Why people will continue to buy homes

Add to that the maintenance of a rented property is more dependent on the good faith of another party. As an owner you are more free to maintain or improve your home whether its for economic reasons or just personal taste. And over time the cost of moving has monetary costs as well as psychological ones.

this is my first purchase and its definitely a good feeling taking care of my place knowing that its mine. I love the fact that I dont have to worry about a lease or anything. The $200 a month for six months assessment i just got is not so nice. lol

Yeah, some of us prefer the benefits of our homes to be in the physical realm, not the psychic realm. You know, better location, better views, bigger size, nicer finishes. To each his own.

"our homes" good one. renter, it is not your home hehehe... but, as with all things, there are +s and -s to each case. There are no universal truths. To each his own. There is nothing worse than someone thinking "his or her way" is right and/or right for everyone.

A home may also be a bet on government policy which wants two things
1) Negative real interest rates which lowers the effective government borrowing cost
2) Increased asset prices (e.g. real estate) as a means to continue the bank bail outs

I find the debate over WHEN to buy vs. rent more interesting than WHETHER one should buy vs. rent.

"Add to that the maintenance of a rented property is more dependent on the good faith of another party. As an owner you are more free to maintain or improve your home whether its for economic reasons or just personal taste."

... you have it completely backwards. As an owner, I can make do, stretch out the repairs and improvements, and live humbly in a troubled hovel. If I were a real estate investor, and wanted to maximize my profit, I'd make sure everything is kept in tip-top shape so as to keep my revenue coming in at a maximized/optimized constant/profitable level. Excessive vacancies are the death of a real estate investor.

Lets just say that some rent; some buy, some squat. It's all good depending on time and circumstance.

Keith Burkhardt (broker)

Heading up to Warwick Winery & Distillery for the Bob Dylan Tribute Weekend
http://www.wvwinery.com/

alan what you think of brooklyn gin? http://www.brooklyngin.com/

Keith, koom-by-yah. Or however one might spell it. But the truth is, it is not "all good." That is a ridiculous statement. Many people buy at the wrong time under the wrong circumstances. They ignore risk and finance with vehicles inappropriate for them, they have time horizons that are too short, they over-extend themselves, they do not make the decision to buy within the framework of a well-thought-out long term financial plan. I am a strong advocate of ownership when you (1) have a long time horizon, (2) if fits reasonably and logically within a long term financial plan established by working with an independent financial advisor, (3) in the short term the costs are acceptable given one's means and (4) after purchasing one still has the financial ability to deal with a couple of curve balls that live tends to throw at us from time to time.

Buying should be a very carefully thought out decision. Renting is not fraught with risk generally and it is tough to ruin your life by renting. Not so with buying. The discussion about whether buying is right for an individual should always be approached with the utmost seriousness and circumspection. Brokers do not encourage this,nor is it particularly their role. But when a broker chimes in with rent or buy ..."it's all good" it sounds ridiculous.

Very good points Kyle.
Couple of thoughts.
1)R.E,Broker works to earn a cc and is not truly advising a buyer( Fiduciary relationship in a legal sense)
2)Bank/Lender/Mortgage Broker works to earn a commission on the mortgage/ transaction and again what's the
Fiduciary /legal responsibility?

Despite the past crisis nothing has really changed. The Republicans fight against Elizabeth Warren's appointment. The OCC and the Fed speak about the foreclosure crisis in terms of the health of the financial system(BANKS!) and not in terms of protecting consumers. The NAR puts out pollyanish propaganda on the state of the market and lobbies against Free Market competition.

There's a ton of good information out there to help prospective home buyers but little evidence that they are benefiting fully from it.

KeithB, I've never had Brooklyn gin. I generally don't drink flavored vodka, the one exception being Absolut Citron with fresh grapefruit juice.

I heard of taking comments out of context, but to not even quote the complete sentence is a bit more than unfair. In the same sentence, KeithB did qualify his "all good" phrase with "...depending on time and circumstance."

