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No its not cheerleaders of doom. Its hoping the market finishes its correction from the lunacy of the bubble. Then more people will be able to afford living in a home. That is not being a cheerleader of doom. That is being a rational thinker.
No, a rational thinker would move elsewhere if prices were out of reach and if they "really" wanted that house.
If I were to move to a bubble-icious area, I'd fully expect to have to rent if I couldn't afford a home. But I would not be bitter about it and call people dumb and wish for the housing market to implode further. There's real people suffering out there, but all I hear is "me, me, me, me, me." Cheerleaders of doom or selfishness, whatever you prefer.
No its not cheerleaders of doom. Its hoping the market finishes its correction from the lunacy of the bubble. Then more people will be able to afford living in a home. That is not being a cheerleader of doom. That is being a rational thinker.
In many areas their has been a huge correction - I would prefer to see a boost in jobs and an increase in pay back to where it was before I wished for further loss for those desperate to sell - I will be a cheerleader for that - further correction to affordable in some areas would mean free homes for all until decent jobs (or any at all) return. So for many, further correction to more affordable truly is just a sign of doom.
I would like to live in your fantasy land. Sounds like a nice place.
I'm not making an argument about affordability. I'm making an argument for flexibility, which given the bleak outlook for jobs, is very important in factoring in when making a decision to rent or buy.
And, most homeowner problems DO NOT carry on to renting. HOA fees, maintenance and upkeep are not your problem. If you are at all uncertain about your situation, the last thing you need is for a roof to start leaking or for plumbing to go or to need to replace a heating/cooling system.
If you lose your job and can no longer afford your apartment, you have options. You can typically break a lease for 1-2 months of rent. You can move to a new area or city quickly if you find meaningful employment there.
If you would look at a lot of the threads on this board and others for different cities, you would see plenty of "what should I do" threads about homeowners who are trapped in their home or bound to 2 mortgages because they HAD to move to keep or find new employment, and were trapped in the property they owned.
Really, I think you're missing the point. How is coming up with 1-2 months rent cheaper than coming up with the same increment of funds to make a repair? And as you "move" based on flexibility, where are you going to get that 1 1/2 months security dep.for the new apartment, let alone aproved for a lease. Like I said, you are missing the point. Owning or renting, either way, you have to have aplace to live. I find it more of an exception than a rule that people are "trapped" with 2 mortgages. Many, at least in my "fantacy land", have one and are paying that monthly to live in their own home, job loss or not. I suppose it does help to be in a major metropolitin area in the event of a job loss, leaving a move less of a necessity but regardless, most families will do whatever it takes to keep stability to stay in their community of choice, whether renting or owning. I guess their is that otption of living under the bridge in a box, as someone suggested. But buying/owning is still not "dumb" as you have rudely stated several times now.
Really, I think you're missing the point. How is coming up with 1-2 months rent cheaper than coming up with the same increment of funds to make a repair? And as you "move" based on flexibility, where are you going to get that 1 1/2 months security dep.for the new apartment, let alone aproved for a lease. Like I said, you are missing the point. Owning or renting, either way, you have to have aplace to live. I find it more of an exception than a rule that people are "trapped" with 2 mortgages. Many, at least in my "fantacy land", have one and are paying that monthly to live in their own home, job loss or not. I suppose it does help to be in a major metropolitin area in the event of a job loss, leaving a move less of a necessity but regardless, most families will do whatever it takes to keep stability to stay in their community of choice, whether renting or owning. I guess their is that otption of living under the bridge in a box, as someone suggested. But buying/owning is still not "dumb" as you have rudely stated several times now.
The idea that renting is more flexible than owning is pretty much a fact. I can't believe you are even arguing this. The equivalent of coming up with 2 or 3 months rent up front is a down payment. And for almost all cases a down payment is more than 1-5k you need to put down to rent. And the cost of losing your job is most of the time 2-3 months rent(what the court will order when the landlord sues you for breaking your lease), versus the 7- to who knows what k when you have to sell your house under duress. There is not equivalent of making a repair to a house, you don't have to repair things when rented.
Buying a house isn't dumb, if you have a stable job and don't foresee yourself being unemployed, or you have a spouse who has the same thing. But the decision between buying a house and renting if you are worried about your job is easy and the answer is renting.
Of course you will need a place to stay regardless, but if you are renting you have a lot more options than if you owe 200k to the bank. You can rent a room stay with family etc.
