[jfkIII]

Originally Posted by fishordie

Are you Ben Bernanke???

No...but I play him on TV.

[tony soprano]

Originally Posted by ScoopLV

It makes absolutely no sense to me that someone would invest and also continue to rent.

It can make perfect sense. I live in a geographic area where it makes little sense to buy (silicon valley). I rent a home that were it to be purchased with a 20% down payment, the mortgage payment would be somewhere around 50% greater than my current rent. It gets worse when you factor in the rate of return I can make on my monthly cash savings and my would-be down payment.

Of course, this is not necessarily the case with Vegas where in some price segments it's cheaper to buy than rent. You really have to run the numbers for each set of circumstances. The duration of time in a given location figures prominently in your calculations.

I think it bears mentioning that it doesn't always make sense to pay out $30k in rent while you're waiting for homes to fall $20K.

[ScoopLV]

Originally Posted by tony soprano

It can make perfect sense. I live in a geographic area where it makes little sense to buy (silicon valley). I rent a home that were it to be purchased with a 20% down payment, the mortgage payment would be somewhere around 50% greater than my current rent. It gets worse when you factor in the rate of return I can make on my monthly cash savings and my would-be down payment.

Of course, this is not necessarily the case with Vegas where in some price segments it's cheaper to buy than rent. You really have to run the numbers for each set of circumstances. The duration of time in a given location figures prominently in your calculations.

I think it bears mentioning that it doesn't always make sense to pay out $30k in rent while you're waiting for homes to fall $20K.

I can see your point. But I still always work the percentages. Rent is always a 100% loss. I simply don't DO 100% losses. Sure there's the opportunity cost and the price of money and all that. But I can't get around the 100% loss part. That's my deal breaker.

Percentages for me is an easy way of looking at all things economic. It's served me well. But I don't know if it would work for everyone. Or even if it's an optimal strategy.

[NoMoreRJ]

Originally Posted by ScoopLV

I can see your point. But I still always work the percentages. Rent is always a 100% loss. I simply don't DO 100% losses. Sure there's the opportunity cost and the price of money and all that. But I can't get around the 100% loss part. That's my deal breaker.

Percentages for me is an easy way of looking at all things economic. It's served me well. But I don't know if it would work for everyone. Or even if it's an optimal strategy.

My neighbor moved to las vegas in 2007 and is renting. The home he's living is is worth about 340,000 at the time he moved in. Had he bought the home, he would be down 200K and his home now worth 140K at best since some are short listed for 125K now. His rent is 100% loss but had he bought, his loss would be much much higher than 100% of his rent. He's paid what around $50-70K in rent in 4 years if his rent is about 1000-1200? Might be higher but I don't know what his rent is but some are now renting in the 1100-1200s. So losing the 70K is better than losing 200K in a home or having to short sale and take a hit on your credit. Yeah no mortgage tax write off but better that than 200K underwater.

RE is all about timing. Had he moved in 2002, I'd say he should have bought and he may not be underwater or if he was not too badly under but had he moved in 2009, I might have said for him to buy as the market was tanking but I've seen that I would have been wrong to tell him to buy as the market was continuing to tank, the right thing would be to buy after it's finished tanking or when you think the bottom is near. I think the bottom is near but as we all know, NOBODY CAN PREDICT THE BOTTOM OR TOP OF MARKETS! You make your own bets and some do better than others, thus the bmw porsche lexus owners and some not so well, the short sellers, the beat up car owners and the like.

[ScoopLV]

We bought in 2007 as well. The market was sliding when we bought, and we knew it was going to crash. But we bought anyway. Why? Nice house, great view, and houses around here only go up for sale when someone dies.

I've got people knocking on my door at least twice a month and asking if I want to sell.

While "the good stuff" hits the market all the time, most of what's available right now is "the leftovers." I'm not interested in some cookie-cutter tract house. Let the bottom-finders fight for that junk.

Our house went down in price. It will go up in price. But regardless, it's still the house we wanted.

[LVPoker1]

Originally Posted by NoMoreRJ

My neighbor moved to las vegas in 2007 and is renting. The home he's living is is worth about 340,000 at the time he moved in. Had he bought the home, he would be down 200K and his home now worth 140K at best since some are short listed for 125K now. His rent is 100% loss but had he bought, his loss would be much much higher than 100% of his rent. He's paid what around $50-70K in rent in 4 years if his rent is about 1000-1200? Might be higher but I don't know what his rent is but some are now renting in the 1100-1200s. So losing the 70K is better than losing 200K in a home or having to short sale and take a hit on your credit. Yeah no mortgage tax write off but better that than 200K underwater.

You could rent a $340,000 house for $1000-1200 a month during the boom?

[eventusstultorummagister]

Originally Posted by ScoopLV

If you own a house, you own a house. You can use it. It has intrinsic value that gold, stocks, or even money in a CD does not.

Not anymore. It will take 2 decades to recoup the 6 trillion dollars worth of housing wealth lost between 2005 and 2010. Which means in real terms it may never be recouped. In 2005 there were 25 million two-parent families with children and 72 million 3 or 4 bedroom homes. The baby boomers are retiring now and there is currently a 40% OVERSUPPLY of family-sized houses. You can no longer look at a home as a way to make money because it won't. Buying a house in Vegas now is all hole and no doughnut.

[NoMoreRJ]

Originally Posted by eventusstultorummagister

Not anymore. It will take 2 decades to recoup the 6 trillion dollars worth of housing wealth lost between 2005 and 2010. Which means in real terms it may never be recouped. In 2005 there were 25 million two-parent families with children and 72 million 3 or 4 bedroom homes. The baby boomers are retiring now and there is currently a 40% OVERSUPPLY of family-sized houses. You can no longer look at a home as a way to make money because it won't. Buying a house in Vegas now is all hole and no doughnut.

How many decades did it take for the profits "earned" during the boom years of 2002-2006ish? There are some people who made tons of money during that time and exited out of the RE market with hefty profits. Some of those 6 trillion (i don't know where you got this Figure) losses were fake profits from the boom years. Where do you get your figures since I have no idea if they are even near accurate or not.

You can no longer expect your house to appreciate without any good reason but if you buy low and rent high, it can still make you money.

I get some of your thought some time but this doesn't make sense to me. They sell doughnuts and doughnut holes at the shops, I like both so can you explain that a different way?

[NoMoreRJ]

Originally Posted by LVPoker1

You could rent a $340,000 house for $1000-1200 a month during the boom?

YUP! I'm looking across the street and back in 2007 a $340K house rented for 1100-1300s. now that same house is about 125K and it's still rented for below 1300.

[von949]

Originally Posted by eventusstultorummagister

Not anymore. It will take 2 decades to recoup the 6 trillion dollars worth of housing wealth lost between 2005 and 2010. Which means in real terms it may never be recouped. In 2005 there were 25 million two-parent families with children and 72 million 3 or 4 bedroom homes. The baby boomers are retiring now and there is currently a 40% OVERSUPPLY of family-sized houses. You can no longer look at a home as a way to make money because it won't. Buying a house in Vegas now is all hole and no doughnut.

This reminds me of how much my old neighbor used to complain about losing 5 million in assets(homes) over 4 years. He used to be a realtor.

The "wealth" that he lost was his own fault for being greedy and not being fast/smart enough to know an end was coming.

From 2005-2010 is a short time frame to build something. I could see if there was a longer period of time like 20+ years but gaining something then losing something in that short amount of time(5 years) probably means you never really had it.