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

To: ajtj99 who wrote (197300)	4/21/2009 10:35:49 AM
From: Jim McMannis	Read Replies (1) \| Respond to of 306849

Killing the Myths of Homeownership reallyfuckedhomeowner.com Recently I read an article in The Economist that had many incorrect assumptions that shows just how far the myth of homeownership has permeated society. Here are some of the common myths and corrections along with actual articles from other sources to back up the key points. Myth #1 - Home ownership encourages “forced savings” because home owners have to pay off their mortgage. ABSOLUTELY NOT! That is exactly what home equity lines and continuous refinancings were all about. Spending your savings as opposed to accumulating it and making yourself a “renter with an option to eventually own”. A person very close to me has just refinanced a 30 year mortgage after 21 years effectively turning it into a 51 year mortgage and unless the almighty intervenes they won’t be paying it off in this life. Myth #2 - The mortgage income tax deduction is good for homeowners. ABSOLUTELEY NOT! It just encourages people to raise the price of the house to eventually eliminate the advantage of the benefit (NOTE: Any increase in income chasing a, somewhat constrained, good means that prices get bid up and income tax deductions raise effective income). Its a zero sum game that only raises your interest payments in the end (because the principal needed is more due to larger home prices) which means the bank actually makes more money (remember they are the bad guys nowadays). Eliminate the deduction and new home buyers (current homeowners would, truthfully, be screwed) would see lower prices commensurate with the decline in the kickback from the government. That means lower interest costs and more money, net, in their pocket (again current homeowners would see their housing values fall) Myth #3 - Homeowners benefit from many social advantages. Sorry but there are NONE and actually some social disadvantages, including worse sex. Study after study done as recently as last January show that there is practically NO social benefit of homeowning vs. renting. In fact home-owners had been those leading the charge AGAINST racial integration in their neighborhoods. Turns our renters are actually more relaxed, less racist, more social and, yup, have better sex. Additionally these housing bailouts are a tad racist/classist and are bad for current homeowners in the long run. Don’t believe me check out these links: Recently published study by Wharton (Its a long academic study but just read the first paragraph) The American McDream from the San Francisco Chronicle (renters have better sex, too) Understanding how Obama’s Plan Hurts 100 MILLION US Citizens from watchingmarcitz.com (this shows how home bailout programs have a dark underbelly) How the Crash Will Reshape America from The Atlantic (why renting is actually the answer to the problem we now face) The Advantages of Renting from National Public Radio Myth #4 - The market is finally finding a bottom Take a lesson from the movie Titanic. The ship has just temporarily stabilized before its violent rush to the bottom as shown here.