Trulia Voices Real Estate Q&A in Tampa
A Word of Advice During a Housing Slump: Rent
A promotional spot for the National Association of Realtors came on the radio the other day. The spot, introduced as something called “Newsmakers,” was supposed to sound like a news report, with the association’s president offering real estate advice. “This is the best time to buy,” Pat Vredevoogd Combs, the president, said cheerfully. “There’s a lot of inventory in the marketplace. Interest rates are low. It’s a wonderful tax deduction.”
By the Realtors’ way of thinking, it’s always a good time to buy. Homeownership, they argue, is a way to achieve the American dream, save on taxes and earn a solid investment return all at the same time. That’s how it has worked out for much of the last 15 years. But in a stark reversal, it’s now clear that people who chose renting over buying in the last two years made the right move. In much of the country, including large parts of the Northeast, California, Florida and the Southwest, recent home buyers have faced higher monthly costs than renters and have lost money on their investment in the meantime. It’s almost as if they have thrown money away, an insult once reserved for renters.
Most striking, perhaps, is the fact that prices may not yet have fallen far enough for buying to look better than renting today, except for people who plan to stay in a home for many years. With the spring moving season under way, The New York Times has done an analysis of buying vs. renting in every major metropolitan area. The analysis includes data on housing costs and looks at different possibilities for the path of home prices in coming years. It found that even though rents have recently jumped, the costs that come with buying a home — mortgage payments, property taxes, fees to real estate agents — remain a lot higher than the costs of renting. So buyers in many places are basically betting that home prices will rise smartly in the near future.
Over the next five years, which is about the average amount of time recent buyers have remained in their homes, prices in the Los Angeles area would have to rise more than 5 percent a year for a typical buyer there to do better than a renter. The same is true in Phoenix, Las Vegas, the New York region, Northern California and South Florida. In the Boston and Washington areas, the break-even point is about 4 percent. “House prices have to fall more before housing becomes a clear buy again,” says Mark Zandi, chief economist of Moody’s Economy.com, a research company that helped conduct the analysis. “These markets aren’t as overvalued as they were a year ago or two years ago, but they’re still unfriendly. And that’s one of the reasons the market is still soft — people realize it’s not a bargain.”
There is obviously no way to know what home prices will do in the next few years. But there are two big reasons to doubt the real estate boosters who insist that it’s once again a great time to buy. The first is history. After the last big run-up in house prices, in the 1980s, a long slump followed. In the New York area, prices peaked in early 1989 and then fell 9 percent over the next three years, according to government data. (Adjusted for inflation, the drop was much bigger.) Not until 1998 did prices pass their earlier peak.
Keep in mind that the 2000-5 boom was even bigger than the ’80s boom and that house prices on the coasts, according to the official numbers at least, have fallen only slightly so far. So it is hard to imagine that prices will rise 5 percent a year, or another 28 percent in all, over the next five years. The second reason for skepticism is that buying has never been quite as beneficial as Realtors — and mortgage brokers, home builders and everybody else who makes money off home purchases — have made it out to be. Buyers have to pay property taxes on top of their mortgage, while renters have the taxes included in their monthly rent bill. Buyers also face thousands of dollars in closing costs (and, in Manhattan, co-op charges). Renters, meanwhile, can invest what they would have spent on closing costs and a down payment in the stock market, which hasn’t exactly delivered a bad return over the last 20 years.
And that famous mortgage-interest tax deduction? Yes, it reduces the borrowing costs that come with a mortgage, but it doesn’t eliminate them. Renters don’t face any such borrowing costs. Almost two years ago, I interviewed a thoughtful 37-year-old man named Tchaka Owen, who happens to be a real estate agent. (Whatever the sins of the Realtors’ association, there are a lot of smart, helpful agents out there. Just remember that they have a financial interest in getting
Hello Theace,
Renting as previously stated in not an investment. If you buy low in today's market and sell when the prices increase again, because they will, you will have made some money on your investment.
You have the opportunity to invest in housing, which may not have been the case for you 4 or 5 years ago. That is an investment.
