For years Americans custom-built homes with pricey extras expecting high returns on their investment. They're in for a letdown.
Comment: *** ur house, and *** ur couch too bittch....i cant sell mine either, *** my house, i'm losing money and sleep, i shet on this market...
Comment: Any buyers? At 35k below market, I'll sell for $715. Live here worry free. rogerally@comcast.net
Comment: The vast majority of homes in the United States are already priced at or near historic averages of two and a half times median income. I believe in the dream of home ownership, but I think much of the disappointment around high median home prices centers around areas most people simply do not qualify to live.
The promise of home ownership doesn't mean beach home, luxury condo, or 10,000 square feet on100 acres in Charlottesville, VA. Bottom line is housing is priced about right. It's time for people in highly desireable locations to adjust their expectations, and possibly relocate to places they qualify to live in.
Comment: I don't wish anyone finanical ill, but I hope to see housing prices continue to drop until they return to historic averages (2.5 median income). Median income is essentially unchanged over the past few years and yet housing prices have risen by 1/3 - I don't know why anyone thinks this is a healthy development. A few make out, but the rest of us end up spending a larger portion of our income on housing, which just throws our work/life balance further out of whack than it already is. Ridiculous commutes, slavery to the Blackberry, new mothers who can't afford to take more than a few weeks off are just a few of the social ills that are due, at least in part, to the way we have auctioned up housing prices to unheard of levels.
Comment: Rogerally, I've been watching and reading the circus of comments you received since this article posted on msn.com a week or so ago. And I must say, that you've received a lot of scrutiny, and some support, from this article. I???m sure you weren???t looking for either.
People judging you and being mean to someone (you) they don't even know is not surprising, but the amount of people who wrote ???mean??? and ???empty??? things is a bit surprising. I've been told that if you don't have anything nice to say, don't say anything at all, you know, display a little respect and class! But I guess given a forum such as ???post your comments???, people who normally don???t say anything mean, have a private forum where they can attack strangers online. I guess we all need an outlet!
Nevertheless, I'll say that I understand your perspective and your objectives. I???m interested to see how the market changes over the next few years. I???ve got several houses out there that I hope will increase in value (all rental houses though). Hopefully, for us that know how to leverage property for investment purposes, we???ll come out on with a few more dollars in bank. Frankly, everyone who buys a home and opts not to rent is doing so for investment or tax purposes. The might mighty dollar??? and whether we want to admit it or now??? we are all driven by the might mighty dollar in some capacity or another.
Comment: We only own one home.
Comment: Well, Boo Hoo for the Elliotts. They bet the farm on a lavish home and lost. Unsaid in the article was that their previous residence is also for sale and remains unsold. I seem to recall words of advice regarding all of your eggs in one basket. Let me see if I have the facts here.
Building contractor, leveraged real estate speculator, owner of two homes in the same market ?
Comment: It is discussed in some schools of thought that considering the home you live in as an investment is a mistake. Generally, it should be seen as a liability that needs to be managed. Viewing the home burdened with a 30-year mortgage as something that will provide future (high) returns does not make much economic sense, because your are the one utilizing the benefits of this investment, and plus you are paying interest on that for 30 years. Many families fall into the trap of building bigger and bigger homes by selling their old homes, without ever going out of mortgage. Roger would have been much better off if he would have bought an investment home (or other property) for renting with the inheritence he had, and that with a shorter mortgage, which could have been converted into a dream home after the investment pays off the mortgage and starts bringing additional income. It is the old story - we want everything and now - instant gratification with funds we don't own yet. On the other hand, now that the investment has been made, it does not make sense to dwell on the foregone short term returns, but focus on the long run. Roger's home being a high quality structure will allways retain value and the right buyer will allways come along for something that is of undisputable, hight above average quality, should the need exist to divest from it. If Roger would have built an average home, on the other hand, he would definitively have problems selling it if the need would arise. And since it really does look like a dream home, the Elliotts should be grateful for it and enjoy every moment of living there, without being borhered with second thoughts.
