Nice to meet you, Florida real estate bubble of 2005-2008. I see houses every day that appraise for $100,000 less than they did one or two years earlier, every single day.aychamo_aycono said:
Home buying thread
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Wow, that fucking sucks for people who paid that much money for that shitty of a house! That"s like apartment-grade garbage. Damn that sucks!r3probate said:
i completely disagree. what you are suggesting is that late 20 somethings take around 200k of their future savings over the next 5 years and slap it into their home. that 200k invested over the course of the average mortgage(25-30 years) at a reasonable return of 8%(the last 100 years of stock market ROI is around 9%) amounts to around 1.25 million us dollars alone, assuming the person never added a single extra penny to it. If people on this board arent concerned about the money they earn from investment they i really think they should be.Cad said:
this also makes me wary. dont equate owning your home free and clear with minimal risk. we can come up with 100 "what if" scenarios that can counter the pros and cons of each strategy. for example, lets say you just owned your house free and clear by pumping 200k savings into it, then the subprime mortage hit. for those people who are leveraged, tons are walking away from their mortgages and homes because its no longer a wise financial investment. they simple send the keys back in the mail and take the credit hit because it would take 25 years to get above water on a home that drops 35-40%.Cad said:
if a person puts the 200k into the house, he takes the full brunt of the loss, and has little savings left over. effectively, his finiancial worth has take a 20 year backwards leap.
its possible for any investment to "take a bath", house included. the one part of your argument that is valid is that if all else fails you can live in your own house. however, you cant live in a stock portfolio.
even this assuring argument is mostly false. when people lose their jobs (the fear of which is partly driving you to pay down the house) one of the highest likely events involved in getting a new job is moving to a new area. if i am the owner of an entirely non liquid totally non leveraged house,the only real option is by turning the property into a rental (since you cannot sell it without taking a huge loss). in both cases, i have far less equity than if i were fully leveraged, and little savings to assist in the purchase of a new house.
there is of course the chance i can find a job in the same area and keep the house. thats always possible, but i want to stress the fact that its a RISK. investments in the end are just a series of calculated risks.
once again, living within your means is always wise. people have different definitions of what that means to them, but if you cant at least afford 4-6 months of your mortgage off savings (the average time it takes to sell a house), then i think you shouldnt live there.Cad said:
i think the main difference in our viewpoints is that you see the house costing 200k by paying it off quickly and i see the same house costing 1.25 million lost in opportunity over 30 years.
Yes, it was. As for the inside stuff, it is upgraded from the basic install. Looks fine to me.aychamo_aycono said:
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8% minus the ~6% they"re paying on that money mortgaged is a 2% return. Run your numbers again. You also have to figure that you don"t earn the 100 year average steady each year.. what happened to the investments people had over the last 2 years? Oh right - so not only did their leveraged real estate drop like a stone, but they lost their ass on the investments too. Nice plan!splorge said:
And when your investments go down, so that you"re not only losing your 5-7% in interest but your investments are also losing money? You"re just betting the markets will go up every year. Averaged out, they do - but what happens when people who only make a little bit more than they need to survive have a bad 5 year stretch?splorge said:
Absolutely no different than if your money is locked up in any equity that is heavily under water, and you need your money. You take the loss if you need to. If your house is paid off, it doesn"t make a lot of difference if you take some loss selling it - you"re probably selling it because you"re distressed, and in that case you just need your cash. It"s a downside, but I"ve owned my house free and clear for almost 10 years.. haven"t needed to move yet. I"ll be moving in the next 18-20 months though.splorge said:
I"d much rather take the risk that my house will plummet in value and I"ll have to move to find a job (neither of which have happened) than I would take the risk that the stock market will crash and every fund on the planet will lose it"s ass. (Which has happened).splorge said:
I"d say more like a year-eighteen months would be wise.splorge said:
The simple reality is that your way has a great "theoretical" return. In reality, people sit there acting like having debt which they invest is the "smart" thing, and don"t pay off their house - but they don"t follow through on the investing part, or they fuck it up and lose money thus fubaring the whole plan. IF you are disciplined with your money, IF you make wise investments, and IF your home mortgage interest rate is low enough, your plan is great. For 98% of people, those things will not happen. Thus, my way is smarter for 98% of people. For you? Go crazy, make 1.25 million. For me, I"d much rather own my home free and clear. I"ll have millions either way.splorge said:
Isn"t that why he said an average? So that 2 years out of the last hundred don"t set the baseline for the 20 years that it will be invested? Looks pretty sound to meCad said:
ive never heard of closing costs being included in the price.Eduardo said:
there really isnt any advantage to paying cash, but if your intent is to lowball and pressure the seller into accepting the deal you can show up with a check to let the seller know you are a serious bidder and put a deadline on it.
