[tjay]

Originally Posted by Sparrow_temp

I HAD to sell -- because I moved out of the state. When I purchased -- I thought the price was too high but ALL of the houses on the market were too high and the real estate people convinced me that this was simply the "market rate". They were technically right but nobody knew when the bubble would burst.

Friends and family were encouraging me to a buy a house because of the equity that I'd build in it (good investment), the tax deductions, and I'd no longer be flushing money down the toilet by renting. This might have all been good advice at one time but it was total crap for me. The only reason to buy a house is for quality of life issues. It's not a good investment -- even in good times. Real estate transaction costs eat at any equity build-up. Tax deductions simply reduce all of the INTEREST you're paying on your loans. Your house has to be going up in value enough to overcome the realtor commissions, the interest your paying on the loan, the upkeep costs, the property taxes, home-owners insurance costs, and the opportunity costs of investing the money elsewhere. There's also risk of the neighborhood changing for the worse dropping property values, and the house becoming an anchor keeping you from pursuing other career opportunities which may present themselves elsewhere.

People are more mobile these days and don't create a home in one location for 20+ years and work for the same employer their whole lives. These were the conditions in which home ownership was a wonderful thing. There were no 401K's, IRA's and other investment vehicles in which to build equity so the home was the best alternative thanks to the mortgage tax deduction and limits on how high property taxes could be raised per year. Things are not nearly as stable today so I don't think the renting vs buying thing is clear cut at all. I'm renting a house for the time being.

i agree....unless you're going to stay put its not necessarily an investment. with the amount of interest you end up paying all together, the taxes, the utilities, the repairs, etc you could probably pay rent for the rest of your life and it come out even. the only downside is that you won't own anything, but does it really matter when you're too old and have to go to an old people's home or live with your kids anyway?

[YAZ]

We purchased our most recent home in downtown Phoenix with a 30 year plan for a reason:

We want to live here.

Things can change, I know.

We might change our minds....

That 5% rate turned me on....

[Monelli]

Originally Posted by tjay

i agree....unless you're going to stay put its not necessarily an investment. with the amount of interest you end up paying all together, the taxes, the utilities, the repairs, etc you could probably pay rent for the rest of your life and it come out even. the only downside is that you won't own anything, but does it really matter when you're too old and have to go to an old people's home or live with your kids anyway?

Costs of owning a house surpass that of renting by double at the very least.This is with 20% standard downpayment,if less you will pay more.You do not own anything as the goverment does.Property taxes take a nice chunk of the pie.I guess i was way too stupid on banking a 3-5% annually increase in prices.The rest is history.

[tjay]

Originally Posted by Monelli

Costs of owning a house surpass that of renting by double at the very least.This is with 20% standard downpayment,if less you will pay more.You do not own anything as the goverment does.Property taxes take a nice chunk of the pie.I guess i was way too stupid on banking a 3-5% annually increase in prices.The rest is history.

alot of people can't afford 20%.....and yeah, with the taxes paid you never really own your own property, you're basically paying rent FOREVER on it. that's the part that really makes me leery of buying a house.

ok rant here....it just seems like you have to be wealthy to own a home and have medical coverage. what if my dream job is something that pays $25,000 a year? should i do something i hate for the rest of my life (but make more $ at) just so i can live in this country? am i not allowed to have kids because i won't sell myself out? i dunno....it sucks.

grr.

[JGatti]

We are lucky and unlucky at the same time. Our house was worth $190,000 about 5 years ago. I guess we are luck because we owe less than $70,000. We are lucky in a way that our house was never one of those ballooned overpriced homes, that sold for 3 times what it was really worth. Our taxes are still much lower than a lot of the foreclosed homes on the market. ( people still don't seem to want to touch because even though they are getting a big house cheap, they are still going to get nailed on the taxes) I guess we are also lucky that homes like ours are the best selling homes. Smaller but not too small, in a good area with good schools. There have been some real dumps selling around me for more than I ever would have thought.
I guess where we are unlucky, we talked about selling 6 years ago. Woulda shoulda coulda. Could have walked with over $100k . Damn

In think things are starting to turn a little as far as home sales. I hope it continues as we have ours on the market now. 5 years too late.

[Midas AG]

My close friends have lost 50% of their home value from when they bought it 2 years ago. As for the people saying it can't get worse, they were saying thatt a year ago, and it has. I don't see it getting better any time soon.

[tryin2buy]

Originally Posted by Midas AG

My close friends have lost 50% of their home value from when they bought it 2 years ago. As for the people saying it can't get worse, they were saying thatt a year ago, and it has. I don't see it getting better any time soon.

Nobody I know has said it can't get worse. They must not live in Michigan! Seriously though.....this can't last forever (please tell me this can't last forever). I have a really secure job but at the rate this is going, I'll be paying them to go to work everyday.

[Midas AG]

Hate to say it, but I feel that it will get worse yet. We haven't seen the bottom yet, but we will. It can get worse, but I feel it literally can't get much worse. It'll just take while to get there

[FESTER]

Well there is ONE good thing about living in the UP. Our home prices don't generally ride the roller coaster the rest of the country does. That's because our economy does not swing up and down. It is always down. Sometimes more down than others, but always down. Our county has 25% unemployment right now and homes are not selling much, but home values have remained steady. We are in a correction right now. The stories of being upside down and people losing their homes are tragic and terrible. When someone says their home has 'lost' half of it's value, that is not exactly true. The home was not worth what they paid in the first place. Same with stocks etc.all driven by speculation. Places like California and Nevada have taken a real beating on home prices and a lot of people have walked away. You have to live somewhere right?
The sad truth is a lot of people in Mi. will never see their home's price recover to what they paid much less go higher. Should you stay or bail? That is a decision only you can make for yourself.

[Peter B]

We bought our house for $315k cash 5 years ago and it's gone up to around $360K or so only because we made a couple of updates (central A/C, new garage doors, appliances, carpeting, paint, deck) and have deeded water rights on West Grand Traverse Bay. If we didn't have the water rights, value probably would've went down I'd guess.