Fronty Owner

Unfortuneately dodgezilla's problem is what is killing the housing market.

too many people started flipping houses to make money. Instead of adding value to these homes, they do cosmetic changes and sell it for more than its worth.

This is related to a larger problem in the US. There are too many people that don't add value to products, they just add cost to the products. We have moved from a manufacturing society to a service society. While some services are necessary, many are not. A good example of this is the guy that works as our buyer. He buys from an electrical salesman I know that works for a distributor. That distributor buys from a wholesaler. that wholesaler probably buys from a factory rep. each of these layers have added a markup. each layer adds cost.

chipmonk

i'd say don't worry, as the only thing that is a sure bet is that the population is rising, and all of those people need places to live. the housing market went through something very similar in the '80's, and it eventually bounced back even stronger than before- it's just the way the housing market corrects itself.

Shovelhead

Location..Location...Location........

The house we sold was about 1/2 mile from a Metro Subway Station, 15 minutes to the Pentagon, 20 minutes to downtown DC, and 20 minutes to Tyson's Corner (a major shopping/office neighborhood).

The house we're building will be larger, cost about 1/2 as much, and be sitting on 53 acres instead of the 1/4 acre lot the other one was on, and the taxes will be about a fourth of what we pay in Arlington, VA.
Of course it will also be 3 1/2 hours from downtown DC.

RAMRODD

I am sick of all the crying over the so called housing crisis. I cant believe people actually buy a house for a investment. Or actually pay someone to appraise your house

So lets say you sold your house before the value went down good for you but now your homelessSo now you need to buy another over priced house. The only people I see have a problum here is their job moved and they have no choice to move.
I don't feel sorry for people that cash the equity out of their house and buy a new toy. Then the value of the house goes down and they owe more then the house is worth.

This is a great time for young people to buy a house. For those of you who are in a house to stay in what to have. In the long run things will turn around so don't loose any sleep over it.

super_b ak

You don't loose a dime till you sell.

Hopalong

Real Estate was always considered a long term investment.
Not something you bought, held on to for a couple of years, and turned over for huge profits.
Just because that is what happened for a few years, does not make it the norm. Some people just got lucky.
Even if you bought high, chances are, that if you stay put, in the long run it will be a good investment.
If your house today is worth more than what you paid for it, I'd say you're still in good shape, and even if it drops some more, if you're in it for the long haul, you'll be fine.
Example, I bought my house in 1985 here in Ca. for $150,000. I thought the price at the time was outrageous.
In the late '80's early '90's it was worth less than I paid for it. I wasn't that worried, I liked the house, liked living in this area.
Fast forward to the peak in 2005. House down the street(not near as nice as mine) sells for $800,000.
Today, I think I could sell my house tomorrow for $600,000.
I don't look at it as losing $200,000, but making $450,000.
Capital gains taxes eat that up anyway.
Anyway, my point is, real estate was never a "get rich quick" investment.

tmleadr03

Like that is even close to a bad thing... I cant wait to get out of this area. I am heading either to NM or CO.

TreeFarm

That's still too close to DC.

Shovelhead

Naaa,....I'll be 140 miles southwest.

The prevailing winds are towards the northeast.
When the "Big One" hits,.... I'll see a glow in the northern sky, and all the Nuclear fallout will be going the other way.........

HOHN

A home is not an investment. It's an asset that happens to hold its value rather than depreciate, though market forces can change that value. If the market holds constant, the value of a house will simply appreciate as inflation lowers the value of a dollar.

Buy a house because you want to live there. If you are trying to make money off it, you better know the local market cold, and know what you are doing.

I think a lot of people contributed to the housing bubble because they watched all these HGTV and TLC shows and thought that house flipping was an easy way to make big $$. Just follow the recipe and get rich, right?

The banks got greedy, but they had to. When one bank does NOT offer someone a loan they can't afford at a rate that's too low, some other bank will, all but forcing them to do so as well or they won't be competitive.

You'll note that almost all of the companies in hot water are public companies. Without shareholders to answer to, a privately held company doesn't have to give into that pressure to make a buck and can steer clear of the risky loans.

jh

chipmonk

actually, according to all the financial experts, as long as you're paying a mortgage, your house is a liability (debt) and not an asset. anything that you pay on is a liability, and anything that pays you, is an asset. your house is an asset to the bank, who receives your payment every month- they say it's one of the the most common mistakes people make, when they list their liabilities and assets.

Dodgezilla

I'll be leaving the area in a few years. I never planned on staying here forever. It's way too crowded here for me. My house is still worth almost double what I paid for it so I can't complain too much BUT if somebody stole $200,000 from you, you would not be too happy about it regardless of how you came into that money. That's all I'm saying. If it were my dreamhouse on the water far away from this congested area then I would not give a crap. When my full intention is to leave eventually then the loss of value becomes a big deal because that money was the downpayment for the next home...

Jeff in TD

In my area, I really think houses really were treated like tech stocks.

People bought houses that were priced over what they were worth, because they could sell them to some other invester for more... kind of like stock prices of tech companies rising beyond what the company is worth...

After that had gone on for a year or two, I think a lot of folks assumed things would go on like that forever (that you would always be able to buy overpriced property and sell it for more).

Sooner or later, housing prices have to come down to what the people working in the community can afford to pay for a place to live.

TreeFarm

That sick.......but really funny.

HOHN

Yes. But when you OWN a house, it's an asset. An asset doesn't have to make you money to be an asset.

For example, my truck is paid for-- it is an asset, even though it is depreciating and costs me money to operate.

Moreover, as a liability, a house is the least painful to owe on, because of the tax advantages of mortgage interest as well as the general tendency of a house to hold its value in the long term.

JMO