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I think the mistake that so many people make is to consider their home an investment. It is in the sense that you'd rather not lose money on it, but it isn't in the sense that a place to live is non-discretionary. Could I rent a place in the school district I'm in for what I'm paying in PITI? No. If I rented a place exactly equal to my home the rent would be higher. It has to be in order to cover the owner's carrying costs and allow them to make a profit. Could I rent a place that is almost as good for the same costs to me? Possibly, but it wouldn't be the same size, it wouldn't have the land, and it wouldn't be "customizable". And that is where the decision to rent or buy leaves the realm of dollars and enters the realm of lifestyle. I prefer owning to renting. For example, if I want a color of wall other than white, I just paint it. If I want to have a dog, I don't have to start looking for a new place. Because I'm in a free standing structure instead of an apartment, I don't have to wonder if the new neighbors are bringing some sort of insect life with them.
Where we are at today, is the bottom. So where do you go from the bottom... Only up! The upswing in the market is going to be faster than we would like it to be. I do economic forecasting, and the sharper the downturn, relates to a sharp up turn. Look at the stock markets. Remember when we were at 6 thousand on the dow. Look where we are at now. Look for home prices to do the same in the next 2 -3 years! Once we clear the foreclosures off the market. WATCH OUT!. I think I am going to do a blog that is going to "expose" what the banks are doing to lower home values so they can start from scratch again. Talk about artificial manipulation of the market. No seller will sell their house for 2/3 of what it was baught at, let along half. Look for explosive prices to the upside by 2015.
Last edited by toobusytoday; 08-31-2012 at 01:11 PM..
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personally i think we are a whole lot longer than 2 or 3 years from seeing anything close to where homes were.
they were mis-priced where they were like nasdaq was at 5,000 during the dot com era.
there is so much that has to improve in the economy and jobs before a bounce back in housing is seen.
housing prices arent built as much on future perception as the stock markets are. housing is more rooted in the here and now.
my opinion is we are starting to see deflation poking its head around the world and as much as it looks like we hit bottom , future deflation showing up will drop prices farther.
with food,energy and healthcare killing the average american there is not much left to go round now to feed all the other sectors and they are slowing.
2/3's of the s&p 500 have already cut revenue and earnings estimates.
im a wholesaler of over 15,000 products and yearly i do a bid for contracts alot of customer .
i was blown away by how much prices fell over the last 2 years on sooooooooooo many items. it was scarey.
zero rates has few takers for loans to buy new goods and services. for a country that counts on consumer spending for 70% of its gdp thats not good.
all in all for the next few years i see an ugly picture before things get better.
We could have rented it out. But the going rate seems to be about $2K for this size/type/location of house. The mortgage payment was $2400 a month with little hope of reducing that (could not re-fi because it's underwater). Plus being a landlord living in VA could only result in headaches or the need for a property manager. It just didn't seem like a good option.
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