That’s how it has worked out for much of the last 15 years.
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Actually, that's how it has worked out before the last 15 years also. That said, I am also an honest realtor. I think if you don't have to sell, now is not the time to be selling. Part of the problem right now is there are too many sellers clogging up the market with houses that aren't really for sale.
To answer the dishonest and misleading hack realtors whose false claim that renting is not investing I have to say they are as wrong as the outragous 6% commision that they charge.
If you bought a home within the last 3 to 4 years or are planning on buying one you will lose money, as much as 100% or more of every dollar that you've put into the house, including your down payment if you made one.
Now If you've rented a house in the last 3 to 4 years or are planning on renting then you should invest the savings you will have from rent verses own in CD's, money market account or the stock market, which over time will far appreciate any returns you could ever hope to gain by home ownership alone.
Remember, until you pay off you mortgage to the Bank you are NOT an owner but a renter as you are only renting the money from the Bank in order to buy it.
An honest realtor
Theace
To suggest that a buyer MAY lose as much as 100% (OR MORE) of every dollar they put into the house, while "potentially" true (although I don't see under what scenario they might lose MORE than they put in), is also dishonest, misleading and insulting to buyers everywhere.
Not all buyers are using sub-prime 100% reverse amortization loans, and not all buyers are purchasing to the farthest reach of their financial capacity. Many buyers are putting 20%, 30% down and more, and are buying in areas (such as the North Shore of Chicago) where we have only seen moderate single-digit declines in some locales, and modest increases in others.
To present, as a fact, that if you bought in the last 3-4 years you WILL lose money is imperious and presumptuous at best. If you truly had that crystal ball, you'd be able to see which areas were going to be hit the hardest, and "short" the real estate market in those areas.
Not all buyers are dimbulbs and ninnyhammers as you suggest.
I respect your right to voice your opinion, but please dial back the rhetoric a little. It's worn thin.
The King is not only dead but dead wrong on this one folks and I stand by my answer that a buyer can lose 100% of every dollar that they invest in a house in todays current market and a sub-prime loan has nothing to do with it even if they still existed, they don't.
Here's how and why. House prices at todays current levels are over priced in the Bay area by as much 100%. Therefore if you purchase a house or condo for $500,000 with 20% down ($100,000) and it depreciates 30% in the next year as most reputable economists predict and by reputable, I mean those economists that are not paid schrill's of the NAR the house you purchased for $500,000 is now only worth $350,000. Not only have you lost 100% of your $100,000 down payment but every mortgage payment, insurance payment, property tax payment, HOA dues and maintenance is also being lost.
Houses historically only appreciate at 3% per year therefore it would take 23 years for you to recoup your $100,000 down payment.
Any further questions Elvis, if not get back to Graceland.
An honest realtor
My question to buyers is always what are your plans. If they are looking to buy and live in the home for a year or two, then my answer would have to be to rent. If the buyer is planning on staying in place for a number of years then buy if you can find the home you want at an affordable price.
As a Realtor, I have been a renter and a homeowner. I rented for the reason that I was not sure if I was going to be living in the area for any certain length of time and did not want to be locked into a home, especially if the market declined. However, when I have planted roots in a community it was time to purchase. If the prices decline, I have no objection to staying put. If the values increase I then have other opportunities.
Of course the question you are asking is an oversimplification. I have had sellers that lost 20% on a smaller home, but then are buying a bigger home at 20% less than it would have cost at the same time. Of course if you were a mind reader and had not bought back then, you could save the entire 20%.
I noticed that you asked this question and then answered it for yourself below. You say the stockmarket has done well over the last 20 years and it has. Unfortunately, if you happened to buy at the wrong time (when the market it high) it can take you years to make that money back. The same is true in the housing market. The trouble is nobody seems to be able to answer where the high point and the low point is. And as in the stock market trying to time the market is usually a loser.
