GTgears

I said absolutely nothing of the sort. The 2007-2008 housing market bubble and crash was an extremely unique incident and situation. You had all kinds of people rushing to what they thought was a gold rush. They bought homes they couldn't afford on the assumption that it was going to appreciate to the point that by the time their interest only arm when active they would be able to sell, cash out their equity and then actually be able to afford more home. And you had idiots buying half a dozen "investment" homes this way. And then you had the derivatives market.

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.

Quadcammer

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.

GTgears

When did I say that you were going to see any major appreciation? I said it is an investment that rarely loses value. This is true. I could spend 1/4 million dollars on rent over 20 years and have nothing to show for it, or I could spend the same on a house and have something that probably was $150k when I bought it and 20 years later is probably worth 25% more than that. No, it's not how you get rich. But for most people it's how you have a place to live without being poor. Even if it is worth less than the $250k you spend on it, it has utility value over that 20 years (or more if you stay in it after it is paid off) that is totally separate from it's book value.

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.

Mondrian

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.

GTgears

Are you really that daft or just bring a smart ****?

myflat6

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!

Mondrian

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.

mooty

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?

Amber Gramps

Speaking of real estate.... My grand parents purchased 89 Miriam St, Daly City, CA 94014 for $12,000....then sold it for $250,000 in green $100 bills to a Chinese family. Did they do OK?

GTgears

We bought my childhood home as new construction in Foster City in 1974. $82.5k. Sold it in 1987 for $225k. Today buying that house would cost us $950k.

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.

911Dave

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.

GTgears

How is the air cooled bubble technical content in the first place? I'm just saying...

golfnutintib

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...

Amber Gramps

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.

theiceman

this I agree with , we seem to have more and more non tech stuff bleeding into our technical forum.