Dear folks who wish you owned your own home

[vraiblonde]

If I lived in an area besides the DC metro, where I could get a decent house for a realistic price, I would love to own. This area is just crazy anywhere within about 100 mile radius of DC.

Maryland is crazy with its housing prices. Whenever I go somewhere, I always like to pick up a Homes & Land to see what houses are going for in that area. It always shocks me what you can get in other states for what you pay in MD.

 

[MMDad]

Maryland is crazy with its housing prices. Whenever I go somewhere, I always like to pick up a Homes & Land to see what houses are going for in that area. It always shocks me what you can get in other states for what you pay in MD.

Pick one up next time you're in California. You'll be ecstatic over Maryland prices.

 

[Cowgirl]

Maryland is crazy with its housing prices. Whenever I go somewhere, I always like to pick up a Homes & Land to see what houses are going for in that area. It always shocks me what you can get in other states for what you pay in MD.

I'm looking at 10 acres in NC w/ a house for $75.

 

[vraiblonde]

Pick one up next time you're in California. You'll be ecstatic over Maryland prices.

Actually, I felt much better when I saw prices in the Keys.

 

[somdrenter]

Sorry, but your quoted morgages are pure bs. If you want to compare to the cost of renting, you need to include things like pmi, insurance, taxes, hoa fees, and maintenance costs. Not too mention that you make no statement about down payments or closing costs.

Now that the gilded forecasts have proved spectacularly wrong, homeowners don't know what to think about real estate's future. The dizzying rise sure didn't make sense. And the sudden slump doesn't seem any more logical. How can you make reasonable financial plans for the future if you have no idea what your house is worth?

In most markets people won't lay out much more in monthly costs to own a house or condo than they would to rent a similar property unless they expect a huge profit when they sell. Indeed, speculators chasing quick profits did a lot to inflate the recent bubble.

But once the fervor fades, prices must fall to restore their normal, long-term relationship with rents. Rents exercise a kind of inevitable gravitational pull on prices. The ratio of prices to rents "behaves much like price/earnings ratios for stocks," says Yale economist Robert Shiller. "Like P/Es, price-to-rent ratios are mean-reverting." In other words, while prices soar from time to time, sending the ratio to exceptional heights, sooner or later the relationship is bound to return to its historical average.

Real estate: Buy, sell, or hold? - Nov. 7, 2007

 

[vraiblonde]

In most markets people won't lay out much more in monthly costs to own a house or condo than they would to rent a similar property unless they expect a huge profit when they sell. Indeed, speculators chasing quick profits did a lot to inflate the recent bubble.

Hello?

I'm curious how many homeowners bought their house to make a profit when they sell. Most people buy homes to live in them, not use them for investment purposes.

 

[Agee]

Hello?

I'm curious how many homeowners bought their house to make a profit when they sell. Most people buy homes to live in them, not use them for investment purposes.

...and the nice tax breaks!
Let's hope they don't screw with that benifit.

 

[somdrenter]

Hello?

I'm curious how many homeowners bought their house to make a profit when they sell. Most people buy homes to live in them, not use them for investment purposes.

Either to live in or bought on spec, given the proliferation of toxic mortgages, the outcome is still the same.

 

[Pete]

Either to live in or bought on spec, given the proliferation of toxic mortgages, the outcome is still the same.

Be it houses, cars, bling or Beenie babies, stupid people have been separated from their money for eons and you can't stop it. Not everyone has a toxic mortgage. I would say that they are a significant minority yet you keep painting this with a broad brush. Give it up.

Sincerely,
5.5% fixed, 30 year, $1400 a month PITI, 2200sq foot, 1.5 acres

 

[dems4me]

Be it houses, cars, bling or Beenie babies, stupid people have been separated from their money for eons and you can't stop it. Not everyone has a toxic mortgage. I would say that they are a significant minority yet you keep painting this with a broad brush. Give it up.

Sincerely,
5.5% fixed, 30 year, $1400 a month PITI, 2200sq foot, 1.5 acres

What is a PITI? :shrug: I saw vrai use that earlier and thought she meant PITA :shrug: I'm doing well on my new savings plan of 2008 and have set my goal on buying a house before year end. What is a PITI? :shrug:

 

[Pete]

What is a PITI? :shrug: I saw vrai use that earlier and thought she meant PITA :shrug: I'm doing well on my new savings plan of 2008 and have set my goal on buying a house before year end. What is a PITI? :shrug:

Principal, Interest, Taxes and Insurance. The 4 elements of a typical house payment.

