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Strategies & Market Trends : Heinz Blasnik- Views You Can Use -- Ignore unavailable to you. Want to Upgrade?

To: benwood who wrote (2792)	6/27/2003 6:12:40 PM
From: EL KABONG!!!	Read Replies (2) \| Respond to of 4907

Hi Ben, I appreciate your sharing of the reasons why you became a homeowner. I doubt that my own situation could differ any more than it does from yours. My wife and I have owned (to be truthful, paid a mortgage on) only 3 homes. We started off our marriage by renting (3 different locations), and realizing that we weren't getting ahead of the game financially, decided to purchase a home. Primary reason: financial, more specifically home appreciation. We had decided that the best and easiest way to start building equity in our marriage was to buy a home and stop paying rent to someone else. Mortgage interest was tax-deductible; rent payments weren't. As we went from the first home to the second home and ultimately to the third home, asset appreciation was the primary motivating factor behind each move. We were never blessed with children, so many of the reasons that homeowners with children often cite as influencing their home purchase decisions never applied to us. (Talking about things like schools, recreation and parks, neighborhood amenities, close proximity of children of similar ages, etcetera...) I think Grace is at least somewhat correct in stating that hoped for (or expected) home price appreciation is a major motivating factor for many homeowners. It may not be the primary factor for everyone, but let's be honest about it. Everyone has to live somewhere, so they either rent or mortgage (or in some cases, squat <g>). And no one that I know of builds much in the way of home equity by renting... Just my 2 cents worth, and that's about what it's worth, adjusted for inflation, of course... <g> KJC

To: benwood who wrote (2792)	6/27/2003 8:11:21 PM
From: GraceZ	Read Replies (4) \| Respond to of 4907

The rich didn't bid up my little houses in the city which were sitting there for years not going anywhere in price. Record low interest rates and a perception that the housing prices are rising in the city did it. In case you missed this: I reread the post you originally replied to and I want to make it clear that I didn't mean to imply that people ONLY buy houses because they expect them to appreciate or even that this is the primary motivation (the way one would buy a stock). The thing about houses is that they share the aspect of a consumer good and that of an investment. When people choose a house they are most concerned about the things you cite, but the investment aspect does play an important role. Message 19067326 1) I have an aversion to renting because of my childhood, where we'd be booted when the house sold; There is something to said for being in control of where you call home. 2) I like doing my own improvements, and wanted to keep the results; So that the improvements you make, which make your home worth more will belong to you. Sounds like you expect to add to the value of the house, that it'll be worth more in the future- is that anything like appreciation? If all you wanted was the use of the improvements it wouldn't matter to you if you did leasehold improvements or fixed up your own house. We do our own improvements as well (done lot's of leasehold improvements too). Sweat equity is the only appreciation I count on. 3) economic -- I expect to pay off the house and live much more cheaply, and not experience rising rents ever While a mortgage (and eventually a paid off house) does protect you from inflation, you aren't protected from inflation in taxes, insurance and up keep. In some markets renting is cheaper over your lifetime. Its very specific to location and your tax bracket. I've done many scenarios for people trying to decide to rent or own and in almost every case owning a house was more expensive over time than renting but each market is different so you can't make a mass generalization which will end up cheaper. What also makes a difference is what you do with the cost difference, how well you do in terms of investing the difference in the beginning. 4) wanted to ensure the kids did not have to change schools This is a very good reason. A house is first and foremost a home. Frankly, I think most people emphasize the investment aspect far too much. Its the place you come home to every night, where your children take their first steps, where you sit out on the lawn with friends on a long summer evening. Like I said above in the post I linked to, I didn't mean to imply that is the only reason people buy houses but it is a motivating factor in which house they buy and how much they are willing to pay. Most buyers do expect that their house won't go down in price over time. If you want to see someone who is unhappy with their home purchase, find someone who is sitting on a house with a loan value above the estimated sale price.