Comment: It is unfortunate that the real estate market has taken such a turn. Hard working Americans have invested in building their home, buying a home, refinancing their home, etc. and we all were not ready for this down fall. But we should have seen it coming with all these lenders approving loans to families which in reality did not have the credit, income, and the knownledge of the lender they were dealing with. Of coarse, everyones dream is to some day buy a home and some lenders just took advantage of that fact. But its good to see that these lenders have gone out of business for bad business. Now its time to clean up and get back to the traditional home selling with sound finanical lenders and qualified sales agents.
JPR - Laredo, Texas
Comment: "Comment: We all know roger, you intended to flip this place within 2 years...now your stuck"
Funny cause many "flippers" stuck their totally out.
Well maybe funny isnt right choice of words, but still there are many now being offered by the banks for less than many "flippers" paid for the property itself, and not including any improvements.
Its a mess, but it seems these highs and lows in our bi polar RE market really help to push our economy and allow politicians to show us just how great they want us to believe things are, and also just how bad they want us to believe they are, and just pretty much manipulate things in general.
Comment: Now those like Roger should honestly not bother with the day to day short term changes, and count their blessings that they are in a financial situation that allows them to weather the storm of the downturn. On the positive side for them there are and will be countless purchasing opportunities that will offer even greater return on investment (long term, not short) then their original decisions.
Remember all those in the early and mid 90's both professional builders, investors, and individual homeowner etc who got into serious trouble from speculation and greed etc? I guess we all forgot about those declines from the excitement of the recent boom, but just like the history of the previous decline showed us there will eventually be an upside again.
Now for Roger I have to say I can feel your pain, but I cant share your concern or anexiety. I know you believe this story may cause you to apear greedy, but I have to disagree as it really makes you appear to be out of touch with the real problems many are facing, and sort of like snobish for appearing to be so overly concerned with profit during such times etc. I know there was some idea from those writing the story to make it seem a certain way (its sort of obvious so dont let it bother you much) and this seems to be the way some feel they have to be in order to make things "news worthy"
I would recomend you count your blessings like the rest of us who are still enjoying positive equity (did I mention my own primary residence is down over $200k ) and look closely at your options before making any changes. I have seen so many different opinions from so called professionals that I have trouble remembering or deciding if this is a market to buy up, downsize, or sell everything and move to Mexico :)
Lastly I have to admit I do feel somewhat for those who decided to buy or build around the height of the market, and though its not a feeling of sympathy I can certainly understand the many reasons it would cause concern etc, but I also have to admit I am somewhat confused by some that have also purchased other high end items (boats, cars etc etc and some topping the amounts of many homes) that are doomed to normal depreciation that will hardly ever recover period, but fully accept this without worry of any kind.
So I guess short of selling now (with a much lower than anticipated profit) and redirecting your equity into leveraging several investment properties as to create an even larger long term profit etc you will just be stuck in that very nice looking and sounding home for a little longer than expected, and I cant feel sorry for that either :)
Comment: "The good the bad, and the truth"
Roger is not at fault for wanting to see his home appreciate in value, and that is something I believe most would agree to be a good thing to happen with what is the largest investment and purchase many people will ever make.
Where I see an issue is (and apparantly it maybe something that was leveraged in the story for better impact, wow what a suprize lol) in the worrying and with the described main interests.
Worrying about your current potential profit or loss in the value of your home is at best wasted energy, and with all the people currently having to worry about losing their homes etc it can seem down right obscene.
The rise and fall of home prices seems to be newer problem or at least the larger dollar amount swings (especially on the downside) that has shown up and sort of has followed the decline in domestic manufacturing and related industries and jobs. I know something that has happened for nearly 30 years doesnt sound new to everyone, but I cant find anyone who believes when compared to the previous 100 years our RE market since the 70's could be considered stable.
Since RE has always been a good investment (long term) and many times an unbelievably good investment short term in more recent years etc it also only makes sense that along with the increased upside potential there also is an increases downside potential. I dont have the time and maybe not even all the knowledge to fully explain all the economics of it all, but let it suffice to say that just like the stock market there will be winners in a frenzied upside swing, and losers on the down swing.
