Discuss Detroit » Archives - January 2008 » The argument against home ownership « Previous Next »
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Iheartthed
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Post Number: 2783
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Posted on Monday, March 03, 2008 - 5:07 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

What was a savings plan is now pushing some into indentured servitude

quote:

Homeowners are much less likely to move than renters, especially during a downturn, when they aren’t willing (or can’t afford) to sell at market prices. As a result, they often stay in towns even after the jobs leave. That may be why a study of several major developed economies between 1960 and 1996, by the British economist Andrew Oswald, found a strong relationship between increases in homeownership and increases in the unemployment rate; 10 percent increase in homeownership correlated with a two-per-cent increase in unemployment. (In the U.S., it may be worth noting, the states that have the highest unemployment rates — states like Alabama, Michigan, Mississippi — are also among those with the highest home ownership rates.) And reluctance to move not only keeps unemployment high in struggling areas but makes it hard for businesses elsewhere to attract the workers they need to grow.

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Sstashmoo
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Posted on Monday, March 03, 2008 - 5:18 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Good point.
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Johnlodge
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Post Number: 5408
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Posted on Monday, March 03, 2008 - 5:23 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

I can see it, but home ownership is a real joy to me.

Is there not another possible factor in that statistic? Might the areas with high unemployment rates also have the most affordable housing stock? Could this be just as meaningful as people simply being less willing to move because they own a home?

Yes, you could lose money selling a house. How much would you have lost paying rent every month?
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Danindc
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Post Number: 3950
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Posted on Monday, March 03, 2008 - 6:14 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

quote:

Yes, you could lose money selling a house. How much would you have lost paying rent every month?



I think it's this argument that "tricked" many unqualified buyers into purchasing during the era of super-low interest rates. Much like the stock market at the end of the 1990s, people failed to realize that such a wild upswing, outpacing wage growth, could not be sustained.

Frankly, I don't see how renters "lose" money. At the end of the day, you still have a roof over your head, and you're not directly responsible for costs like property taxes, maintenance, repairs, and realtor/broker fees. Let's not forget the opportunity cost of sacrificing cash flow, at the expense of investing the money you have left over after paying rent.

I read a while ago (can't remember the source) that as a rule of thumb, if the price of a home exceeds 20 times the annual rent, you're better off renting.
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Johnlodge
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Posted on Monday, March 03, 2008 - 6:26 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Dan, I can understand that. But I bought my house for a really good price during the recent housing problems, and my payment is not much more than I was paying for rent. But your point certainly stands, you shouldn't buy something you can't afford, EVER, and there are plenty of other considerations to make financially. I just don't think equating home ownership with unemployment is the whole story.

Your rule of thumb seems reasonable to me. I'm well under that.
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401don
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Posted on Monday, March 03, 2008 - 6:29 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Too many buyers get hooked on the mortgage payment with little regard to taxes, utilities, maintenance, etc. You should subtract ALL these costs from what you're comfortable with in terms of a monthly payment and then see if you have money left over for the mortgage - not the other way around.
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Bragaboutme
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Posted on Monday, March 03, 2008 - 6:37 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

That is an interesting study. I have been both and I'm young, but I like renting more especially in this day and age because of the lower cost,i.e. less space to heat,light etc. The thing you have to sacrifice is space, but its the lesser of two evils with these gas prices and taxes going up.

Johnlodge I do see your point, but you have to pay either way so i don't understand that logic unless you already have a good amount of equity or the house is payed for. In the 60's jobs for those in michigan were plentiful (as I was told) you could get a good paying job easy, and get locked in a fixed rate so home ownership wasn't a problem. Now adays allot of peoples' payment are allot higher, so not only do their payments go up, but they end up losing thier homes. This is the real reason the economy is messed up.
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Mackinaw
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Posted on Monday, March 03, 2008 - 6:42 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Homeownership is overrated...especially if you have no business owning a home given your income and current market conditions. For too many people, this is the case, yet they cling to the notion of homeownership because it is the "american" thing to do. What's worse, we have established a standard of living, particularly in this state, that entails owning something that is too big for your needs, and thereby getting in above your head financially.
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Johnlodge
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Posted on Monday, March 03, 2008 - 6:47 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

401don you are 100% correct for sure.

