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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: reaper who wrote (7248)	12/10/2002 10:23:48 PM
From: ild	Respond to of 306849

Man, you just don't understand it. The RE agent said that this house will be appreciating 15-20% per year, so if a few years she will have a cool million in RE equity. She believed the agent because she has many friends who bought houses in the last few years and made lots of $$$. Houses don't go down, it's been in the paper. Stocks do, everybody knows that now, especially this Cisco or Crisco thingy. -G- As a matter of fact I have friends who won green card lottery and moved over to US three years ago. They are making little money and live in an apartment for low income families. Two months ago they asked me if they should buy a house. I asked why. They said that their friend bought a house three years ago and now this house has doubled in price. They have no clue how to buy a house and if they are able to buy a house, but they know for sure that if they buy they will make a lot of money.

To: reaper who wrote (7248)	12/10/2002 10:46:39 PM
From: MulhollandDrive	Respond to of 306849

this is the BENEFIT of home ownership, especially for low income Americans?? perhaps one of the real estate apologists / brokers on the thread can eloquently explain to me how this poor woman is better off by OWNING her home, and is not simply being financially raped by the various charlatans who stand to make a fee on her real estate transaction. Cheers aw c'mon now reaper...you're sounding awfully grim. it's simple...."real estate always goes up." <bg>

To: reaper who wrote (7248)	12/11/2002 1:03:16 PM
From: Doughboy	Read Replies (1) \| Respond to of 306849

"perhaps one of the real estate apologists / brokers on the thread can eloquently explain to me how this poor woman is better off by OWNING her home" I'll give it a shot: She's clearly better off in the home. What you forgot to calculate in is the fact that she is getting a better place to live for the money she pays. While the article does not describe the difference in housing, we have to assume that the house is nicer than the apartment she lives in. So she is getting benefit there that you have not priced in. Even if that benefit is slight, she is still acting rationally. She is getting equity in the property in the form of a gift of $4400 plus the forced savings component of her mortgage payment of around $1500 per year. Even assuming no appreciation in the property whatsoever, she is better off. The caveats are mentioned in the article: if the home builder boosts the price of the property by what it gifted to her, then it's more likely that she's bought an artificially inflated property. Clearly the loser in this situation is the lender, not the homeowner. They are getting stuck with a riskier loan, and have nothing to show for it. She is no worse off than she was in the beginning, even if she eventually is foreclosed on, and therefore is acting perfectly rationally. Doughboy.

To: reaper who wrote (7248)	12/12/2002 5:42:51 AM
From: maceng2	Read Replies (3) \| Respond to of 306849

perhaps one of the real estate apologists / brokers The price of property is always at a premium. Your argument can be made at any time. One always seems to be buying property at the high, except in severe downturns when everything is on sale. Trouble is rent money is money down the tubes for sure, while owning real estate (your own home) is one of the few ways normal people can increase their net worth. Not to say there is not a property bubble, and that house prices can go down just as fast as they went up. That is always a risk I think. True enough though, I bought my current house about 5 yrs ago, and now glad I did. Trouble, is according to my evaluation, house prices can only continue to go up if wages do too. Almost certainly that would be an inflationary environment. Inflation would of course bring it's own problems with mortgage payments. In this country (UK)there are no real fixed loan rates. A "fixed loan" has a fixed rate from 1 to 6 yrs usually.