What's with the riots?

[Guest Speed Racer]

people do buy houses for investment

 

I didn't think for a second that you meant investment in terms of rent as the investment. In the era of house-flipping and "these windows will totally add value!", since you kept mentioning my parents' loss, and since my landlord is a landlord and my rent money is his income, not investment, my mind just never went there. I thought you were saying that if you weren't getting appreciation on the house you could buy, how could you ever buy a house?

 

I misread you. Multiple times. Which I think we can share the blame for. We should do this again some time.

[caliber66]

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?

People own homes. They have to move for business. They cannot sell their house because the market sucks. They rent their house, which they still own, but do not live in. They did not purchase the house as an investment. My brother is in this situation. My parents were in the late 80s/early 90s. It happens a lot more (clearly) than you might think.

[Synthesizer Patel]

well i meant investment in all ways. all people that buy property to rent are making two investments. the first is the money from the rent, and the second is value the house makes over time - as the market goes up. you don't buy houses to rent out with the idea that the property will devalue over time as this will result in a loss on the value of the property as the money from the rent will never offset this loss. it can often just be a way of putting your money somewhere other than a bank, so that you spread your money around and avoid certain taxes - people who do this aren't doing it with the idea that they'll loss out, because the very fact that they are doing it in the first place means that their motivation is money making, or at least not lossing as much if they invested the money elsewhere.

 

anyway, let's stop this now. it's christmas - good will to all men! hope you have a good one, by the way. (christmas, that is)

[Ghost of Electricity]

 

 

anyway, let's stop this now. it's christmas - good will to all men! hope you have a good one, by the way. (christmas, that is)

 

 

I was just about to say something along these lines.

[Synthesizer Patel]

People own homes. They have to move for business. They cannot sell their house because the market sucks. They rent their house, which they still own, but do not live in. They did not purchase the house as an investment. My brother is in this situation. My parents were in the late 80s/early 90s. It happens a lot more (clearly) than you might think.

 

and he has bought another house, or is renting? and if he's renting, is he renting from someone who is in the same situation as him?

why can't he sell it as Recorded Nap's parents did? as any new house he'd want to buy would be roughly the same value as the one he is trying to sell.

 

i don't think the housing market sucks. i still think house prices are too high. the only thing that sucks is that lots of people are in the same situation as your brother - and everyone will either have to bite the bullet and suffer to make things more realistically sustainable, or else have another cycle of boom and bust again in the future.

[Guest Speed Racer]

why can't he sell it as Recorded Nap's parents did?

 

Their house was on the market for 15 months. It's a buyers' market, which means it's reallyreallyreally hard to sell. If you get transferred from Chicago to Topeka with 30 days notice, you won't be able to sell your house in that amount of time no matter how many strippers you have showing the house.

 

Merry Christmas!

[Guest Speed Racer]

i don't think the housing market sucks. i still think house prices are too high.

 

They are SO low it's kind of ridiculous. It's the lowest it's been in decades here. Almost everyone selling right now will take a substantial loss. It doesn't suck if you're a first time homebuyer, but if you're trying to unload a house - especially if you're trying to do it fast - the market is terrible. The only upside is that most people unloading are also buying, so it is still possible to try to break even.

[caliber66]

and he has bought another house, or is renting? and if he's renting, is he renting from someone who is in the same situation as him?

why can't he sell it as Recorded Nap's parents did? as any new house he'd want to buy would be roughly the same value as the one he is trying to sell.

 

i don't think the housing market sucks. i still think house prices are too high. the only thing that sucks is that lots of people are in the same situation as your brother - and everyone will either have to bite the bullet and suffer to make things more realistically sustainable, or else have another cycle of boom and bust again in the future.

I am not sure you understand the housing market in the United States.

 

I think my brother would probably have to walk away from about 200K if he wanted to sell his house for its current market value. He obviously bought at the exact worst part of the market and had to sell at the opposite end, but it seemed like a good investment when the housing market was only going up. The house he bought in Washington costs quite a bit less than the one he still owns in Virginia.

[Synthesizer Patel]

I am not sure you understand the housing market in the United States.

 

I think my brother would probably have to walk away from about 200K if he wanted to sell his house for its current market value. He obviously bought at the exact worst part of the market and had to sell at the opposite end, but it seemed like a good investment when the housing market was only going up. The house he bought in Washington costs quite a bit less than the one he still owns in Virginia.

 

what have i said that makes you think i don't understand the market?

 

when you say he'll walk away from 200k - do you mean that he owned the house and that's his 200k, or it's mortaged, and that's the banks money? if it's his then he's obviously still screwed, but he's not tied down to making the value he purchased the property for - other than to not make a loss on his purchase. if it's the bank's money, then obviously he's got a bigger problem - as he doesn't have the money to pay for the value he purchased the property for - and for being tied into that place whilst needing to live somewhere else.

[Guest Speed Racer]

what have i said that makes you think i don't understand the market?

 

For me, it was these two things:

 

why can't he sell it as Recorded Nap's parents did? as any new house he'd want to buy would be roughly the same value as the one he is trying to sell.

 

i don't think the housing market sucks. i still think house prices are too high.

[Synthesizer Patel]

so your parents example is not reflective of the market, and therefore wasn't worth mentioning, or what?

what was the point in mentioning it then? or was that the sensible way, and the vast majority of the american housing market behaves in a different way.