KW ; as someone who began advising people to avoid buying in late 2006 I hear you. The key phrase in my light hearted holiday weekend post is" according to time and circumstances. "

I still advise a large % of people buying is inappropriate for their circumstances. Enjoy the warm weather!

"If I were a real estate investor, and wanted to maximize my profit, I'd make sure everything is kept in tip-top shape so as to keep my revenue coming in at a maximized/optimized constant/profitable level. "

You've apparently never been a landlord.

Even in "luxury" rentals, it's a constant uphill battle keeping everything in "tip-top shape" because of the mentality of renters that transcends all socio-economic levels: "It's not mine, so I don't give a shit about keeping it nice."

of course people will continue to buy homes, that's really not the issue. they just won't do it indiscriminately, they won't over spend, and they won't assume it will be worth 12 beeellion dollars when they sell regardless of what they paid and what it is. they'll just go back to buying homes to live in, that's all. but that alone WILL dramatically change the landscape of the industry.

And hopefully they'll go back to putting a minimum of 20% down and utilize only fixed-rate mortgages, not ARMs that were designed specifically to help people over-extend themselves into properties they couldn't afford.

"renter, it is not your home hehehe..."

you're joking, but can we just agree that your home is where you sleep? of course it's home. i may not be able to replace the countertops, but i wouldnt rent a place with ugly countertops! and if something breaks, you better believe i'm calling you as soon as it happens and you better send someone over chop chop, or i'm reporting your slumlording ass. frequently. or at the very least ensuring that you care deeply about my incovenience. see, that's *my* privilige as your tennant.

"if something breaks, you better believe i'm calling you as soon as it happens and you better send someone over chop chop, or i'm reporting your slumlording ass."

Because THAT always works.

did you know that nys i can just stop paying rent and it will take you something like 6 mos to evict me? did you know right before moving out, if you were particularly unpleasant in our dealings, i could open up the radiator and slather a tub of peanut butter in the farthest, deepest cracks? distrubed pettiness is not limited to landlords ;)

but can we just agree that your home is where you sleep

Technically you have to own it for it be your home, otherwise it's where you live.
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And hopefully they'll go back to putting a minimum of 20% down and utilize only fixed-rate mortgages, not ARMs

I agree on the 20% down. perhaps more but ARMS can be a great product for the right people. What other product allows you to apply your bonus toward reducing your monthly payment without refinancing? Most countries do not have 30 year fixed rate mortgages. They're terrible for lenders who have to deal with the duration mismatch to their cost of funds.

i thought home was where the heart was. is that wrong? damn, i'm always mixing things up, it's the pot.

"did you know that nys i can just stop paying rent and it will take you something like 6 mos to evict me?"

Did you know that I could cut off your heat, water, and electricity in the meantime?

Good luck with that 6 months.

did you know that there are countless tenant rights advocates and pro bono commie hippies who could ruin your life on my behalf at no charge to me, but you'll be bleeding your very own hard earned pennies for evah?

If I were a real estate investor, and wanted to maximize my profit, I'd make sure everything is kept in tip-top shape so as to keep my revenue coming in at a maximized/optimized constant/profitable level. Excessive vacancies are the death of a real estate investor.
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No this is wrong. Maximizing profits means considering whether the repair increases the market value of the property. Additionally the landlord has a lease and during that lease will weight delay, non-repair, or patching the problem until the lease runs out or against the possibility of a violation/fine.

Not every repair/improvement will generate sufficient returns so the owner/investor may not consider it. Refrigerators are not replaced until there's an obvious and noticeable difference in obtainable rent assuming that the rent increase is even obtainable in light of rent control or building location. Ditto that for bathroom counters or new floors.

Did you know I really don't give a rat's ass about tenants' "rights" activists?

