Air Cooled Bubble?
#166
If a normal sane person goes out and buys a home that they can afford with a reasonable down payment on a traditional 20 or 30 year mortgage there is a extremely good chance they will not lose money on the deal.
You say these Americans lost their homes? How did they lose their homes? They defaulted on a mortgage that they couldn't afford. They didn't lose their home because the house lost value in the crash of the bubble. They lost the home because they bought beyond their income in the first place. Do not confuse the two.
#167
If a normal sane person goes out and buys a home that they can afford with a reasonable down payment on a traditional 20 or 30 year mortgage there is a extremely good chance they will not lose money on the deal.
You say these Americans lost their homes? How did they lose their homes? They defaulted on a mortgage that they couldn't afford. They didn't lose their home because the house lost value in the crash of the bubble. They lost the home because they bought beyond their income in the first place. Do not confuse the two.
When you buy a house using leverage, not only do you have the interest costs, you have closing costs, and I've not seen any major home price appreciation with few pockets of exceptions. Of course this excludes any sort of repair costs.
owning a home is not the great investment some people think it is.
considering the above, your home would need to appreciate by at least 50% to make money on the deal. And that also doesn't take into account the interest or returns a renter would generate by not putting those funds into the house.
Your explanation of the housing crisis is overly simplistic. It wasn't just one issue or the other. It was a combination of a number of factors, including home values, people buying more than they could, strategic defaults, etc.
#168
Um, no.
When you buy a house using leverage, not only do you have the interest costs, you have closing costs, and I've not seen any major home price appreciation with few pockets of exceptions. Of course this excludes any sort of repair costs.
owning a home is not the great investment some people think it is.
considering the above, your home would need to appreciate by at least 50% to make money on the deal. And that also doesn't take into account the interest or returns a renter would generate by not putting those funds into the house.
Your explanation of the housing crisis is overly simplistic. It wasn't just one issue or the other. It was a combination of a number of factors, including home values, people buying more than they could, strategic defaults, etc.
When you buy a house using leverage, not only do you have the interest costs, you have closing costs, and I've not seen any major home price appreciation with few pockets of exceptions. Of course this excludes any sort of repair costs.
owning a home is not the great investment some people think it is.
considering the above, your home would need to appreciate by at least 50% to make money on the deal. And that also doesn't take into account the interest or returns a renter would generate by not putting those funds into the house.
Your explanation of the housing crisis is overly simplistic. It wasn't just one issue or the other. It was a combination of a number of factors, including home values, people buying more than they could, strategic defaults, etc.
You mention the interest. I write off the interest from my mortgage on my tax return. Don't you?
Yes, I did overly simplfy it, on purpose. 95% of the people out there who engage in these conversations don't even really understand what happened on the most peripheral level. I dummed it down deliberately. No offense to anyone reading this. It's just a least common denomitor fact.
#169
Its funny how meaning of words are changed over time, back in the day an investment meant investing money for profit .... so the new meaning must be investing money so no losses are made as I have seen 2 posts suggesting same, one investing in cash & the other investing in housing - no wonder so much money is being poured into cars & other collectibles.
#171
Air Cooled Bubble?
I have bought and sold 5 houses and profited nicely on all of them. Both of my Porsches are also worth quite a bit more now than what I paid for them. Many people have the same experience investing in houses and cars. This thread is getting off the tracks as many are trying to over simplify by stating "cars are bad investments" or "houses are bad investments". It is all about buying right and selling right. You can make money on almost anything doing that - or you can screw up your profits (losses) on just about anything by not doing this.
I now need to figure out how I can find a good deal on a 964 coupe - talk about crazy pricing swings!
I now need to figure out how I can find a good deal on a 964 coupe - talk about crazy pricing swings!
#172
According to survey stats majority of folk think their offspring will have reduced financial capability - this is pretty much true for all western nations. I wonder if the same pessimism is mirrored in their investment strategy.
