"you still own something of value as opposed to worthless stock in some defunct dot.com start-up."
Don't remind me!!!! ARRRGGGHHH!!!!!!!!
60 % don't live in california, new york or florida
Bubble? You mean the MSM/Dem "Hate Bubble" concocted to discredit the Bush regime?
Well, that makes sense. Once homeowners believe in a real estate bubble it's no longer a real estate bubble, rather it's a real estate bust.
My wife and I sold our house in S. Calif. recently and moved out of the state. Why? Becuase the equity isn't real unless you take it, and I didn't believe it would be there forever. When I left, only 11% of the people could afford a home in California.
As inflation and interest rises, housing prices will come down. And they will rise, and are rising.
By the way, there's no bubble where I am now. We took our equity and paid cash for a home in another state: New 3 br 2 ba - $129,000. California housing prices are insane and unsustainable - no other word to describe it. It's so crowded there, it is no longer even a nice place to live. They can have their rat race, and inaffordable housing and gay marriage. Color me gone!
It's alway good to have a roof over your head. Maakes you feel better about yourselve.
If we'd all just go out and buy a house, using an interest-only negative amortizing loan if you have to, we'll all be rich someday.
Yeah, that's the ticket.
Throughout human history, houses have always been a negatively depreciating asset. Houses wear out, need maintainance, and fixing, just like a car would.
It's no different today. To the extent that they go up in an area, it's because of market forces-desirability, job growth, income growth, population growth, immigration, inflation, or most importantly, SPECULATION.
Stocks in general are not worthless. They are shares in the real and intangible assets of a corporation. If you are a "homeowner" you're really not one until you pay the mortgage off. With stocks, unlike houses, you cannot lose more than you invested. With a house, you can end up losing all of your investment (down payment) and then some. If you put 5% down, and the house falls 20% in value and you need to sell, you still will owe the remaining balance to the mortgage company.
no one is truly a homeowner anyways since the govt. can take it away from you at any time, for practically any reason. If person "B" will pay higher property taxes than person "A" that govt. can take it from "A" and give it to "B." Go ahead and stop paying your property taxes, i.e., your rent to the govt. You'll find out who really owns that property
If you paid half a million for a 500-square-foot condo with the idea of flipping it in a year or two, then you might nto actually own something of value.
I saw someone on CNBC the other day saying the prices of real estate in NYC have been dropping recently.
Not really: an asset is an asset, and its value depends on beliefs about the stream of future benefits.
if values drop, you still own something of value as opposed to worthless stock
You seem to be completely misunderstand value and the mechanism of price formation.
More disturbingly, you believe that things have an intrinsic value. This is idea was introduced by Marx and has been discredited even by socialists. Does that bother you that you are in such company?
It's true that a house can't totally "disappear" in value the way stock can. However, a house CAN end up costing a great deal to maintain. God forbid your house goes down in value and is upside down in the mortgage - and then you end up with a major problem like mold or flooding not covered by insurance. It can be a true financial disaster.
Houses are very like the stock market, in a way people don't realize. They do go up and go down - logically people realize that, but they don't really internalize that knowledge.
My father was a real estate investor for many years - it provided him with a great living, but it takes a lot to be suited to it - a lot of work, and like politics, a thick skin. You can't go to bed at night worrying about a tenant or the mortgage.
Home buyers do.
The cost of land is going up more than anything. And with an inflated price of 2x4s, new houses will cost more too.
The result I think is no bubble burst. Maybe flat in some places, but here in Phoenix it's obviously still a good time to buy.
That being said, I happen to think that there are most surely bubbles out there....some huge, some not so big. Time will tell....
FWIW-
But unless you live in your stock, you can always sell it high.
The only problem is that real estate is so leveraged. If your mortgage is 70% of the value of your house, and prices drop 15%, you have lost half of your stash, ala the NASDAQ collapse. It is the leverage the gnomes are worried about.
Hate to rain on your happy parade, but the real estate market is controlled by the "MARKET FORCES" not the "happy homeowners confidence."