Anybody own a house?

I live in Europe.
Overhere things are different.
Between 1999 and 2004 prices rose 45%.
In 10 years time prices doubled.
Over the last 50 years prices went up 26-fold.

Over 75% of the population lives in their own house. Until now we never had a substantial downturn in prices.

We pay approx. 4.25% on a mortgage that has a fix rate for 20 years.
 
Comparing real estate to the stock market is a futile effort.

Real Estate is a decentralized market, the stock market is not.

Stocks are about "when". Real estate is about "when and where", even within the same city.
 
Thats a good point about foreclosures. They are up over 96% since last year in california. Obviously someone *IS* getting hurt in real estate.

Ive read several sob stories in the papers as well, where a couple bought a home way above what they could actually afford. (which is almost always the case in california). Couldnt refi because it was worth less than their loan, couldnt make the payments once the interest only part reset and the arms started reseting too.

Then they get foreclosed on and own the bank $100K, wiping out everything they had, and leaving them with a big fat negative net worth. Buying a home didnt seem like such a good idea for them did it?

When you live in an area that is so over priced that the only way you can get into a home is to leverage yourself to death, then buying a home isnt such a cut and dry good idea.

Buying a home is a no brainer in cheaper parts of the country and a great idea for most people.

You will be hearing more of these stories in the next year.
 
yea, houston is a growing place. you can make a 2K down payment and get a 100-150K house. then rent it out and et other people's rent money build equity for you. plus u might get a little positive cash flow after taxes and maintainance, etc. but the major wealth creator is appreciation in the house. i know so because my dad owns a couple of houses like that in houston.
 
Quote from traderdragon2:



Ive read several sob stories in the papers as well, where a couple bought a home way above what they could actually afford. (which is almost always the case in california).
More...

So the moral of the story is to not buy a house you can not afford.

Wow, that was easy...:p
 
Not so easy when an area is priced so high that MOST people can't afford an average home (San Francisco is a good example).

Many people feel forced to buy one anyway, so they leverage like hell and most discretionary income goes to the house.

Its a no brainer in most areas that aren't inflated to the moon, but not in those that are. many people move, but many others either cannot or will not.
 
Exactly right. 85% of the people in san diego bought their homes with interest only + ARM loans.

The reason?

Its the only way they could get into a home there.

If people followed the "3.5 X your gross income" rule, no one would ever buy a house here :D

The median detached home costs 13.5 times the median family income here. Nuts.
 
Quote from tradecrumbs:

Or do all traders live in one bedroom rented apartments?
I don't know one trader that owns a house. The only traders that I heard of that own houses are also book authors.
What does that tell you? :cool: :(
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my husb and i own one. we are not full time traders, though.
 
If you don't own a house, have your retirement paid for, kids education, weddings, etc paid for wtf are you doing trading? If you have not prospered in your other endeavors to the point where you can afford the above, you will not in trading. It is the acquired discipline to do want you don't want to do to succeed....
 
I own a house with my partner. I own a rental house in another city that I'm selling. We are renovating a French Quarter house and will move into it when it's done. The house we live in now will be rented out for as long as it returns positive cashflow.

As for the buy/rent decision, it's not all financial. There are some kinds of houses (nice ones, mostly) that are just not available for long-term rental in my area.

In higher-priced cities (NY/LA) where everyone rents, there is a larger supply of high quality rentals. But not here for the most part.

Traveler
 
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