Now those like Roger should honestly not bother with the day to day short term changes, and count their blessings that they are in a financial situation that allows them to weather the storm of the downturn. On the positive side for them there are and will be countless purchasing opportunities that will offer even greater return on investment (long term, not short) then their original decisions.
Remember all those in the early and mid 90's both professional builders, investors, and individual homeowner etc who got into serious trouble from speculation and greed etc? I guess we all forgot about those declines from the excitement of the recent boom, but just like the history of the previous decline showed us there will eventually be an upside again.
Now for Roger I have to say I can feel your pain, but I cant share your concern or anexiety. I know you believe this story may cause you to apear greedy, but I have to disagree as it really makes you appear to be out of touch with the real problems many are facing, and sort of like snobish for appearing to be so overly concerned with profit during such times etc. I know there was some idea from those writing the story to make it seem a certain way (its sort of obvious so dont let it bother you much) and this seems to be the way some feel they have to be in order to make things "news worthy"
I woul
Comment: Re: "...winners in a frenzied upside swing, and losers on the down swing" Turn that statement on its head and think "losers in an upside swing (ie, paying too much) and winners in the downswing (scooping up bargains)" -- that's buying low and selling high. And as simple as it sounds, that's the way we should invest our money. Practice this: When you read articles that tilt in one way, you tilt the other way. When the buzz in critical mass is for one sector, look at the underappreciated sectors, put them on your watch list, and take the time to study what makes certain companies strong. When an entire sector is getting pummeled in the press, a sector that has potential to rebound, pluck out the few companies that might be unfairly dragged down and (quickly in this case) determine whether buying the depressed stock might be a true bargain. Basically, think critically like a short seller, without actually being one and assuming the risk. That's how you win on an upswing and a downswing.
Comment: We all know roger, you intended to flip this place within 2 years...now your stuck...I hope you have to stay in this one for 5-6 years.....at least you'll know where to find the builder when the "roof leaks".
Comment: If I intended to flip within two years why would I have put a GerardUSA.com roof on it? That costs twice as much as tile. Why would I have put foam insulation in it? That also costs double. The energy payback takes seven years. The roof only pays for itselft if you live here beyond 30 years. Most buyers could care less about these things. This house was built to live in forever. We have low electric bills and can safely ride out a hurricane forever.
Would I want to be able to sell it if I had too? Yes. And you would too. Wanting to be able to sell is not the same thing as building a glitzy Palm Beach home with a plan to flip.
Comment: To sshameless: Come on, don't be jealous. If you know how to invest and make money, then you can be as rich as he is too. I bet you don't even have $100,000 cash in your account at all, haha. Not even $10,000.
My suggestion: go get some education and stop spending like an idiot.
Comment: "The good the bad, and the truth"
Roger is not at fault for wanting to see his home appreciate in value, and that is something I believe most would agree to be a good thing to happen with what is the largest investment and purchase many people will ever make.
Where I see an issue is (and apparantly it maybe something that was leveraged in the story for better impact, wow what a suprize lol) in the worrying and with the described main interests.
Worrying about your current potential profit or loss in the value of your home is at best wasted energy, and with all the people currently having to worry about losing their homes etc it can seem down right obscene.
The rise and fall of home prices seems to be newer problem or at least the larger dollar amount swings (especially on the downside) that has shown up and sort of has followed the decline in domestic manufacturing and related industries and jobs. I know something that has happened for nearly 30 years doesnt sound new to everyone, but I cant find anyone who believes when compared to the previous 100 years our RE market since the 70's could be considered stable.
Since RE has always been a good investment (long term) and many times an unbelievably good investment short term in more recent years etc it also only makes sense that along with the increased upside potential there also is an increases downside potential. I dont have the time and maybe not even all the knowledge to fully explain all the economics of it all, but let it suffice to say that just like the stock market there will be winners in a frenzied upside swing, and losers on the down swing.
Comment: Come on Roger....we all know your intention was to flip this house within 2 years...now your stuck. I hope your in this one for 5-6 years....at least you'll be able to find the builder when the problems start showing up.
Enjoy your home and have some nice cheese with your wineing.
