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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsI 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
Bluenorthwest
(45,319 posts)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)$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)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)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)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)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)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.