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Old 02-05-2009, 08:10 AM
 
744 posts, read 1,289,467 times
Reputation: 182

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Quote:
Originally Posted by Jerseyt719 View Post
I am not saying that I expected to get double for my house, although the realtor adds tell you that homes double every ten years. I never expected that when I bought. I didn't expect to lose either.

My point is that if we all go with Bid Half Off Peak's recommendation, then those of us that bought 11 years ago would lose on that. Is that fair? No it's not. I'm also not saying that we have a right to appreciation. But how about breaking even? I think that's more than fair. If anyone bid half off peak of 2006 prices, that would be about $30K less than what we originally paid.

I'm just saying that half off peak is laughable to even suggest in a lot of communities.

Yes, I worded the post incorrectly - it was ambiguous at best. I do not feel I should LOSE money on my home. If that's the case than a home is a pretty bad investment of time, energy, and money.
That's the point, buying a house this decade is just like buying a pets.com back in the dot com days. A bad investment.

People who make them lose money, that is the way the world works.

I think you'll find a lot of arguments that a home is a bad investment of time, energy, and money - that's why realtor ads often mention things like "a place to call your own", "stability", "flexibility", "be part of a community" these are all non-financial reasons for owning a home. They are used in advertising because the financial reasons are not compelling for people who actually run the numbers (at least post 1999). Now those reasons aren't bad in themselves, there's nothing wrong with making bad financial decisions in order to get non-financial benefits - after all it's financially silly to eat out at a nice restaurant when you could buy some canned soup at the super market for a dollar but people do it because they enjoy the non-financial benefits of a nice meal out.

Do you expect not to lose money when you buy and then sell after using for a years a car as well?

Half of peak is probably laughable in many areas - however one thing to note about asset bubbles is that markets often over correct. That's why people sometimes talk about "buying opportunity" when stock markets go down they are suggesting that the market has over corrected and gone down further than the fundamentals indicate it should be.

Housing is less volatile, since people tend to hold instead of selling due to moving houses being a hassle and foreclosures take much much longer than margin calls, which reduces the size of such swings. But given the magnitude of the up swing was unprecedented I don't think anyone really has a good idea of what the magnitude of the down swing will be - especially since it is coupled with what may turn uot to be a severe recession.

Owning a home is taking a risk. Borrowing money to own a home is leverage which magnifies the risks (and the gains). There's nothing wrong with taking risks but you can't pretend there were no risks - there have been times in the past where houses have gone down in value over a ten year period, and there will be times in the future.
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Old 02-05-2009, 08:15 AM
 
Location: The Beautiful Pocono Mountains
5,450 posts, read 8,023,156 times
Reputation: 2991
Quote:
Originally Posted by sholden View Post
That's the point, buying a house this decade is just like buying a pets.com back in the dot com days. A bad investment.

People who make them lose money, that is the way the world works.

I think you'll find a lot of arguments that a home is a bad investment of time, energy, and money - that's why realtor ads often mention things like "a place to call your own", "stability", "flexibility", "be part of a community" these are all non-financial reasons for owning a home. They are used in advertising because the financial reasons are not compelling for people who actually run the numbers (at least post 1999). Now those reasons aren't bad in themselves, there's nothing wrong with making bad financial decisions in order to get non-financial benefits - after all it's financially silly to eat out at a nice restaurant when you could buy some canned soup at the super market for a dollar but people do it because they enjoy the non-financial benefits of a nice meal out.

Do you expect not to lose money when you buy and then sell after using for a years a car as well?

Half of peak is probably laughable in many areas - however one thing to note about asset bubbles is that markets often over correct. That's why people sometimes talk about "buying opportunity" when stock markets go down they are suggesting that the market has over corrected and gone down further than the fundamentals indicate it should be.

Housing is less volatile, since people tend to hold instead of selling due to moving houses being a hassle and foreclosures take much much longer than margin calls, which reduces the size of such swings. But given the magnitude of the up swing was unprecedented I don't think anyone really has a good idea of what the magnitude of the down swing will be - especially since it is coupled with what may turn uot to be a severe recession.

Owning a home is taking a risk. Borrowing money to own a home is leverage which magnifies the risks (and the gains). There's nothing wrong with taking risks but you can't pretend there were no risks - there have been times in the past where houses have gone down in value over a ten year period, and there will be times in the future.

VERY VERY good response.

The only thing I take ever so slight issue with is the using of a home analgous with a car. You barely ever make improvements to a car. A home?? I know we as well as all of our neighbors around us have made major improvements to our homes.

I do love your explanations though and thank you for not attacking me and showing the reasons/evidence of your claims.
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Old 02-05-2009, 09:57 AM
 
2,312 posts, read 6,948,104 times
Reputation: 897
I don't agree with the idea that owning a home is risky. For me, a parent and mother of two, it's the way I can guarantee in the surest way I can live in the community I want, in the kind of dwelling that I can afford and suits me, for the longest possible time, without someone else's interests (landlord) taking precedence over mine.
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Old 02-05-2009, 10:06 AM
 