Brag, I wouldn't purchase a house without a locked in fixed rate. I'm sure there are reasons for doing it, but not for me. My payments are what I can afford. As a renter, I paid all utilities. As for taxes, they are figured into my monthly payment, which as I said, are what I can afford.

The arguments against it sound to me arguments of people getting into bad situations. It is not something one should do on a whim without a lot of research. It is also not something everybody is ready for. But if you are, and can get a fixed rate mortgage with payments you can afford, I still think home ownership is much better than renting. Building equity, and hopefully if you have the skills, performing improvements that increase the value of your home and even neighborhood, are still investments. Renting is payment for services received, and nothing more.
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Bragaboutme
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Posted on Monday, March 03, 2008 - 7:02 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Ok, let me ask you this John and I'm not saying your wrong, but how old are you (you can give a range) and do you have family or not (if to personal don't answer) and i take it you have a good job. I on other hand or same am single, no money problems, and understand this thread is about economics and the effect that owning a home has on it, meaning the renter will spent more money and when they move someone will replace them and so on. The homeowner will stay and be limited to the household and a little to help local business thrive and grow.
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Dougw
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Posted on Monday, March 03, 2008 - 7:08 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Throughout much of the country, house prices got out of whack with respect to rent levels, making home ownership less of a good deal. See the price-rent ratio charts with this article:

http://calculatedrisk.blogspot .com/2005/06/price-rent-ratio- update.html

(I'm a big fan of the Calculated Risk blog btw.)

House prices never got quite as crazy in metro Detroit, though. If you fall under that 20 times ratio and you know you're not going to move for at least a few years, buying is still a good idea.
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Johnlodge
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Posted on Monday, March 03, 2008 - 7:22 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Bragabout, I'm in my 30's and starting a family. I'm not sure I understand your post, I suppose you are saying the renter puts more money into the local enonomy? If you are talking about investment in the community, there is money, and there is also renovating a home, being involved in your community, which I would hazard to guess homeowners tend to be more often than renters (at least in metro Detroit, perhaps not in a more urban oriented area).

I KNOW way too many people were buying out of their means. This is an American problem that goes beyond home purchases, though. People think they deserve things. That cable, high speed internet, a netflix account, a couple credit cards, a house, a new car with full insurance, etc. are just what any American should have, therefore they can have it.
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Bobj
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Posted on Monday, March 03, 2008 - 7:24 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Don't forget about the tax advantages of home ownership with the write off of property taxes and interest.
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Rampartstreetnorth
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Posted on Monday, March 03, 2008 - 7:35 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

A renter simply pays the costs of someone else's ownership without the tax breaks and potential to build equity.
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Bobj
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Posted on Monday, March 03, 2008 - 7:38 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Homeownership is a longterm investment with the tax breaks, equity growth, value appreciation (hopefully), pride of ownership and control of your living space.

I rented for 12 years saying I would never buy, have owned for 15 - good decision for me.
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Johnlodge
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Posted on Monday, March 03, 2008 - 7:40 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

There are some potential tax breaks for renters in Michigan, the government recognizing some portion of your rent is going towards the owner's property taxes. I'm not sure how much of this is based on income, but it was something I was able to take advantage of some years back.
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Softailrider
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Posted on Monday, March 03, 2008 - 8:15 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Got to consider quality of life in the picture , of course if you're living in the ghetto you don't have much in a house or an apartment . If you're living in a nice secure area give me a house any day . When I was living in an apartment I had neighbors in my face constantly . I don't think I'm anti-social , but , that got old after a while .
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Frankg
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Posted on Monday, March 03, 2008 - 8:30 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

I don't understand why homeowners should get tax breaks. I don't think it is fair. The corrollary to "no new taxes" is that whenever someone is given a tax break, everyone else ends up paying for it. I don't think it is fair that renters should subsidize the taxes of people can most afford it (property owners).
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Bragaboutme
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Posted on Monday, March 03, 2008 - 8:31 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

true John, I too know way to many people who did the same thing, so i see where you are coming from. The reason i asked the ?s were to see where you were coming from with the statement of

"I wouldn't purchase a house without a locked in fixed rate. I'm sure there are reasons for doing it, but not for me".

