What's with the riots?

[Synthesizer Patel]

People can get home loans that are WAY outside their means. Around here, you can get an awesome three bedroom home for $200,000-$250,000, and a do-able one for $150,000ish. An unemployed friend of mine and her grad school husband were approved for $250,000. That's obscene to begin with, but it was also way outside their means. But they could get it, and they could try their damnedest to pay it off.

 

i think that the banks approved these things because they had a vested interest in the market not becoming stagnant - like i said in the post above.

the big problem is that everyone says, "god housing prices are through the roof!" - yet everybody wants their own houses to be worth a lot. unfortunately if this mentality changed, people wouldn't be able to act any differently, because their houses HAVE to be worth that much money, otherwise they are absolutely screwed with the high mortage they took out and the reduced value their house then becomes.

[Guest Speed Racer]

i think that the banks approved these things because they had a vested interest in the market not becoming stagnant - like i said in the post above.

the big problem is that everyone says, "god housing prices are through the roof!"

 

First, housing prices are LOW here. Ridiculously low. It's a definite buyers' market right now.

 

Second, with regard to stagnant markets:

Everything works best on the premise that not everyone makes the same smart decision. If everyone got to the airport exactly 2 hours before their flight, then security lines and boaring would be worse than they are (as if they could be!). If everyone paid off their loans early, as they *should*, then lenders wouldn't make as much money and interest rates would actually go up.

 

So what you *should* do is rent until you are debt free and can afford to buy a home, and pay off that mortgage as fast as you can, armed with the knowledge that few people will do the same because they're irresponsible jackoffs.

[Synthesizer Patel]

rent from who? if housing prices are so low, who are these people who own the houses to let? - surely they've been ruined by the property collapse.

 

also, unfortunately just because you act cautiously and are able to pay off your mortage it doesn't mean these irresponsible jackoffs aren't going to impact on you. you buy a house for $300,000 and pay off your mortage on it - the housing market dips because the "irresponsible jackoffs" foreclose on their loans, and your house then becomes worth $150,000 you're just as screwed as they are. aren't you?

[Guest Speed Racer]

rent from who? if housing prices are so low, who are these people who own the houses to let? - surely they've been ruined by the property collapse.

 

I'm in an apartment. There are plenty of apartments around here. When I lived in a place with fewer apartments there were plenty of houses to rent.

 

also, unfortunately just because you act cautiously and are able to pay off your mortage it doesn't mean these irresponsible jackoffs aren't going to impact on you. you buy a house for $300,000 and pay off your mortage on it - the housing market dips because the "irresponsible jackoffs" foreclose on their loans, and your house then becomes worth $150,000 you're just as screwed as they are. aren't you?

 

I don't know a better phrase for people saddled with debt who take out a mortgage outside their means.

 

If the market dips, it dips. I can't control that. That's a risk people take renting and buying. My rent went up this year, and a quick survey of other available housing showed my place was *still* below the market. If my imaginary house is worth half of what it is when it's time to sell, the market would suggest that many other houses are in that situation too. My parents were just in this same situation: their home lost 1/3 of its value, but so did the new house they were buying and they pretty much broke even. So unless Tommy Toe-Breaker is shaking me down for the drug money he lent me, I won't exactly have a pressing need for cash, will I?

[Synthesizer Patel]

they lost 1/3 of the value of their house and they had a mortage? let's assume they did, at the 20% you said

 

so let's say the house is worth £100,000 when they bought it. they took out a mortage of 20%, as you say. so that's £20,000

they sell it for £66,666 and buy another house with that money.

their new house is no longer 20% of the mortage - it's gone up to over 30%

 

that lower housing price is linked to the rest of the economy, the cost of daily living goes up - and the problem of that 10% difference, caused by the lower housing prices, becomes magnified.

 

so even the very cautious make a loss, that's ignoring the reality of what people actually mortage their houses for.

[Guest Speed Racer]

Rent until you can afford to own. Save up at least 6 months of living expenses in the event that things go clusterfuck on you. It's not a guarantee of protection, and I never claimed that it was. But you'll be in a much better place than an individual with school debt on top of house debt, paying for children too.

 

The system is by no means perfect, but claiming that acting as a fiscally responsible individual will cause the system to collapse is nothing but bunk.

[embiggen]

you're going to make a great lawyer!

[Synthesizer Patel]

i didn't say what you are saying. i said being responsible doesn't mean you won't be hit by the problem. and i just explained how by using your parents situation as an example - doesn't what i said makes sense to you?

 

the thing is that i agree with you in what you are saying - that you should only buy what you can afford. but, i am saying for what you are saying to become the norm the system has to collapse, and everyone has to suffer - whether you've been sensible or otherwise.

[Guest Speed Racer]

Quit it with the personal attacks, Flick.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

for what you are saying to become the norm the system has to collapse, and everyone has to suffer - whether you've been sensible or otherwise.

 

And what I've said multiple times is that pretty much everything that works smoothly in life does so because other people take the hard route.

