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1   Misc   2019 Jul 28, 11:51pm  

Since WWII buying a house was not a high risk endeavor, that is until Glass Stiegel was removed. Glass Stiegel not only separated main street banking from investment banking, it prohibited investment banks from securitizing loans on residential properties. Well, 10 years after its repeal the financial system almost failed because of dodgy loans underwritten by Wall Street. We had about 8 million foreclosures during the Not-so-Great Depression. Figure about 3 people per dwelling and double the number of people impacted due to renters being evicted (those are kinda conservative numbers in my opinion) and you end up with about 50 million people economically displaced within the country. The federal government bailed out the banks, Wall Street, state and local governments and the rich, but let everyone else fend for themselves. There was very little gun play involved, just a few stray incidents, as most people went along with their lot in life. After being bailed out, the banks and Wall Street did not increase lending to commoners for houses that were now at depressed prices. Instead the banks and Wall Street firms took their bail-out money and loaned it to their hedge fund friends, who used it to buy up many of these foreclosed houses. This was approximately 7% of the US housing stock that was transferred from individual owners to Wall Street hedge funds. There was nobody who even spoke up about this much less people with guns. Housing prices are now at an all-time-high compared to wages. Prices could continue to increase as interest rates decrease with possibly government debt going negative interest rate, or they could crash if there is another recession/depression caused by investors not purchasing more corporate debt. It's risky again.
2   SunnyvaleCA   2019 Jul 29, 10:59am  

One thing I see people forget is that a house that doubles in values after 30 years has not appreciated at all; it's barely kept up with inflation (if that).

I know buyers of old hoses who have now idea how to maintain old houses. Each little incident is a multi-hundred-dollar repair call. It adds up quickly.

Then there's the issue of property taxes being raised on you. This is the nightmare of Illinois. It's a double whammy... not only does it now cost you more each year, but your house becomes less valuable because nobody wants to buy your house and take on the tax responsibility.

Lack of flexibility can be brutal. Buying a house and finding out you need to move a few years later to get a better job almost certainly means you'll take a loss. Or you'll stay put and not advance your career. Or you'll stay put and take the new job and suffer the long commute — wasting 2 additional hours every day that could have been put to use working longer hours and advancing your career.

That said, if your house appreciates, you are 5x leveraged!
3   Tenpoundbass   2019 Jul 29, 11:10am  

My house will be paid off this time next year.

I just put a 200sqft Shed in the back yard. The metal studs were 4 times thicker than the metal studs they use in Construction. This building is built like a brick shithouse.

24 Sheets of Drywall, 14 sheets of Hardibacker 500, 6 bags of thinset, 1 bag of grout, 20 boxes of Daltile Ceramic Tile, 7 electrical outlets, 5 male, 5 female XLR wall plates, 2 4 pair Banana Jack Speaker Wall plates. and a 1200 BTU Mini Split AC unit, and about 10 grand and 4 months later. I've built a one hell of a Studio/Office. Can't do that in a rental.
4   Onvacation   2019 Jul 29, 11:18am  

Misc says
The federal government bailed out the banks, Wall Street, state and local governments and the rich, but let everyone else fend for themselves.

Damn that Bush.
5   Ceffer   2019 Jul 29, 11:39am  

Tenpoundbass says
This building is built like a brick shithouse.

Haven't they just discovered a bunch of underwater brick shithouses off the coast of Florida? Like, literally underwater.
6   Tenpoundbass   2019 Jul 29, 11:46am  

Florida is a man made paradise. Everything that is attractive about Florida as a vacation spot was man made.

Our beaches are no exceptions. Our beaches were once long mangroves that extended the coast line about a 1/2 mile out further.
Those were all cleared out and the Army Corp of Engineers dredged off the coast and built the white beaches we associate with Florida now.
As a result the natural seabed off the coasts, keeps reclaiming the beaches. Without the mangroves there to keep the sea at bay. The beach has to be replenished every ten years, or it gets serious. That is exactly what happened until early 2000 when they stopped the practice of the every decade beach restoration project.

There was once a bar and grill about 1/4 mile off Hollywood beach, in the 30's.

As for where I'm at, I don't even have to buy flood insurance. When it rains hard like it did the last few days. My street does not get standing water. I drove to the store, a few streets over, the streets and yards are flooded.
7   Ceffer   2019 Jul 29, 1:39pm  

In Florida, outfitting a nice used submarine on stilts would be a good choice of housing.
8   WookieMan   2019 Jul 29, 3:24pm  

Tenpoundbass says
My house will be paid off this time next year.