The idea that renting is more flexible than owning is pretty much a fact. I can't believe you are even arguing this. The equivalent of coming up with 2 or 3 months rent up front is a down payment. And for almost all cases a down payment is more than 1-5k you need to put down to rent. And the cost of losing your job is most of the time 2-3 months rent(what the court will order when the landlord sues you for breaking your lease), versus the 7- to who knows what k when you have to sell your house under duress. There is not equivalent of making a repair to a house, you don't have to repair things when rented.
Buying a house isn't dumb, if you have a stable job and don't foresee yourself being unemployed, or you have a spouse who has the same thing. But the decision between buying a house and renting if you are worried about your job is easy and the answer is renting.
I understand what you are saying and I am not argueing whether it's more convenient to rent than buy. Of course you're not going to buy if there is potential job loss in your future, however, that is the same no matter WHAT the market is doing, correct? I understand why some rent, and appreciate them, as they stay out of the owners market. We have a rental system in this nation for a reason and many renters crossed over and bought that "pie in the sky" trying to get rich quick and that is NOT what tradional homebuyers buy homes for. So argue all you want, just don't say it's "dumb" to buy, based on the "what-if the sky falls" premis. If the sky falls, it will fall on renters as well, flexibility or not. And for the record, flexibility is far less of a reason of priority than stability, in my opinion. I like that my kids are in a great community with great schools and that I don't have to worry about finding the caliber of home we live in by renting it....They are not available for any long term conditions. So I would hate that flexibility of not knowing if I'll be able to stay in the home I love if it's no longer for rent or the owner decides to sell. There are arguements for both sides, either way, but living like a gypsy to I don't have to worry about whether I'll be able to pay my monthly housing cost is not what I and many are worried about, believe me!!
Certain markets.....buying is insanity. Los Angeles for instance. I don't know of a single person who purchased in non desert Los Angeles county in the past 6 months that isn't paying a mortgage that is 5-6 times income. How they even got the loan, I have no idea. BUT, every single one thinks that they will sell for a profit in 5 years. lol.
LOL.
I'm guessing OP comes from a similiar market.
OTOH, yup, depends on the local market. For example Las Vegas. Buying a $135K house in Las Vegas IF you have a stable job, is not that much of an issue. Your mortgage/taxes/insurance will be less than renting equivalent. AND if the market does happen to drop 20-30% more, the dollar amount is not THAT much...the cost of an entry level luxury car. Whereas the equivalent home in Los Angeles is around $400-500K right now an a 20-30% drop means $80-150k....A VERY hefty sum.
So everyone saying it depends on the individual markey got this one right.
Exactly. And we're not trying to buy a place this year in order to make a profit in the future... I mean, profit is always nice, but we're prepared to take a loss if that's what happens. We want a house primarily for raising a family soon, for investing in their childhood memories, for being involved in a great neighborhood/community, for simply enjoying life while we can, without going bankrupt doing so. And we're not going to go bankrupt, even if prices fall. So as long as those goals are met, a "profit" if we end up selling down the line would be great, but not one of our priorities. We bought a solidly-built house that would not give us much trouble, and that we would not have to put tons of sweat equity into in order to live comfortably. And we would have done that in any market, since we are in our early-30s and ready and able to buy, before having kids.
Quote:
Originally Posted by mumra
i find this ammusing, OP encourages other people to wait it out and stay in thier aparments althought the OP really desires to get back into a house.
Why do people assume renting always means an apartment and/or no sense of community, stability, etc.?
At least in my area plenty of very nice houses in very upscale neighborhoods are available as rentals right now. I've looked at a bunch, and the numbers have worked out to be much, much less to rent than to own every time. A lot of homeowners who would probably rather sell, but who refuse to give their houses away, (translation: won't accept anything less than peak bubble price) have become landlords.
I certainly don't agree with the OP that anyone buying now must be dumb.
Generalize much?
But there is also no way I'd buy in my particular situation/market right now. There are some markets where you do have to wonder if anyone buying now is seriously considering the long term financial ramifications. After all, there's no shortage of examples of folks buying whatever they could finance with no thought given to future economic consequences.
One of my econ professors used to say that successful real estate investors should always look at stabilized cash flow in the first year of ownership. If it doesn't make sense in year one; it's not an investment, it's a speculative gamble.
On a broader sense, applying that to purchasing a home to live in... while I don't necessarily look at home ownership as just an investment, neither do I want to risk my financial future on a gamble.
Buying a home is one of the largest purchases most folks make, but I know plenty of people who can rattle off all the emotional justifications in the world to buy, but they seem to have no sense of the actual financial realities of home ownership.
All that said, every situation is going to be different. You need to run the numbers for your personal market and parameters.
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