A good example was in 1998 we bought a townhome in Connecticut. The newspapers had articles on the fact it was a bad time to buy as values were decreasing. We ended up buying the townhome and suddenly the prices appreciated very quickly. Within six months the townhomes had already increase 22%. They could have just as easily gone down, but we were very lucky we had bought at that time. By the way the seller had lost just over 40%. Just think, they had been trying to sell the house for so long that they had many price reductions and lost over 40%, and just imagine if they saw the values just six months later. We sold the townhome in 2003 at 48% higher price than we paid in 1998. Not bad.
I also have had one home that lost money. That was the first home that I bought, back in 1979. I sold and rented for a little while, got over the sting and bought again. I also knew that in reality when I rented I did pay the property taxes, HOA fees and more as they are rolled into the rent. Yes those people that bought in 2005 or 2006 may not be able to rent if for enough to cover these costs, but those that did not buy at the high times can.
In my years of investing in stocks and real estate, I find that the economists, the money shows and the press usually write to one excess or in the other, and that is when I start to think the consensus is wrong. In 2005 virtually every press release talked about how the market would never decline and you can make tens of thousands in months and many did, but it did not last. Today everything is doom and gloom and that is when I start thinking it might be about ready to turn. Personally I still think the market has some time before it recovers, but in the past I have seen many renters waiting to buy at the low time, they have their lease, and suddenly the market recovers, their lease runs out months later, and they have missed out on the lows.
In the almost 30 years I have been buying and selling real estate, I have never seen anyone able to predict the market accurately. One person may be right this time, but they have been wrong many others.
I had read an article several months ago that talked about how the last 14 times that economists and newspapers had predicted recessions, they were only right 3 times. My guess is that they are just about as correct in accurately predicting when the housing market will improve.
Theace
Using your scenario, as you explained below, I can now see what you're talking about... thanks for explaining... (although I still think you can manage to dial back the rhetoric a bit... do you really feel it necessary to "send me back to Graceland?" Do you really think that adds to your argument?)
So, using your scenario... for the sake of argument let's assume you're right... that the Bay area is overpriced by 100%. Chicago isn't. the North Shore of Chicago isn't... not even close. I'm sure there are at least a few other areas of the country that aren't 100% overpriced.
You didn't make the statement that if you bought/buy in the bay area you'll lose money. You made that statement for every buyer all over the country. Are you now dialing it back to the Bay area? And you didn't say that you might lose money... you said that you WILL lose money.
And let me point out, that you don't lose money until you sell (just like the stock market). If you don't sell for 10-20 years, you might actually MAKE money... or does your crystal ball see a loss that far out too?
Also, if the bay area has "historically appreciated only 3% per year, the bay area wouldn't have had that huge run up (which I believe eclipsed 3%), and wouldn't be 100% overprice, would it?
I'm open to a discussion about this, but not if you're going to continue to "name call"... so let's try to keep it civil, okay?
I thought the topic was "which is the better investment" Theace.
I cannot see renting a home as a better investment.
You are giving away money each month to the landlord and gaining nothing out of in it.
Renting - you come up with the first and last months rent and maybe a deposit of some sort.
8 times out of 10 you never see that deposit back. So you still have a large chuck on money to put out (maybe not as much) to rent a home and nothing to show for it after 5 years of renting.
While yes, you have the out of pocket expenses up front to pay for closing costs and down payment.
As you pay down your mortgage you gain equity in your home.
Most home buyers are in it for the long haul.
They are looking for a home to raise thier families in or maybe to reitre in.
Also, You CANNOT generalize the Real Estate market. It differs from state to state, county to county, and town to town. Because you believe one section of your town is 100% over priced does not mean the whole country, state, town is that way.
I stopped listening to the news some time ago.
If we had a big thunderstorm rolling across Florida, by the time the news got done, it was the worse tropical depression they had ever seen. They take a picture of 3 tree limbs on the ground(only damage for miles) and it is posted everywhere showing the "destruction".
The bottom line, If you are ready to buy a home then it is the right time for you! If is not the right time, then wait a little longer until you are ready.
2 cents from another Honest Realtor
I've spent to much time on this question but I'll answer one more question for Jackie.
