The real estate arguement irony.... (renter, vents, brokers, advantage)

[Humanoid]

Originally Posted by fairmarketvalue

The fact that you view a lexus as in your paragraph above, simply states it all.

What does it state? What I stated were fact's about Toyota's marketing strategy. When you buy a Lexus you are paying far more than any value added vs a Toyota, there really is nothing to disagree about. Its a rather obvious case of price discrimination. These sorts of strategies are employed by pretty much every large company in some fashion.

Originally Posted by fairmarketvalue

And I said LITERAL, not liberal. Meaning specific!

Yes, I obviously misread you.

Originally Posted by fairmarketvalue

Wonder why Toyota only stuck to 2 brands to "exract" money out of people.

If you understand what I'm describing the answer would be obvious. Toyota sales in two markets, hence needs two brands to do so effectively. They need to segment the market so that the people that are willing to spend the extra money on a Lexus won't purchase a Toyota instead. This is a risk because the products are so similar. In this case, they do a bit more than simply changing the logo. That works at the grocery store, but not for cars. They need to also make superficial changes (in terms of cost) to the products to get them to appear different enough to get the markets separate.

Anyhow, you can be the sort of person that gets suckered by this sort of thing or the one that doesn't. Its up to you, I really don't expect you to change your mind after my comments. It took me over a year to get my Mom to "get it" after she purchased a "luxury" brand car. Marketing plays on people's psychology..

[sheenie2000]

I agree with Humanoid that houses depreciate. For some reason a lot of people forget to add in all the money they put in towards repairs and upgrades. Like the 10K new roof, the new boiler, new heating unit, new tiles, broken pipes, fixing a septic tank, etc etc.

I'm still wondering why people feel that houses can make you so much money.

Does anyone want to start off a scenario and see how the numbers come out for say a 220K 30 yr fixed mortgage with a 20K downpayment? Then compare this to how much a person can save/make if they rented instead after 10 years?

[mathjak107]

i posted this work of art ( ha ha ha ) in another thread but i think it fits in here as well...

heres what everyone is missing here that makes this debate go on and on and on... your missing the true cost of ownership and housing... housing costs are not a 3 year thing, a 5 year thing or a 30 year thing. housing costs go on for a lifetime and never stop compounding

think about a renter, his cost of housing over a life time is the rent he pays every month for life..the cost of renting just dosnt stop compounding because he moves, rather the total grows and grows and grows over a lifetime.

now i keep saying a house is a consumption item, not an investment and heres why.

the costs of housing for a homeowner over a lifetime are not just i paid this and i sold for this, or my house is now worth this but rather the cost of housing is all the costs and expenses that go with the privilage of owning a home.

your taxes,mortgage interest,expenses,maintaince ,repairs,renovataions, extra insurance over and above what renters inssurance cost , landscaping, a roof, snow removal ,etc you home owners can probley extend this list into tomorrow, i know i could. the list goes on and on

all the expenses compound year after year after year just like a renters rent does.

as time goes on its apparent that your total cost of housing increases and increases and may and probley will exceed the value of the home decades later.. the longer you house yourself and your family the higher your housing costs accumulate. you can sell and move but regardless the next house keeps the meter running and gets added to the first house as well as if your trying to compare renting to owning and seeing how housing costs compare thru a lifetime you need to compare everything and allow the actual costs of housing you and your famly to keep compounding.. you wouldnt stop counting the renters rent just because he moved.....

in most cases the amount you spent on your home and the costs for the privelidge of owning that home and housing you and your family over a lifetime will be above the value of your home especially in a high tax area. in nassau or suffolk county 8-12,000 a year is the norm, and so you will actually be at a loss if sold as time marches on when total housing costs are figured .. the question is over decades of life which gives you the smaller loss , renting or buying and paying what may be a decade of higher costs but having the value of the home at the end .................. by the way if you sell the house and rent you cant count those profits yet from the sale as you still have a lifetime of housing costs to add in from renting now, which by the way over time will be alot more most likley then if you kept the house or bought another house.

now of course every area is diifferent so the cost of buying vs renting is different. initially here in new york you can rent for 1/3 to 1/2 less then buying and no down payment so your free to invest it...now renting is better in the early years but your costs arent fixed and so inflation pushes the rent up around 2-3% a year here....

on the other hand a large part of buying is fixed and thats your mortgage or if you paid cash its your house cost and other parts like taxes and expenses go up and are variable and increase over time.

many years out in our area you reach a point where rents increased enough to be the same as the cost of buying and so the relationship shifts. now buying became cheaper as rents go up from here, especially because the homeowner has certain expenses offset with those writoffs that bring him down in housing costs compared to the renter paying the same amount.