Comment: NEW YEAR is just around the corner---ask any common sane person---what is his or her wish?
PEACE is all we want---PEACE is all that God asks---why dont we get this into our swollen heads?Why dont the world rulers understand it?
POVERTY must go----ILITRACY too.
Comment: Enter Your Comment
Comment: Enter Your Comment
Comment: I have heard it said - when is the right time to buy? Anytime. That is anytime you can afford it. How much should you pay? As much as you can afford. You did just that. Affording it also means to consider the cost of property taxes, insurance, interest payments and maintenance like we all have to do. So the real problem is the potential ROI and the sense of wellbeing that brings if it is positive. I believe we are all swimming in a sea of mass greed and fear in the real estate world. That seems to be what drives the market. We are in a period of fear at the moment and that will probably change. We are human and seem to love both parts of fear and greed or you could say contraction and expansion. As a spiritual person you have a wonderful opportunity to say, thank you God for the ups and thank you God for the downs. You are not your house or the value associated with it. I say, let go of the notion of potential loss and cherish the time you have with your wife and family and good fortune to enjoy this house.
Comment: I have heard it said - when is the right time to buy? Anytime. That is anytime you can afford it. How much should you pay? As much as you can afford. You did just that. Affording it also means to consider the cost of property taxes, insurance, interest payments and maintenance like we all have to do. So the real problem is the potential ROI and the sense of wellbeing that brings if it is positive. I believe we are all swimming in a sea of mass greed and fear in the real estate world. That seems to be what drives the market. We are in a period of fear at the moment and that will probably change. We are human and seem to love both parts of fear and greed or you could say contraction and expansion. As a spiritual person you have a wonderful opportunity to say, thank you God for the ups and thank you God for the downs. You are not your house or the value associated with it. I say, let go of the notion of potential loss and cherish the time you have with your wife and family and good fortune to enjoy this house.
Comment: Why are the prices going down?Surging high?Sky rocketing?
Stock's ups and down?Market crashing?Banks?Corporates?Leasing companies?Pharmaceuticals?Buisnesses?Realtors?Rents?Buying and selling homes?Medicl?Bills?Fuel?FOOD?CLOTHES?BOOKS?EDUCATION?Take anything----its their to LYNCH your own people----why?You are their to provide and protect them ie the people,not turn their lives into night mares.
I tell you even if you charge a DOLLAR for all the facilities you provide you shall mint money ie PROFIT----Give relief to ur people----make their lives not destroy----the whole world has learned wrong stuff from you---the RICH getting RICHER---the POOR---POORER----Shame on those who in the name of progress and prosperity are killing the majority.
What kind of rulaers are u?
Lift the downtrodden!
Help others as God asks.
Live and let live.
Share the world with love not hate.
Dont enter any home without permission---a country is ones home---so dont invade---for their wealth ie BLACK GOLD.
Might is not right.
God says:I have not made you police over them nor guard,dictator,responsible.
Dont tell others to do good and forget yourselves,when you have the BOOK ,dont you read it?
Dont pounce on others wealth like a vulture---in the name of liberation or religion----God forbids thefts,backbites,wrong witness,framing others for your wrongs,murder,suicide,VIOLENCE---for Violence is worst then murder---(Book)
Unite not divide..
Its time that the laws of God DAWNS ON ALL LOOTERS AND PLUNDERERS.
Its the peoples power not a few at the top---who controls the world----the day the public realizes the TRUTH---all is gonna be well----Its peace God asks for---not wars---when I say war I mean effort to overcome all ills in a society-----In Arabic and urdu---jihad is a word derived from Juhd meaning effort----to overcome poverty,diseases,femine,illitracy and so on so forth----some muslims misinterpret as the west does----to cash on it.
Give it a serious thought?
A leader is onnne who sits with the common people---eat with them---solve their problems---not load them with chrges and interests,that too compound----even worst then that----bring the charges to the barest MINIMUM----instead of BOOM-----for a few---BOOM off goes the public---blownup---shattered-----to get votes---u have to win their hearts----how?Give them joy and happiness----to enjoy God's BLESSING---why Put a HIGH TAX on it???