Now that we've already establish that owning a house that was purchased in the last three years is a losing proposition and to purchase a house in this current market is a fools investment. While renting in and of itself is not an investment it can be if you invest the savings that you will reap from not throwing money away on an over priced house that will decline substanially in value.
I call that Investing.
Elvis,
This Blog is for Tampa so why you thought I was speaking of the Chicago market I've no idea. As for waiting 20 - 30 years to recoup the loss in most cases that is not possible for as you well know most people sell there house in 5 years or less due to change in personal circumstances.
I don't see how buying in today market can be a foolish thing.
Buyers today have many homes to choose from. They really aren't limited to just a few homes.
There are some really good deals out there.
Real Estate is like the stock market, it goes up and it goes down.
Btw, I could not rent a home for what I pay for my mortgage!
But I do relieze I will not be able to change your mind on this.
I respect your opinion, I hope you can reciprocate.
House prices at todays current levels are over priced in the Bay area by as much 100%.
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Do you post on CraigsList? you sound like one of the BHs over there. You keep using that 100% figure. Do you think houses are going to be free in the future? They'd have to be is you lose 100%.
I realized that you were talking "from" Tampa, but didn't realize that "which is the better investment..." was limited to Tampa only. I'll leave you to spin your "honesty" in Tampa, just to Tampans.
Sorry.. but thank you for the much more civil tone of your last response. Much appreciated.
I realized that you were talking "from" Tampa, but didn't realize that "which is the better investment..." was limited to Tampa only. I'll leave you to spin your "honesty" in Tampa, just to Tampans.
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If the OP is "from Tampa" why is he so concerned about the bay area? I highly doubt he's a "real estate pro" either.
I luv ya Capone! lol
Elvis....Don't ever leave Chicago for Graceland!
Theace...closing on an 2 bed/2 bath rental investment property here in Chicago that I plan on keeping for 10 year...My monthlyy return will be 11% on my investment after expenses..... I'll rent it out to you!
Thank God for peeps that like to give me money every month in rent! The great part is they can leave and I still have their money!
In your example of a $500,000 home in your example where you say it is now worth $350,000 and where your $100,00 deposit is lost there is a couple of things missing.
First, for an average rent on a $500,000 house in the same 23 years you would have paid out approximately $1,172,308 with average rent increases. As an owner you would have paid $958,548 including taxes and Homeowners Insurance. There would of course be HOA fees and repairs on top of that. There would also be tax savings of approximately $165,487 over that 23 years making a net cost of $793,061. As an owner in 7 more years you would have your mortgage paid off and then would only pay the taxes, HOA, repairs etc. The other issue is that as a renter, you often have to move much more often especially when the homeowner decides to not rent anymore. How many renters love having a house being sold as they are renting. Figuring the cost of moves and the hassle of not having your own home, and never being able to have the home the way you want, I will always take buying over renting. In 30 years my mortgage is paid off, while the renter is still paying.
You also say you are losing 100% of the mortgage payment, HOA fees, etc. No you are getting tax benefit, homeownership, and in 30 years a home you own. As a renter you lose everything as you get no tax benefit, and no chance for appreciation, and when my home is paid off the renter may have to pay rent for another 30 years or more. And remember the rent payment you pay already includes the HOA fee, property taxes and homeowners insurance that the owner is paying. Yes many owners are getting less rent than their payments, but that is only the homeowners that bought at the high times.
The other thing you are also missing is that when prices decline quickly, they tend to hit a bottom and may hold that bottom for awhile, then suddenly rebound. I have often seen after the bottom a few years of small appreciating then suddenly we see 10% or more appreciation per year then it goes to a normal return. Now I have only been buying real estate for 30 years, and do not know your experience so can't speak to that, but I have never seen the bottom hit and then slow growth as you speak of. Therfore that loss you are talking about would much more likely be made back much quicker. Unfortunately those that buy at the highest time lose, but that is true in the stock market you talk so fondly of. If you bought at the dot.com bust you would feel the same as if you bought a house in 2005. Real estate being local makes each market different. Areas like Detroit will probably see what you are talking about. The $150,000 loss you talk about so far was probably someone who bought at the very highest time, something that is a large number of people, but on the whole is a small percentage. Most people who bought before 2005 are still making money when they sell, but less than they had hoped. I looked at several homes in my area and those bought in 2004 and sold in late 2007 or early 2008 are selling up between 28% and 41% since they bought them. The buyers who bought in late 2005 and throughout 2006 and selling now are taking good size losses.
