Posted on 08/21/2005 11:40:06 PM PDT by ex-Texan
"I wished the f'n tourons hadn't decided to stay."
Tourons? LOL, I went to Western, we called them Floridiots.
FYI in descending order: idiot, moron, then touron..... Get the picture?
Ain't in nice being a Tar heel? That doesn't mean we went to The Hill neither!!
"Ain't in nice being a Tar heel? That doesn't mean we went to The Hill neither!!"
Never even considered UNC-CH. Planned on going to State, but didn't much care for the campus once I went down for an extensive tour. Western had a well-regarded program in the field I wanted to enter at the time. Ended up with a BFA in Graphic Arts though, lol, which means I should have stuck with State. But, all in all, I can't complain, things have worked out well for me.
What part of NC do you call home, and what are you seeing in residential RE there? Coastal is still nuts to my understanding, as are certain areas in the mtns. Appreciation and days on market are improving in all the Piedmont cities last I saw. USA Today even had Durham listed as "hot," although I have no idea why they'd have appreciated over 30% since last year, when everybody else in the Piedmont region cities are between 5 and 10%. Must be some sort of statistical quirk?
"Is that old trailer without the wheels in the back of the picture the guest house?"
Yeah I think so. Maybe the 4th bedroom.
More cad than wuss, I guess a little of both. But I'm man enough to NEVER inflict a "mid-life crisis" on my beloved family, I hate any ba$+@rd that does that.
Actually, it's almost a wash. My bond purchase pays 4.125 at 5 years and I have a 5 year IO ARM at 4.25%. There's a slight amount of loss due to taxes and the difference in the rates, but it's less than I currently pay for my life insurance policy and just as important for my families financial well-being.
My plan is that if the bubble turns out to be a non issue in 4.5 more years, I'll cash out the bond and pay off the ARM (finding one with no prepayment penalty was a bear, but I got one). If, on the other hand, the bubble does turn out to be real, I'll have a large potential cash reserve to call on to help me through whatever difficulties may arise. I know that I'll still be on the hook for the debt even if the bank pulls the property, but that kind of cash gives you a LOT of options.
I also have the advantage that the outstanding debt on my first mortgage (a 30 year fixed) is about 30% less than its current appraised value, so our market can lose nearly a third of its current level before the bank-pull clause even becomes a possibility. My second doesn't have that clause at all.
"I know that I'll still be on the hook for the debt even if the bank pulls the property"
Now there's an ugly thought... in the event of a large-scale decline in value, a given mortgage company could conceivably call the mortgage, sell the property in the fear that it would lose further value, and then come after the mortgagee for the difference, thereby protecting their interests.
The laws governing foreclosure due to nonpayment surely don't apply identically, in a situation where mortgagee has continually paid on time, with mortgagor "pulling the note" due to "underperformance" beyond the control of the mortgagee, do they?
Whatever... if you don't realize that there are as many markets as there are grocery stores there is no use. I'll pay taxes if that means I have a fatter wallet.
Invest your money where you can afford. Have it fixed at 30 if you are uncomfortable with an ARM; save your money. Wait for 3-10 years. Sell or borrow of the equity; buy up somewhere else...
If you wait for everyone to go bankrupt you may as well buy in Mojave. At least you can afford plenty of tinfoil with the money you save.
If there is a clearance sell I'll be sure to buy the houses with the money I'm making now. How about you?
This is a marvelous point, and one that I think Marx sought to exploit. It's very simple. Capitalism is amoral (this of course is one place where Rand erred). However, it requires self-government to really reach it's fullest potential. There are times when the capitalist ought consider the plight of others (as in "not gleaning all your fields.") It's much better for everyone if it's done voluntarily rather than enforced by regulation. The institutionalization of anything ruins it if there is no room for the heart.
No, Houston housing is cheap. No one moves to a place like Houston voluntarily. Coastal California real estate can become overheated and overpriced, as it is now, but the underlying demand will always be there. Barring a major aerospace resurgence, there is nothing in Houston likely to create demand, so those cheap houses are going to stay cheap. And even at their currently low prices, they have more potential downside than upside, and will likely lose value in the event of a real estate downturn.
~ cue Erik Estrada~
"Get your piece of California real estate...in California City!!!" ;)
"Barring a major aerospace resurgence, there is nothing in Houston likely to create demand, so those cheap houses are going to stay cheap"
Continued high oil prices will drive domestic exploration and production. Housing in Houston is "cheap" as you put it, due to not having fully recovered from the "oil bust" back in the late eighties.
And, to state that no one would voluntarily move to Houston smacks of a sort of flyover-country mentality. Sure, the summer's hot and humid, as well as long. How much of the rest of the country could be similarly described, including several putatively "hot" markets? Orlando springs to mind, for one.
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Historically that's not so. NYC RE is fueled by Wall Street bonuses at the high end. If they go away (as happens from time to time) so does the value at the high end, a change that will drive all prices downward.
Also, one day of fifty dead on the subways from a London type attack will drive businesses away.
No, it completely misses the point. machogirl, like a lot of Americans, has been tricked by mortgage industry propaganda and family folk wisdom into thinking she has to own a house, and therefore must go out and compete with all the speculators in her area. Instead, she needs to do what any good capitalist would do - play the other side of the trade. Rent, save her money, let the fools bid the prices up, and take advantage of them when the market gives way.
The market doesn't owe you a house at a price you can afford. But neither do you owe the market your money when the value for the dollar isn't there.
A capitalist is only the victim of a bubble if he or she chooses to be. There is always another way to play the game.
I've been saying it for years, The Economist has done quantitative analyses of it, but this is a lovely calculator that makes it simple to wrap your head around. In many areas, renting is a superior investment to buying in terms of net worth due to a very soft rental market and very tight buying market.
Even accounting for write-offs and appreciation, renting and investing the money saved is a superior investment strategy in many, many markets.
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