And speaking of "no charge to me" ... don't think that I won't be getting my hands on your rent money whether you "pay" or not. Getting a judgement against you is very easy ... it takes less than an hour or so. Judgement in hand, I can now legally pull the money I'm owed directly out of your bank account -- or garnish your wages, if you prefer we get your employer involved.

Oh yeah, and a judgement will do a real number on your credit rating, not to mention your future ability to rent from another landlord.

but i'm the person who rents from a slumlord, and then ties them up in courts to amuse myself. or are you a respectable landlord in this senario and i'm just a bad tenant? confused.

"Even in "luxury" rentals, it's a constant uphill battle keeping everything in "tip-top shape" because of the mentality of renters that transcends all socio-economic levels: "It's not mine, so I don't give a shit about keeping it nice.""

This is SO TRUE. A friend of mine is working on her PhD, her hubby is a hedgie. They are smart and educated and they have the money for the nanny, etc. She's talking to me and starts telling me she had the entire alarm system "ripped out" of her rental home. Because it was "annoying". You KNOW the landlord spent some buck$ having that installed. I was shocked.

Home is where the Harts are. If the Harts sleep in old refrigerator boxes, that's home. "My" doesn't refer to ownership in the case of a non-tangible concept, similar to "my health".

Your confusion stems, probably, from broker-babble in which what is actually a house is all of a sudden referred to as a "home", as if that's a type of physical object. Similarly, a moron broker explained that the condo complex in DC that I looked at with my cousin "used to be apartments". Huh?

needsadvice, she would have had to put it back upon moving out, no? if they just destroyed the place and moved on abandoning their deposit to the poor landlord, i think the problem may be your friends' character and not their status as renters.

http://www.merriam-webster.com/dictionary/home

funny, no mention of ownership.

Matt -- I bet you get called "asshole" a lot and you are proud of it.

right before moving out, i could walk around and un screw every screw that's holding something in place so that it's just barely hangin on. then it looks ok, but whoever the next person is to check/use it they will all fall off! outlet/light switch plates, door hinges, cabinet hinges. that's funny! *i* will be laughing, i don't even have to see it happen! only minus is that person could be a nice cleaning lady, and i dont want to give her any trouble. maybe i'll leave a $100 bill under the sink for her to find. she works hard.

From the Oxford English dictionary
1 the place where one lives permanently, especially as a member of a family or household:
a house or an apartment considered as a commercial property:

i could mess with your doorknobs too. there are ways to have fun with a nasty landlord and make sure they remember you long after you forget them, is what i'm saying here.

"the place where one lives permanently"

sloppy definition. planet earth is the only answer to that. plane of the real? not real estate though, doesn't stretch.

just one more thing

"Oh yeah, and a judgement will do a real number on your credit rating, not to mention your future ability to rent from another landlord."

i know someone who actually did this, she is much more dedicated to her psychosis than i am and really went to war with the landlord, and you know what she did next? SHE BOUGHT. HA!

yes, as compared to a hotel. or sleeping on matt's couch. although either could become "home" if viewed in a certain light.

try again.

RS #1: "Technically you have to own it for it be your home, otherwise it's where you live."

RS #2: "From the Oxford English dictionary: the place where one lives permanently, especially as a member of a family or household."

So the OED defines a home as where you live. Shocking.

reading over these posts and seeing the se regulars (inonada and ar are of course present) snipe at each other over what is essentially a personal choice on a crystal clear beautiful Memorial Day weekend affirms what an absolute bunch of self important and boring assholes all of you are. get a life. seriously.

is there room for anyone besides you on the second avenue bus?

wouldn't be complete with out columbiacunty weighing in from his uws hole. another fellow with noone to enjoy a gorgeous day with. how many posts today cc?

it's funny. im several days between posts at this point, but columbiacunty, without fail will comment usually within 30 minutes or so i've my posting. this has been going on for years. troll? what kind of quality of life can he have?

so much better than yours.

you can only imagine and wish.

good luck on the bus.