Each person has to figure what is right for them.
For those who are interested in this relevant topic, may I suggest the following post: http://www.irvinehousingblog/2008/01/14/rent-versus-own/
Theace,
Others were very accurate when they said that renting is not investing. The idea behind investing is to pay something today for something that will be worth more at a later date. You have no future rights when you rent.
Also, Advice to anyone - ignore anyone that states in a post that a fact is established when it has not been. They are usually trying to fool you. Example: "Now that we've already establish that owning a house that was purchased in the last three years is a losing proposition and to purchase a house in this current market is a fools investment" I can not find anywhere in this thread where this was established and agreed upon. And, I don't know how it can be established until you wait a few years and see what the return on investment is for people that buy in this market.
I am not a real estate agent, and don't work in real estate, but it scares me to see people throwing around unsubstantiated comments as facts. That is never a good thing.
Once again the truth is being twisted by self serving realtors and the messenger is being attacked rather than the message because both the messenger and the message are truths.
I never said renting in and of itself is an investment. What I said was the money that you would be throwing away by purchasing a house in this over inflated market would be better spent by renting and investing the money that you would save from renting verses buying.
As to my other statment that it is a fact that if you bought a house in the last three years (Tampa bay area people) anyone who has been paying attention to both the NAR economist and real economist as well as seeing what is happening all around Florida would know that Tampa leads the nation and is second only to Miami in house depreciation.
THIS IS A FACT! And therefore it stands to reason that the vast majority of late to the party property buyers paid vast sums of money above true market value and now that the market is returning to fundermentals they are losing vast sums of money.
Those realtors ton here that are disputing these facts ought to be ashamed of themselfs. Buyers today are a lot smarter than you give them credit for.
An honest reator.
Wow, Theace, you sound like a Realtor (My understanding is Realtor is supposed to be capitalized) who has thrown himself on his own sword for the good of all man kind. I'm not a Realtor but I'm curious why you remain a Realtor if this is so bad. I'm sure you don't wish to continue life as a hyprocrite and keep selling?
By the way, you only lose money when you sell in life. Long term investors, be it stocks or Realestate win 99% of the time when they sit on the investment.
Maybe I should look at buying some investment properties in Tampa so I can rent them out to peeps like you that like to give me money!
Jeff, if your numbers are correct ,which I am guessing they are, then I have alot of money to look forward to receive from Theace!
If you absolutely insist on buying a property then I'm the right guy for you as I'll give it to you straight.
However, if you think that the rent that you'll collect from a purchase in Tampa will cover your costs of a mortgage (P&I) ,taxes, HOA, Insurance and maintenance cost you are very much mistaken my friend.
I myself rent a 2+2 Condo with a bay view for $1,250 per month the owner of the Unit (a late to the party speculator) is subsidizing my rent to the tune of approximately $2,750 per month. His cost of mortgage, HOA, Insurance and taxes minus my rent.
Whereas his $780,000 investment purchased in August of 2005 is now only worth $569,400 a loss of 27% loss and still falling. As for myself, I invest more than his negative cash flow each month at a guaranteed rate of 6.25% the money for which is derived from the amount I save from renting verses owning.
Are you sure that you wish to purchase a property as an absentee owner in order to rent out?
US Housing Crash Continues
It's A Terrible Time To Buy
Why?
Prices still disconnected from fundamentals. House prices are still much too high, far beyond any historically known relationship to rents or salaries. Yearly rents are 3% of purchase price. Mortgage rates are 6.5%, so it costs more than twice as much to borrow money to buy a house than it does to rent the same thing. Worse, total owner costs including taxes, maintenance, and insurance are about 9%, which is three times the cost of renting. Salaries cannot cover mortgages. Anyone who buys now will suffer losses immediately, and for the next several years at least, as prices keep falling.
