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I truly mean absolutely no disrespect and I hope you find that "perfect home" that you are cautiously waiting for. Good luck and best wishes. I mean that, sincerely, as I know you are not against home buying, all together. Have a good evening.
No offense taken at all. And thanks for the good wishes. Let's hope I'm wrong and all this resolves sooner rather than later!
Location: Halfway between Number 4 Privet Drive and Forks, WA
1,516 posts, read 4,590,499 times
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Quote:
Originally Posted by cohdane
Thanks PotterGeek. As usual, you feel like a kindred spirit. I was thrilled to see your closing went well and wish you happiness and peace in your home. (Send your karma my way...)
Thank you, and I am hoping you find a great house soon! At a good price!
Location: Halfway between Number 4 Privet Drive and Forks, WA
1,516 posts, read 4,590,499 times
Reputation: 677
Quote:
Originally Posted by Humanoid
Certainly, people should do whatever they want to do. But some of us are interested in finances and the effect buying a house vs renting can have on such. So, although the debate may seem tiresome to some its interesting to others = )
Yes, I do agree. And finances are very important to me, too.
However, I sometimes read between the lines on alot of these posts and wonder if some people are unrealistic with their expectations, though. No one will probably ever be able to purchase a million dollar home for $200k or less. I don't see that ever happening. All the fence sitting in the world won't make a luxury home like that "affordable" to the masses.
I think sometimes people have a hard time coming to reality of what they can truely afford, not what they "wish" they could afford, or perhaps what they feel entitled to.
There is a point to what I'm trying to say, it's just hard to put it into words...
I think sometimes people have a hard time coming to reality of what they can truely afford, not what they "wish" they could afford, or perhaps what they feel entitled to.
Sure, I agree with this, its essentially true of younger folks. But in many of the bubble markets a rather modest house is still out of reach for those that make a median income or less income. Around here the cheapest houses you can find are $270k, but these are run down foreclosures that are hardly in livable condition. But, younger families are going to have to realize that their first house isn't going to be 3000 s/f in one of the most desired communities locally.
I believe realtors are hurting pretty bad in Illinois as well, though perhaps not as bad in areas such as California. I just used a realtor to rent out my place who worked with a realtor for the people renting from me. The second realtor is now driving a cab to make ends meet.
$400,000 house renting for more than $2600/month? Its possible, but tough to find. Additionally, let's assume you have $200/mth for association dues (all condos, townhomes, some houses) and you will need to collect more than $2600/mth just to cover your expenses. Let's add in taxes for a real comparison and you don't even come close to breaking even. You would need to get at least $3000/mth to make it work. And this is also with 20% down. I am sure $80K at 3% (money market return) with $2400/yr could be used for other things.
My place in Itasca (townhome) has monthly debt service of $1420 ($120 association and $1300 P&I, propety taxes dropped slightly due to appealing). I rent it for $1500/mth. I was trying to get $1600/mth but the market is really soft for rentals with lots of accidental landlords out there (I chose to be a landlord). It was worth $275M in early 2007 and now is worth $250M based upon sales of comparable units last month. I bought it for $215M in Jan 04. I would not be surprised if it drops to $215-225K, maybe even $200K, before we hit bottom.
CA realtors are taking it in the shorts. Spoke to my REA last week to catch up. He has not been in RE for about year and been collecting unemployment. His home he purchased for 700k at the peak is now valued at around 340k. He is hoping the latest dip in rates will bring out the suckers.
oh and he's also banking on the mortgage bail out bill to modify his loan. Last time we spoke early 2007 he said the NAR and local REAs agreed that the market would recover in 3 months. doh.
Of course not, because why would a Real Estate Agent care about such things. Buy buy buy is always the conclusion.
I don't think there is one person on this forum, or any other that I frequent, for that fact, that is more likely to 'stir the proverbial pot' than you humanoid.
Why not suffice it to say that renting simply works out better for those who are not up to home ownership and home ownership works out better for those not suited to rent?
Of course not, because why would a Real Estate Agent care about such things. Buy buy buy is always the conclusion.
Again your problem is that while complaining about "real estate being local" you always ignore this fact in what you say. I'm in Southern California and that $400k condo is likely to continue to drop in price for a number of years. The owners will be lucky if the value is back at $400k in 10 years.
No, anybody that rents is already aware that the situation is temporary. But really, if you pick the right rental then you are likely to be able to stay for a long time. Its very easy to pick out the serious landlords from the accidental landlords, I would never rent from an unexperienced landlord that was just buying time before they put their house on the market. In my case I decided to rent an "apartment home" because I didn't want to deal with a potential move. It was also a better deal than renting a Condo despite being identical in features to many Condos in the area.
Regardless, you seem to not understand that most are not suggesting you should always rent instead of buying. Rather they are suggesting (myself included) that you should rent now and wait until home prices are a better value in comparison to rents. If home prices are already a good value in comparison to rents in your area then so long as you have a decent down payment (to protected against any decline) and plan to stay long term buying can make sense. Although, if you believe prices are going to continue to decline then it may be perfectly reasonable to wait a bit too.
Anyhow, I'm not advocating that people should never buy houses. Rather I'm suggesting at the moment many will benefit greatly by waiting for the market to bottom out before purchasing. I'm not against home ownership, I may purchase a house in 2-3 years if prices become reasonable. Although, I'm likely to do it with cash.
Humanoid,
I just recently absorbed your reply to me. I'm not sure I understand. Where does it say the $400,000 example given was in CA? I thought it was just a general scenerio so no, I am not "ignoring the fact of what I say" ie: real estate is local. It seems to be you who wants to talk about no other area other than your own. This is a REAL ESTATE forum for the entire nation, not just CA. You have made it abundantly clear that "YOU DON"T CARE" about other areas but as someone else stated, the OP made a blanket statement, followed by and argued by several others, from DIFFERENT areas around the US. You actually have already assumed things are far from bottoming out and I understand that might be the case for you, but your general statements cross over into arguements for ALL real estate. You argue, in past, pretty passionately for renting and have been pretty opinionated about the people who think buying is better. Also, I'm just curious. As we continue to talk about real estate, even in CA, is any and all homes just going to be worth nothing more than the materials it cost to build them, in your opinion, and location, location, location has NO EFFECT? Just curious.
I am not sure your $400K example works with $2400 in P&I, plus taxes, and possible assessments. It might work for apartment building with multiple rents but would be tough for single family in suburban Chicago. Also, don't forget the opportunity cost of that $80K down payment.
Also, you might be buying a depreciating asset for the next 12-18 months until we hit bottom here in the Chicago area.
rrufast,
Why not suffice it to say that renting simply works out better for those who are not up to home ownership and home ownership works out better for those not suited to rent?
Saying that renting simply works out better for those who are not up to home ownership is elitist at best and possibly not knowledgeable. There are people out there like Humanoid (looking to buy in cash in 2-3 years) who clearly could be homeowners if they chose to do so, but are choosing to be renters until the market declines further.
There are renters out there who are not "up to home ownership" but there are certainly renters out there who are but are waiting for a better deal. There are also renters out there who prefer to rent then to buy because of the flexibility it gives them.
This is all coming from a landlord in Chicago who is getting ready to buy his 3rd building and will be looking to buy more properties in the future, not some bitter renter.
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At a good price!
Illinois Market
