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Not all markets are declining aldreth/aldread. Rents in many areas are also rising.
Then there is the tax advantages of owning a house.
Because we'd miss you if you were gone.....
We wanted a home of our own to live in for many years to come (ie. we are ok if the market continues to decline for a few years) We got a really good deal with a really low interest rate (home originally sold for 1.25 mil in 2005, just paid 745K). Get tired of living in an apartment...the final straw was when we were told we couldn't have bird feeders!
"Then there is the tax advantages of owning a house."
There's also a tax advantage associated with selling stock at a loss (to offset other capital gains) but I prefer to make a profit when I sell.
Interest rates. They are low, and I can Buy=Rent. I expect a 'paper loss', but I expect it to be less of a monthly payment now, compared to when interest rates rise later for a lower price.
I can also submit to lower my taxes later, once my home devalues further. This will give me a tax decrease, lowering my cost of 'ownership' further.
Lastly, to counteract inflation, low interest rate loans are the proper micro economic solution.
I do not feel that I need to mention the stability for my family.
Because they can.
.
If we buy in the next few months, it will be because we found a development that we like and we are fairly picky about certain things. We would be okay with a slide of 50k or so from where we buy as long as the house has all the things we find important and we are able to reason with the seller. If not, we will sign up for another year's rent in another house.
Because I was sick of where I was living and couldn't imagine one more day there. Renting isn't an option, so I sold and now I'm shopping.
We got an excellent interest rate, we're making money on our house we just sold (almost, lol) and prefer the stability and roots of owning. We're we are moving, the prices have not declined that much, and there is not that much inventory. It's a wealthy, stable suburb. Not everywhere fits your "foreclosure mold".
because i rented a duplex and the neighbors turned into the neighbors from hell.the owner does't know what to do so he hides, and i dont want to go to jail so now i am also. for this i pay rent?
Aldreth, it all comes down to the fact that home ownership is not a strictly financial decision. I know many doomers refuse to acknowledge the human component in a RE transaction, but it exists. Many who were priced out when prices were rapidly rising are now in a position to buy in their financial comfort zone. Those people are buying with the idea that they'll stay put for a long time.
A lot of people like to throw out the "The average person moves every seven years" statistic. What they don't realize is that according to the 2000 Census data, that's true, but the majority (2/3) of those people stay within the same county. Also, renters are 4 times more likely to move. Interesting stuff that changes that statistic, IMO.
so now i'm 50, peak of my money making years. i own my retirement property and fund roths to do the work it needs in 10 years. all set. all i want is some peace and to be left alone. if i buy and can't break even in 12 years i'm screwed. i am so sick of this a-hole i am liable to seriously hurt him. with a lot of hard work these people may one day move up to what my southern grandmama used to call white trash
"Because they can."
Because they can and they're foolish. Everybody knows that time is on the buyer's side. Will I buy next November when my lease is up? Maybe, not likely though. I'd rather wait for the rates to creep back up, thereby pushing down the values significantly more, thereby giving my down payment more leverage. And I'll get a 15 year loan so I don't have to wait eight years to start building "equity".
"What they don't realize is that according to the 2000 Census data, that's true, but the majority (2/3) of those people stay within the same county. "
Unless you live here...more people move out than stay in. Very sad.
I know many doomers refuse to acknowledge the human component in a RE transaction, but it exists.
That is a gross mischaracterization, and unfairly dismisses the role that all those pimping real estate the past 5 years had in things. If I had $100 for every time I heard "real estate is a sure win investment" in the past, none of this would be an issue for me. Those weren't doomers telling me I was missing the investment of a lifetime.
And I'm in the camp that could readily buy, even at peak bubble prices. Family, children, having owned for many years until 05, and an elderly live-in parent in consideration, you don't need to tell me about the premium value of ownership.
LOL, I know caliguy, I'm one of them! It'll be interesting to see how the statistics change with the next census in two years.
"Because they can and they're foolish. Everybody knows that time is on the buyer's side. "
Unfortunately your strategy doesn't work across the board for all people in all markets. Like I said last month, people are finding good deals and exercising their option to purchase them. I don't see what is so foolish about that. The fundamental difference between your perception of the market and their perception of the market is that any [on paper] price decline will be mitigated by:
a) time
b) intrest rate increases
c) not renting
d) buying something that makes them happy
e) the fact that prices may not fall to fire the sale levels folks are predicting
f) any combination above
.
People buy when it's the right time to buy (for them). In declining market, many tend to wait and see he bottom to jump, if they can and rent a few months, or maybe years. Does anybody see clear bottom in the past 40 years? For stock market, you can cash out and keep the cash safe and sound, ready for next upswing. For real estate, you need to live somewhere whether or not market is up or down. The value (either market value or appraisal value) is one factor to decide if price is right at the moment, This market is great for buyers who has clear plan how long they will stay, live and love the home, with great interest rate to those excellent credit trully creditworthy..
Because I'm 40 years old and have never owned a home. I will retire in 4-5 years from the military and need to get established and a place to live before I retire. The military will pay me a housing allowance over the next 5 years that I would like to put into a home. That's my reason...
Because I bought cheaper than I could rent. Because I'm saving gas money by the move. Because I sold higher than I really thought I could and don't mind the 1% drop in value in Texas compared to the 8% elsewhere. Because I friggin love the house. Love everything about it.
And
And
AndBecauseIBoughtTheHouseFor30To40KCheaperThanWhatANewHomeBuilderIsTryingToSell-SameRooms-SameSqFt-EqualUpgrades.30-40kLessInTexasIsSignificant.
Rates rates rates. I could give a rat's arse about the rates. How about price price price! Prices are dropping faster then a Britney's panties in my area. So what if rates dropped down to 5.4. Prices will continue to drop. I already see SFH 220 sq ft homes built in 2000s for 350k range (2003 prices) in some areas of SoCal. So at this rate of price drops, who cares if the rates rise back up to say 6.1265. A mortgage rate is not permanent, can always be refinanced. Overpaying for a home is!
2200. Actually my dog flipped his house for a good profit. He bought a fourplez and is renting it out to 8 families of Chihuahas.
... and, it's free and anonymous
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Why are you buying in a DECLINING MARKET?
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Aldreth
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