Buyers borrowed too much money and cannot pay the interest. Now there are mass foreclosures, and senators are talking about taking your money to pay for your neighbor's McMansion, even though no one in the US has been made homeless by foreclosure. In fact, forclosed owners end up far better off: they go reap large savings every month, since it costs less than half as much money in rent as they were paying to "own" the very same thing.
Banks happily loaned whatever amount borrowers wanted as long as the banks could then sell the loan, pushing the default risk onto Fannie Mae (taxpayers) or onto buyers of mortgage-backed bonds. Now that it has become clear that a trillion dollars in mortgage loans will not be repaid, Fannie Mae is under pressure not to buy risky loans and investors do not want mortgage-backed bonds. This means that the money available for mortgages is falling, and house prices will keep falling, probably for 5 years or more. This is not just a subprime problem. All mortgages will be harder to get.
A return to traditional lending standards means a return to traditional prices, which are far below current prices.
Interest rates increases. When rates go from 5% to 7%, that's a 40% increase in the amount of interest a buyer has to pay. House prices must drop proportionately to compensate. The housing bust still has a very long way to go.
For example, if interest rates are 5%, then $1000 per month ($12,000 per year) pays for an interest-only loan of $240,000. If interest rates rise to 7%, then that same $1000 per month pays for an interest-only loan of only $171,428.
Recent lower Fed inter-bank lending rates do not directly affect adjustable mortgages rates. Most adjustable rates are linked to LIBOR, which is set in London. The 30-year fixed mortgage rate actually went UP after the Fed's rate cut, on expectations of higher inflation caused by the Fed.
Extreme use of leverage. Leverage means using debt to amplify gain. Most people forget that losses get amplified as well. If a buyer puts 10% down and the house goes down 10%, he has lost 100% of his money on paper. If he has to sell due to job loss or an interest rate hike, he's bankrupt in the real world.
It's worse than that. House prices do not even have to fall to cause big losses. The cost of selling a house is 6%. On a $300,000 house, that's $18,000 lost even if prices just stay flat. So a 4% decline in housing prices bankrupts all those with 10% equity or less.
Shortage of first-time buyers. High house prices have been very unfair to new families, especially those with children. It is literally impossible for them to buy at current prices, yet government leaders never talk about how lower house prices are good for most people, instead preferring to sacrifice American families to make sure bankers have plenty of debt to earn interest on. Every "affordability" program has the effect of driving prices higher and locking out more middle-class people. To really help Americans, Fannie Mae and Freddie Mac should be completely eliminated.
Surplus of speculators. Nationally, 25% of houses bought the last few years were pure speculation, not houses to live in, and the speculators are going into foreclosure in large numbers now. Even the National Association of House Builders admits that "Investor-driven price appreciation looms over some housing markets."
Fraud. It has become common for speculators take out a loan for up to 50% more than the price of the house he intends to buy. The appraiser goes along with the inflated price, or he does not ever get called back to do another appraisal. The speculator then pays the seller his asking price (much less than the loan amount), and uses the extra money to make mortgage payments on the unreasonably large mortgage until he can find a buyer to take the house off his hands for more than he paid. Worked great during the boom. Now it doesn't work at all, unless the speculator simply skips town with the extra money.
Baby boomers retiring. There are 77 million Americans born between 1946-1964. One-third have zero retirement savings. The oldest are 62. The only money they have is equity in a house, so they must sell.
Huge glut of empty housing. Builders are being forced to drop prices even faster than owners.
Theace,
Gary Du Pery posted this for another answer. I suggest you read the CODE of Ethics.
This comes from the REALTOR code of Ethics. It is pretty good reading, you might give it a try. I attached the link just in case you are not able to find it on your own.
