I Hope The Housing Market Crashes

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No offense to the homeowners, but I can't believe how ridiculous its gotten. Up 2.7% in one month. What? Did income go up 2.7% in one month? Hell no. This is going to end ugly and I sure hope it does, b/c I'd like to buy something but I'm not going to buy into this pig of a market. Whether its tomorrow or next year, this smells of 2000 in the Nasdaq.
 
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It sure does.........there are some markets that could be hit hard.

California
Las Vegas
Parts of Florida
 

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I could be wrong, but while I think it is going to level off very soon and possibly retreat abit, I don't expect a "crash" ala Nasdaq, unless the overall economy tanks and interests rates rise sharply.
 

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D2bets said:
I could be wrong, but while I think it is going to level off very soon and possibly retreat abit, I don't expect a "crash" ala Nasdaq, unless the overall economy tanks and interests rates rise sharply.

Probably correct
 

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Vaulted Treehouse said:
No offense to the homeowners, but I can't believe how ridiculous its gotten. Up 2.7% in one month. What? Did income go up 2.7% in one month? Hell no. This is going to end ugly and I sure hope it does, b/c I'd like to buy something but I'm not going to buy into this pig of a market. Whether its tomorrow or next year, this smells of 2000 in the Nasdaq.

I bought a new house in January of 2004 and man am I happy I did. I think it has gone up $200k since. I have been hearing for over a year now that the bubble is going to burst and the prices have continued to skyrocket every month.

I would think it has to end sometime...but I have been hearing this for a long, long time.
 

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Clip, how would you feel if your home declined by 30%? The 200,000 grand your up would evaporate. Sell it and rent and wait for armageddon in the market. My free advice to you....And I know nothing, yes, but I do have a feeling here.
 

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I will never be happy if my house goes down 30%...but it won't happen. I am sure it will top out at some point, but it happens.

Sell and rent? :icon_conf

I would rather lose 30% of the value on something I own than to donate rent to someone every month. How would that make any sense for anyone?
 

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Clip Joint said:
I will never be happy if my house goes down 30%...but it won't happen. I am sure it will top out at some point, but it happens.

Sell and rent? :icon_conf

I would rather lose 30% of the value on something I own than to donate rent to someone every month. How would that make any sense for anyone?

If a market is not going up at least 3-5% on average a year, one is actually better off financially if they rent.

Many individuals do not realize this.

God forbid they get in looking solely for profits and the market declines.

-Fish-
 

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Fishhead said:
If a market is not going up at least 3-5% on average a year, one is actually better off financially if they rent.

Many individuals do not realize this.

God forbid they get in looking solely for profits and the market declines.

-Fish-

Blanket Statement Fish.....not necc true....
 

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I am from Newport RI and since May '99 proprties values are up 140 %


:party:
 

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Vaulted Treehouse said:
b/c you can buy back cheaper clip.

I live in a home and neighborhood that I love...moving is a pain in the ass. Not to mention the cost/time/damage done with moving. When all is said and done, selling in hopes that the market crashes and renting makes little to no sense in my eyes. But to each their own.

I have made well over 25% on my home in a year and a half so a 30% decline would suck, but not be devastating. Especially when you consider I could happily live here for the rest of my life.
 

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sherman said:
Blanket Statement Fish.....not necc true....

Sit down for 2-3 hours and PUT ALL THE FIGURES into it.

Say you buy a house for 100,000 and it appreciates 3% a year for five years and then decide to sell vs. somebody that rents at a comparable price level.

Remember, take 2-3 hours and put ALL THE FIGURES into it.................closing costs, up keep, property taxes, assoication fees, etc., etc.,

In alot of scenarios, owning a house is more of an AUTOMATIC SAVINGS plan then an investment option.

And as mentioned, heaven forbid the market goes down in those 5 years.
 

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Vaulted Treehouse said:
Clip, how would you feel if your home declined by 30%? The 200,000 grand your up would evaporate. Sell it and rent and wait for armageddon in the market. My free advice to you....And I know nothing, yes, but I do have a feeling here.

