North Chandler feels as if it is becoming an extension of Fiesta District/West Mesa (Phoenix: sales, rental)

[asufan]

FWIW the first single family home purchase I made I put down 5%. I was in my early 20's in grad school and didn't have much more than that. I paid PMI, but after 18 months I requested a PMI removal appraisal and had it removed because it had appreciated enough that I had more than 20% equity (part of it was also because it was a good purchase about 5% below market value). The point is, PMI isn't necessarily a lifetime commitment.

[ShampooBanana]

Originally Posted by FirebirdCamaro1220

Why does real estate have to appreciate in value? It seems to be the only price that people want to rise, which goes against common sense of everyone wanting falling prices.

Appreciating prices doesn't create any real wealth for anyone. It screws buyers by making it that much harder, and screws sellers in the big picture, because it is a zero sum game for them unless they downsize or move somewhere else.

And eventually, you get million dollar shacks, where a house that was purchased by an electrician or mechanic today will only be able to be purchased by a trust fund baby or some investment firm in 3 generations.....

Real estate appreciates in value because the underlying land is a finite asset. Nobody is creating more land (except I suppose the sand islands in Dubai which are prohibitively expensive except for a few billionaires). Also, homes/buildings are a durable good and if properly maintained can last a century or more (unlike say, a car). As population continues to rise there is increasing demand, yet no more land is created. In most places, the value at least rises with inflation, and in many places more. It follows the simple laws of economics.

[asufan]

Originally Posted by FirebirdCamaro1220

PMI is burning money

Haha, I think renting is burning money. I have tenants in Scottsdale paying $2,300/mo to live in a house that costs me $1,250/mo. I guess we have different calculators

[FirebirdCamaro1220]

Originally Posted by ShampooBanana

Real estate appreciates in value because the underlying land is a finite asset. Nobody is creating more land (except I suppose the sand islands in Dubai which are prohibitively expensive except for a few billionaires). Also, homes/buildings are a durable good and if properly maintained can last a century or more (unlike say, a car). As population continues to rise there is increasing demand, yet no more land is created. In most places, the value at least rises with inflation, and in many places more. It follows the simple laws of economics.

That's why you eventually build up, like most major cities, it reduces the cost per square foot when you can't cheaply build out anymore

[FirebirdCamaro1220]

Originally Posted by asufan

Haha, I think renting is burning money. I have tenants in Scottsdale paying $2,300/mo to live in a house that costs me $1,250/mo. I guess we have different calculators

That's why I rent a one bedroom apartment rather than a house. I only pay $1k/month, which allows me to attempt to save for the down

[Ultrarunner]

Originally Posted by FirebirdCamaro1220

PMI is burning money

I'm PMI adverse but that said... it is a tool and nothing more.

When looking at property and property values it is easy to overlook the highs and lows.

No need to go back almost 40 years to 1980... just look at this decade and maybe go back 5 years.

I guess it is human nature for the masses to shun what is out of favor and to want what is to the point of being competitive to get it.

I realize a person can't pick when they are born... the luck of the draw and help or hurt.

You mentioned 1980... well, this was around the time of the worst unemployment since the Great Depression of the 1930's...

My advice is work towards your goal...

I was in a similar situation and gave up on buying a single family for the moment... I bought a duplex which was a 1920 home with a very small 420 square foot cottage in the back... I lived in the cottage and did repairs... in two years the rent from the house covered my mortgage and taxes...

Did I want to be a landlord or live next to my tenant... not something I had planned but put me one step closer to my goal...

EDIT... Have posted before that to buy I had to sell my prized Camaro that I had lovingly restored... 1968 Z28 and all stock... right down to the OEM 15" E tires... I sold that car for $6,000 in 35 years ago and today estimates have it's value 10 to 15 times higher... would have been better to keep if in your situation where your parents home increased only 4 x from 50 to 200k?

[Ultrarunner]

Originally Posted by ShampooBanana

Real estate appreciates in value because the underlying land is a finite asset. Nobody is creating more land (except I suppose the sand islands in Dubai which are prohibitively expensive except for a few billionaires). Also, homes/buildings are a durable good and if properly maintained can last a century or more (unlike say, a car). As population continues to rise there is increasing demand, yet no more land is created. In most places, the value at least rises with inflation, and in many places more. It follows the simple laws of economics.

Hey I have several cars that are over 100 years old...

[wase4711]

Originally Posted by FirebirdCamaro1220

Are you happy when the cost of gas goes up? Or how about milk or beef? I mean, people love to have to fork out more $ every year for the same stuff, right?

Originally Posted by FirebirdCamaro1220

PMI is burning money

Nope, I am never happy when the price of consumer products goes up; if I own stock in oil companies, and they raise prices and that increases profits and increases my stock prices/dividends, then I am not as mad about the price going up, but if I dont make any profits from my stocks from increased prices, then no, I am not happy..

and yes, PMI is just burning money, and hopefully, that "requirement" goes away....before the mortgage bust in 2008, you only had to pay PMI if your credit was bad, but, that all changed during the Obama administration...
Plus, even now a days, once your home goes up in value, or you have paid off enough of your mortgage so your mortgage is only 80% of your homes' value, then PMI goes away on its own...

[asufan]

Originally Posted by wase4711

before the mortgage bust in 2008, you only had to pay PMI if your credit was bad

This part is not true. I had excellent credit in 2000 when I bought my first house but paid PMI due to only putting 5% down

[wase4711]

I bought a house in 2005, with only 5% down, and did NOT pay PMI, in illinois, so maybe it was different in different states..