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I was wondering how that would play out. Lots of homes have been destroyed. Those people need unoccupied houses to live in. I Hate to put too much thought into the economic ramifications of peoples misfortunes because it just seems wrong to do so. SM

Ah, now if you read all of my posts, you'd have found a concesssion in there somewhere. I even thought that we were at a bottom, which kind of implies an admission that the prices had softened. I just get so tired of the doomsayers who refuse to realize that these things aren't static...That...

No, Old Trader is right. Its the apocalypse. Because 1% of the homeowners might go into foreclosure, we'll be living in bunkers and eating canned food. Sad, really.

The black crow flies at midnight. Repeat: the black crow flies at midnight. Godspeed, Captain America.

That is interesting. In a way, glad I could help. Bear in mind, my spreadsheet did not assume a recovery at all, but rather inflationary growth from the current price levels. It also made an assumption about how low prices fell, which must be cross-checked. I guess all I can say is that...

Quote from pitz: Smart Money, part of the (major) problem with your analysis is that you haven't included the maintenance costs on the house, that you appropriately should be subtracting from the net rent yield. These costs are borne by the homeowner or the landlord, but are included as part...

Ok, see the attached (below) I did an analysis of my own. To make the numbers simple for me, I assumed that there was a $150,000 house. (I know, they don't exist). Anyway, the house reached a value of $150,000 before the crash, and dropped to a price of $107,527. So, if you paid a 3%...

No. I wasn't saying that it is always superior. I'll concede that there are short-run periods where renting is better. But in the long run, in the U.S., buying is better. I do not believe there is any point in time, where there is at least 7 or more years after that point, where buying...

No, just put 5% down on my house. Fixed rate for 30 years. With closing costs, I'm in it only 8% of the home value, so back then, I was leveraged at about 13 to 1. As long as the house continues to increase in value at the inflation rate, I continue to make more than 30% on my downpayment...

Woohoo. Ok, I'm gonna try to reply here. Probably only interesting to your or I. I figured out some of the confusion is coming from our context. I was soley discussing an owner occupied dwelling. So I'll clarify here (see below). [/B] But it happens all the time. You buy a house (to...

A lot of those CFO's elect to unload properties not because of a bubble, but because of tax advantage. If you purchase, you can write the building depreciation off over decades. But if you lease it back to yourself, you can write it off immediately. A major drugstore chain does this as a...

OK, one of us is failing to see the other's point. In real estate, you either take out a mortgage (lets say at 6%), and you pay interest on the amount borrowed, or you pay rent. I promise you, that when you rent, you're still paying down the mortgage, (for someone else) which is the same 6%...

Rock on! Another thing that people don't get is that you don't have to pay something off to cash in. If I put $500K of my own money (or pledged equity...yummy) into the purchase of a $5 million dollar apartment complex, and then just barely make ends meet over a 5 year period, then the...

Awesome stuff. To make the case stronger, its important to point out that the tenant's monthly payment will go up at 3 to 4% a year, and even during the 15 years that the homeowner is paying off the house, his payments will stay mostly flat since the only variable is the smaller portion of the...

Nice. I was using $10K and $100K as an example. Makes more sense than saying 3% down plus closing costs on a $367,000 house or something like that because the concept would get buried in the details. FWIW, $100K can get you nice house depending on where you are. I do play the real estate...

Two years is indeed too short of a time horizon. But, if the house is getting 3% real growth, and you're leveraged in it at 10 to 1, then you're really getting 30%. Between that kind of equity gain, and the fact that you're not seeing payment increases averaging 3 to 4% a year (vs. rent)...

Its very different. You just illustrated my point of people not understanding. In a simple example, if I put 10% down on a $100,000 house, I've invested $10,000 (not $100,000). Yet in 12 years, I will have $100,000 in equity. Until lately, you could fairly easily finance $1 million in...

I'm telling you. Nobody seems to understand that. If you make a downpayment on a house and then make payments on it for 12 years,...on average...you will have as much equity in the house 12 years later as the original purchase price of the house itself. Thats some powerful stuff. SM

***Interesting perspective*** US: Mortgage Default Rate Stabilizing Source: Associated Press/AP Online Publication date: September 24, 2007 By GILLIAN WONG SINGAPORE - The default rate on U.S. mortgages is stabilizing, an American housing official said Monday, adding she didn't...

Thats dynamic thinking. If you're going to be a successful doom and gloomer, you're going to have to think more statically. Say for example, if you were driving a car, and started to take a right turn from Park Avenue to Washington Street. During the turn, a doom and gloomer would assume that...