3/30 Dear home owners who have|plan to buy 2nd/3rd/4th homes for the
purpose of investment, PLEASE STOP IT! For each home you buy, you're
taking it away from first time buyers. Last year, ~1/4 of the homes
bought were investment homes. That's at least 3-4 million less homes
for people who really want one. I mean, come on, what is this, the
era of Monarchs and Aristocrats? Medieval period where the people who
own land gets to own even more land? I thought social equality is
suppose to improve especially after WWII. Something's wrong here.
\_ Tough Shit -- getting ready to buy 2nd home.
\_ We REALLY need to do something to the Chinese population.
They're like the Jews in Germany in the 30s, buying
and owning all the properties and making everyone else's life
a total hell.
\_ Yeah! go go final solution!
\_ But Chinese immigrants are relatively poltical quiet. They
don't try to influence American politics to benefit their
home country like the Jews do.
\_ YOU TELL EM! Damn Dirty Jews.
\_ Ah, now it makes sense; Sour Grapes Housing Guy is someone who
has been holding on to his money since 1998, waiting for the
housing market to go down so he can buy. -tom
\_ He'll "save" $200K in the end, but will have spent $150K
in rent and will have lost another $50K in deductions while
having lived as a renter the whole time. We'll have to hear
endlessly about the $200K he saved on his house price.
\_ the amount that goes to mortgage interest is higher
then rent these days, even after tax deductions.
no point buying unless you think home will appreciate.
rent savings, tax deductions, etc. no longer are
sufficient justification for buying. Only buy if
you think house will appreciate more than you can
earn with your principal invested elsewhere.
\_ Interest is higher than rent? I rent out a house for
$2000/mo, and I'm paying a $1500/mo. mortgage payment on a
15-yr fixed loan for that house.
\_ yea, but when did you buy the house? try buying one
now and renting it out.
\_ I bought it in 2000.
\_ I bought mine in 2004 and my mortgage interest
is around $1800.
\_ If you buy $650k house in the southbay, the MI would
be around $2k. It's reasonable that a 3bd house can
be rented for over $2k/mo.
\_ Interest is supposed to decrease over time, but
rent is increasing. Don't forget there are tax
benefits with interest.
\_ rent is increasing? SourceP
\_ #t
are you talking short-term or long-term?
\_ give me a break, there are more than one person on the motd
that believe the current housing market is in a bubble, and
I do own a home. -!pp
\_ Please move to a communist state, where social equality is
mandatory for everyone except the Chairman.
\_ We need land reform for urban areas!
\_ Yeah right. seriously though all the housing tax incentives
are totally unhelpful to regular people wanting a home. They
are designed to help investors (low capital gains tax on
appreciation, bullshit depreciation writeoffs, mortgage writeoffs,
etc.). All that stuff does is help those with leverage and jack
up the price that much (since houses are sold based on monthly
payments not on actual value). I'd also argue it harms the
economy, relatively speaking, to have so much debt and assets
tied up in these useless houses that in the end just sit there
not producing anything.
\_ Gotta love capitalism! The more wealth you own, the more wealth
works for you. What are you gonna do, revert Reagan's great tax cut
for inheritance and investment property? Revert Bush's income tax
cut for the upper-class Americans? Unlikely.
\_ Patience young Skywalker, you waited this long, don't be
tempted by all the house talks in the news, etc. It IS a
bubble, it will dip like it did at the end of 2001, that's
when you go in with your savings. At any rate, it cannot
sustain the current growth for another year, period. The
best investors have a cool mind when everyone else is
buying into the hype, like all those stupid people who
decided to join Nasdaq when it is at 4000-5000. Even
Greenspan acknowledged the housing market is in a bubble,
do you remember what he said about the stock market back
then? Trust yourself, don't buy into the hype.
\_ You know, that's what I said in 2002, 2003, 2004. It's 2005
and things haven't changed a bit. I don't have problems with
housing going up. I have a lot of problems with people buying
investment homes and claiming deductions and other loopholes
in the tax system. If your 2nd/3rd home is an investment, then
it is business, and should be subject to business tax rules
and tax brackets. The current tax system and interest rate
encourages everyone to buy a house, but made it even easier
for existing home owners who could take a 2nd mortgage loan or
reallocate and what not. And in the end, when there's only so
much land to offer, the winners are the people who have the most
land. Fuck GW Bush and fuck Reagan.
\_ I admit it's easy for me to say this because it is
all in the past, but things are not quite the same in
2002, 2003, 2004, and 2005. 2004/2005 can be
classified as red hot, but in 2001/2002 and even in
part of 2003, it was actually quite manageable.
Perhaps your expectation needs to be adjusted
slightly. Instead of waiting for a crash, watch out
for cool periods. Have realistic goals. As it is
right now, it's unlikely that the house you like will
drop back to 400k, but a instead of selling at 600+,
it may drop to 550 or something. Are you willing to
take it then? Don't get stuck waiting for it to go
back to 400k just because that's your limit, limit
can be stretched. The bay area is a special
situation, everyone I know, including myself, my
parents, their friends, have "bit the bullet" when
they bought the house and at the time it all seemed
very expensive. But sometimes you just need to do
that, even if you buy it relatively high, in the long
run, say 5-10 years, you are still likely to be ok.
(Still, I don't recommend you do that right now, in 6
month or a year, see what it is like, I don't think
my house will approach 1 million, trust me, it will
level off and people will stop bidding up as much)...
Vegas has already dropped 25% and one person I knew
who's in your accused category is in a hurry to sell
the home he has and guess why...
\_ Think outside the box, do you really need to live in
the bay area? How about somewhere else? You DON'T
have a house yet, so you are not tied down. Find a
job somewhere else and see if you like it. Houses are
more affordable elsewhere. If you are Asian I can
understand your desire to stay in the bay area, but
if you are not, then why not? If I don't have a
house, I may very well move to shanghai. With my
savings, I can buy a very decent home in shanghai.
There are also other options as others have pointed
out. There are still 400k homes around. Your first
home doesn't need to be perfect, like your first gf. ;)
\_ Do you absolutely need a house right now? or it would be nice
to have one? Our advice depends on your situation.
\_ Let them buy their 2nd, 3rd, 4th and 5th home. While they
are waiting and waiting for them to appreciate, rent it
from them for cheap. Then, when the housing prices start
falling, and their highly leveraged investments go south,
and they are forced to sell at a loss, buy it from them for
cheap. Be merciless when bargaining for a good price. Housing
bubble's gonna pop! bwahahaha!
\_ what if they're so dang rich they already own all 5 homes
and can wait 20 years?
\_ Yep. Lots of landlords have been doing this since the
1970s. They bought all their houses/buildings for cheap.
If the portfolio takes a dip that's okay as long as
income stays good. |