if you were tracking your true cost of housing in both cases you will find that both cases probley give you a negative number on your net worth decades out as associated costs overtake the home value and the renter in his case spends rent ..it all boils down to which is the smaller loss over a lifetime.

if the renter invested all that extra cash he didnt spend buying he may very well come out a head... its just theres no answere here as everyones personal situation and numbers over a lifetime of housing costs are different...

there is no clear cut winner its only which one costs less over a lifetime

[mathjak107]

good analogy is the cost of feeding your family ... if you live in most apartment houses you have a choice in nyc,you can buy a refrigerator on your own or use the refrigerator the landlord gives you and is included in your rent... in either case its the actual cost of the food that you buy that determines the food costs for you and your family ... over a lifetime those food costs are going to probley out weigh the costs of the refrigerator .

lets suppose that if you buy a refrigerator that you picked a model that increased in value over time so you had something of value at the end.

whether you come out a head or not in either case is higly unlikley, it all boils down to who spent the least. if you watched your food costs as a refrigerator renter and invested the money you didnt spend on the refrigerator you may come out ahead, on the other hand if the buyer of the refrigerator had the value of that refrigerator go up enough they would offestt some food costs and lack of not investing the refrigerator money since they bought.


as you see there is no answere, its all about consumption and not investing in a refrigerator...


i hope all the above seems logical because my 1 finger i type with is sore from all this

[fairmarketvalue]

Originally Posted by Humanoid

What does it state? What I stated were fact's about Toyota's marketing strategy. When you buy a Lexus you are paying far more than any value added vs a Toyota, there really is nothing to disagree about. Its a rather obvious case of price discrimination. These sorts of strategies are employed by pretty much every large company in some fashion.


Yes, I obviously misread you.


If you understand what I'm describing the answer would be obvious. Toyota sales in two markets, hence needs two brands to do so effectively. They need to segment the market so that the people that are willing to spend the extra money on a Lexus won't purchase a Toyota instead. This is a risk because the products are so similar. In this case, they do a bit more than simply changing the logo. That works at the grocery store, but not for cars. They need to also make superficial changes (in terms of cost) to the products to get them to appear different enough to get the markets separate.

Anyhow, you can be the sort of person that gets suckered by this sort of thing or the one that doesn't. Its up to you, I really don't expect you to change your mind after my comments. It took me over a year to get my Mom to "get it" after she purchased a "luxury" brand car. Marketing plays on people's psychology..

It wasn't marketing that "suckered me" or anything else, for that matter. I liked the vehicle, the kids love the head rest tv screens, great for travel, moves beautifully on the road, and never had any problems with it in the almost 5 years of ownership. Like some of us appreciate and understand what owning a nice home feels like, same for cars. I guess that's how they are alike after all. Anyway, not important and off topic. I hope all understand that cars and homes do NOT work the same, financially or figuratively speaking. Unless, of course, you own your own business (as I do) and can amortize and deduct your vehicle expenses and then tax related, they can be somewhat similar. Other than that, I'll not hold my breath that I'll get more than I paid for my car when it's time to trade. The house? no doubt it will bring more than paid when we decide to sell. No doubt.

[Humboldt1]

I agree with Humanoid about Lexus. My younger brother drives an ES330, might as well drive a Camry. But, whatever, he likes the car. And Lexus or Toyota, the Japanese make good cars.

I am essentially doing the reverse, driving a Lincoln LS, which is the American version of the Jaguar S. Both of which are nice cars, but have maintenance issues, though I have been pretty lucky with mine, at 163K miles now.

FMV,

You may make money when you sell your house as you are not looking to sell your house anytime soon. My guess is you would have to wait until after 2012 to make any sort of gain, given that you bought last year.

[Humanoid]

Originally Posted by fairmarketvalue

....and never had any problems with it in the almost 5 years of ownership. Like some of us appreciate and understand what owning a nice home feels like, same for cars.

Again, at issue is that the Lexus (or similar brands) is not "nicer" in any meaningful sense then what you can get in the base brand (in this case Toyota). But, purchase whatever you like.

Originally Posted by fairmarketvalue

I hope all understand that cars and homes do NOT work the same, financially or figuratively speaking.

No, I don't understand and I've stated exactly why I think they are fairly similar. You on the other had have merely stated that they "don't work the same" and have given zero justification for your claim.

Originally Posted by fairmarketvalue

Unless, of course, you own your own business (as I do) and can amortize and deduct your vehicle expenses and then tax related, they can be somewhat similar.