A neighbor who lives in Pomander Walk had to move last year to another unit at that coop. Now, he has to move again because the landlord wants the unit for his son. This guy has a large dog, and works freelance so he cannot document a all of his income. It's not easy to find a reasonably priced rental that accepts a large dog and will look the other way on the traditional (40 times rent) income test, so he was stressed out but he secured a place 8 blocks further north. Buying sure beats stressing out about moving. It might sound silly but one of my earliest motives for buying was to avoid eviction on someone else's whim. In the 80s there were landlords wary of HIV sufferers, and while not afflicted, I took that as a warning that seizing some home rights might be logical plan.

you're right cunty, i can't imagine. waiting for someone else to post a comment on a message board, so i can criticize their choice of public transportation. it must be swell. salud.

jim_hones11
about 1 hour ago
ignore this person
report abuse reading over these posts and seeing the se regulars (inonada and ar are of course present) snipe at each other over what is essentially a personal choice on a crystal clear beautiful Memorial Day weekend affirms what an absolute bunch of self important and boring assholes all of you are. get a life. seriously.

"what an absolute bunch of self important and boring assholes all of you are"

i don't think we're boring. some among us, sure, but certainly not all

Meh. RSer, you've given reasons why people buy. Doesn't mean that they're right and/or rational.

Inonada: At the highish end of the rental market, LLs small or large tend to maintain their properties well. I would hesitate to say that's true for all rentals or the majority of rentals. Ditto owner-occupied properties.

With current economic environment, it's much better to buy than rent if someone:
1. currently is or will be paying rent in the next two+ years
2. can afford the downpayment + closing cost
3. the monthly cost is less than rent

Deflation is over. Rents are projected to increase and real interest rates may be negative for some time to come. If you have the means, now is a good time.

4. is in Nevada, Arizona or Florida

I was generally satisfied with the rental experience until I moved to Manhattan.

Elsewhere in the U.S., renters were generally treated like valued customers, while in my crappy pre-war rental building in NYC, the owners seem to think of the tenants as annoyances. I guess that's why NYC has the unusual custom of tipping the building employees, in order to bribe them into doing their jobs because management otherwise doesn't care.

"The bear case typically sounds more intellectually compelling but consider."

"People prefer ownership and all its psychic benefits such as the ability to provide stability to the family with regards to where the children live, go to school, and the feeling that this is yours."

Some people. Others prefer flexibility. In the end, depends on how much you want to pay for it... and this was already (over) factored into prices.

"2) Real Estate gains grow tax deferred "
So do index funds. Of course, you don't pay maintenance on index funds.

"3) Mortgage debt is deductible"
Already (over) factored into pricing.... such that you really don't get the benefit anymore.

"and becomes cheaper over time as payments are not adjusted for inflation "
Factored into interest rates... again, you already paid for it.

"4) Bonds in many cases carry credit risk or are priced with negative real returns "
And there is no risk in housing?

"5) Stock Market return can be uncertain and some stock performance is just built on fraud or fake earnings, Enron, Countrywide, Longtop Financial "

RE returns are certain... as in certainly low.

"6) Primary home may be a more protected asset under bankruptcy or other actions."
That is a good one... if you plan on going bankrupt.

Consider that home prices overall continue to fall.

The mistake made in this assessment is not realizing that while some of these are benefits, they have finite value... and it is entirely possible (and in the boom probably) to overpay for them.

If there is a benefit worth X, why would you pay 2x to acquire the benefit???

And yet AGAIN, people are mistaking investment dollars with housing dollars.

The argument over real estate appreciation over bonds/stocks/whatever is invalid. The only valid comparison is the return you get on the $2000 you spend on your mortgage versus the $2000 you spend on your rent.

Fking idiot $.10 bjmatt.

If you have 1 hour to masturbate or the same hour to have sex with 3 hotties..... I guess it's your masturbation hour, so get your box of tissue and shut the door. No wonder you are a coop board prez.

VICE prezzz