 

[KWAK]

Well, here's your tip: don't get an adjustable-rate or interest-only mortgage. I thought everyone knew that, but apparently not. In some cases they make sense, but not on a regular house that you plan on living in for any length of time.

One of the mortgage giants recently decided to stop purchasing Alt A IO loans - insiders say to expect IO loans to be less of option for people trying to get more house than they can afford!

 

[vraiblonde]

insiders say to expect IO loans to be less of option for people trying to get more house than they can afford!

That's probably a good idea. I though I was a financial idiot but I'm a genius compared to some of these people out there. When I was 24, my ex and I bought our house and talked to both sets of parents, plus friends who owned homes, all of whom gave us excellent advice, part of which was "don't go with an ARM".

It never occurred to me that so many people would fly blind with something as important as buying a home. That takes a special kind of dumbbell.

 

[somdrenter]

I would say that they are a significant minority yet you keep painting this with a broad brush. Give it up.

Sincerely,
5.5% fixed, 30 year, $1400 a month PITI, 2200sq foot, 1.5 acres

Absolutely Pete. They are a minority. But, as it seems, that’s all it takes.

Fannie Mae posted a 4th Qtr 07 $3.6 Billion loss. This minority is causing significant losses. Say this minority is 1%. What if it were 1.2% or 1.5%?

Sincerely,
Saving almost $1000 a month by renting.

 

[KWAK]

That's probably a good idea. I though I was a financial idiot but I'm a genius compared to some of these people out there. When I was 24, my ex and I bought our house and talked to both sets of parents, plus friends who owned homes, all of whom gave us excellent advice, part of which was "don't go with an ARM".

It never occurred to me that so many people would fly blind with something as important as buying a home. That takes a special kind of dumbbell.

I wholeheartedly agree!! Obviously, I am an "insider" and have worked for this financial giant (as referred in the media) for 10 years now - I work with the riskiest stuff out there, most risk layers that can be done - what I see in a day (well, used to see in a day) is incredible! And I handle billion dollar deals! It was no wonder what happened in the market did! There are A LOT of dumbbell's out there!

 

[vraiblonde]

Absolutely Pete. They are a minority. But, as it seems, that’s all it takes.

And do you, Somdrenter, think the taxpayers should be bailing out this small percentage of people who, through their own stupidity and irresponsibility, got into a financial jam?

Yes or no.

And, even better, should we the taxpayers be bailing out real estate investors and speculators who got into a financial jam because they gambled and lost?

Yes or no.

 

[KWAK]

Absolutely Pete. They are a minority. But, as it seems, that’s all it takes.

Fannie Mae posted a 4th Qtr 07 $3.6 Billion loss. This minority is causing significant losses. Say this minority is 1%. What if it were 1.2% or 1.5%?

Sincerely,
Saving almost $1000 a month by renting.

Don't forget this part. . . .

"On a positive note, we grew our guaranty fee income by more than 19 percent to $5.1 billion, as our single-family guaranty book grew 15 percent and our multifamily guaranty book grew by more than 22 percent."

 

[MMDad]

And do you, Somdrenter, think the taxpayers should be bailing out this small percentage of people who, through their own stupidity and irresponsibility, got into a financial jam?

Yes or no.

And, even better, should we the taxpayers be bailing out real estate investors and speculators who got into a financial jam because they gambled and lost?

Yes or no.

Don't forget:

Should we the taxpayers be bailing out mortgage companies that gave loans to people who could not afford them?

 

[Pete]

Absolutely Pete. They are a minority. But, as it seems, that’s all it takes.

Fannie Mae posted a 4th Qtr 07 $3.6 Billion loss. This minority is causing significant losses. Say this minority is 1%. What if it were 1.2% or 1.5%?

Sincerely,
Saving almost $1000 a month by renting.

Ah but I will be paying $1400 a month for only 20 more years but you will be paying more forever.

 

[somdrenter]

And do you, Somdrenter, think the taxpayers should be bailing out this small percentage of people who, through their own stupidity and irresponsibility, got into a financial jam?

Yes or no.

And, even better, should we the taxpayers be bailing out real estate investors and speculators who got into a financial jam because they gambled and lost?

Yes or no.

No and no. Absolutely not. Not one penny, nadda, none.

Furthermore, someone mentioned tax breaks a few pages back. These folks that are/will get government bailouts and/or will have their lender renegotiate the terms of their loans; do these folks deserve tax breaks? I think not…