Duties to REALTORS®
Article 15
REALTORS® shall not knowingly or recklessly make false or misleading statements about competitors, their businesses, or their business practices. (Amended 1/92)
Standard of Practice 15-1
REALTORS® shall not knowingly or recklessly file false or unfounded ethics complaints. (Adopted 1/00)
Standard of Practice 15-2
The obligation to refrain from making false or misleading statements about competitors’ businesses and competitors’ business practices includes the duty to not knowingly or recklessly repeat, retransmit, or republish false or misleading statements made by others. This duty applies whether false or misleading statements are repeated in person, in writing, by technological means (e.g., the Internet), or by any other means. (Adopted 1/07)
Web Reference: http://www.realtor.org/mempolweb.nsf/pages/printable200...
Sorry for the missing spelling, Gary De Pury.
I couldn't agree more with Gary De Pury, many postings on here from so called realtor's who knowingly and recklessly make false or misleading statements about the Tampa housing market.
Case in point is the personal attacks that I have received on here for posting facts and truths but not one attack on the truthful and factual statements that I have made concerning the Tampa housing market.
It is hard if not impossible to obliterate the truth with lies, half lies, insults or spin no matter how unethical some of you are or get. The facts are facts whether you like them or not.
Buyers and sellers who visit this site expect to receive honest answers from ethical realtor's not the spin and hate that has been displayed here. Those of you to whom I refer ought to be ashamed of yourself's while I shall hold my head high as those of whom I speak some sink ever lower into the cesspool of deceit during these hard times.
I have a few questions....
What is a reator as in "An honest reator." Is reator anything like a REALTOR? If so, then I would think that it would be spelled correctly.
Secondly, I bought a few houses about 3 years ago. The only depreciation has been about 2% on one of them. The others are just fine...but thanks for asking.
Lastly, and I will leave my arguments here because this thread is truly not worth my talents as a trained negotiation expert...(See my ActiveRain Profile) You stated "After the last big run-up in house prices, in the 1980s, a long slump followed. In the New York area, prices peaked in early 1989 and then fell 9 percent over the next three years, according to government data. "
Riddle me this "messenger" what, pray tell was the economic situation in the 1980's What was the GDP and what was the prime interest rate.
If you would like to debate this, I will gladly entertain you as a guest on my Radio show, but you will 1st present this forum with proof of your licensure in the State of Florida...Heck, I'll take any state and in your case, I will lower the standard even further to you simply proving a valid drivers license, just to allow you the opportunity to advance your agenda. But, if you attempt to get a free plug for the apartment complex where you work, I will have to cut you off.
OK, are you really just stupid...I AM ATTACKING YOUR ARGUMENTS...
You cannot prove your arguments......(so sad)
Of course I am attacking you as well, but that is just for fun...
I can handily beat your arguments. Come out of hiding, prove your numbers and give us valid facts to attack so that we don't have to attack you, otherwise...what Capone said goes from me as well.
It is hard to defend Theace because his argument is just generalities. Yes, we all know the Tampa market is down over the last three years. But people don't buy for the past, they buy for the future. Look at Theace's statements:
"Now that we've already establish that owning a house that was purchased in the last three years is a losing proposition and to purchase a house in this current market is a fools investment. While renting in and of itself is not an investment it can be if you invest the savings that you will reap from not throwing money away on an over priced house that will decline substanially in value. "
1. Is Theace saying that it is a fact that anyone in Tampa that bought a house in the last three years (including yesterday, last week, January, etc...) is involved in a losing proposition and a fools investment? If so, Theace is saying that he knows what the future holds for these investments. He knows that over the long run these homes will not appreciate as well as investing the difference between rent and the cost of owning.
2. Is he saying that homes bought in the last three years will "decline substantially in value" in the long run? I assume he means the long run, or he will not do to well as an investor if he sells every time there is a correct in the price of a security. How do you argue against Theace on this point if you also can not tell the future?
3. He says "However, if you think that the rent that you'll collect from a purchase in Tampa will cover your costs of a mortgage (P&I) ,taxes, HOA, Insurance and maintenance cost you are very much mistaken my friend. " This is the case in most of the country, but that is not why you buy a rental property. You buy the property assuming that over the long run you are going to achieve a certain rate of appreciation on your investment, and take advantage of the fact that renters are paying a portion of that investment fo