Comment: I think we are a society who has become accustom to quick money, quick changes and in general quick lives..Maybe we should think of our houses as homes versus investments....your return will come and in this case later than sooner but maybe that has to be okay.
Comment: By the way, I don't feel "sorry".. In fact, just the opposite. I'm quite happy with what we built, just not when. - Roger
Comment: You should never consider your own personal home as an investment. Stocks bonds, gold, and silver and some commerical real estate properties should be considered investmnets. Your home is an investmnet in life style. Your home also provides tax deductions, that renter do not receive. If the property is losing value, have an appraisal done on the property to determine the current value, if lower than current assment, then appeal the tax assessor for lower property taxes. Consider doing TIC with a private investor, or investor groups. Be willing to create an investment vehicle out of your home for a private investor, or investor groups to consider buying into, and still keep some of the benfits of home ownership for your self Not all private investors, or investors groups are looking for rapid appreciation growth, but would consider buying security, and safety in an investment. You can create the best of all worlds, for yourself, and private investors, or investor groups. Just don't think on one level, be creatived, and think on muli-levels. Most of all don't let GREED thke over you thinking process.
Comment: You should never consider your own personal home as an investment. Stocks bonds, gold, and silver and some commerical real estate properties should be considered investmnets. Your home is an investmnet in life style. Your home also provides tax deductions, that renter do not receive. If the property is losing value, have an appraisal done on the property to determine the current value, if lower than current assment, then appeal the tax assessor for lower property taxes. Consider doing TIC with a private investor, or investor groups. Be willing to create an investment vehicle out of your home for a private investor, or investor groups to consider buying into, and still keep some of the benfits of home ownership for your self Not all private investors, or investors groups are looking for rapid appreciation growth, but would consider buying security, and safety in an investment. You can create the best of all worlds, for yourself, and private investors, or investor groups. Just don't think on one level, be creatived, and think on muli-levels. Most of all don't let GREED thke over you thinking process.
Comment: Are we supposed to feel sorry for Elliott and company? Because I don't. Somewhere along the lines, people lost sight of the reason to own a home: to have a place in which to (raise a family and) grow old, to have a solid and secure place no one could take from you. It's about security, not "return on investment." So if these people lose their shirts, I can't feel bad for them. After all, they weren't even building the right dream.
Comment: HAHAHAHA Typical americans! Quit being so jealous of someone who actually went to school and got educated and deserves the money that they make. Why don't you all quit whining about what you DON"T have and get off your lazy butts and so something about it instead of criticizing someone? To call this man GREEDY is hypocritical because you all know if you HAD the money to build such a lovely house you would want to make a profit also, who wouldn't?
Comment: I'm not hypocritical. I have wealth and a modest home. no one knows my net because I don't discuss it or feel the need to do so. Yes I have investments - some up and some down. But I'm not fretting over it like Roger. And he's fretting because he has to live in his investment mistake and think about it EVERY waking minute.
Comment: This is Roger. I asked both the writer and his editor to reconsider the sentence which said I expected double digit returns. They chose to leave the story unchanged and suggested I write this in the comments. So I am. The story made me appear greedy, which I'm not. This is not a question of greed, or ROI. It is a question of loss. To loose would be unfortunate for anyone, including me. Many posters had to sell and did loose. That is tragic. Anyone who bought in late '05 - '06 has that risk, regardless at what price point they bought, if they need to sell soon. That is the point of the story.
