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True. If you're a "flipper" that's one thing, but I think *most* folks in my age bracket are buying for the last time and the market does what the market does kind of thing. If the price goes down, honestly, I don't really much give a gnats butt. If it skyrockets, I don't really much care either because if this one skyrockets, they all are so we still wouldn't move....
I agree, if you own a home and have no plans of going anywhere, what the market matters not. But if you find yourself needing to sell, you certainly don't want to sell in a slump. And if you're buying, you don't want to buy at a peak. All no-brainers.
For us, we saw our choices quickly diminish in this recent upswing. We latched onto a house and would have been in that "market matters not" phase were it not for a cloud on the title. So we've been looking and where we saw maybe 5-6 homes that met all our criteria, we're seeing nothing now. The market here is definitely on the rise. If you're considering selling, start cleaning the house.
I agree, if you own a home and have no plans of going anywhere, what the market matters not. But if you find yourself needing to sell, you certainly don't want to sell in a slump. And if you're buying, you don't want to buy at a peak. All no-brainers.
For us, we saw our choices quickly diminish in this recent upswing. We latched onto a house and would have been in that "market matters not" phase were it not for a cloud on the title. So we've been looking and where we saw maybe 5-6 homes that met all our criteria, we're seeing nothing now. The market here is definitely on the rise. If you're considering selling, start cleaning the house.
Oh, absolutely! The market in SWFL has certainly been on the rise and is forecast to continue. Had we waited, we probably would have been able to afford (comfortably anyhow) the house that we bought. Buy high, sell low is never a good practice.
If you find yourself needing to sell, you sell. Or, you don't. That's a risk anyone who owns property has to take. That's why I said many people should not own a home. The idea that home ownership makes sense and is the American Dream is a feel-good marketing myth, perpetuated by the RE industry and lenders.
If you don't ever want to face that risk and prefer to be liquid and have flexibility, save your initial down payment money or total home purchase money, and rent. Invest the rest in whatever is right for you.
As a pure financial investment, primary residential housing generally SUCKS. Here's very basic math:
1) Take your total purchase price (this assumes cash deal, NO financing) plus every penny you spent in connection with getting that done.
2) Add your total cost of carry (operating costs such as insurance, utilities, general repairs, property taxes, every single iota of general maintenance & supplies, pool & garden services, etc. etc.) over all years of ownership.
3) Add all big repairs & upgrades.
4) Add sale brokerage fees and other garbage fees you have to cough up at time of sale.
5) Take your sale price and subtract the total of the items in 1-4.
6) Divide that number by your sales price. That's your total return.
Here's a hypothetical scenario:
1) Let say you bought a house in PGI 20 years ago for $290k for cash (no financing), + another $5k in misc. closing costs, or a $295k total outlay.
2) Assume an avg. monthly operating cost during 20 yrs of around $1k/mo. (which is probably low, but let's assume that’s the # for illustrative purposes). 20yrs = 240 months * $1k/mo = $240k in operating costs.
3) Let's say some bigger ticket items such as appliances or a/c, pool/spa resurfacing & equipment replacement, a bathroom remodel, a kitchen remodel, or a roof getting replaced at some point, for $100k total spent over time.
4) That's now $340k in total operating costs.
5) Assume that house is now selling for $600k.
6) Total ownership costs of $340k plus selling commission of 5%, or $30k = $370k.
7) $370k + the initial $295k purchase price = $665k total invested.
8) $600k gross proceeds - $665k invested = ($65k) realized loss, or an (11%) loss. That is one BAD investment.
Just fuhgettaboutit if the house is worth less than $600k, or the buyer used financing (a mortgage) during this time. It’s not even worth calculating how bad that scenario is.
Now, let’s say one rented for 20 years at an average of $2k/mo (inclusive of rent, utilities and renters insurance, which also assumes lower rent 20 yrs ago and higher rent today), and that assumes tenant not responsible for any repairs or upgrades/replacement of major items.
1) $2k mo * 240 months = $480k spent on rent.
2) You took about $280k (which you would have otherwise used to buy the house) 20 yrs ago and plunked it in the market in a couple of mutual funds, and your annualized return was 8% avg. over this period of time.
3) With that, you’d be sitting on $1.3MM in an investment account, vs. being economically underwater (from a total return standpoint) with homeownership. Even if it's converted to 100% cash, that's a lotta cash that can continue to get tapped to pay for rent & expenses for a very long time.