I am assuming your in an adjustable, (again non of my biz) but the point i was on was to look at it from the aspect of how home ownership has hurt our downtown growth and the businesses around them grow, unlike the areas in other downtowns i.e. chicago, new york, philly ect., granted there are also condos as well as rentals, and this is a great thread to understand how detroit is lagging in this area of competition because of the luxury of many people being able to own a home during the time of his study. In the bigger picture from 1960 to 1996 you can see how it hurt us(Detroit and the metro) in the long run. Now I get to the part where I agree with you

"I KNOW way too many people were buying out of their means. This is an American problem that goes beyond home purchases, though. People think they deserve things. That cable, high speed internet, a netflix account, a couple credit cards, a house, a new car with full insurance, etc. are just what any American should have, therefore they can have it".

What I think happened during this time is that the investment to most became something of an overwhelming situation to the newer buyers and the "american dream" became the "american nightmare", when the newer has to deal with many more things than the original investor.
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Johnlodge
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Posted on Monday, March 03, 2008 - 8:32 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Softail, as someone who enjoys playing music, on my own or with friends, I can understand that argument. Apartments were never an option for me, nowhere to jam.

Renting can also mean a house though, and that's what I did for a good 7 years. Just got tired of living in somebody's else's house, that I couldn't do anything to. And if I did want to do something, I'd be spending money improving somebody else's investment. As a handy person who enjoys woodworking and home improvement, my situation now is definitely more fulfilling to me.
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Johnlodge
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Posted on Monday, March 03, 2008 - 8:36 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Brag, check my statement again "I wouldn't purchase a house without a locked in rate". I did get a locked in rate. I had to turn down several lenders trying to convince me I should take an adjustable rate, even though I qualified for perfectly good fixed rates. I went through a good 10 of them before I found one I trusted that would listen to what I wanted, not what they wanted to sell.

That's the situation that led to this mess. Here I am, someone with good income who just wants a regular fixed rate home mortgage, and I have to argue and yell and hang up on people because they've been trained to get everyone in an ARM.
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Bragaboutme
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Posted on Monday, March 03, 2008 - 9:26 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Oops miss read that, ok I see.
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Dougw
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Posted on Monday, March 03, 2008 - 11:04 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Johnlodge -- Why not consider one of those fine negative-amortization "Option ARM" products?



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Johnlodge
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Posted on Tuesday, March 04, 2008 - 9:19 am:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

There's a show on TLC or one of those channels about first time home buyers. I scream at these people through the television as they are going through the process. Most of them only talk to one agent and one lender. They set a price limit in their heads, then they go over it. They want houses that have everything in the world in the best neighborhood as their first home. Then they take out interest-only mortgages, or some other creative financing to pay for them. They usually throw out some nonsense about expecting to make more money in a few years as their justification to themselves. UNBELIEVABLE! Hope for the best, and expect the worst. What happens when you have one emergency expenditure you hadn't budgeted for (do these people even budget at all?)

One of the biggest decisions in one's life, yet they go into it with little or no research, and trust the first agent and lender they stumble into. What ever happened to that good old-fashioned American distrust for anybody with a smile and something to gain?
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Danindc
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Posted on Tuesday, March 04, 2008 - 9:23 am:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

^^^It's the children of the "me" generation! What did you expect? Sensibility?
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Wally
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Posted on Tuesday, March 04, 2008 - 9:49 am:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

An ARM never appealed to me neither, I never even considered one. If I couldn't afford a fixed rate mortgage on a house, It meant I couldn't afford it and to look elsewhere. I knew the limit I was pre-qualified for, for a fixed rate mortgage and stuck to it. And just because you're prequalified for a certain amount, you still need to be comfortable with the monthly payment if you buy a house for that maximum amount. I like the idea of a mortgage payment that will never go up and the idea of NO mortgage payment when my house is paid off. Taxes may go up, but I've experienced no rise in taxes more than a few hundred dollars in one given year ($15-$20 a month).

I do agree that in bad economic times such as now, a house can anchor you to a region though, no matter what type of mortgage you have. Not true at all when the economy is better, just a lot more work moving and selling.

(Message edited by wally on March 04, 2008)
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Defendbrooklyn
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Posted on Tuesday, March 04, 2008 - 10:13 am:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

I just bought a house last year and happen to be very happy. My wife and i took full advantage of the depressed housing market and locked in a low 30 year fixed rate. I agree with many of J. Lodge's points...Big decisions take research...Many of my friends purchased at the height of the market and have adjustable mortgages...That translates into owning a house that is worth less then you paid and you can no longer afford.

