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^^^ITA!!!
Especially when comparing 0.25 acre vs 0.25 acre (or that 3 acre vs 3 acres doesn't matter, so long it uses same community service, built via same builder/developer) in the same hood...
Comparing all 3 bed 2 bath on the same acre in the same hood using the same community pool....
Comparing this town home vs that other town home build in the same hood...
Or comparing this McMansion vs the other McMansion by same builder / developer....
where outside of the home as "HOA" mandate (the clothes) does not change (so the value equalizer)... maybe the insides may have upgraded options (when "value" or that "firesale" will mandate the buyer's choice)...
What can balances the upkeep home value... will also "equalize" the fall as well.
P.S. update... since I do work around many HOA communities... I just gave advise to another friend on how to "rent out" a townhome unit he just bought for on the cheap cash....
great rental investment, but NOT as a homeowner to live in....
(back to the question.... does rental neighbourhood devalue homes in the surrounding area????)
Citydata provides great tool to research what percentage are actually "homeowners" in the community when buying.... I sure used that feature for data.
There are even other sites that gives data of what percentage took out second mortgages, applied for loans within a community v/ local etc... internet datas & google are great like that to help future home buyers.
Once the interest rates start to rise and believe me they will, what do you think will happen to house prices.....thats right prices will go DOWN
The last time interest rates were forced this low for such a prolonged period was 1935-40. Interest rates went up for 40 subsequent years, after that. So did home values.
The last time interest rates were forced this low for such a prolonged period was 1935-40.
Do you really think rates were "forced" down in 1935?
Wasn't demand for borrowed money just so low that the rates just went there?
It's not like the Fed was buying Treasury bonds, was it?
I guess they were restricting the money supply, but that's different than "forcing."
Quote:
Originally Posted by middle-aged mom
Interest rates went up for 40 subsequent years, after that. So did home values.
Home prices tend to move with inflation.
Once the increase in the money supply starts to get out into the general
economy, prices of everything will rise - including housing - no matter what the
interest rates are. Check out 1975-1980 for mortgage rates and home prices.
^^^Agreed.
The home value may have a "peak hike" rapid increase from 40s - before 50s... but after that is a pretty steady "slow climb"... thus I do not see much increase / difference in home prices from 50s till the next "peak hike" during the 2004/5 till 2007/early 2008 housing boom.
Inflation in US $ is also part of what makes home prices... same w/ building materials (where even today, w/ a weakening of USD, material prices stayed almost the same and did not become even more which should be w/ inflation adjustment via a weak dollar).
Further more... the income people make in peak housing does not "justify" the increase in home prices (eg. 200% gain during peak from when that house is bought & build during the 80s w/ even that 16% interest)... does a normal household income balance / justify the home price jump of that 200% too??? (Income of a 200% jump maybe achieved when one becomes CEO, CFO or other heads of the company etc. or some successful bankers... but how many of these "real jobs" are that???)
Thus why many people when they take out loans against their homes (for that kitchen /bath updo / deck / sunporch addition / college loans etc.) are also "in trouble" due to the banks allowing people to take out more than they can pay back.
Thus when I bought, I bought with the prospect of housing not recovering till after 2015-16 & or worse... 2020 like shiller predicts. Thus should the housing bottom later... I'd still be safe, but should it bottom now before 2015... I am way ahead of the game.
P.S. My BIL advises that like stock... it is best to buy when prices are almost bottom, "on the way down" than when "on the up swing" up mode.
Once the increase in the money supply starts to get out into the general
economy, prices of everything will rise - including housing - no matter what the interest rates are. Check out 1975-1980 for mortgage rates and home prices.
I thought of you, yesterday when I was keying that response. We tend to agree on the fundamentals albeit not the extremes.
That's why it is called an investment, you takes your chances and if you lose, it's in you. I had one house I held for ten years because someone had built cheap town houses across the street, another I sold within two years for double what I paid. Nobody should be bailing you out for a decision you made
Be careful to pay up on all HOA dues...
As per another friend who owned a HOA property who also lost value close to 100K, that HOA fee is something that even bankruptcy and foreclosure cannot discharge, very much like that college loan.
Plus...
Your place will be much harder to sell (not to mention, much more expensive to sell eg. separate attorney fee to handle HOA etc.) if HOA due is not up to date.
Good luck to you all the same.
You are 100% wrong on the HOA fees not being able to be discharged. You would only have to pay them if you kept the house in bankruptcy.
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Good luck to you all the same.