That, in a nutshell, is the cost vs. benefit of homeownership.
Quote:
Originally Posted by Tujuleez1
I agree, if you own a home and have no plans of going anywhere, what the market matters not. But if you find yourself needing to sell, you certainly don't want to sell in a slump. And if you're buying, you don't want to buy at a peak. All no-brainers.
For us, we saw our choices quickly diminish in this recent upswing. We latched onto a house and would have been in that "market matters not" phase were it not for a cloud on the title. So we've been looking and where we saw maybe 5-6 homes that met all our criteria, we're seeing nothing now. The market here is definitely on the rise. If you're considering selling, start cleaning the house.
True. If you're a "flipper" that's one thing, but I think *most* folks in my age bracket are buying for the last time and the market does what the market does kind of thing. If the price goes down, honestly, I don't really much give a gnats butt. If it skyrockets, I don't really much care either because if this one skyrockets, they all are so we still wouldn't move....
I know these retirees ( me and DH) are here for the duration, don't plan to go anywhere, so house prices matter not one bit to us. In fact, I'd he happier if house prices did not go up, because when they do, so do our taxes.
I know these retirees ( me and DH) are here for the duration, don't plan to go anywhere, so house prices matter not one bit to us. In fact, I'd he happier if house prices did not go up, because when they do, so do our taxes.
I know these retirees ( me and DH) are here for the duration, don't plan to go anywhere, so house prices matter not one bit to us. In fact, I'd he happier if house prices did not go up, because when they do, so do our taxes.
We're here for the duration as well and gotta give you a for the taxes comment!
SJNE17 that's true ...If you do, in fact, SAVE All the money.... or invest ALL the money.... Facts of life are, somewhere between Many and Most DONT, save that kind of money.. So that fact may not be true on this board .. but Nationwide its true.. Given the chance to " Have It All" most end up with little to nothing. This Group/Board doesn't fairly represent the Average American. We might represent the Dream , but we do not represent the realty. I don't know what to believe about studies, but I am lead to believe that for People 55 and older.. 40% don't own, the place where they live... About 60% either own it debt free or own it with some debt. 29% , of that group /55+, right now, have little to no savings and the same is to said for investments and ..they also do not have a DP / Defined Pension Fund.. Being presently retired or at most 10 years from retirement, they are or will be , completely dependent on SS. Would-a ... Could-a ... Should-a ... are Did's , 3 stupid brothers.
Quote:
Originally Posted by SJNE17
If you find yourself needing to sell, you sell. Or, you don't. That's a risk anyone who owns property has to take. That's why I said many people should not own a home. The idea that home ownership makes sense and is the American Dream is a feel-good marketing myth, perpetuated by the RE industry and lenders.
If you don't ever want to face that risk and prefer to be liquid and have flexibility, save your initial down payment money or total home purchase money, and rent. Invest the rest in whatever is right for you.
As a pure financial investment, primary residential housing generally SUCKS. Here's very basic math:
1) Take your total purchase price (this assumes cash deal, NO financing) plus every penny you spent in connection with getting that done.
2) Add your total cost of carry (operating costs such as insurance, utilities, general repairs, property taxes, every single iota of general maintenance & supplies, pool & garden services, etc. etc.) over all years of ownership.
3) Add all big repairs & upgrades.
4) Add sale brokerage fees and other garbage fees you have to cough up at time of sale.
5) Take your sale price and subtract the total of the items in 1-4.
6) Divide that number by your sales price. That's your total return.
Here's a hypothetical scenario:
1) Let say you bought a house in PGI 20 years ago for $290k for cash (no financing), + another $5k in misc. closing costs, or a $295k total outlay.
2) Assume an avg. monthly operating cost during 20 yrs of around $1k/mo. (which is probably low, but let's assume that’s the # for illustrative purposes). 20yrs = 240 months * $1k/mo = $240k in operating costs.
3) Let's say some bigger ticket items such as appliances or a/c, pool/spa resurfacing & equipment replacement, a bathroom remodel, a kitchen remodel, or a roof getting replaced at some point, for $100k total spent over time.
4) That's now $340k in total operating costs.
5) Assume that house is now selling for $600k.
6) Total ownership costs of $340k plus selling commission of 5%, or $30k = $370k.
7) $370k + the initial $295k purchase price = $665k total invested.