"People think they deserve things. That cable, high speed internet, a netflix account, a couple credit cards, a house, a new car with full insurance, etc. are just what any American should have, therefore they can have it."

Be careful people. What one wants and reality are two drastically different things.

If you are in the appropriate position, be smart and take advantage of this depression.
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Iheartthed
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Posted on Tuesday, March 04, 2008 - 10:29 am:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Okay, so let's steer this discussion back on course.

A few months ago, I raised the question on this forum of whether having so many homeowners was healthy for Metro Detroit's economy. The evidence is pointing towards "no".

quote:

Even without lending and borrowing excesses, though, our high rate of homeownership would likely create problems as the economy slows. To recover from recession, economies need prices to fall until they reflect genuine supply and demand. With certain kinds of assets, like stocks, these adjustments take place quickly, sometimes viciously so. Buying and selling houses, though, is a far slower process.



People who had nothing to do with the buying or selling of ARMs are being affected by the current situation because their homes are valued less than what they owe on their mortgages. In other words, they have no equity. Not only do they have no equity, but they may have previously had equity that was wiped out due to too many homes on the market.

With the excess supply of homes on the market in metro Detroit, and no population to soak it up, how will the housing supply be reduced to stabilize values? One way or another these excess homes have to be taken off the market. Will it be through blight? Will we start to see what is happening in inner-city neighborhoods like Boston-Edison spread to areas like Farmington Hills?

Should the state and local governments have tougher regulations on building new homes?
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Diehard
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Posted on Tuesday, March 04, 2008 - 10:36 am:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

I think some of us are missing the original point - we bought our houses because it was supposed to be a safe investment, but now that so many houses are in foreclosure, the prices have dropped so much that even responsible buyers find themselves "upside down" and owing more than they could sell for. Thus, a house is an anchor that keeps someone stuck in a depressed region.
I know a lot of people who'd love to move but don't see any hope of selling without taking a big loss. I've had friends tell me to "let it go" - as in, just stop paying and let the bank foreclose, as if that's the only way out. I know people who've done that, and they're free of their burden but their credit is wrecked so they probably won't be able to buy again. That's not the way it's supposed to work.
It makes me angry that, as someone who never overextended myself and has never missed a payment, I'm getting sucked into this mess too. I bought a house in '98 (for half the mortgage I was approved for) in an area in which housing values had steadily doubled every ten years. Good idea, right? Now, I find out my house is probably worth less than I paid for it. And supposedly I did everything right.
The case for renting is that you have the freedom to go when your lease is up. Even if it's just to move closer to your job, not out of town entirely, you're not stuck.
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Pffft
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Posted on Tuesday, March 04, 2008 - 11:38 am:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

People need to get out of the habit of seeing a home as an ATM machine. Unless you're flipping houses, the point isn't to suck equity out and/or make a killing when you sell it. It's to have a stable home in an neighborhood with other homeowners, who have a stake in the peace and prosperity of the area and won't be generating police calls at 3 a.m. (in theory).
It's like the stock market right now. Relax, don't do anything -- you can't anyway. Enjoy your home ownership ...
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Johnlodge
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Posted on Tuesday, March 04, 2008 - 11:54 am:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Thanks Pffft.

As a homeowner, I can tell you seeing a for rent sign on a nearby house doesn't make me too happy. But seeing a happy new home owner outside cleaning up his yard and home sure does.
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Wazootyman
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Posted on Tuesday, March 04, 2008 - 12:15 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

I bought my house 3 years ago at the age of 24, and haven't had any regret. I do recall being given the option to go with a fixed rate or adjustable. I sure am glad I chose a standard 30-year fixed.

I personally couldn't handle renting - I get a lot of enjoyment and satisfaction working on my home. For example, I am really looking forward to re-siding and re-wiring my detached garage this spring. I'm also itching for the snow to disappear so I can enjoy a warm afternoon working in the yard. I get a kick out of seeing myself closer to full ownership with every monthly mortgage statement.

But I agree Johnlodge - it's really satisfying to see your neighbors outside with you on a weekend afternoon, working on their yards. Or, listening the nearby sound of hammers and circular saws. It makes you feel like you're part of a community that cares about improving itself. It's something you just don't see with rental properties.

I figure I may be upside down on my mortgage, too (I've knocked a fair amount off of the principle, but maybe not enough to counteract the drop in neighborhood values), but I plan on staying put for a while, so I'm really not too concerned. I do expect that some day when I sell my home, I will be ahead.