This is one of the positives of home ownership. You of course need to live there long enough to pay it off. But if you do, those savings can be massive in the years you need to conserve the cash the most. There are too many variable to the own versus rent discussion to ever say one option is better than the other, so I've never understood it. Seems like owners feel more superior for some reason and there's some sort of jealousy aspect to it.

I've personally stopped worrying about appreciation. Our goal has been to cut the housing costs as much as possible and make our home awesome for us (sounds like a nice shed FYI). Fact is we're never home and when we are, statistically most of it is spent sleeping. We've got a pool and a kick ass garden for the warm months/days. And then a full finished basement with a theater for the cold months to chill and watch movies and shit. We're all in about $1,200/mo PITI. We're under 7% debt to income on the payment. We could both work at McDonalds and still live pretty comfortably. I'm an IL unicorn with only $3k in taxes. As with any market, timing is everything and knowing how to appeal your taxes.
9   FortWayneAsNancyPelosiHaircut   2019 Jul 29, 3:25pm  

First home is usually a good way to go (if you don't overpay).
After that it's only an investment if you can buy during down turn when taxes are low, rates are high, and prices are down.

Buying during boom is usually a losing proposition, when that money will do better just sitting in a boring stock investment.
10   Ceffer   2019 Jul 29, 3:38pm  

WookieMan says
We're all in about $1,200/mo PITI. We're under 7% debt to income on the payment.


I live in California. I hate you. May illegal immigrants and homeless crap on your lawn.
11   WookieMan   2019 Jul 29, 3:46pm  

Ceffer says
WookieMan says
We're all in about $1,200/mo PITI. We're under 7% debt to income on the payment.


I live in California. I hate you. May illegal immigrants and homeless crap on your lawn.


People in my own state hate me. My mother in law is close to paying $1,200/mo in property taxes alone. I'm not gonna lie, we got fucking lucky when we bought. I've lost on real estate though big time before. You live, you learn. We'll likely own this house in retirement and may VRBO/AirBnb it, but plan is to rent and travel during retirement. Short term 3-6 month leases in different countries.
12   Shaman   2019 Jul 29, 3:55pm  

Ceffer says
WookieMan says
We're all in about $1,200/mo PITI. We're under 7% debt to income on the payment.


I live in California. I hate you. May illegal immigrants and homeless crap on your lawn.


Hah yah, I feel some of that same jealousy. Unfortunately, here in California we also have a greater chance of those bums and immigrants crapping on our lawns.
No tornados though. Just droughts, wildfires, torrential rains, and an unending fountain of horseshit flowing out of Sacramento. Oh and my PITI is about three times Wookieman’s. I gotta make money!
13   Onvacation   2019 Jul 29, 6:40pm  

WookieMan says
Short term 3-6 month leases in different countries.

That sounds like a great idea!
14   Dholliday126   2019 Jul 29, 6:44pm  

People who don't own, love crapping on owning and people who own love renting to people who love to crap.
15   everything   2019 Jul 29, 7:08pm  

For many people it's a relatively flat investment, and the bank must be paid. I agree, we are in a bit of a healthy flat spot, even though mortgage rate fell about a full point while the fed has done nothing, price increases have abetted some.
16   Tenpoundbass   2019 Jul 29, 7:17pm  

WookieMan says
This is one of the positives of home ownership. You of course need to live there long enough to pay it off. But if you do, those savings can be massive in the years you need to conserve the cash the most.


Really after 5 years, we realized we barely paid $7G off the principal, and that's with only a 4.25 rate.
So about 4 years ago, we started slamming an extra $2K on the mortgage, like we had a $3800 mortgage(as many people making less than we do).
The principal disappears quick when you start doing that.

I think the trick is, don't pay more than $200K for a house. Unless you really have the money to live large like that. And if every brain dead idiot in the world didn't put a $500K value on every Crap shack left in inventory. Then $500K would buy a lot of house, and $120K would be buying a nice starter home.
17   Patrick   2019 Jul 29, 7:27pm  

Misc says
Since WWII buying a house was not a high risk endeavor, that is until Glass Stiegel was removed. Glass Stiegel not only separated main street banking from investment banking, it prohibited investment banks from securitizing loans on residential properties. Well, 10 years after its repeal the financial system almost failed because of dodgy loans underwritten by Wall Street.


What we've got here is failure to regulate.

https://en.wikipedia.org/wiki/Regulatory_capture

Regulatory capture is a form of government failure which occurs when a regulatory agency, created to act in the public interest, instead advances the commercial or political concerns of special interest groups that dominate the industry or sector it is charged with regulating.[1] When regulatory capture occurs, the interests of firms, organizations, or political groups are prioritized over the interests of the public, leading to a net loss for society. Government agencies suffering regulatory capture are called "captured agencies".

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