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How exactly did you do it? All I keep seeing on the RE forum and in this forum is people posting about how happy they are that the housing market is crashing because it'll make housing "affordable" for people.
What exactly does that mean? Does it mean that people who make $10 have the right to buy a house so prices should come down enough so they can partake? Do people even have a right to this?
Does it mean people who make $7 and hour? Or, does it make more sense that the people who've worked multiple jobs, scrimped and saved for years finally got their reward?
I'm just having a problem understanding these blanket happy/gleeful/joyous statements about the RE and credit crash making some things more "affordable"...
Anyone can realize that the cost of a new house should be more or less the cost of construction. Over time as the house ages it should depreciate. In the past there were affordable homes built, and in the early days of the country anyone with the ability to build could have a home. Anyone who can work should be able to buy a home. Before the carpetbaggers and stolen money drove up prices you could find "distressed" properties around here for 40K or less in relatively safe areas. My home was built by myself and dad, and the lot was bought with cash. My first home was in a sketchy area that I purchased at a bank sale for 15K cash. It took me two years to save the cash while living with my parents. High housing prices are a sign of impending economic disaster, and low home prices indicate economic strength. The housing bubble always preceeds a great depression.
We bought this house in 1967 and never upgraded although there was tremendous pressure to upgrade or take equity loans or line of credit. I had U.G.L.Y. altercations with bank people in the 2000-2005 time frame where they literally told me I was stupid to have a paid off house. We should take equity out to have a nice vacation or whatever. Blah, blah. I have had people tell me what a "cute little cottage" we have. It's 2400 square feet - considered small and inferior to the 4,500 sq feet houses available.
So we have a paid off house and continue to have a paid off house because we resisted intense pressure to have *more*.
Well, even if the market hadn't crashed I'd be looking to buy, because I plan on holding onto whatever I pick up rather than trying to make a quick greedy buck in flipping. The home that I live in is paid off, and I can't regret that for a single minute. Even if something goes horribly wrong, I'll still have that.
I'm ambivalent about the market crash. On one hand, it is costing me even though I own my own home. I don't think I need to go into how, exactly, as it's pretty evident in rising prices, et cetera. On the other hand, I'm happy that real estate prices have come down so far, because this will enable me to buy approximately twice as many properties in the same amount of time that it would have taken me to buy one. Definitely a win for me, and I can't shed any crocodile tears for someone who has lost a house due to greed or stupidity. And before someone jumps on me for that statement, notice that I did NOT say that everyone who is losing or has lost a house deserves to have done so.
How exactly did you do it? All I keep seeing on the RE forum and in this forum is people posting about how happy they are that the housing market is crashing because it'll make housing "affordable" for people.
What exactly does that mean? Does it mean that people who make $10 have the right to buy a house so prices should come down enough so they can partake? Do people even have a right to this?
Does it mean people who make $7 and hour? Or, does it make more sense that the people who've worked multiple jobs, scrimped and saved for years finally got their reward?
I'm just having a problem understanding these blanket happy/gleeful/joyous statements about the RE and credit crash making some things more "affordable"...
We own a rental prop free and clear and owe only $30,000 on our primary residence.
How did we do it? - We purchased our first home in CA in 1998. In 2000 I took some equity out of our primary residence and bought a townhouse - cash - in MA so that my mom could rent from me since her rent was increasing and her income wasn't. The rent she pays covers the taxes and HOA since there is no mortgage. Gotta do what you gotta do for family.
In 2006 a year after the birth of my daughter we sold our house in CA and purchased a home in Central TX and put 85% down so we could lower our cost of living.
I don't think anyone has the "right" to buy a house. If you can afford a house and want it, then o.k. go buy. If you can't afford it then accept it. Some people are happy renting and that's o.k. Homeownership isn't for everyone and never has been. Not everyone deserves a house.
I'm not thrilled about a market crash but some people find great opportunites during down times and that is o.k. It's there money and they can feel how ever they choose to about a market crash and use it to there advantage if they can.
