Why buy a home to lose money on it the next day? 19 million homes vacant.

Discussion in 'Economics' started by wilburbear, Feb 3, 2009.

  1. I have seen some financial advisors in the last few months actually recommending selling your home if you can get a decent price and renting. They predict that home prices may be going much lower and that you can get into a nicer home at a lower price in the future.

    It is a great time to buy foreclosed houses cheap, rent them, get a ton of tax breaks and wait 7-10 years for a bullish real estate cycle to sell them at a profit. I just can't stand the idea of being a landlord (been there, done that).
  2. There was this dude on the tube from Forbes that said that he had sold his house in nyc because the price of houses was going down drastically and he was going to buy one back at a much lower price.

    The problem was that he said that more than 10 years ago and since that time the prices skyrocketed.

    He probably hasn't made a profit even now.

    Saw the dude on tv again recently. He's still a financial advisor. :D

  3. I do agree with you Dr. But also remember that everybody has been snatching up property and trying to rent it out. There is an outstanding amount of junk that is very overpriced on the rental market right now imo. Typical renters are making less now as well, and in my area rents have been falling pretty fast along with prices.
  4. Costs of being landlord have went up a lot also.
  5. Because the gap between mortgage and rent are getting too close to resist.

    Here is the logic.

    I live in Bay Area CA. I was paying 2K a month for a 2 bed 1 bath 900 sqft apartment.

    In November you could smell the panic so I put a lowball bid on a 3200 sqft home with pool hot tub on 20K sqft lot. This home sold in Jan 2007 for $1.2 mill. I picked it up for about 650K. Now my "rent/mortgage" is fixed at $2700 for life.

    You see I don't give a shit if they tell me my home is worth $5 tomorrow... I won't sell and I'll never be hostage to renting again.

    Does that make sense?

    Also debt to income ratios in the bay area are below long term sustainable levels and people are starting to buy again.
  6. Lucrum


    Or you could just move in a vacant house for free and hope no one notices. "They" can't keep an eye on all 19 million vacancies can they?
  7. If you pay the property taxes, take care of the place, and pay the utilities, the bank won't mind.
  8. sumosam


    i found the housing numbers hard to believe....from a negative up to 6%?

    Maybe people are starting to buy again....and perhaps it is cyclical. in any event, i am staying long SRS.:confused: :confused: :confused:
  9. #10     Feb 3, 2009