 

i was only expanding on your parents situation to show that even in that way they still lost out. i wasn't using it as an example of how most people go about buying and selling houses in your country. i think i said something along the lines of how their situation was based on the 20% mortgage you mentioned as being your example of "sensible house purchasing", and that most people were singing from a different hymn sheet than this most of the time.

[Guest Speed Racer]

No no, it wasn't bringing up my parents, it was asking why he couldn't sell, and thinking that housing market is not all that bad and that the housing prices are actually too high. All three of those suggest that you are not familiar with the current U.S. housing market.

[Synthesizer Patel]

i was saying why couldn't he sell as to show that your parent's situation wasn't the norm. obviously i understand why he can't sell. well, actually he can sell - he just can't sell it at the current market value - that's what he can't do.

 

housing prices are still too high if you ignore the fact that the prices have to go back up for people to not get backrupted over their housing purchases. housing prices should reflect the populations wages - you should be earning enough to live in a house that suits the level of work you do - with some help from the banks, but not virtually total dependency on them.

 

my parents themselves sold their 3 bedroom house back in 1996 for £78,000. a similar house right now in the same village are on the market for £210,000 - in the current housing situation. now that price has not gone up in relation to average salary increases or inflation - it's gone way way beyond that, and as is now being proven - it's not sustainable growth.

[caliber66]

what have i said that makes you think i don't understand the market?

 

when you say he'll walk away from 200k - do you mean that he owned the house and that's his 200k, or it's mortaged, and that's the banks money? if it's his then he's obviously still screwed, but he's not tied down to making the value he purchased the property for - other than to not make a loss on his purchase. if it's the bank's money, then obviously he's got a bigger problem - as he doesn't have the money to pay for the value he purchased the property for - and for being tied into that place whilst needing to live somewhere else.

It means he owes more for the house than he can sell it for, and will lose 200 thousand dollars if he accepts an offer for what the market will bear for the house. Thus the keeping the house and renting it out while he lives elsewhere.

[Guest Speed Racer]

well, actually he can sell - he just can't sell it at the current market value - that's what he can't do.

 

Here's the misunderstanding. He can't sell. Everyone is lowering their price. Short of giving a house away for a buck, people literally cannot sell their houses. Everyone is lowering prices, therefore everyone has their pick of the litter. People with homes aren't necessarily jumping on the low market to sell because they can't sell their homes. There are fewer buyers than homes, so houses actually can't sell, even with a lower price.

 

Re: housing prices suiting the level of work you do - that's not a realistic expectation. I will always be able to afford a better house than my peers with similar wages because I will not - barring natural miracles and/or disasters - have children. Lovely though they are, they are utter money pits. My household income, therefore, has a greater home-buying potential than the average household composed of people my age. I could surely spend that extra money on other things, but the fact is I have a higher portion of my income that can be put toward home-buying than, humorously, people who need the extra space.

[Synthesizer Patel]

66rebilac said what i thought, he owes more for the house than what he can sell it for. so he can't actually lower the price to the current market value - which is the reason he can't sell it, he must keep the price higher than people will pay out of necessity. which is something your parents didn't have to do.

 

obviously what people spend their salary on will vary a great deal from person to person. look at it this way - it's not like you have to take a loan out to buy a car which you need to get around, you can if you wish - but, on a normal income you can buy a car outright, either brand new or second hand. you can also buy food each week, some people can buy the best quality food or eat out every night, whilst some people can't. i'm talking about average salary earners, before you say, "yeah but what about tramps?" however the average salary earner cannot buy a house without taking out a large loan, in much the same way as "university fees" - which they are crippled by in later life, as they are caught up in debt. i'd like to know how much the average person actually pays off on their mortgage per month - not on the interest, but on actually lowering the mortgage? that's where i am saying the balance between income and house prices is completely off; or do you think the house prices of 20 or 30 etc... years ago were too low in comparison to the average earner's wage?

[ih8music]

My apologies for being late to the party. What exactly does MN real estate have to do with European riots?

[bjorn_skurj]

Seriously? You know it's inevitable, right? Simple math tells me it's a pipe dream.

This whole thing in Europe seems to be nothing more than governments realizing you can't give people things like free health care and free education without something failing. Instead of rioting about steep increases maybe they should consider the health care they get. This type of entitlement breeds spoiled children. You can point out countries like Denmark and Sweden but it wasn't very long ago we were looking at the EU and admiring the "free" education. I'm not trying to sound like a dick but shit it doesn't take a genius to know you can't give give and give without receiving. Which brings me to my point about Social Security, the cash rolling out far exceeds the cash rolling in.

I'm afraid it's much more than tits-up.

Unless I get back what I have been paying into it since the Anno Domini MCMLXXXVI, I will consider the social contract null and void and all those fuckers better watch the fuck out.

[bjorn_skurj]

And that's WITH interest.

[Tweedling]

Unless I get back what I have been paying into it since the Anno Domini MCMLXXXVI, I will consider the social contract null and void and all those fuckers better watch the fuck out.

I must say, I admire the spirit.

[Good Old Neon]

 

 

 

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."

 

Alan Greenspan for one - and two, pretty much every other financial talking head prior to the collapse. It’s no secret that purchasing low and selling high was a wise, if risky (though often described as low risk) investment for a while there – up until it wasn’t. The idea of a home being more than just a home, and also an investment is not a new or revolutionary.

 

Matt Taibbi's Griftopia goes into great detail on this subject.