#173
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07-08 housing collapse is not just housing. the world fell apart. mortgage as most ppl understand them no longer exist. i would write CMBS, MBS, sythetic leases, commercial paper, and other papers that would make you flip out when the circumstances are right... but that's another topic
real esate IS AN INVESTMENT, and a very good one. but as quadcammer mentioned that only small pockets seen large appreciation. RE investment like fixing cars, isnt' for everyone. some "flip" house and got lucky... well that's just luck. it's a tad more complex than that. and you need the right location. russian hill in SF, atherton in peninsula just two area i know well, didn't see much of a dip if at all throught 07-08 and now it's increasing at rapid rates.
so to say bubble or RE isn't a good investment... well it has to be qualified. some ppl MADE money in 07-08... so to them, there wasn't much of a bubble.
anyhoo, too much investment talk. shouldn't be be driving?
real esate IS AN INVESTMENT, and a very good one. but as quadcammer mentioned that only small pockets seen large appreciation. RE investment like fixing cars, isnt' for everyone. some "flip" house and got lucky... well that's just luck. it's a tad more complex than that. and you need the right location. russian hill in SF, atherton in peninsula just two area i know well, didn't see much of a dip if at all throught 07-08 and now it's increasing at rapid rates.
so to say bubble or RE isn't a good investment... well it has to be qualified. some ppl MADE money in 07-08... so to them, there wasn't much of a bubble.
anyhoo, too much investment talk. shouldn't be be driving?
#174
07-08 housing collapse is not just housing. the world fell apart. mortgage as most ppl understand them no longer exist. i would write CMBS, MBS, sythetic leases, commercial paper, and other papers that would make you flip out when the circumstances are right... but that's another topic
real esate IS AN INVESTMENT, and a very good one. but as quadcammer mentioned that only small pockets seen large appreciation. RE investment like fixing cars, isnt' for everyone. some "flip" house and got lucky... well that's just luck. it's a tad more complex than that. and you need the right location. russian hill in SF, atherton in peninsula just two area i know well, didn't see much of a dip if at all throught 07-08 and now it's increasing at rapid rates.
so to say bubble or RE isn't a good investment... well it has to be qualified. some ppl MADE money in 07-08... so to them, there wasn't much of a bubble.
anyhoo, too much investment talk. shouldn't be be driving?
real esate IS AN INVESTMENT, and a very good one. but as quadcammer mentioned that only small pockets seen large appreciation. RE investment like fixing cars, isnt' for everyone. some "flip" house and got lucky... well that's just luck. it's a tad more complex than that. and you need the right location. russian hill in SF, atherton in peninsula just two area i know well, didn't see much of a dip if at all throught 07-08 and now it's increasing at rapid rates.
so to say bubble or RE isn't a good investment... well it has to be qualified. some ppl MADE money in 07-08... so to them, there wasn't much of a bubble.
anyhoo, too much investment talk. shouldn't be be driving?
#175
I made money on the housing crash. I bought my house at the bottom and sold it 2 years ago for a nice little profit. Timing is everything on these things.
#176
At the least, the conversation should stay on topic. If you guys are going to talk about real estate and investments, please start a new thread in the off topic area. I'm tired of coming back to this thread every day just to find more conversation about housing.
#177
How is the air cooled bubble technical content in the first place? I'm just saying...
#178
let's make it real simple
when everyone is buying something (lets say, good real property, or even good cars, as a stretch), thinking it will appreciate, you shouldn't
when everyone has to sell those same things cuz they can't afford it anymore, or people are totally scared sh*tless to buy -- that is the time YOU buy
trick is...at that time when the world (defined as - even when successful people) has great, paralyzing fear... do you have the cash on hand, and do you the courage to buy?
air cooled bubble? well prices are high and rising, people have cash, they are buying... will today's prices crash down to 50% of what they are today in the next few years...well maybe, but quite unlikely imo...
...unless there is a global catastrophe...
when everyone is buying something (lets say, good real property, or even good cars, as a stretch), thinking it will appreciate, you shouldn't
when everyone has to sell those same things cuz they can't afford it anymore, or people are totally scared sh*tless to buy -- that is the time YOU buy
trick is...at that time when the world (defined as - even when successful people) has great, paralyzing fear... do you have the cash on hand, and do you the courage to buy?
air cooled bubble? well prices are high and rising, people have cash, they are buying... will today's prices crash down to 50% of what they are today in the next few years...well maybe, but quite unlikely imo...
...unless there is a global catastrophe...
#179
Perhaps a better title would have been "Speculating on the 911".
The current economic conditions have brought lots of turds to the market. Cars that owners can no longer afford to fix, insure, etc are sold off to speculators who polish them up and flip them. New buyers have no idea what they are buying other than its a Porch.
The current economic conditions have brought lots of turds to the market. Cars that owners can no longer afford to fix, insure, etc are sold off to speculators who polish them up and flip them. New buyers have no idea what they are buying other than its a Porch.
#180