People who bought houses they couldn't afford using adjustable, interest-only (or reverse amortizing) mortgages might just be getting what they deserve.
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Ray1936
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Posted on Tuesday, March 04, 2008 - 12:19 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Well, here's fifty years of home ownership as experienced by my wife and I.

1959. Purchased 19940 Lindsay for $12,500. Sold in 1971 for $17,500.

1971. Purchased 20001 Houghton for $24,000. Sold in 1977 for $27,000.

1977. Purchased 15505 Warwick for $33,000. Sold in 1984 for $55,000.

1984. Bought in Clark co., NV, for $102,500. Sold in 2006 for $305,000.

2006. Had home built in Henderson, NV, for $291,000, and here they will pull me out feet first.

For the long haul, you can't beat home ownership. I must admit, however, that my early 2006 sale was perfect timing just before the bottom fell out of the market both here and nationally.
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Mrsjdaniels
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Posted on Tuesday, March 04, 2008 - 12:31 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

the intial post is dead on in my situation...

when we bought, we had savings and 'secure' jobs. But now the cost of home ownership has exceeded our budget. I am a fairly smart person and research this in depth. What I couldn't account for was job loss and that has taken us to a place that has our credit card balances SKY HIGH and reluctance to seek new jobs in different cities for fear of being able to sell the house.

So while I do agree that homeownership is fruitful for some, in our case, it might not have been the best thing to do at that time. What we will do this time (if our house sells) is rent below our means, save save save, address all of our debts first, leave a cushion and ONLY spend 20-25% of our income on a home.
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Chuckjav
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Posted on Tuesday, March 04, 2008 - 12:31 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Ray1936....Awesome R.O.I. from 1984 to 2006!

The wife and I once owned a home in Blackman Township (just north of Jackson); bought it in 1990 for 46K - sold it in 1995 for 55K.

I can only hope to match that sort of percentage gain on the home we purchased (suburban Dayton) in 1998.

This area is a tough market for older construction; thousands of newer ones aren't selling.
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Ray1936
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Posted on Tuesday, March 04, 2008 - 5:56 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Market has really slowed here in southern Nevada also, Chuck. New home starts are declining in numbers monthly. But the big difference between MI and NV on the foreclosures matter is that the majority of foreclosed homes here were investors, while the majority in MI were the home owners themselves.

Nevada real estate was quite a bargain compared to southern California, so literally thousands of S. Californians invested in homes here, only to see the bottom drop out in late 2006.
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Mwilbert
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Posted on Tuesday, March 04, 2008 - 11:10 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

"Ray1936...Awesome ROI from 1984 to 2006!"

An investment going up by a factor of three in 22 years is almost exactly 5%/year. Now housing tends to be pretty leveraged, so the return on equity may be a lot higher, but there are a lot of expenses too, and various annoying risks.

Buying a house is a great for lots of people, but in most times and places it is way overrated as an investment. And owning a house definitely impairs your mobility. I speak as a long-time homeowner.
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Jerome81
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Posted on Tuesday, March 04, 2008 - 11:28 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

I'm going through this question in Chicago. Not really related to the OP, which is definitely interesting, but I find I'm stuck between having the opportunity to get in at (what I think) is a good bottom, and hopefully things improve over the next 5 years or so.

However, I can't help but get discouraged by the fact that I could rent for $800 or buy for $1800/month including the insurance, taxes, assessments, etc. Yeah, I can do the $1800. But it doesn't leave much more than a couple percent to 401k, I have an 11 year old car that needs a new clutch and timing belt, and $1800/month doesn't leave much for the random repair/replacement if the stove busts or something.

I'm not dyin to buy a place. I wanted to eventually (which is part of the reason I left California for Chicago), but am feeling a little "forced" into it simply because it seems to make a lot of economic sense to buy in this depressed market. Not to mention, that even if my wages increase over the next 5 years, housing prices could go up proportionally more and I could be paying more money and looking at the same or lower-end condos.

It sucks. Its a huge decision and I'm not finding anything I really love either. I wonder if I wouldn't be better off renting, and putting a huge chunk of what I'm not paying for a mortgage into 401k and Roth, and using a couple hundred more to replace my rapidly aging Miata. Not to mention I love being able to visit my parents in Idaho 2x a year. I would like to be able to do some camping this summer. Hit up some cubs games. All that jazz. I feel like I'd almost end up a slave to my home.

