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The truth is that Americans got use to a home being the best financial investment they could make. They thought the worse that could happen is they sold at great profit. Then the bubble burst. Recession tend to do that to many investments really. Never take too much risk is the key for average person..
Over the past twenty-seven years, I have never lost money on a house. Ever. I'm well diversified, but real estate certainly hasn't hurt my bottom line.
Last edited by randomparent; 01-29-2015 at 07:02 PM..
My house is just under 2000 sq ft. A guy who recently did some work on our house described it as a "small" house. We paid the top range of what we could afford based on our calculations and a 20 percent down payment. The bank said we could afford a house more than 2 times what we knew we could afford. I think the bank tells people they are approved for "x" amount and then they think that's their target price.
I am in the process of a mgt- really ? I have dug up more dead bones for the underwriter to inspect than the Bone Dr-- its not that easy to get a loan- at all
I am in the process of a mgt- really ? I have dug up more dead bones for the underwriter to inspect than the Bone Dr-- its not that easy to get a loan- at all
Back in the last big housing run up, the ex thought we needed a bigger, nicer house, despite being on the verge of empty nesting. We were qualified by the local mortgage company for a cool quarter million, an amount that I thought was completely absurd and excessive, and that the ex wanted to go right up to. Eventually, I got tired of looking at houses in excess of what 2 adults and 1 teen needed and tuned the whole process out. I have a feeling that this was one of the reasons she "ex'd" me.
We had raised 3 kids in under 1000 sq/ft. Dunno why she thought we needed to upgrade but I think she had the keeping up with the Jonses thing going on and I just don't give a hoopla about that. Her friends all had Porsches....
I know SEVERAL people who, once empty nested or even retired, traded up or added on. There were reasons I'm sure, some had just HATED something specific and finally had the $ to address it, some had visions of multi generations gathering under their roof for Christmas or whatever.
I'd like to downsize (my kids can stay at a motel for the holidays! LOL!) but probably won't be able to so I'll upgrade my space, it needs it from time to time anyway.
I have been told from men who work on job sites building mc mansions that many are built in a few days, short cuts, shoddy work, cheap fiberboard instead of good plywood. I also see the tyvek they use today is a thin piece of plastic instead of the thicker insulated tyvek they used some years ago used under the vinyl siding.
And the cost of these homes went overboard .. why? Every time the interest rate would go down a half point, the builder would jack up the price for the same house by 50k..
I think one of the main reasons for that is we have a society that values material wealth; how much junk one can accumulate rather than who a person actually is - what they believe or have accomplished.
As far as Americans being brainwashed into buying homes they don't need, I'd say yes. Propaganda and brainwashing starts early on. Mass-marketing creates a sense of need where one previously didn't exist. And, they're very effective at it, as the personal debt loads demonstrate. The road to bankruptcy is paved with all kinds of good deals.
I know SEVERAL people who, once empty nested or even retired, traded up or added on. There were reasons I'm sure, some had just HATED something specific and finally had the $ to address it, some had visions of multi generations gathering under their roof for Christmas or whatever.
I'd like to downsize (my kids can stay at a motel for the holidays! LOL!) but probably won't be able to so I'll upgrade my space, it needs it from time to time anyway.
Wife and I ran into a couple yesterday that recently bought a 4200 sf house on 2 acre lot outside of town in the $750K range and they had to qualify for a mortgage to buy it. Of course my wife loved the neighborhood and wants a house there where prices start over $600K and we recently retired and kids are out of the house. I want to downsize, not upsize when we don't need it except if we have a lot of company in for a visit. We could afford it financially but that's way too much to keep up with. Take away...women are crazy.
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Well above