Some one i know is also looking to buy a house soon. We both feel the market is going to crash soon. So he wants to wait a while for it to come down...

Ps..If my house had gone up in value 200k, i would sell right now, rent for a while until the crash comes around...

With all this political turmoil around the world, the market is bound to crash.
 

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I made the same mistake waiting a year to buy my home because I bought into "the crash is coming" theory. Needless to say housing went up over 20% in the year I waited.

I am in a home that I would consider my "dream home" so to say in that I could happily live in this home the rest of my life. It is not an investment and I wouldn't sacrifice quality of life to rent and try and save some money banking on a crash.

Every person has their own situation and reasoning...for some it may make sense while for others it would not.
 

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Fishhead said:
Sit down for 2-3 hours and PUT ALL THE FIGURES into it.

Say you buy a house for 100,000 and it appreciates 3% a year for five years and then decide to sell vs. somebody that rents at a comparable price level.

Remember, take 2-3 hours and put ALL THE FIGURES into it.................closing costs, up keep, property taxes, assoication fees, etc., etc.,

In alot of scenarios, owning a house is more of an AUTOMATIC SAVINGS plan then an investment option.

And as mentioned, heaven forbid the market goes down in those 5 years.

<TABLE cellSpacing=0 width="100%" border=0 valign="Top"><TBODY><TR class=heading3><TD>The Basics</TD></TR><TR style="FONT-FAMILY: Arial,Helvetica"><TD>Buying vs. renting: What's right for you?
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To put it simply, being like most people means you'll stay put in your next home for seven years or so. Longer than that, renting becomes irrational, financially speaking. It means the numbers add up to a negative, and you'll become a loser. The longer you rent without buying, the more you will lose. <TABLE borderColor=#336633 cellSpacing=0 cellPadding=5 width=146 align=right border=1><TBODY><TR><TD vAlign=top align=middle width=146>Find a loan that's
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Although nearly two-thirds of the nation’s households own their own homes, it’s not the best choice for everyone. If you move a lot from city to city or you have had credit problems or simply can’t afford the home you like, you may be better off renting.

The choice between renting or buying is a tough one, both financially and emotionally. Owning a home means you have to pay not just the mortgage each month, but real estate taxes, homeowner’s insurance, maintenance costs and any other incidentals that occur. From an emotional standpoint, it means you’ve agreed to establish roots in a single place with a long-term loan that for most people, lasts 30 years.

Go into the purchase knowing what it’s going to cost you, not just in the long-term but at the time of purchase as well. The closing costs can be as much as $2,000 to $5,000, depending on lawyer’s fees, points, escrow costs and other fees. That’s in addition to your down payment. You’ll have to pay at least 20% of the home’s price if you want to avoid paying private mortgage insurance, which otherwise adds another $40 to $80 to your monthly mortgage payment. If you can’t afford that much (as many first-time buyers don’t), there are many lenders who will allow you to borrow up to 95% or 97% of the price.

The mortgage gives home ownership its strongest investment characteristic. It offers leverage.

As wealth-producing as leverage can be, it always involves an increase in risk as well as the possibility of reward. When home prices (or stock prices, for that matter) are falling, leverage makes losses. Borrowing most of the cost of buying in a down market means the loss you take could wipe out your ownership interest, or equity in the property you sell. Your equity is the market value of your property, less the amount you owe on it and must repay when you sell. It represents the amount of your money that's "tied up" in the property.

You can use this knowledge of leverage to your advantage. Get information from your local Realtor or Chamber of Commerce to determine how prices have risen in your area. You can even get a broker to show you appreciation levels by specific neighborhoods. Also, look at your region’s economic health. Is it growing? Are more people moving in than leaving? If so, this could lead to price appreciation that could make your home a good investment. And with the changes in the tax laws, you can keep the appreciation money tax-free as long as you live in the home at least two years.