[Guest Jules]

Lauren said "bunk",

[Synthesizer Patel]

And what I've said multiple times is that pretty much everything that works smoothly in life does so because other people take the hard route.

 

yeah, apart from in the case that you just gave about your parents 1/3 house devaluation. other than that, yeah i guess you're right.

[Guest Speed Racer]

What about that? That the value went down? Shit happens; I said that earlier.

[Sweet Papa Crimbo]

My usual shit? When have I ever personally attacked you? How was that, at all, a personal attack?

 

You called kids you didn't know spoiled. I asked if I could do the same and you said no. I agreed, because it's not polite to do so.

 

I am not going to engage you here.

You crossed a line with me that I will not countenance.

Period

[Guest Speed Racer]

Okay, better luck next time!

[Synthesizer Patel]

it's not that the value went down. they made a loss on their investment. were they given the house for free or something?

[Guest Speed Racer]

Investment? Who said it was an investment? I think that's part of the problem with the housing market.

 

They bought it, and they lived there. They are done living there, so they are reselling it.

 

I don't expect my car to appreciate. I don't expect food I buy in a restaurant to appreciate. My apartment building sure as shit isn't appreciating. Why should we expect our houses to appreciate?

[Guest Jules]

We shouldn't. Your home is a place to live and take care of your family, and should be treated as such.

[Guest Speed Racer]

kthx

[Synthesizer Patel]

that's what i said - the problem is that people see housing as an investment. the fact that people did and do think that led to the housing boom, which in turn has led to it's partial collapse. the fact that your parents don't view their house as an investment doesn't mean it's not part of the market that does. i take it they had a big party when they sold their house for 2/3 of it's value a few years back.

 

i don't know; i think you fundamentally can't understand what i say 90% of the time, and whilst it's fun saying the same thing in 20 different ways to try and get my point to stick - it's not really going anywhere.

[Guest Speed Racer]

i take it they had a big party when they sold their house for 2/3 of it's value a few years back.

 

Not a few years back - about a month ago. Went out to a fancy dinner because they're pumped about their new house. Really excited, actually. They don't move for a few more months but we get to go see it tomorrow when I visit them.

 

that's what i said - the problem is that people see housing as an investment.

 

I think our primary communication chasm is that you're talking about what "people" think - who? Who thinks this way? I'm talking about what I think, because that's all I really know. I tell you what I think and you counter with "people" who think something else, and I don't know many of those "people."

[Synthesizer Patel]

Not a few years back - about a month ago. Went out to a fancy dinner because they're pumped about their new house. Really excited, actually. They don't move for a few more months but we get to go see it tomorrow when I visit them.

 

lol. 2/3 of the value that the house was a few years ago. see - even that simple sentence is lost in translation.

 

people. people. yeah, ok - nobody anywhere sees buying houses as an investment. the people that you are saying will let the houses that people will rent are just collectors of houses - they can't help it, they just can't stop until they get the set! or aren't these people that own the houses for rent people at all. perhaps they are dogs?

 

so, anyway - it's wrong to buy houses as an investment. yet people should rent properties until they can afford to buy them. yes? and that works, how?

[Guest Speed Racer]

lol. 2/3 of the value that the house was a few years ago. see - even that simple sentence is lost in translation.

 

They bought a house in 2003, at x. They sold it a month ago, for .6667(x).

 

so, anyway - it's wrong to buy houses as an investment. yet people should rent properties until they can afford to buy them. yes? and that works, how?

 

Rent at x per month. Save y per month. When y(n) = z, put z toward downpayment of a home only at such a time when x+y can cover the cost of the mortgage payments, property taxes and a good fund to fix things up.

[Synthesizer Patel]

no. HOW DO YOU HAVE HOUSES THAT PEOPLE RENT when PEOPLE DON'T PURCHASE HOUSES AS AN INVESTMENT? how does that work?

do people buy the houses and rent them out at a loss so that they can't be regarded as investments, but follies?

 

do you really not understand what i am saying? or just don't want to acknowledge anything that might impact on your argument.

[Guest Speed Racer]

There is a difference between the investment of renting, through which the home generates an actual income per month, and the investment of living in a home and "adding value" to it. Buying a home to rent it out has little to do with value re: appreciation or depreciation.

 

Many people in the market right now are renting their homes out when they can't sell them, simply because of the funds they generate. But that is not the same as purchasing a house as an "investment."

[Synthesizer Patel]

ok, so people do buy houses for investment, and this does have to continue if the housing market is to work in a way that you think it will work best? based on your "rent until you can afford to buy scheme" and you do, therefore know these people, as you yourself rent?

 

"no further question your honour, no further questions!"

 

Many people in the market right now are renting their homes out when they can't sell them, simply because of the funds they generate. But that is not the same as purchasing a house as an "investment."

 

WHAT? people are renting out their houses? you mean the ones they live in, or their second or third etc... homes? and these were not purchased for investment in the first place?