Guess sometimes it makes money sense (hopefully), but doesn't always pull on the heartstrings either.
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Royce
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Username: Royce

Post Number: 2569
Registered: 07-2004
Posted on Tuesday, March 04, 2008 - 11:44 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

I agree with Pfft's post 100%. You buy a house for "peace of mind" not for a "piece of the action." If your can sell your house for more than what you bought it for, that's great. I think the idea of using your home as an investment is the wrong idea. You buy a house to have your own personal space, raise a family, own a dog, and plant beautiful flowers. And it's nice to have neighbors who share your same views about home ownership.

Getting tax breaks on your income taxes for owning a home is nice, but that shouldn't be the only reason to chose a home over renting. Also, the gain you get from selling your home can be wiped out by all of the expenses incurred while owning the house. Can anyone really account for all the expenses incurred in owning a home?

The correlation between home ownership and unemployment is a moot point. There would be little home ownership if no one had jobs. Also, many homes are owned by retires who no longer have to work but still contribute to the local economy through the spending of their pensions and social security benefits. Who frequents a lot of the mom and pop restaurants? That's right, senior citizens. A fact that has nothing to do with unemployment.

Again, home ownership should be looked upon as something to enjoy for the range of activites that you're able to experience and not just a means of trying to make money.
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Sandyrabbit
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Username: Sandyrabbit

Post Number: 24
Registered: 02-2008
Posted on Wednesday, March 05, 2008 - 4:54 am:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

to original poster, havent read the rest yet,
i think the reasons you came up with to not own a home, may some up to the the reason decide to do heroin or not.
but kinda opposite.
you dont do heroin cause you know it will kill you
you dont give up your home, cause in the long run it may kill ya.
i think people give up way to easily these days, our weakness makes us weaker. when the government, or whoever, sees how easily we give up. the harder they try to make us.

if i had enough loot or gumption to buy a home, you better bet your arse that i will stay there strong. maybe my one feat in life was to safe the neighborhood my house stands in. who knows. but i better believe in it.

but then again. have never found a location i believe so much in.
ok what i said was neither here nor there.
there's a storm goin on outside for crying out loud...
but i know if i made a life decision like buying a home, i would stand by it, and if it starting changing in a creepy way, i would still make sure my needs were met.
no matter what it took
,
but alas and once more, better know what you want before you buy it
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Jjw
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Username: Jjw

Post Number: 516
Registered: 10-2005
Posted on Wednesday, March 05, 2008 - 5:17 am:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

The home that someone is renting is still owned by someone so I don't get the point. It is always wiser to buy and invest rather than pay out with no return. But, the key is to buy what you can afford. That is when the trouble starts: when people purchase a home that is going to be hard to afford. The study is interesting but there are many other factors.
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Danindc
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Username: Danindc

Post Number: 3954
Registered: 10-2003
Posted on Wednesday, March 05, 2008 - 8:36 am:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

quote:

It is always wiser to buy and invest rather than pay out with no return.



I think that mentality is what created the current mortgage mess in the first place!

Too many people see their homes as an investment rather than a place to live. Rather than buy a place, and more than double my monthly outlay for housing, I've taken my extra cash flow and put it into investments that historically earn a higher ROI than home appreciation.
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Johnlodge
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Username: Johnlodge

Post Number: 5444
Registered: 10-2003
Posted on Wednesday, March 05, 2008 - 8:43 am:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

quote:

I think that mentality is what created the current mortgage mess in the first place!



That mentality can't create the mess on its own. It must be coupled with uneducated home buyers purchasing outside of what they can comfortably afford, making them unable to also invest in other areas, and save money for an unforseeable crisis.