Comment: Go do something usefull you fat capitalistic prissy bore
Comment: Enter Your Comment
Comment: What goes around, comes around
Comment: Re: ohwell!'s post
Regarding ancestors toiling to build something to pass along ... ever heard of "shirtsleeves to shirtsleeves in three generations"? Google it, and you'll see why immigrants make traction here and following generations fritter it away on foolishness rather than employing the same frugality and intellect their ancestors did so successfully. I think "Rich Dad, Poor Dad" makes the same point. A word to those who seem to be seething with jealousy. Don't. No need to be. Ever head the saying "Looking good but going nowhere"? That pertains to a person that appears to be living large, where all looks golden on the outside, but in actuality, that person's true financial picture is a fright. In 1996, I had a chat with a mechanic who worked on imports and he confided that most of his clients were just a paycheck away from losing it all. We're witnessing the fallout of those "Roaring 20s-like days." But I don't feel sorry for them, because it's hardly the Great Depression -- we're simply not facing near-25% unemployment (that's right, near 25%). So people can learn. Hard lesson, but they can learn. I urge everyone on this board to start studying what those with multigenerational wealth do, how they pass along family values and teach stewardship, so that their kids, once grown, aren't wondering what to do with a windfall of cash. Even if you don't have much in savings, you can raise your kids to be financially literate. You might not be super-wealthy in your time, but your kids can actually build on your knowledge -- what they call human capital -- and in that way, you can build a legacy. My husband and I don't have much at all, but we're slowly turning our thinking around -- having not had any financial training -- and so we're benchmarking our goals against those who are in superior positions, those who have foundations, involved in charities, whose money actually invest in meaningful change.
Comment: Re: ohwell!'s post
Regarding ancestors toiling to build something to pass along ... ever heard of "shirtsleeves to shirtsleeves in three generations"? Google it, and you'll see why immigrants make traction here and following generations fritter it away on foolishness rather than employing the same frugality and intellect their ancestors did so successfully. I think "Rich Dad, Poor Dad" makes the same point. A word to those who seem to be seething with jealousy. Don't. No need to be. Ever head the saying "Looking good but going nowhere"? That pertains to a person that appears to be living large, where all looks golden on the outside, but in actuality, that person's true financial picture is a fright. In 1996, I had a chat with a mechanic who worked on imports and he confided that most of his clients were just a paycheck away from losing it all. We're witnessing the fallout of those "Roaring 20s-like days." But I don't feel sorry for them, because it's hardly the Great Depression -- we're simply not facing near-25% unemployment (that's right, near 25%). So people can learn. Hard lesson, but they can learn. I urge everyone on this board to start studying what those with multigenerational wealth do, how they pass along family values and teach stewardship, so that their kids, once grown, aren't wondering what to do with a windfall of cash. Even if you don't have much in savings, you can raise your kids to be financially literate. You might not be super-wealthy in your time, but your kids can actually build on your knowledge -- what they call human capital -- and in that way, you can build a legacy. My husband and I don't have much at all, but we're slowly turning our thinking around -- having not had any financial training -- and so we're benchmarking our goals against those who are in superior positions, those who have foundations, involved in charities, whose money actually invest in meaningful change.
Comment: Who cares? Quit whining and get over it. People like that --- Americans in general --- are spoiled, shallow, ungrateful clods. We've become a nation of prancing prissy queens. THINGS COULD BE SO MUCH WORSE FOR MOST OF US, even if the economy DOESN'Tcrash. Most of us need more reality checks like this one. I hope it takes a very long time to break even. Yay!
Comment: I'm glad that Roger and his wife can afford to keep the house if the value increases or decreases. With that said, I agree with the other posters. YOU took the risk Roger. Whine not to me. And the reason you took the risk was not for your comfort, your wife's comfort, or your family's comfort in a home. Instead it was GREED. You became greedy. And now you suffer from your GREED. I wonder how much empty space you have in the big ole house. how many rooms you don't even use. Don't get me wrong, I'm not trying to put you down. Just don't expect other to feel sorry for you.
Comment: Enter Your Comment
Comment: Welcome to the world of investments Roger, the risk-return trade off is inalienable. If you want outsized double digit returns on your investment in a house, you have to accept the large risk that accompanies it. Sorry those are the sour apples. I will not vote for anyone who tells me I need to pay higher taxes to bail out those who with risk-appetite than me. If you are going to make a risky venture... YOU HAVE TO ACCEPT THE RISK. People shouldn't point fingers because they made a careless investment, and it encourages the wrong behaviour if the American taxpayer buys out every idiot who didn't take three minutes to look at average historical house price appreciation (3%) and see that it falls way short of double digits. Thanks for ruining the economy.
