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To: Tradelite who wrote (145257)	1/22/2002 5:55:55 PM
From: benwood	Read Replies (1) \| Respond to of 436258

When I was vacationing in Vancouver, B.C. a few years ago, I read an article about a length study of home ownership which concluded, at least in Canada at that time and with their assumptions (reasonable), you were somewhat better off renting in perpetuity. The difference was not trivial, although in reality you should associate some price for piece of mind (if you get that as a homeowner). The tax laws and housing market in the US are different, of course, so the results of that study don't translate across the border evenly; however, it is food for thought. Considering the cost of buy/sell (up to 10% or so, or more in states with a high excise tax), buying and moving each 7 years costs a lot of dough.

To: Tradelite who wrote (145257)	1/22/2002 6:03:41 PM
From: reaper	Read Replies (4) \| Respond to of 436258

<<I'm a licensed real estate broker (in the biz for about 14 years) >> Well, that explains a lot then. Look, paying too much for anything is a stupid idea. The dude who bought the place down the street from me for a million bucks (thus establishing the comp for my appraisal <g>) is going to lose ALL his equity if house prices merely fall 10% from where they are now. And given that prices are about 65% higher than they were 30 months ago in my neighborhood, a 10% drop is far from out of the question. Yeah, I know, house prices ALWAYS go up. They go up when inflation is high (real estate is an inflation hedge, right) and they go up when inflation is low (with low rates people can afford to pay more). Heads I win; tails I win, my home is a perpetual motion (err...cash) machine. I'm going to try this one more time. Financial advisors say I should buy real estate because it is a leveraged (usually 9:1) bet on more people buying real estate (do you see the circular reasoning here?). The value of residential real estate has separated from any sense of "inherent" value based on cash flows and is now just a gigantic ponzi scheme where you just need to pray you're not the last guy in. And for what its worth, I DID sell my house. I sold it to the bank. I "own" 10% of my house. I pay rent to them (my mortgage payment) and in return I get to live in my house and I get the use of $400k of their money, which right now is invested in Treasury strips but in 4-5 years will very likely be re-invested in more South End real estate at prices 50-60% lower than those prevailing in the market today. As usual, JMHO. Cheers

To: Tradelite who wrote (145257)	1/22/2002 6:11:11 PM
From: Oblomov	Respond to of 436258

>>And Joel, if you don't believe in home ownership, don't buy a home. I assume you mean, instead of making arguments against ownership? And no, I have no avoidance tendency with regard to becoming heavily indebted, not to mention possessing a highly leveraged asset with the potential to appreciate or depreciate. Been there, done that. With regard to personal finance and investment, conventional wisdom is so often wrong as to be comical. The people whom I know that have done well in RE (as compared with competing investments) are not "homeowners", but rather sophisticated speculators in distressed properties. They don't disabuse themselves of the risks associated with leverage, whether they reside in the property or not. IMO, if one can't cough up a down payment of at least 10%, then he would be an interesting psychological profile... the very opposite of the "avoidance behavior" with which you label Joel. This person is willing to take extraordinary risks, and is willing to take on a great financuial burden, for a feeling of security. This isn't to say that I don't have my own foibles, just that such a person has different foibles.