Buying a Home - Need opinions (Minneapolis: prices, housing, metropolitan area)

[golfgal]

Originally Posted by lalife

Let's get one thing clear. BUYING A HOUSE IS NOT AN INVESTMENT. To own a house gives one privacy from neighbors so you don't have to share walls and that is about it. I know a few single people who own houses and they have little savings in the bank. I rent and I have several years worth of savings. I don't have to constantly **** money away for updates and repairs. You do the math.

Oh another thing. I was part of a mass layoff a couple of years ago. The people in trouble in that layoff were the homeowners. They either had to sell to relocate to stay with the company ( and at a HUGE loss), or they were confined by their home location and stuck with a long commute if the new job was far away. More than 1 of those coworkers said that they will never buy a house again.

Buying a home most certainly is a long term investment. The problem is people keep wanting to apply short term gains to a long term investment and it just does not work. Yes, in this current market selling a home is difficult, but we have also sold homes in good markets where we have had 5+ offers the first day it was listed. It is all cyclical. In the example I posted earlier, the value of homes, over time, will increase and you will realize that increase if you hold your home long enough. For some markets "long enough" is 5 days, other's it might be 20 years.

10 years ago we sold my Grandfather's property (well my Dad did). He bought the land/house for $8000, 500 acres, house, 2 barns, 3 outbuildings. We parceled off part of that land and sold each ACRE for $8000/acre 60 years after he bought that. You can do the math to see how this was an investment.

Homeownership is not for everyone but there is no return on rental dollars, ever. However, you still need a place to live so you will spend that money one way or another.

[lalife]

Originally Posted by golfgal

Buying a home most certainly is a long term investment. The problem is people keep wanting to apply short term gains to a long term investment and it just does not work. Yes, in this current market selling a home is difficult, but we have also sold homes in good markets where we have had 5+ offers the first day it was listed. It is all cyclical. In the example I posted earlier, the value of homes, over time, will increase and you will realize that increase if you hold your home long enough. For some markets "long enough" is 5 days, other's it might be 20 years.

10 years ago we sold my Grandfather's property (well my Dad did). He bought the land/house for $8000, 500 acres, house, 2 barns, 3 outbuildings. We parceled off part of that land and sold each ACRE for $8000/acre 60 years after he bought that. You can do the math to see how this was an investment.

Homeownership is not for everyone but there is no return on rental dollars, ever. However, you still need a place to live so you will spend that money one way or another.

YOU ARE TALKING ABOUT BUYING PROPERTY THAT WAS IN THE FAMILY. OF COURSE YOU WILL MAKE A PROFIT WHEN SELLING BECAUSE YOU GOT IT CHEAPER THAN IF YOU WEREN'T FAMILY!!!!!!! Do the math on that one. And this post is about buying a house not acres and acres of land. Almost everything you say is always off the subject and just rankles me.

[homiej]

Where else would you go? Once you relocate in the future, if that happens, will you have interest in coming back to the Cities? Do you have what it takes to rent out your home?

[golfgal]

Originally Posted by lalife

YOU ARE TALKING ABOUT BUYING PROPERTY THAT WAS IN THE FAMILY. OF COURSE YOU WILL MAKE A PROFIT WHEN SELLING BECAUSE YOU GOT IT CHEAPER THAN IF YOU WEREN'T FAMILY!!!!!!! Do the math on that one. And this post is about buying a house not acres and acres of land. Almost everything you say is always off the subject and just rankles me.

We didn't buy the property, we sold it after my Grandpa died. HE paid $8000 and when he died that property was worth well over $1,000,000. Part of this WAS his house.

[Glenfield]

Originally Posted by golfgal

We didn't buy the property, we sold it after my Grandpa died. HE paid $8000 and when he died that property was worth well over $1,000,000. Part of this WAS his house.

As the fine print says, past performance is no guarantee of future results.

[golfgal]

Originally Posted by Glenfield

As the fine print says, past performance is no guarantee of future results.

True, however, over time, you will see appreciation in your home. There have been good and bad housing markets all along coupled with interest rates in the 15-18% range. Those not old enough to remember those days think now is a bad time to buy, but they are wrong. With 3.3% interest rates you are practically getting a house for cost. We were pricing out homes for our son over the weekend. He was looking at rentals and I suggested he look at houses to buy. There were several townhomes and even a few single family homes that would have given him a $400/month HOUSE payment (with taxes and insurance). He has a couple friends that he would rent rooms to cover his house payment. His plan is to keep this as a rental property down the road. It's a smart move all the way around. The current tax value on these places are in the $175,000 range, listed in the $75K range. One is poised for a potential state or county take-over in the next 10-15 years possibly.

Now, if he were thinking of selling in 2 or 3 years, no, buying a home doesn't make sense. If you are looking LONG TERM, real estate is always a great investment. Ask at your bank, mutual fund company, etc. what their money is invested in....

[homiej]

Originally Posted by golfgal

True, however, over time, you will see appreciation in your home. There have been good and bad housing markets all along coupled with interest rates in the 15-18% range. Those not old enough to remember those days think now is a bad time to buy, but they are wrong. With 3.3% interest rates you are practically getting a house for cost. We were pricing out homes for our son over the weekend. He was looking at rentals and I suggested he look at houses to buy. There were several townhomes and even a few single family homes that would have given him a $400/month HOUSE payment (with taxes and insurance). He has a couple friends that he would rent rooms to cover his house payment. His plan is to keep this as a rental property down the road. It's a smart move all the way around. The current tax value on these places are in the $175,000 range, listed in the $75K range. One is poised for a potential state or county take-over in the next 10-15 years possibly.

Now, if he were thinking of selling in 2 or 3 years, no, buying a home doesn't make sense. If you are looking LONG TERM, real estate is always a great investment. Ask at your bank, mutual fund company, etc. what their money is invested in....

Buy in the city, not in the suburbs. Suburban land values will plummet in the near future, especially as the demographic reversal continues and people move back into the cities.

[Glenfield]

Originally Posted by golfgal

True, however, over time, you will see appreciation in your home.

Maybe. That's a valid opinion and one could argue that we are simply reverting to the long term trend. Real vs Nominal Housing Prices: United States 1890-2010

However, due to significant demographic changes such as the aging of the population, and the fact that the next generation may not do as well financially as previous generations, it looks to me like maybe not.

I am an advocate of home ownership, but not for any financial reasons. I just don't want to have to move because a landlord decides to sell or not renew my lease. I believe that housing prices still have a long ways to fall, and we'll never again see the type of housing price increases that we saw from the 1970s to 2007. I personally don't care if the price of my house goes down, but for someone borrowing against it, or planning to ever sell and pay off a mortgage in order to relocate, like our OP, it's a very risky bet to ignore the global deflationary trend in housing prices.

[golfgal]

Originally Posted by homiej

Buy in the city, not in the suburbs. Suburban land values will plummet in the near future, especially as the demographic reversal continues and people move back into the cities.

Never in a million years would he live in the city. Our town of 20,000 is too big for him.

[danielle_pal]

Try this area out, it is safe affordable, and "rentable". I have friends who bought a starter home a few blocks further to the East (14th Ave). They now rent it for more than what their mortgage is. It is a nice area and a quick drive to the U or the airport.

4605 5th Ave S
Minneapolis, MN 55419
MLS 4055167

I have no idea whose home this is. I promise!

This one is a little more pricey but nicer. And closer to my friends rental.

4649 13th Ave S
mls 4102841