Anyone can realize that the cost of a new house should be more or less the cost of construction. Over time as the house ages it should depreciate. In the past there were affordable homes built, and in the early days of the country anyone with the ability to build could have a home. Anyone who can work should be able to buy a home. Before the carpetbaggers and stolen money drove up prices you could find "distressed" properties around here for 40K or less in relatively safe areas. My home was built by myself and dad, and the lot was bought with cash. My first home was in a sketchy area that I purchased at a bank sale for 15K cash. It took me two years to save the cash while living with my parents. High housing prices are a sign of impending economic disaster, and low home prices indicate economic strength. The housing bubble always preceeds a great depression.
Agreed. There is this ridiculous mentality that's developed in this country that a house in itself is an investment. A house is a product, nothing more, nothing less. It's a place to live. It can be an investment if you actually do something with it like rent it out or run a business from it, but just buying it and selling it should not result in significant profit or loss. It is a store of wealth only in so far as it provides stability and a place to hang one's hat, so to speak.
I've read your comments about Miami's housing market and how an absolute and total crash would be beneficial to the economy there. As someone who would like to base his business in Miami eventually, I have to agree that a housing crash there will certainly motivate me to move there to set up shop!
I remember my parents making a lot of sacrifices so they could make double and sometimes triple mortgage payments. They did this on a house that cost way less than 3x annual income. They lived within their means, made good financial decisions, and paid off a 30-year mortgage in 7.5 years (after refinancing during the 1990s to a 15-year mortgage).
It can be done, but only with discipline, and not getting in over one's head in the first place.
I bought my first house in 1995, I was 20. Then I was able to buy a nice townhouse in a decent area(not great). I bought what I could afford. put 10% down, and since I was single I kept roomates to help pay the bills. I only made $6-$10 an hour and worked between 2 &3 jobs. I had perfect credit and managed to pay $20-$50 extra per month and 1 extra jpayment per yr at tax time. I never did any "major" things to the place but kept it in good condition.
In 2001 I got married and moved in with my hubby. I had lots of equity but gave it all to my brother and let him take over the house for what was owed.
We started our marriage with 0 debt except for the nice house we had. Paid mortgage bimonthly and did something major once a year(it was an older house) when I say major I dont mean stuff like kitchens and baths. we did the roof, AC, windows etc.
Last yr we moved to SE tx. right at the beginning of our lovely housing crisis. We were able to sell our house quickly because it was almost like a new house and we priced it 50k below appraisel. needless to say we made 200k off of it. instead of being like most people and getting the most we could afford we bought the min. that we needed. which ended up meaning going from a huge 5/2 1/2/2 home we went to a simplified 3/2/2 home. in a great area. It has some getting used to but I wouldnt change my decision for the world. We now have a paid off home with a brand new kit and swimming pool. It may be smaller inside and not brand new. not prestigious at all but I have no worries about a depression or anything bad.
We have always lived within our means and now that "means" includes money in college funds, already enough to retire on and between 2-4 vacations per yr. Oh and I am also a SAHM.
On the other hand all of my friends who used to joke me because I wasnt doing beautiful upgrades, getting my nails done, wearing brand name clothes, and driving new cars are struggling.
Oh and that is the other way I did it. I have no issues with garrage sales, thrift stores, craigs list, etc. I did not own a beautiful bedroom set until this yr. and we still use our 10 yr old tv and 17 yr old izuzu impulse.
Live within your means and you'll be amazed at what you can achieve.
You gotta admit, home prices took an awfully BIG leap in the last decade or so. On speculation, mostly. So that flippers could turn a fast buck. It wasn't a natural, slow rise, it was a ridiculous flight! It had folks planning for early retirement and living the good life off the equity in their homes. Common sense should have told you, "This can't last!"
So home prices will revert to the mean and likely overshoot a bit to the downside, before stabilizing at what is more or less true value. It could take awhile - another couple of years, maybe more. There are still folks out there anxious to buy NOW, thinking they are getting a bargain - just like there were dot.com investors ready to rush in after the 2000 crash because the Nasdaq was so cheap. It still hasn't come back yet.
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