Comment: I find it very difficult to feel sorry for these people. After I retired from the US Army with 20+ years of service, we bought a house in Virginia Beach, VA in 2005 and we paid too much for it. We have moved to Tampa, Florida when I was offered a job here. Now we are stuck with paying the mortgage on the house in Va while we pay the rent here, all because we wanted to be closer to our extended family in Miami. Now our house will not sell, so we will have to rent it out at a much lower price than our mortgage and have to bite the bullet until we can sell it, which may take some years...why are you folks so worried about the value of your home if you are already living in your dream house? Suck it up and enjoy your new home, and realize that you are lucky to be home already. I'm not feeling any sympathy toward you, and don't feel sorry for yourselves either, you poor rich people!
Comment: Enter Your Comment
Comment: Let's just see how this thing works.
The contractor make $100.00 plus a square ft..
The Realtor makes 7% on the price of the home.
Now if i see things correctly !! Only one of these professionals are really trying to help the American people.
Didn't anyone take notice of the Contractors and Real estate people becoming mortgage brokers. Could the answer be Greed... There is nothing wrong with Roger having his dream home as long as he doesn't sale it to someone for morer than it's valued at Stop blaming the mortgage brokers for the fall, blame the people to whom shouldn't have been getting any money... for a service that we really don't need ..
The Mortgage Broker can only make up to 5% (but always get blamed)
Comment: People are losing their homes, most people are living in homes they couldn't afford to buy in today's market, and many of us in the "middle class" can't afford to live near our jobs, and I'm supposed to feel sorry for these people who live in monstrously huge homes (that they can afford) because they aren't seeing double digit returns? Why does Newsweek even bother to accept these articles as worthwhile?
Comment: don't be jealous... Those people who cannot afford paying the mortgage deserve it. They are not retards, they should be responsible for their own financial plan.
Comment: Enter Your Comment
Comment: haha, it is the payback time now... house price will keep going down in 2008....
^__^
Comment: If you are interested in selling, then hang on to it, and eventually, down the road, as history has proven, the market will change; but can you wait for it?
Comment: carolannxo,
Instead of blaming greedy banks, couldn't you just blame naive people who are unable or unwilling to read the terms of their mortgages. Are you suggesting Roger put the inheritance into some sort of charity, negating the lifetime of toil and strife his ancestors went through? The American way is not to accept charity, but to "come here" on a boat with 12 dollars and a dream and make it happen with work. I think you have America confused with another country or two that punish sucess and drive while rewarding mediocrity. Obvioulsy there are exceptions, yadda yadda. Thanks for the entertaining view though, I enjoyed it and am glad there are people out there who still give a s#!t.
Comment: yeah maybe you should remember how immigrants are usually the first ones to be ripped of by the banks.
read a history book if you CAN read
Comment: It is really hard to feel sorry for these people when they have enough money to pay their mortgage, buy their food and live their nice upper-middle class life. Buyer beware. House prices are cyclical historically. If they can get over their worry, which I believe is based on their current personal greed, they will realize their money when the cycle comes back around (even if it isn't tomorrow or next year). They should be thankful for the good things they have and not whine that they are not getting an instant mega-profit.
Comment: Enter Your Comment
Comment: Greed, Greed !! You can blame this on the Realtor's and Contractor's
1). You build a re4ally nice home for less than $100.00 a Square Ft.
2). No one deserves to make 7% off of a homeowner, just to show their home.. If the sale price is $200,000.00 x 7% = $14,000.00 Why ??? But everyone blames the lenders !!! lENDERS DON'T HIRE Realtors ! Homeowners do... If it wasn't for the lenders half of the American people would not be in homes The other half don't have 7% to put down. If we are going to blame someone ! Blame the one's that really cause the sales price to go up.. Bankers don't put sales pricess on homes..