Try watching that show I mentioned earlier about the first time home buyers. It'll have you throwing things at your television in no time.
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Steelworker
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Username: Steelworker

Post Number: 1069
Registered: 02-2004
Posted on Wednesday, March 05, 2008 - 12:25 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Just bought a home and waiting on closing. Such a tough process to get an FHA mortgage with the rolled in repair funds. Lots for me to buy and spend still but I believe and hope im making a good decision.
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Johnlodge
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Username: Johnlodge

Post Number: 5454
Registered: 10-2003
Posted on Wednesday, March 05, 2008 - 12:27 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Steelworker, you still aren't in that house? I thought you moved onto Rose-something in Oak Park?
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Steelworker
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Username: Steelworker

Post Number: 1070
Registered: 02-2004
Posted on Wednesday, March 05, 2008 - 12:35 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Yeah this lender and mortgage company have jacked me around royally. I have had everything done they just reluctant to send the file along to each additional step. Plus the average time for closing on my loan is 60 to 90 days because I am also fixing the house up to make it perfect. new windows, carpet, new electrical service, and fix some minor plumbing. fha 203ks is a long and tiring process. If you have time and your a first time buying wanting to fix something up a little its the way to go but if your in a hurry definitely not good. Should be cleared to close today or tomorrow and closing day hopefully next week sometime.
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Steelworker
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Username: Steelworker

Post Number: 1071
Registered: 02-2004
Posted on Wednesday, March 05, 2008 - 12:36 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

and yes its rosemary in Oak Park. Im investing in Oak Park hope it pays off.
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Gannon
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Username: Gannon

Post Number: 11759
Registered: 12-2003
Posted on Wednesday, March 05, 2008 - 12:36 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Almost exactly a year ago.


Wishin' these archive searches worked better. I'd like to know the first time I used the term American Nightmare to describe the mortgage setup in this land. Scammed and enslaved, slam dunk.
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Iheartthed
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Username: Iheartthed

Post Number: 2793
Registered: 04-2006
Posted on Wednesday, March 05, 2008 - 12:53 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

quote:

It must be coupled with uneducated home buyers purchasing outside of what they can comfortably afford, making them unable to also invest in other areas, and save money for an unforseeable crisis.



What about the home builders that were churning out subdivisions like an auto assembly line? What share of the blame do they deserve for making all these people lose so much equity from their homes?
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Gannon
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Username: Gannon

Post Number: 11761
Registered: 12-2003
Posted on Wednesday, March 05, 2008 - 1:19 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Responding to the market, nothing more.

They are not culpable, not a one of 'em built without a housing 'permit'.
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Iheartthed
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Username: Iheartthed

Post Number: 2794
Registered: 04-2006
Posted on Wednesday, March 05, 2008 - 1:51 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

quote:

They are not culpable, not a one of 'em built without a housing 'permit'.



So should there be a stricter policy regarding housing development? When the banks pissed everyones money away in the Depression they created the FDIC along with other controls to protect peoples money. Should there be similar controls to safeguard homeowners equity in their homes?
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Jjw
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Username: Jjw

Post Number: 517
Registered: 10-2005
Posted on Wednesday, March 05, 2008 - 4:00 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

"That mentality can't create the mess on its own. It must be coupled with uneducated home buyers purchasing outside of what they can comfortably afford, making them unable to also invest in other areas, and save money for an unforseeable crisis.

Try watching that show I mentioned earlier about the first time home buyers. It'll have you throwing things at your television in no time."


Exactly. I couldn't have said it better. The issue isn't buying the home, it's buying a home that you really can't afford. And... a home is an investment. Whenever you put out big money, it's an investment. Just invest wisely!
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Johnlodge
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Username: Johnlodge

Post Number: 5462
Registered: 10-2003
Posted on Wednesday, March 05, 2008 - 4:07 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

And afford doesn't mean being able to make your payments every month, either. It means making your payments every month and still being able to save money. There's no point in owning a home if all your money goes towards owning it, and you can't invest in other ways for your future. Plus, like I said, in that situation all it takes is one crisis and you're screwed. Losing a job or car dying or whatever. And crisis WILL happen! That is life. One crisis after a-freakin-nother.
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Gannon
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Username: Gannon

Post Number: 11762
Registered: 12-2003
Posted on Wednesday, March 05, 2008 - 5:44 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Iheart,

I said that to show the emptiness of your accusations. The builders were merely responding to market demands, how can you vilify them without keeping those in the future from risking their capital and time to develope anything else?


DOES a city's planning commission, or a township's zoning board perform ANY useful duties for the whole, or should they merely kiss the Chamber of Commerce's cheeks to further business?

It is always a fine line between serving the people and serving businesses (employing people). When you have every economist saying the only growth industry is housing for SOME length of time...then a builder comes along and says they have a plan to bring this trend of growth to our town...how would ANY planning commission turn away from that?!


Nobody was paying attention to the Invisible Hand, prepare for the inevitable, invisible BitchSlap.

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