I got out-bid on the house. This led me to dump my realtor as he kept taking other offers on it. My new realtor quickly found another house for me, nicer than the other one, with oak kitchen cabinets and higher-end appliances. This guy only takes one offer per house. As soon as I made the offer ($54,900, which was the asking price), he took it off the market. No competition means I stand a high chance of getting this one. It"s still a short sale, so nothing is ever guaranteed, but so far so good.
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Totally agree. The bathroom vanity top is the cheap fake granite shit, everything in the bathroom looks cheap, the countertops look like formica, the cabinets are all garbage. The tile everywhere looks like the cheapest color/type of tile (the shithole I"m renting now has the same tile), the sink is cheap with cheap faucet, the carpet is gross, the baseboards are cheap little things, no crown molding, etc, etc. It really is all apartment-grade/contractor grade cheap junk.Cad said:
I looked at one house recently that was $200,000 and it had all brand new wood floors, granite countertops with tumbled stone (or whatever it is) backsplashes, all the nice stuff. For $300,000 you gotta have badass stuff.
You don"t live here, so you don"t know fuck-all about the real estate market here or how bat-shit insane the prices were during the boom period. That house sold brand new for over 300k. The house you describe would have gone for well over 500k minimum.aychamo_aycono said:
Here"s another example: I used to live in an apartment. The housing boom was so insane, that the majority of apartment complex"s kicked out their renters and converted them into condo"s to sell. The two bedroom apartment I was in (which was average quality at best) sold for $250k. For an apartment! Now people are losing their houses and there is a huge shortage of rental apartments for them to go to.
I have said it before, but I can"t adequately describe just how high the boom time was here or how low it is now. My area (SW Florida) is the poster child of how our economy fell off a cliff. Living here and seeing first hand what has and is happening is staggering.
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I hope I didn"t come across as argumentative. I didn"t mean to imply that I didn"t believe you or anyone. I"m just shocked that they could put such low grade shit in a house and sell it for so much. What fueled the boom? Was it an incredibly desirable part of Florida?Wolfen said:
A house I looked at a while back where I"m at just sold for $165,000. The house, if in any other neighborhood in the city, would have been worth about $60,000 (it needs about $40,000-$50,000 put into it to make it current). That"s a $100,000 premium someone paid to live in a certain neighborhood.
During the boom, ANY part of SW Florida was highly desirable. The area these particular houses are located is not some fancy area. It"s a normal blue collar area. In normal times, when the market isn"t sky-high or mega-low, it would cost around $150k to build one of these homes from scratch.
Anyone who owns vacant lots are screwed hard. My realtor bought several .25 acre lots during the boom for $30k. They are now selling for $5k. Not that it matters because nobody is buying vacant land because now, a good looking woman can get a house for a few blow jobs and a couple cooked dinners.
As for what fueled the boom, during that time, the economy was going gangbusters. Everyone was working and the banks didn"t give a damn who they loaned $300k to. Even at the highest point of the market, people still thought they would make a huge profit, even when buying at those prices. When the money ran out and people finally realized that they could not afford what they bought (many thousands of people in my area alone), the feces finally hit the rotating device.
