And as a result, rent rises, probably more than taxes.Originally Posted by Arklatex
And as a result, rent rises, probably more than taxes.
"If you study science deep enough and long enough, it will force you to believe in God." ~Lord Kelvin
Why is it so important that's it's a damn farm in the middle of nowhere? Why not live on a sizeable plot close to town?
"If you study science deep enough and long enough, it will force you to believe in God." ~Lord Kelvin
We'll assess this two years from now.
Helpful commentary.
I didn't know the choice was between owning a home and simply living for free elsewhere.
Time value of money, dude. Borrowing here is the smartest move one can make.
I really doubt the mortgage interest deduction will go away any time soon. Too many people have their hands in it - lenders, real estate agents, etc. all want it to stay around for their selfish purposes. If it does go away, though, you have a great point. Interest will always be deductible as a business expense.
Renters are paying the same taxes. They are hidden though- included as part of your rent. If you buy, you lock in your monthly payments and if you pay off the property it goes to zero (aside from the taxes portion). Rents will not go to zero but will likely rise over time as well. Unless you are living off somebody else, you need to pay money for a place to live. Buying gets you something for your money. Renting gets you nothing for your money. You are going to spend it anyways- why not get something in return?
Figures will be different for everybody but I ran some on my own situation. Renting a unit comparable to the one I purchased would have cost me $1200 a month. I bought at just over $100k in 1999 and just finished paying it off early. If I had rented instead of purchasing, in the time I spent paying it off I would have spent $200,000 in rent and had nothing. Now I have a place still worth over $100k and zero mortgage. Sure I am still paying taxes- a bit over $100 a month which is considerably cheaper than paying $1200 a month in rent. How much are people here spending in rent and how much would you pay in the 15 or 30 years it would take you to pay off the mortgage and what would you have at the end of that time?
If somebody is thinking about buying and can afford a place, this is really a fantastic time to buy. If- as it seems- prices are at the bottom and rising they will likely only go up and interest rates are historically low and they too will likely go up in the future.
Last edited by Zippyjuan; 11-28-2012 at 11:29 AM.
Freedom is a state of mind. Nobody can take that from you unless you let them.
http://worldnewsresource.com/wells-f...2/nadene-woods
3.25% in 30 year financing yet the housing market is extremely stagnant. Free money can't resurrect a lifeless corpse. Even a slight jump to 5%, which is inevitable, would send shockwaves through the home ownership market. It remains to be seen how long this smoke and mirrors act can be continued by the Federal Reserve.
Last edited by AuH20; 11-28-2012 at 12:28 PM.
“Our illegal population alone exceeds the all the Irish, Jewish and British immigrants who came. Each year, we catch more people breaking in at the border than all the Swedes and Norwegians who came to America in 200 years. Half a million illegal aliens succeed in breaking in every year, more than all the Greeks or Poles who came legally from the Revolution to 1960..” - Patrick J. Buchanan
What figures are you looking at to feel that the housing market is "reeling"?
Freedom is a state of mind. Nobody can take that from you unless you let them.
The shadow inventory which has been intentionally suppressed. And I've seen conservative estimates at 4 million.
“Our illegal population alone exceeds the all the Irish, Jewish and British immigrants who came. Each year, we catch more people breaking in at the border than all the Swedes and Norwegians who came to America in 200 years. Half a million illegal aliens succeed in breaking in every year, more than all the Greeks or Poles who came legally from the Revolution to 1960..” - Patrick J. Buchanan
More about what I was referring to. And this is area is my backyard:
http://www.businessinsider.com/anoth...ng-soon-2012-5
We have been told that the rate of mortgage delinquencies has been declining over the last year. Let’s see.
In the NYC metro area, the banks drastically cut back foreclosing on properties in the spring of 2009 and have never changed their policy. This has nothing to do with the robo-signing scandal which occurred 18 months later.
Through sheer persistence, I obtained accurate statistics on serious delinquencies from the New York State Division of Banking. Let me explain.
In late 2009, the NYS legislature passed a law requiring all servicing banks in the state to send a “pre-foreclosure” notice to all delinquent owner occupants. It warned them of possible foreclosure and explained steps they could take to prevent this. These servicing banks were also required to report to the Banking Division all notices that were sent.
The Division published preliminary figures in October 2010 but has never updated these numbers. Here is what I learned.
Through the end of March 2012, a total of 192,000+ pre-foreclosure notices had been sent to delinquent owners in NYC. This does not include delinquent investor-owned properties because the law did not require servicers to send notices to them. There are lots of 2-3 family homes in the four outer boroughs of NYC. I estimate that there are roughly 75,000+ delinquent investor-owners.
This means there are roughly 265,000 seriously delinquent homeowners in NYC who have not yet been foreclosed. Why so many? The banks do not foreclose in NYC. As of May 24, foreclosure.com reported a total of 301 foreclosed properties on the active MLS and 103 in Brooklyn. Together, these two boroughs
have a total of 4.7 million residents. That is more people than live in Maricopa County where Phoenix is situated.
Hard as it may be to believe, the situation is even worse on Long Island. With fewer than 3 million occupants, Nassau and Suffolk Counties showed a total of 175,000 pre-foreclosure notices sent out as of the end of March.
Last edited by AuH20; 11-28-2012 at 01:17 PM.
