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Rank: Advanced Member
Joined: 3/17/2009
Posts: 2,571
Points: 7,862
Location: Colorado, United States
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Interesting article about how the recent years, during which home ownership was viewed as a way to accumulate a "nest egg" or a way to generate better-than-stock-market profits, were actually an aberration that is not likely to recur in our lifetimes.
Housing Fades as a Means to Build Wealth
I used to own homes, "traded up" every 3–5 years, considered them to be the best investment, pulled cash out of them when needed. How do those of you who own homes view them these days? And I'm wondering if attitudes differ among countries.
}- Mark -{ ASPARAGUS Asparagus in a lean in a lean to hot. This makes it art and it is wet wet weather wet weather wet. —Gertrude Stein, Tender Buttons
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Rank: Advanced Member
Joined: 2/13/2010
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Location: United States
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A home was always "the American Dream" that is, your castle. Pay off the mortgage, and you never have to pay rent again in your life. That was a much more healthy outlook. It's taking the long view. In the long view, a home is a place to live. Your piece of the rock.
If your home appreciated in value over the years, that was just a bonus, not the reason you bought in the first place.
Real estate moguls buy and trade on "houses", real people buy houses and make them homes. I bet an awful lot of folks that got caught up flipping houses and borrowing against the paper wealth wish they'd taken this approach
"Be without fear in the face of your enemies. Be brave and upright that God may love thee. Speak the truth always, even if it leads to your death. Safeguard the helpless, and do no wrong". (Knight's Oath, Kingdom of Heaven)
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Rank: Advanced Member
Joined: 2/19/2010
Posts: 2,406
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Location: Massachusetts, United States
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I bought my house because I wanted my children to have a place they could call home. I live in apartments for many years and just recently bought my house. I was tired of dealing with my neighbor's loud music... stomping feet... smelly trash...etc... I then decided to buy a condo...same thing but with rules... don't let your children play here... dogs/cats not allowed... fees for snow/garbage removal and it wouldn't get done... so I decided to sell the condo...take what ever profit I got from that and buy a house...
I have a beautiful 3 bedroom house on a acre of land, quiet neighborhood...friendly neighbors, lovely pond in the back of my yard...beautiful vegi and flower garden...I can't ask for more. I think I made a very good investment...at least for my family if not for my finances!!
He who sings scares away his woes. ~Cervantes
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Rank: Advanced Member
Joined: 3/20/2009
Posts: 256
Points: 787
Location: NH - United States
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The home I live in is still a good investment, though it is worth now what I paid for it seven years ago. If I sold it today, I would break even.
I own a condo up in the White Mountains, it is now worth 3 times what I paid for it 15 years ago. If I sold it today, I would more than make my money back, if I sold it 5 years ago when it was value at almost 5 times what I paid for it, I would have made a killing. I love my condo and would never sell it.
I do not borrow against the value of my real estate. This is what got so many people into trouble. People took out second and third mortgages on the highly inflated value of their homes. These homes are no longer worth what they borrowed against, thus if they need to sell today, they must pay back every penny, which most people cannot do at this time. Because of this and the type of loans they took out such as 5-1 ARMS which the payment balloons after 5 years and No Income Verification products, which were given on your credit score and your word that you made $250,000 a year, many people are losing their homes.
One of the big issues is moneies were leant against the appraised value (which uses comparable sales in the area as a metric) not the assessed value (the value used to calculate your taxes which tend to be much closer to what the house is actually worth, depending on the year the home was assessed of course).
Appraised values can change in 3 to 6 monthes. Assessments happen every 3,5 or 10 years.
Homes are still a good long-term investment and IMHO were never meant to be a short-term one (flipped).
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Rank: Advanced Member
Joined: 7/16/2010
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Location: United States
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Vickster wrote:I bought my house... You live in MA and were able to buy a house? LOL
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Rank: Advanced Member
Joined: 2/19/2010
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Location: Massachusetts, United States
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richsap wrote:Vickster wrote:I bought my house... You live in MA and were able to buy a house? LOL hahaha... I didn't say Boston!!! In other parts of Ma you can find good deals... just gotta look!!! Plus I bought it before the recession...
He who sings scares away his woes. ~Cervantes
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Rank: Advanced Member
Joined: 4/10/2010
Posts: 800
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Location: American
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Savings and investment are two different things. If property is purchased for investment then we're talking about rentals.
One's own dwelling is a savings account. You will pay to live somewhere, I want to pay where I get some, if not all, my money back. If my dwelling increases in value by the time I sell, then I make interest.