595 posts, read 896,581 times
Reputation: 321
Quote:
Yes, I worded the post incorrectly - it was ambiguous at best. I do not feel I should LOSE money on my home. If that's the case than a home is a pretty bad investment of time, energy, and money.
The market sets the price for a home. It's got nothing to do with being fair. This country wasn't founded upon being fair. It was founded upon freedom, and the only way to make sure no one loses money on their housing purchase is to take money from the people that make money on them and give it to the people that lost on them. This imposes on a person's right to private property and is in direct violation to the constitution. You have the freedom to buy whatever house you are able to. You don't have the right to make money or even break even on it.
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Old 02-05-2009, 10:09 AM
 
Location: Martinsville, NJ
6,162 posts, read 11,877,398 times
Reputation: 3971
Quote:
Originally Posted by theoakman View Post
The market sets the price for a home. It's got nothing to do with being fair. This country wasn't founded upon being fair. It was founded upon freedom, and the only way to make sure no one loses money on their housing purchase is to take money from the people that make money on them and give it to the people that lost on them. This imposes on a person's right to private property and is in direct violation to the constitution. You have the freedom to buy whatever house you are able to. You don't have the right to make money or even break even on it.
You DO have the right. It's just not a guarantee.
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Old 02-05-2009, 10:28 AM
 
263 posts, read 487,052 times
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Quote:
Originally Posted by sholden View Post
Half of peak is probably laughable in many areas - however one thing to note about asset bubbles is that markets often over correct. That's why people sometimes talk about "buying opportunity" when stock markets go down they are suggesting that the market has over corrected and gone down further than the fundamentals indicate it should be.
Perhaps you can enlighten us why half off peak is laughable in the areas where the bubble was full throttle such as NY metropolitan area. I argued with quantitative data. Now why don't you argue similarly and show us how 50% is too much so to make us laugh.

What is laughable is the expectation of a home owner to make money when said homeowner bought in a bubble. But wait, this homeowner asks for a bailout and guess what gov just gave him $15K
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Old 02-05-2009, 10:31 AM
 
595 posts, read 896,581 times
Reputation: 321
Quote:
Originally Posted by Bill Keegan View Post
You DO have the right. It's just not a guarantee.
yeah, I probably could have worded that a little better. Good catch.
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Old 02-05-2009, 10:32 AM
 
263 posts, read 487,052 times
Reputation: 34
Quote:
Originally Posted by theoakman View Post
The market sets the price for a home. It's got nothing to do with being fair. This country wasn't founded upon being fair. It was founded upon freedom, and the only way to make sure no one loses money on their housing purchase is to take money from the people that make money on them and give it to the people that lost on them. This imposes on a person's right to private property and is in direct violation to the constitution. You have the freedom to buy whatever house you are able to. You don't have the right to make money or even break even on it.

Amen! Someone down on earth.
But wait, maybe we are still in heaven because it is raining bailouts
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Old 02-05-2009, 10:33 AM
 
744 posts, read 1,289,467 times
Reputation: 182
Quote:
Originally Posted by clevedark View Post
I don't agree with the idea that owning a home is risky. For me, a parent and mother of two, it's the way I can guarantee in the surest way I can live in the community I want, in the kind of dwelling that I can afford and suits me, for the longest possible time, without someone else's interests (landlord) taking precedence over mine.
Notice those are all non-financial (well other than "afford") requirements. "Guarantee" is the wrong word though - owning a home doesn't guarantee that, it makes it orders of magnitude more likely than renting which might be all you meant to imply. Off the top of my head a few things that owning a home doesn't guarantee against:

* You get into financial difficulty (lose job, uncovered medical expenses, whatever) and can't afford the property taxes on the home - the government will force you to sell to cover them.

* The government decides it wants to build a railroad through your house/sell the land to a developer who made large donations/etc and via eminent domain forces you to sell the house to them.

* The community the house is in changing significantly and no longer being a community you want to live in.

Both are pretty unlikely, I do admit

The risks I was referring were financial, in that homes can fall in value.
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Old 02-05-2009, 10:47 AM
 
744 posts, read 1,289,467 times
Reputation: 182
Quote:
Originally Posted by halfoffpeak View Post
Perhaps you can enlighten us why half off peak is laughable in the areas where the bubble was full throttle such as NY metropolitan area. I argued with quantitative data. Now why don't you argue similarly and show us how 50% is too much so to make us laugh.

What is laughable is the expectation of a home owner to make money when said homeowner bought in a bubble. But wait, this homeowner asks for a bailout and guess what gov just gave him $15K
I said "many areas" I didn't say "in bubble central".

If you weren't such a one tracked, argumentative, overblown egoed so and so, you might notice I'm agreeing with you on almost every point.

I just manage not to hold such a high opinion of my own views that I can use words that allow for things I don't know everything about and allow me to skip over things I consider less important than the things I do argue the case for.

So while you might just like the sound of your own voice (keyboard tapping?), I prefer discussions in which people on both sides might learn something over ranting the same thing over and over.

My personal views are a bit conflicted. I would expect half off to be on the high side - as in prices should fall even further because the down swing will often be of similar magnitude to the upswing - and half off is just back to normal whereas prices should overshoot and go below normal. Then again the government keeps bailing everyone out which is inflationary and that might push house prices back up to bubble levels in a few years. Of course a loaf of bread will cost $50 if that happens so I don't see it as a positive. But I'm not going to argue those views over and over here. I understand they are outside the mainstream and I'm not going to convince anyone via a generic New Jersey forum so I might as well have interesting discussions on more middle ground areas.

Feel free to keep ranting, it is amusing if nothing else.
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