The economy, is it good or bad. (Page 109/181)
aceman DEC 26, 10:19 AM
We're doing just fine, Steve. One has got to be pretty dumb to think that you can buy a property for $100,000. Watch it go up to $225,000 in 6 years and think that it's going to stay at that level. The house values are just correcting themselves. My house's market value is currently at around $175,000-$185,000 after owning it for 9 years. (Bought at $109,000) That's not a bad return on an investment.

The ones not doing well? Those fools that bought at $200,000 two years ago, couldn't ever reallly afford the payments and now can't sell it for what they bought it for.
Phranc DEC 26, 10:29 AM

quote
So those millions of Americans who’s biggest investment in their lives is their home are doing just fine right? Wrong. We all are getting screwed.



Housing is a longterm investment. Things up 100% come down 10% go up 100% come down 10%. Thats how the economics work. All those people who you think are going to be so screwed will fine in a few years when their houses go back up and past what they paid for.
84fiero123 DEC 26, 10:31 AM
Ya Ace you are one person out of how many MILLIONS?

Just use that brain and education of yours and think about it. Think about how many people who have bought homes in the last few years who didn’t buy beyond their means. They paid more than they are worth.

Now people like you and I who bought just a few years before that have a larger cushion. That does not mean we are immune from what is happening, just in a better position to weather this type of thing.

Not everyone who bought homes in the last few years bought beyond their means, but we are all feeling the bite being taken out by those who did, and the MBA’s who have degrees and said this is never going to happen.

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Technology is great when it works,
and one big pain in the ass when it doesn't.
Detroit iron rules all the rest are just toys.

aceman DEC 26, 11:07 AM
Steve, I am one of millions of people that are doing just fine. You're doing just fine with your investment in a double-wide and a 5 acres of land, right?

Steve, if those people bought 2 years ago for $200,000 and today it's worth $185,000 in 7 years it'll probably be worth $250,000-$275,000.

Owning/living in a house should be viewed as a long-term investment.

If you're looking at buying the house to flip it.....Risky investment.

If you're buying a house and you know that your only going to be living in it for 2-3 years.......Risky investment

If you're buying a house HOPING you can make the payment in 2-3 years......Risky investment (Hope is not a course of action)
84fiero123 DEC 26, 11:19 AM
What about the millions who just bought within their means in the last couple of years?

Have you not noticed that many, many years ago most people bought a home and lived there their entire lives.

Nowadays most people now will own several homes in their lifetime. Moving for their jobs, economic reasons, or just a better home.

You yourself have 2 homes, how many have you owned in the last 20 years?

We are a more mobile society now, people don’t own their homes forever any more.


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Technology is great when it works,
and one big pain in the ass when it doesn't.
Detroit iron rules all the rest are just toys.

Formula88 DEC 26, 11:25 AM

quote
Originally posted by aceman:

The ones not doing well? Those fools that bought at $200,000 two years ago, couldn't ever reallly afford the payments and now can't sell it for what they bought it for.



That's one of my concerns. I bought my house in Jan. 2006 - right at the beginning of the downturn. I was expecting there to be a downturn, but was also concerned about rising interest rates. Do I buy now to lock in a low rate, or wait to see if prices drop, but interest rates go up?

I gambled and went for the low rate; however, I got a fixed rate mortgage, so regardless of how much value (if any) my house loses in the short term, I don't have to worry about my payments changing. The only way I can get bit now is if I lose value and have to sell before it regains the loss. Luckily I have no plans to move in the forseeable future, and my area has fortunately been spared much of the downturn. (we didn't get the explosive growth either, so the correction has been less severe)

But the big thing is - I went with a fixed affordable payment. No matter what else the housing or lending markets do, I can count on that payment staying the same. I've always viewed ARMs as just way too big a gamble on that big of a purchase.
fierobear DEC 26, 11:54 PM

quote
Originally posted by Formula88:
Luckily I have no plans to move in the forseeable future, and my area has fortunately been spared much of the downturn. (we didn't get the explosive growth either, so the correction has been less severe)



This is important. They areas that had the highest growth rate were the most risky investments, and now things are adjusting.
Formula88 DEC 27, 09:57 AM

quote
Originally posted by fierobear:


This is important. They areas that had the highest growth rate were the most risky investments, and now things are adjusting.



Exactly. If we'd been having the huge explosion in growth, I'm not sure what I would have done. I would have been more likely to wait to see if the bubble burst, I think. Hard to say, but again the key would be how long I plan to stay in one place. If I had plans to move within 7 years, I'd probably have kept renting in those markets.
84fiero123 DEC 27, 10:02 AM
So after 20 some pages how about a vote?

Simple answer to a simple question.

Is the economy headed into the toilet?

No rhetoric, no comments, no BS, just yes or no.

------------------
Technology is great when it works,
and one big pain in the ass when it doesn't.
Detroit iron rules all the rest are just toys.

Old Lar DEC 27, 11:37 AM
NO

The recent down turn is just a correction in the market like it did in 1972, 1984, 1987, 2002 etc. I sold my house in NY after 27 years of ownership and sold it for about 2.5x what I paid for it not adjusted for inflation. My house in Florida was ordered in '03 at an affordable price for me. I was fortunate to get a good price before the market went crazy and the house is now appraised (by the taxman) at about 40% more than I paid for it.

http://money.cnn.com/quote/...=5yr&Submit1=Refresh

The Dow shows that for the past 5 years that this index is up ~50%. You cannot evaluate the economy health just by looking at the last two or three months activities.

When I retired in '02, I got into a little panic because the market (my retirement income) decreased for a while, but it did turn around and I'm ahead of the game. That is my situation. I let the money managers of my investments take care of my portfolio. There are too many variables with investment stratagies for me to become a day trader and jump around with my investments.

[This message has been edited by Old Lar (edited 12-27-2007).]