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Much of the distressed housing that we have around me will not be purchased by the people who will buy my house when it comes on the market. They are houses that were puchased by people without 20% or even 10% down, for a low price in not exactly wonderful sections of cities. The people who bought them didn't have particularly good fixer upper skills and most people who move into them have neither the money or the time to fix them up.
So while there ARE losts of sherrif sales, the properties are not being bought buy the average family looking to buy a nice house in a good neighborhood with low taxes.
I have a contractor friend whose "buy it and flip it" business is in horrible shape. This is partly because the properties that he bought and then threw a couple of coats of paint on were low prices houses and were brought by people with cheap money and nothing down. These people don't exist anymore.
So in my area the sheriff sale houses are being bought by a whole different crowd than before.
You are certainly right that I have no crystal ball. But I think you misunderstood what I meant by "distressed housing". I was not referring to houses which are in poor physical condition because they are old and/or have not been maintained. I was referring to the financial distress of the homeowners who are behind on payments and cannot sell their homes for what they still owe. The banks are going to have to continue to deal with that large inventory that has not yet been dealt with; they will do this by short sales and foreclosures, which will continue to put downward pressure on prices. In other words, there is a tendancy to think that after all this pain of people losing their homes and the free-fall of prices, that the bottom has been reached and that we will "recover" now. I just do not think this is so, for the reasons given.
It all depends on where you are. A lot of areas are comming back now , and some never fell all that much in the first place. I live in an area , here in Upper Michigan like that. Marquette houses never fell much in value, are holding their own , and new homes are being built everyday. Areas of the Country that were hit the hardest , were the ones that inflated the most. Contractors are busy throughout the Northern Tier, not just in Marquette.
Darstar and others here might be interested in a currently active thread entitled "Housing Market not recovering any time soon" in the Business, Finance, and Investing Forum. It is in the main forum, not in any of the sub-forums. Just like here, there is some disagreement. One poster there made the same point about differences from one area of the country to another.
It all depends on where you are. A lot of areas are comming back now , and some never fell all that much in the first place. I live in an area , here in Upper Michigan like that. Marquette houses never fell much in value, are holding their own , and new homes are being built everyday. Areas of the Country that were hit the hardest , were the ones that inflated the most. Contractors are busy throughout the Northern Tier, not just in Marquette.
You live in an incredibly beautiful state and area. IMO, the perfect retirement spot if you do not mind the cold.
Of course, I am biased. I was born and raised in Detroit. Back in the days when Detroit was a vibrant & dynamic city. We spent many vacations in Marquette & Traverse City. I remember thinking, I could live here forever.
After reading many articles about Marquette, I am getting the feeling that many retirees are discovering & moving to the area. Is this correct? If so, I am sure prices of homes will rise in the area.
You live in an incredibly beautiful state and area. IMO, the perfect retirement spot if you do not mind the cold.
Of course, I am biased. I was born and raised in Detroit. Back in the days when Detroit was a vibrant & dynamic city. We spent many vacations in Marquette & Traverse City. I remember thinking, I could live here forever.
After reading many articles about Marquette, I am getting the feeling that many retirees are discovering & moving to the area. Is this correct? If so, I am sure prices of homes will rise in the area.
Yes , Marquette has won many national awards , as a prime place to visit , and retire.... Everyday it seems I get more and more people interested in moving here. We are not the average Michigan. The U.P. is all by itself in economy,jobs , and what looks like a bright future.
Contary to what a lot of folks think , we have a milder climate than places like Wisconsin. Our temps. are tempered by Lake Superior. We do get a lot of snow, its mostly dry powder, great for winter sports.
a terrible idea, that is headed to commit financial suicide.
The concept of buying a vacation/retirement home for current/future use and profitability is good one. I think a very good one and just did so. However as you note using a reverse mortgage to do so is horrendous. You are trading equity in one house for another and paying a significant premium to do do. That being said I can also see why and when it might make sense. It goes back to the question we debated of how to capture the equity in your house and for what purpose. You can use it as a living plan to enjoy instead of a legacy pass on. The problem is the high cost of doing so.
There are more and more people who will not qualify for a conventional mortgage. If you are retired and can not show the income to support the loan , you may have no choice but to consider a Reverse. What if your credit score is poor, as many are these days with the high cost of medical, job loss, etc. Some people still owe on their homes, even after retired, getting rid of payments may be survival for them.... Also , for many out there , getting their equity from their paid for home may take longer than they are alive. Whats the difference , taking a huge hit , just to sell your home , or taking a high interest loan that you never have to pay back?...sounds like a no brainer to me......
The concept of buying a vacation/retirement home for current/future use and profitability is good one. I think a very good one and just did so. However as you note using a reverse mortgage to do so is horrendous. You are trading equity in one house for another and paying a significant premium to do do. That being said I can also see why and when it might make sense. It goes back to the question we debated of how to capture the equity in your house and for what purpose. You can use it as a living plan to enjoy instead of a legacy pass on. The problem is the high cost of doing so.
It all goes away when you are dead anyway. Doing what makes you happy , now when you are alive is worth more than all the " best investments" in the world.... The second home problem for a lot of Seniors is they CAN"t get the equity from their long time home , inorder to buy that second/retirement home..... That said , you are doing the best thing , buying it now , while you are still working , have the credit , and the income.... getting a loan for a second home is very hard to do these days for a lot of folks, retired or not.
the problem is most folks wont get enough after fees ,interest and only getting 30-60% of the equity in the house as a loan. for that to last a lifetime it may not be close to enough and now they have no money and no house.
There are way too many folks in America , now living on Social security alone, pensions have gone away thanks to Wall Street , medical costs have took all their savings , and all they have left is the captive equity in their home. There should be a better way to survive, to live out your final years in diginity......and pursuit of happiness.
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