8) $600k gross proceeds - $665k invested = ($65k) realized loss, or an (11%) loss. That is one BAD investment.
Just fuhgettaboutit if the house is worth less than $600k, or the buyer used financing (a mortgage) during this time. It’s not even worth calculating how bad that scenario is.
Now, let’s say one rented for 20 years at an average of $2k/mo (inclusive of rent, utilities and renters insurance, which also assumes lower rent 20 yrs ago and higher rent today), and that assumes tenant not responsible for any repairs or upgrades/replacement of major items.
1) $2k mo * 240 months = $480k spent on rent.
2) You took about $280k (which you would have otherwise used to buy the house) 20 yrs ago and plunked it in the market in a couple of mutual funds, and your annualized return was 8% avg. over this period of time.
3) With that, you’d be sitting on $1.3MM in an investment account, vs. being economically underwater (from a total return standpoint) with homeownership. Even if it's converted to 100% cash, that's a lotta cash that can continue to get tapped to pay for rent & expenses for a very long time.
That, in a nutshell, is the cost vs. benefit of homeownership.
Mac unfortunately your comments are pretty close to the mark. I'd like to add though; People paid their whole lives into a savings / retirement plan called social security. It was supposed to be securely well invested for them to have and use during retirement. It's not an entitlement. It is their money, and no one should be made to feel guilty about using it or getting back the funds they paid into. It was promised to them their whole lives, so your woulda, shoulda, coulda comment is a little rude, just because they didn't arrange for "other pensions." Many people have lived within their means, paid their mortgages, loans and other payment obligations AND saved what they could after the government confiscated and mandated funds from their earnings to be used during retirement. I think that is honorable! Many are still paying into that system now, even though they know - you (and many others) are probably collecting the money from them now, and their will be none left for them. I think those that collect funds now, even though they feel it's due them should have some appreciation of that fact! Many people paid, and true need those funds, they shouldn't be slighted because of that fact either.
I hear the viewpoint you expressed all the time, but not much compassion for those that rely on the merger payouts they get, while they try to get by. Just because they don't have fine clothes, hot cars, boats and "toys" doesn't mean they shouldn't have tons of respect - many of our veterans are in their same situation.
Mac unfortunately your comments are pretty close to the mark. YES they are
I'd like to add though; People paid their whole lives into a savings / retirement plan called social security. It was supposed to be securely well invested for them to have and use during retirement. AND THEY DO It's not an entitlement. It is their money, and no one should be made to feel guilty about using it or getting back the funds they paid into. I HAVE ALWAYS HELD THAT OPINION It was promised to them their whole lives, so your woulda, shoulda, coulda comment is a little rude, NO IMO IT IS NOT just because they didn't arrange for "other pensions." Savings? No Savings after 40 Years? Many people have lived within their means, paid their mortgages, loans and other payment obligations AND saved what they could after the government confiscated and mandated funds from their earnings to be used during retirement. I think that is honorable! Many are still paying into that system now, even though they know - you (and many others) are probably collecting the money from them now, and their will be none left for them. OMG your going there I think those that collect funds now, even though they feel it's due them should have some appreciation of that fact! Yea Whatever ...I Honestly don't believe you understand how SS works.. Many people paid, and true need those funds, they shouldn't be slighted because of that fact either. Who here is slighting them ? Not I , that's for sure...I don't belong to that club.. Others here do, But I don't.. However if all you have is SS.. You should be thankful it WAS mandated or you would now have nothing.. This Is Why SS was started.. Its why Pensions were started for the masses / the general working public...
I hear the viewpoint you expressed all the time, but not much compassion for those that rely on the merger ( Compared to the amount paid in those payments are far from meager ).. payouts they get, while they try to get by. Maybe they deserved a little more from their employers? Just because they don't have fine clothes, hot cars, boats and "toys" doesn't mean they shouldn't have tons of respect - many of our veterans are in their same situation. You seem to forget , I ....am not in the club that paid and voted to treat those people with so little respect.
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I think that is honorable! Many are still paying into that system now, even though they know - you (and many others) are probably collecting the money from them now, and their will be none left for them. OMG your going there 
Just because they don't have fine clothes, hot cars, boats and "toys" doesn't mean they shouldn't have tons of respect - many of our veterans are in their same situation. You seem to forget , I ....am not in the club that paid and voted to treat those people with so little respect. 
