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

To: Tommaso who wrote (17534)	2/19/2004 11:34:38 AM
From: GraceZ	Respond to of 306849

The very first house I ever lived in had a 30 year 5% VA loan. By the time I was in high school rates were double digit, by the time I graduated college they were 16%. I bought my first house when I was 32 at 10% 30 year rates. I bought my second at 7% 20 year and now have a 5.5% 15 year. Do you want to guess what happened to the home price of that first house I lived in during all that time from 5% to 5.5%? The house I grew up in sold for $12,500 brand new and would sell for $350,000-$400,000 now. It was only maybe $30,000 when I was in high school and $45,000 when I was in college, by the time I bought my second house, 11 years ago, that house was $150,000 and that was after four years of a real estate bust. That house is maybe 800 square feet with little or no amenities but it happens to be within driving distance of NYC in a town with good schools. Don't under estimate the value of good schools. A client of mine sold a beautiful house that was almost paid for in an area with lousy schools, to buy an ugly one a few miles away in a town with good ones when he had a kid. He took a 30 year on a house that was three times as expensive as his existing one with the idea that he could either stay where he was and send the kid to private school or move and send him to public school. The cost to him was about the same dollar-wise, but he figured he had a sliver of a chance of getting some of that money back by selling the house after the kid was through school, whereas money paid to private school was lost forever.