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Pros and cons of owning your home
Once you’ve bought a new house, you'll gain from some sizable tax benefits.

In the United States, Congress and the federal government have encouraged home ownership by subsidizing it for several generations. Mainly the largesse has come through income-tax deductions and the special treatment of some gains on the sale of residential housing. If you’re in the 31% tax bracket, owning a home with a monthly mortgage payment of about $1,500 is about the same as renting a house for $1,000.

It's a mistake, however, to think that tax breaks alone make home-buying more rational than renting. Your landlord gets many of the same deductions, and one, namely depreciation, that you don't. You may think you fail to benefit from those, but you do. You see his or her deductions in your rent. It's lower than it would have been without the tax breaks. The landlord, moreover, bears the risk of ownership, the risk that prices will fall and erode his or her equity.

First-time homebuyers especially may overlook another consideration. For all the financial and emotional rewards of home ownership, it carries a heavy burden of responsibility. That's not merely maintenance or cosmetic upkeep, either, as costly as it can be.


Legal liability is a growing concern. Real estate has encouraged American litigiousness ever since colonial battles over land titles. Where there were once lines dividing property worth a few dollars an acre, there are now big-money damage claims. Homeowners can be forced to pay compensation for a stranger's slip and fall or a tree's damage to a neighbor's roof. They can even be forced to pay for the environmental cleanup of oil or other toxins that have seeped onto their property from outside sources.

Buying liability insurance isn't enough. You've got to maintain your property safely and in accordance with legal requirements to keep the insurance. Nobody can insure you against your own criminal negligence.

Homeownership remains part of the traditional American Dream. For the first time in history, America offered ordinary people the right to own their land and their homes outright, indenturing their property to a friendly banker rather than their bodies to a feudal lord. Before you sign up for 30 years of mortgage servitude, make sure you’ve done your homework lest the dream become a nightmare</TD></TR></TBODY></TABLE>
 

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Good read SHERMAN, thanks for sharing with the posters in this thread.


:103631605
 

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a bit lengthy i know but i wanted to get the part about the tax benefits in there....of course i am biased as i do mortgages and my wife is a Realtor....
 

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Fishhead said:
Sit down for 2-3 hours and PUT ALL THE FIGURES into it.

Say you buy a house for 100,000 and it appreciates 3% a year for five years and then decide to sell vs. somebody that rents at a comparable price level.

Remember, take 2-3 hours and put ALL THE FIGURES into it.................closing costs, up keep, property taxes, assoication fees, etc., etc.,

In alot of scenarios, owning a house is more of an AUTOMATIC SAVINGS plan then an investment option.

And as mentioned, heaven forbid the market goes down in those 5 years.

Are we assuming the "same amount of house" for the rental vs. the home? Usually people buy bigger and better homes than they would have if they were renting. I think Sherman is probably right that a blanket statement does not work in all cases. Plus the mortgage interest and tax deduction is big for some people, not as big for others. There are just too many variables to generalize. But the point is well taken that it's not always better to buy. But I think for most people in the long run it's the way to go.
 

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Originally posted by Vaulted Treehouse
"
Clip, how would you feel if your home declined by 30%? The 200,000 grand your up would evaporate. Sell it and rent and wait for armageddon in the market. My free advice to you....And I know nothing, yes, but I do have a feeling here. "

This is one of the most irresponsible and ignorant pieces of advice I have ever heard. Sure there is a possibility of this but once you are in the housing marlet sharp declines (though rare) really don't affect you as the value of your home will stay proportionately the same as other homes. The trouble is people are thinking of their homes as investments - they are not, they are places to live in.

Investment property is like anything else - a gamble. So maybe it isn't the right time to get involved in investment property buying but to sell your home and donate rent when there is still a possibility the market will continue to boom is dangerously unsound advive.

I recollect in 1999 a couple friend of mine selling their home and renting back in the UK thinking prices couldn't keep going up. Well you guessed it - they did keep going up and they have NEVER owned a home since.
 

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