Edit: Here"s another example: I live in a villa located in a gated community. I rent it because I refused to pay those super high prices. The owner paid $350k for it during the boom. Now, others just like it on my street are selling for $70k.
Anyone who owns vacant lots are screwed hard. My realtor bought several .25 acre lots during the boom for $30k. They are now selling for $5k. Not that it matters because nobody is buying vacant land because now, a good looking woman can get a house for a few blow jobs and a couple cooked dinners.
As for what fueled the boom, during that time, the economy was going gangbusters. Everyone was working and the banks didn"t give a damn who they loaned $300k to. Even at the highest point of the market, people still thought they would make a huge profit, even when buying at those prices. When the money ran out and people finally realized that they could not afford what they bought (many thousands of people in my area alone), the feces finally hit the rotating device.
Edit: Here"s another example: I live in a villa located in a gated community. I rent it because I refused to pay those super high prices. The owner paid $350k for it during the boom. Now, others just like it on my street are selling for $70k.
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That"s so nuts. Makes me pretty angry living in NY. 50k house, ugh.
Really until i"m making big money (I make about 50k a year right now if you factor in what they assist me with in school, 42k salary which mind you, i"m a student i"m very grateful for that) but it isn"t even a drop in the bucket. House prices are still averaging $380k give or take around here - unless you want to live in gang land and get your shit robbed twice weekly - then you can pick something up for high 200"s. Millions if you want to live around %100 white people.
So i"m sitting pretty with my 15k in the bank and 0 debt - but there is virtually 0 incentive for me to save it because I can"t even come remotely close to owning a house here without a 100k+ a year income (property tax alone in a DECENT area = the cost of a shitty apartment, my parents pay $8200 annually) then I think to myself, in two years i"ll be making double my income and I should just blow my cash on whatever the fuck.
I have friends in North Carolina and Virginia that are paying MORTAGES combined with property tax and misc bullshit that you have to pay when you own a house (home owners and such I imagine) for less then a decent apartment here. Florida, 50k house, ugh.
I"m sure everyone doesn"t live in areas with cheap houses. What do you guys do /// whats the five year plan?
Really until i"m making big money (I make about 50k a year right now if you factor in what they assist me with in school, 42k salary which mind you, i"m a student i"m very grateful for that) but it isn"t even a drop in the bucket. House prices are still averaging $380k give or take around here - unless you want to live in gang land and get your shit robbed twice weekly - then you can pick something up for high 200"s. Millions if you want to live around %100 white people.
So i"m sitting pretty with my 15k in the bank and 0 debt - but there is virtually 0 incentive for me to save it because I can"t even come remotely close to owning a house here without a 100k+ a year income (property tax alone in a DECENT area = the cost of a shitty apartment, my parents pay $8200 annually) then I think to myself, in two years i"ll be making double my income and I should just blow my cash on whatever the fuck.
I have friends in North Carolina and Virginia that are paying MORTAGES combined with property tax and misc bullshit that you have to pay when you own a house (home owners and such I imagine) for less then a decent apartment here. Florida, 50k house, ugh.
I"m sure everyone doesn"t live in areas with cheap houses. What do you guys do /// whats the five year plan?
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I know the feeling man. My girlfriend bought a house a few years ago. It was $68,000. It"s two bedroom, one bath, all wood floors (tile in kitchen), utility room, big fenced in back yard, only thing is the kitchen sucks. Her mortgage is like $560 a month. I"m paying twice that for my rented townhouse and her place is better than mine (I have carpet and tile, all builder-grade hardware like posted in those pictures on the previous pages.) I"m paying all this money and no equity. She"s paid like half her house off already. In practically the same amount of time I"ll spend $68,000 in rent she"ll have her house paid off and basically have that money in the bank when she sells the house.Chaotic said:
About your $15,000 in the bank - save it!
ToeMissile
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My sisters just bought a house (1700sqft, 4bd, 2.5ba, all appliances except a fridge) about 40 min outside of Phoenix and their mortgage is less than what they were paying for a 2/1 apt. Cost them $85k