Individuals don't deduct a car or a home, so this is irrelevant.

Originally Posted by fairmarketvalue

Other than that, I'll not hold my breath that I'll get more than I paid for my car when it's time to trade. The house? no doubt it will bring more than paid when we decide to sell. No doubt.

Once again, you are stuck on the time scale of the depreciation and the smoke and mirrors inflation provides. If you sell your house in 20 years its very likely that you'll get more than what you paid. Does that mean it has appreciated? ABSOLUTELY NOT. The question to ask is whether it has appreciated in real terms, that is did it appreciate beyond inflation. Of course, like a car, you will have likely spent a good deal of money keeping the home up over 20 years.

The world would be a better place if people actually thought of homes as they do cars.....instead you have a much of people that think a home is going to "build wealth".

[LCMT]

New Jersey Real Estate Report

"From 1998 to 2006, when NEW JERSEY INCOMES ROSE ONLY ABOUT 10 PERCENT,HOUSE PRICES IN NEW JERSEY ROSE 135 PERCENT"

[fairmarketvalue]

Originally Posted by Humanoid

Again, at issue is that the Lexus (or similar brands) is not "nicer" in any meaningful sense then what you can get in the base brand (in this case Toyota). But, purchase whatever you like.


No, I don't understand and I've stated exactly why I think they are fairly similar. You on the other had have merely stated that they "don't work the same" and have given zero justification for your claim.


Individuals don't deduct a car or a home, so this is irrelevant.


Once again, you are stuck on the time scale of the depreciation and the smoke and mirrors inflation provides. If you sell your house in 20 years its very likely that you'll get more than what you paid. Does that mean it has appreciated? ABSOLUTELY NOT. The question to ask is whether it has appreciated in real terms, that is did it appreciate beyond inflation. Of course, like a car, you will have likely spent a good deal of money keeping the home up over 20 years.

The world would be a better place if people actually thought of homes as they do cars.....instead you have a much of people that think a home is going to "build wealth".

Humanoid, I don't know what else to tell you except that home buying HAS "built wealth", and nicely so. And it has for hundreds of thousands and probably millions of the population of the US. Moving to a bigger, more expensive home, ie; moving "up" would not have been possible with out the ownership of the previous home and it's equitabl growth/appreciation. I hope this is simple enough terms for even you to understand- regardless of what it cost to own a home for 20 years. And it didn't take 20- it took less than ten for each one. I've always said, if the one we just built and moved into a year ago appreciates faster than I predict, we'll sell and "move up again" or maybe just by 2 homes at that point in our lives. until then, don't tell me homes don't build wealth. I would think you'd have many argue at least that point with you.

[Humanoid]

Originally Posted by fairmarketvalue

Humanoid, I don't know what else to tell you except that home buying HAS "built wealth", and nicely so. And it has for hundreds of thousands and probably millions of the population of the US.

Don't tell me anything, actually provide justification for your position. I'm not claiming that no single person has gained from housing. I'm talking about what the market does long term, short term it has cycles and if you happen to buy on the bottom of a cycle and sell on a top you may gain something. But this doesn't happen to the majority of people. Also, at times a neighborhood after a period of time will become more attractive. In this case your home may see real appreciation. But again, doesn't happen the vast majority of the time.

I'm talking about general long term trends. Also, as far as it building wealth for you. You'd have to factor in inflation, the money you've spent etc etc, this is something I've doubt you've done. But more importantly, don't count your eggs before they hatch. The market may suck all that "wealth" you think you have right from under you or maybe you made a great purchase and it will work out for you in the end. No idea, don't really care. I'm talking about long term trends in housing.

Originally Posted by fairmarketvalue

I hope this is simple enough terms for even you to understand- regardless of what it cost to own a home for 20 years. And it didn't take 20- it took less than ten for each one. I've always said, if the one we just built and moved into a year ago appreciates faster than I predict, we'll sell and "move up again" or maybe just by 2 homes at that point in our lives.

Perhaps you think you are the only person in the universe, I don't know. But, I'm not making any claims about you personal. I repeat, I'm again talking about real estate in general. Some people do accidentally time things correctly and gain something out of it....but pretending that your particular experiences can be extrapolated to everyone is outlandish.

The funny thing is you go on and on about "real estate is local", yet completely ignore this fact whenever you talk about real estate. Your experiences in real estate are of purchases in a particular time period, in a particular sort of housing, in a particular market. Yet, you want to make some sort of general conclusion from it...its utterly ridiculous.

You cannot refute my claims with your personal experience.