1.35%, and a dollar invested in it would have become only $1.79. Meanwhile, the stock market generated compound annual real returns of 5.95%—meaning a dollar invested in stocks in 1963 would have grown to $12.36 by the end of 2006.

Skeptics might point out that those numbers are only averages and therefore don’t take into account the possibility that a savvy real estate investor might identify and purchase a property that was particularly ripe for gains. But even the highest-appreciating regions, the Northeast and the West Coast, realized annualized real returns of only 2.35% and 2.49%, respectively. Those gains actually underperformed the 2.74% real return on bonds.

The upshot: Real estate gains are nice, but they shouldn’t be the cornerstone of your retirement finances. You’re likely to be better off if you think about your home simply as a place to live—and count on using stocks and bonds to generate the combination of capital gains and stability you need for a healthy income in retirement.
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Old 01-26-2008, 05:26 AM
 
Location: Northern Wayne Co, PA
620 posts, read 1,324,737 times
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Hi Hat,
My parents are big into the lake too. They have a place in Rockledge, their place is not on the lake, but their boat slip is within walkin distance. I really like their community because it is not ostentatious, but it is also not run down at all. The neighbors are all super friendly in there. Houses tend to go quick because it is a small community with a good rep, but a place to keep on your radar since you are cosidering the area. I actually kind of like the vacation community vibe for full time living because it is a nice balance between activity and quietude.

I do think the population will explode over the next ten years. You could see how big boxes are chewing up the land between Hawley and Honesdale on speculation of baby boomers retiring there, either bulding new or turning their summer place into a full-time home. I knew the house I bought this year, I wasnt going to be there forever. I could've gotten my country jones on in a lot of places, but I picked north of Honesdale because I saw smart growth, good quality of life, and an influx of creative people. And I think it is poised for a lot more growth.
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Old 01-26-2008, 07:17 AM
 
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Hello there Merman,

Yes, we were very impressed with the area of the lake and most importantly the people up there seem to be real nice. It's nice to hear of communities where everyone is neighborly and considerate. Good rep means so much for an area when you are selling a house. Yes, I see big things for the Lake. I know where White Beauty was (years ago)....they are talking about putting in townhouses.

I agree with your idea of the population growing over the next ten years. What I like about that area is that you have less commuters and more community oriented people. Many folks are turning over summer houses in to full time residences. I think you had the foresight to pick a great area.

We feel in love with Honesdale. It reminds me of my hometown of Nyack where everyone knows everyone and it is very artsy and accepting of all people. I like the change of the vacation community to the quietness that you describe. I love being on the lake during the week and also love going there on the weekend for a different crowd.

I do not know if it is boating or not. We are new to it and have only been doing it 2 years but all the people I meet where we dock are just so nice.

The Hat
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Old 01-26-2008, 07:46 AM
 
Location: Bridgeville,Pa
4,177 posts, read 6,960,883 times
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I loved Honesdale too ; have been there a few times. But unfortuantely it wouldnt work for us right now to buy there. Last weekend on our trip we saw a wonderful victorian house that we loved. Maybe eventually it would work, but now we would like something in a community for our children and also to rent it out to vacationers, looking downward to retireing and moving there in about 15 years.
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Old 01-26-2008, 07:48 AM
 
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Mathjak,

Great article about real estate and find it very true. Thanks for sharing some great information and great insight to the market.

The Hat
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Old 01-26-2008, 07:49 AM
 
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Dorothy,

Did you find a place yet??

The Hat
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