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NNN0LHI

(67,190 posts)
Wed Aug 29, 2012, 06:21 PM Aug 2012

I have concluded that the current housing market is going to be the new normal

Last edited Wed Aug 29, 2012, 07:03 PM - Edit history (1)

We are never going to see huge 5-10% yearly jumps in prices of homes ever again as in the past. Least not in any of our lifetimes anyway. Isn't going to matter which political party happens to be in power either. Still going to be the new normal regardless.

Might be seeing the few percent increase every year like we are seeing right now. But homes are never going to be considered a good, solid, no lose, money making investment like we have seen in the past.

Buying a home is still a good idea in my estimation. Got to live somewhere. Just have to go into it with your eyes wide open and get the best advice you can get before purchasing. And avoid using emotion as much as possible. Better to get that advice from an uninterested party. And after trying both renting and owning, I still much prefer owning my own home to renting. And also they are all money pits so try to stay as financially solvent as possible if you decide to own one. Because anything can happen. And it usually does. At the worst times from my experience.

Thought, ideas, on my theory?

Don

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I have concluded that the current housing market is going to be the new normal (Original Post) NNN0LHI Aug 2012 OP
Those huge gains were abnormal, 1-2% a year always has been normal. Bluenorthwest Aug 2012 #1
Everything is the new norm bigwillq Aug 2012 #2
Don't know where you are, but in my area, and several near me.. there are major bidding wars now. progressivebydesign Aug 2012 #3
The idea of flipping as an easy, sure fire way to make loads of money bigbrother05 Aug 2012 #4
It was never the normal: it's a return to the old normal frazzled Aug 2012 #5
I hope you are right. A home is somewhere to live, not a money-making scheme. Nye Bevan Aug 2012 #6
Doesn't go in cycles Johonny Aug 2012 #7
 

Bluenorthwest

(45,319 posts)
1. Those huge gains were abnormal, 1-2% a year always has been normal.
Wed Aug 29, 2012, 06:32 PM
Aug 2012

A home is a good purchase as a home, it is a poor choice as a short term investment, always has been, always will be. Those were bubble years, those gains were never real, that was not normal. Not at all. It was fraud. Slow steady gains over many years is normal.

 

bigwillq

(72,790 posts)
2. Everything is the new norm
Wed Aug 29, 2012, 06:37 PM
Aug 2012

$4 gas, 8 % unemployment, CEOs making $$$$ while salaries remain low and stagnant for the rest of us.

There's nothing any candidate of any party is offering that makes me believe anything will change for the better.

We're bought and sold by the corporations and the wealthy.

progressivebydesign

(19,458 posts)
3. Don't know where you are, but in my area, and several near me.. there are major bidding wars now.
Wed Aug 29, 2012, 06:37 PM
Aug 2012

I have friends who have been unable to find a home, because they keep getting outbid. The prices on the west coast are going up, and things are selling in a few days. The prices seem to be similar to around 2005. But they're going up.

The rental market is the big issue right now. It's just hideous. The prices have been going up like crazy, even tho so many people have less income since Bush's recession. Vacancy rates around so low.

bigbrother05

(5,995 posts)
4. The idea of flipping as an easy, sure fire way to make loads of money
Wed Aug 29, 2012, 06:39 PM
Aug 2012

Was always a fiction for the average person. The easy credit, highly leveraged housing market was the result of manipulation by the vultures at all levels. The folks making the big money were the mortgage brokers that took a percentage for each loan approved.

Essentially a pyramid scheme, but the ones making the real money were the financial types getting a cut on each deal.

A few percent growth over a 20-30 year period is a nice investment, especially if you downsize at retirement. The idea of your home or real estate in general as a money making scheme is really a product of the infomercial world for the average person.

frazzled

(18,402 posts)
5. It was never the normal: it's a return to the old normal
Wed Aug 29, 2012, 06:41 PM
Aug 2012

Homes were never fast-money makers. You paid down your mortgage to see equity gains, along with very modest annual appreciations. People today will have to stay in their homes for much longer periods--as they did in previous eras--to realize financial gains. (PS: That is harder to do in today's more mobile society than it was in earlier generations, so I expect home ownership is going to affect mobility, moving from state to state, than it has over the past 25 years or so.)

Nye Bevan

(25,406 posts)
6. I hope you are right. A home is somewhere to live, not a money-making scheme.
Wed Aug 29, 2012, 06:45 PM
Aug 2012

For many people it makes much more sense to rent. People who don't plan on staying in a particular city very long, for example. Ridiculous bubbles enrich speculators at the expense of renters and cause mortgage fraud and encourage people to borrow more than they should. I am a homeowner but will be perfectly content if my house never rises in value from where it is today.

Johonny

(20,612 posts)
7. Doesn't go in cycles
Wed Aug 29, 2012, 06:55 PM
Aug 2012

about every 15-20 years the market forgets itself and you get these price booms. Political policy I think can help feed into that, but I think the boom/bust cycle will always be there.

http://www.jparsons.net/housingbubble/

Shows a graph. You can clearly see the cycle in it, and clearly see how insane the boom cycle was during the Bush years.

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