I will never rent again unless I have no other option. That is money out the door.
Having said that, my mother always owned a house. She moved around the states due to jobs and kept buying up. She died at 63 with a mortgage she would never pay off. She told me about friends of hers in San Francisco who bought their first home at the same time we bought ours in SF around 1973. They did not move and owned their homes outright.
So, buying a home and staying there seems to be the best. Here in Canada, mortgage interest is not deductible from income like it is in the states. I hate that mortgage loans are refinanced every five years, no locking in a good rate for 30 years. It's still better, in my opinion, to own.
Most people refinance and use equity to improve their property. Sometimes, that is a good choice. However, refinancing and using the money to buy a rental is better. Then someone else is filling your equity bankbook.
The fatal pedagogical error is to throw answers, like stones, at the heads of those who have not yet asked the questions. – Paul Tillich
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Rank: Advanced Member
Joined: 4/3/2009
Posts: 2,927
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Location: Michigan, United States
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My house is paid off. And, I love my neighbors, city ,my flowers and my land.
I am carrying my heart~I am carrying my rhythm~I am carrying my prayers~But you can't kill my spirit~It's soaring and strong (Paula Cole's Me Lyrics)***We are not human beings having a spiritual experience. We ARE spirtual beings having a human experience.(T.deChardin)***There are only two ways to live your life. One is as though nothing is a miracle. The other is as though everything is a miracle. (Albert Einstein)
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Rank: Advanced Member
Joined: 2/11/2010
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Location: United States
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I bought my first house when I was 21! I was done with renting. I sold it about 7 years later, moved in with daughter's father. Then when I left him I had to rent an appt. for 2 years. I save during that time and then bought a condo. I LOVED my condo. It was the perfect size for me and my daughter. I put in granite counter tops, new windows, new carpet, painted and it was mine! Now I am married and sold my condo to live in my husbands until it sells and then we will buy a house. It has been hell! He is not good with finances at all. He has a high interest rate on his 1st mortgage and 2nd mtg. He owes $31 thousand more than he paid, and it's worth $58 thousand less than what he owes. It's tiny and dated. But he can't sell it for anything, two years on the market and Nothing!! The housing market is just horrible! (Sorry, I'm a bit bitter about the whole thing) 
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Rank: Advanced Member
Joined: 12/19/2009
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Location: United States
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It also helps your cause if you buy in a stable neighborhood. When we bought our house we were in the country, literally. Not much going north and all the amenities south and east of us. Then the over-populated southern counties, noting our much cheaper land, bought huge swathes of it for housing estates, expensive housing estates. Mini-mansions by the hundreds were built. Shopping centres were developed. Of course, traffic became a problem, roads had to be widened and solutions sought for getting from one side of the state to the other. The answer was a ring road which would have been within spitting distance of my little acre. Zoning laws were changed (just when you thought you were safe) and the bypass was going to be a reality. We fought back with committees, meetings, letters to anyone who'd listen and the road went away. So did the WalMart deal by the main road.
So, yes, invest in a house and research as much as you can that your choice of a place to live will still be your choice years later. I am still here in mine and it's a little more crowded now but still a great place to live.
To see what is in front of one's nose needs a constant struggle. - George Orwell
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Rank: Advanced Member
Joined: 6/30/2010
Posts: 5,684
Points: 16,991
Location: Canada
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Cat wrote:Savings and investment are two different things. If property is purchased for investment then we're talking about rentals.
One's own dwelling is a savings account. You will pay to live somewhere, I want to pay where I get some, if not all, my money back. If my dwelling increases in value by the time I sell, then I make interest.
I will never rent again unless I have no other option. That is money out the door.
Having said that, my mother always owned a house. She moved around the states due to jobs and kept buying up. She died at 63 with a mortgage she would never pay off. She told me about friends of hers in San Francisco who bought their first home at the same time we bought ours in SF around 1973. They did not move and owned their homes outright.
So, buying a home and staying there seems to be the best. Here in Canada, mortgage interest is not deductible from income like it is in the states. I hate that mortgage loans are refinanced every five years, no locking in a good rate for 30 years. It's still better, in my opinion, to own.
Most people refinance and use equity to improve their property. Sometimes, that is a good choice. However, refinancing and using the money to buy a rental is better. Then someone else is filling your equity bankbook. We're lucky, Cat. Peace, Order and Good Government is a little less exciting than Life, Liberty and The Pursuit of Happiness, but at least our homes are still worth a lot more now than they were ten years ago.
Sanity is not statistical
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