“Our illegal population alone exceeds the all the Irish, Jewish and British immigrants who came. Each year, we catch more people breaking in at the border than all the Swedes and Norwegians who came to America in 200 years. Half a million illegal aliens succeed in breaking in every year, more than all the Greeks or Poles who came legally from the Revolution to 1960..” - Patrick J. Buchanan
Others have a different perspective.
http://www.forbes.com/sites/afonteve...ntory-massive/
Not saying the housing market is booming- like the rest of the economy, its gains have been slow and uneven- and they varied by location, but the worst definately has passed in my opinion. If you are going to live in a house more than a few years (otherwise it would not be a good thing to buy a home), then if the prices move up or down in between doesn't matter. At one point my place was worth three times what I paid. It fell by 50% from that. Did that matter to me? No, because I was not selling mine. If you are trying to time a bottom before jumping in- forget that as well- you won't know the bottom was passed (and it may already have been passed), you won't know until well after the fact and it will already be too late to get in at the bottom.As mentioned previously, the most recent data on underwater mortgages shows that nearly a fourth of all residential properties with a mortgage are underwater. That’s 11.4 million as of the end of the first quarter. At the same time, financial institutions including big banks with exposure to the mortgage business like Bank of America, JPMorgan Chase, and Citigroup are sitting on a shadow inventory of 1.5 million units, or four months supply. Worth $246 billion, the shadow inventory will certainly weigh on lending and economic conditions going forward.
Still, the rate of distressed sales is falling. Goldman estimates that if the revision to the 5% historical average happens over the next two years (which is highly unlikely), this would contribute 2% annual growth to home prices; if it happens over four years, they expect a 1% yearly contribution from this effect. It’s important to bear in mind that this isn’t a one-way move, either. Regulation (such as the robo-signing sparked foreclosure moratorium) has helped to slow distressed sales, while vast number of underwater mortgages and size of the shadow inventory suggests housing markets can face a sudden increase in the number of distressed properties. It will be a bumpy ride for residential real estate.
Housing markets are no longer in free fall, even though there are risks to the outlook. But analysts are turning more bullish. Investors should remain cautious, but should expect prices to very gradually firm going forward. They must note, though, that the market is still more than 30% off its peak, and the rate of distressed properties, while substantially lower than in 2009, is still far above the historical average.
If your mortgage is "underwater" that again only matters if you intend to sell right now. If you bought gold at $1900 an ounce and today it is $1700, have you lost anything? Only if you sell it now. If gold falls to $1200, should you wait or should you buy while it is more affordable or wait for the "bottom"?
Freedom is a state of mind. Nobody can take that from you unless you let them.
I don't think the Conference Board is necessarily lying about anything. They are trying everything in their power to create a Pollyanna bandwagon effect to encourage demand, I believe (as that is their meme), but Newport was right when he said that current [modest] price increases, in those areas where they are going up, is being driven by low interest rates, declining inventory and investor activity.
I was just in Sacramento and glanced at the following story:
The most important thing Newport said, which I agree with, is that prices will continue to rise in line with inflation. He said "over the next five years" - I'm saying INDEFINITELY. And by staggering, breathtakingly large amounts, long term. Ultimately, housing prices are going up. Way up. Nominally speaking, astronomically up. And not as a result of some re-inflated housing bubble, either, and you don't have to even believe that hyperinflation is on the near or midterm horizon to know that the currency itself is being diluted as never before in its history.Big investment firm buys hundreds of houses in Sacramento area
An investment firm that owns the Waldorf Astoria hotel and the Weather Channel has bought more than 500 houses in Sacramento in the past few months, betting upward of $60 million that home prices will rise.
Blackstone, a New York-based group with billions of dollars in investments and offices from London to Tokyo, has been snapping up low-priced homes across the region, from Elk Grove to Citrus Heights, at a rate of about 40 a week.
It marks the first time a major investment firm has bought in Sacramento on such a scale – a direct result of the thousands of houses left vacant by foreclosures in recent years and offered at fire-sale prices.
Read more here:
A lot of people are now looking at housing prices, and near term price level adjustments, to see what floor might be left. Unless we are facing truly a deflationary depression, where money simply dries up (pretty much impossible at this point), there's not much floor left -- relative to where the ceiling is headed. As such, I tend to think it's far more useful to focus on the long term fundamentals, and long term cost of ownership.
Housing price increases due to inflation were already going up steadily long before any housing bubble. That inflationary fundamental did not go away, and if anything is going to get worse--MUCH worse. The biggest fundamental going for anyone right now is the exponential nature of inflation itself.
The Big Lie is to center everything around "consumer confidence". Screw Glenda the Good Witch at The Conference Board, who wants to assure all the frightened little Munchkins to come out, come out, wherever they are, to see the new consumer confidence lady that fell from a star. Zero interest rates, artificial scarcity and speculative demand--mostly by investors--is driving modest price increases now.
Consumer confidence has fuck-all to do with inflation, the most important fundamental of all, because one way or another, the nominal COST of housing is going to continue to rise on the behemoth bubble of the currency itself. And that's a bubble that doesn't cause nominal values to go down when it pops, because we would rather self-destruct than deflate. The currency IS the nominal value from which all other values, including housing, are reckoned. And it only goes up. The zero interest rate charade can't continue forever, but it doesn't matter either way. Some combination of inflation and interest rates virtually guarantee that the nominal COST of housing is going through the roof.
The ONLY way that I would not consider housing now has nothing to do with the housing market, or where its headed in general, and everything to do with the currency market, and one's standing in it. The only question someone should be asking themselves, I think, is whether or not they believe they will continue to have access to whatever currency required to service their debts as that currency continues to LOSE VALUE, and the economy goes to shit as a result. If you have the staying power for that, you're going to be paying off a tiny (in retrospect) future debt with an highly inflated currency.
Last edited by Steven Douglas; 11-28-2012 at 01:14 PM.
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