Comment: #1 The prices were driven up not because some Realtor wanted to see how much they could sell a house for but because the interest rates dropped and suddenly there were way more buyers than sellers. Economics 101- when demand is high and supply is low guess what happens...the price goes up!Everyone wanted a piece of the action. People were buying homes that had no business buying them and that is the buyer's fault not the Realtor or the Lender. The only reason prices are going down is not because properties lost value...it is because we went from one extreme to another-too many sellers and not enough buyers-back to Economics 101-supply high, demand low-price goes down. In addition to the normal market of people (first time home buyers, move up buyers, move down buyres, etc.) we have irresponsible borrowers from a few years ago who now have to sell because they can't afford their mortgage and sellers who are selling just because they think the market is crap-which in my opinion is a bad move-wait it out if you can, that would be my suggestion. 2) Regarding the fees charged by Realtors. First of all, all fees are negotiable and second if you are trying to manage a 1/4 million dollar property, why wouldn't you hire an expert to help you? You can legally represent yourself in court but would you? No because you need an expert. You can stitch your own wounds but would you? No because again you need an expert to help you. If you think the fee is too high, try getting sued because you didn't follow the legal guidelines of selling your own home. There is a reason that our agreements are 20 pages long instead of the 2 page agreements you get at your local office supply store and we know every workd of them. We don't just stick a sign in the yard and hope for the best. The right Realtors are market experts trained to market, manage, and close one of the biggest transactions you will have. Think about it!
Comment: Enter Your Comment
Comment: Enter Your Comment
Comment: Nightmare? Isn't that overstating the situation? This article is better suited to Money or Fortune rather than NewsWeek. Maybe you'll find a more sympathetic audience there. You have a beautiful home that you can afford. Spare me the angst. My house is 1500 squre feet and 30 years old. We bought what we could afford and it's home to us. Is the purpose for this house to be a trophy of some type?
Comment: Well Roger you are very lucky to be able to afford your mortgage, especially when many good people are losing there homes because of major price gouging by big companies and greedy banking. Yes housing is falling and that is because people can not afford to feed there children and put a roof over there head. It is sad that you took an inheritance and put into a home that it sounds like you thought you would make a million plus on. This is life and there are ups and downs, be thankfull every day that you have a good job, wife who supports you and helped with her family money to put you in this pricey house and your health. I personally do not feel sorry for you and your choices. Maybe take some of that money you have and help some of the people with families to have a home of there own...that is the american way is it not.
Comment: The real estate boom made my conservative land owning family rich, but for many years we STRUGGLED. When we saw the insane boom we watched people get into the game that hadn't lived through the meager years like we had and feared for them. What goes up must come down and if you can avoid bankruptcy, divorce, etc. which we barely did for decades the down market will come up. BTW, a home isn't a good investment cause even in the boom you still had to buy another one so if you didn't own multiple homes or move to Mexico with your loot, you just had to pay the increased prices over again.
Comment: Roger is lucky to be able to build a home with so many extras, he may lose money on his investment, but he is young enough to live long enough to see his investment grow. Realtors, bankers, and investment companies helped to over inflate prices to where the ordinary hard working person could not afford payments to keep there homes. Loans were given to people all these investment companies approved knowing they could not afford the payments. Now we have far to many foreclosures and do they care what happens to these people. I think not, so Roger count YOUR blessings you at least can afford your home, and you can maintain it, while many are homeless and have lost everything they have. Be thankfull for what you have and that you are in good health, life is a roll a coaster ride and what will be will be.
Comment: That is what is wrong with the US today. We always want more. No one is happy to just have a healthy family and friends. All of these extremly wealthy people could do so much more with there money to help the struggles of children, homeless, etc. instead of spending 750,000 dollars on a house. Anyone heard of the word greed ?
Comment: I'm a single parent in her 50's, working 3 jogs and college fulltime. I'd love to not worry about a mortgage payment, oops, I forgot, I have e 79 douglewide., at least we have a rood over our heads, bed to sleep in, and a table to eat upon
Comment: I'I'm ag single parent
Comment: Maybe if you hired a maid and a pool boy you would be happier! Come on, why do you care what the market is doing when you live in a house that you intend to live in for a long time? Take the ride like the rest of us. Get 'er done!!!
Comment: Maybe if you added a maid and a pool boy you would be happier! Why do you worry so much about the market when you already live in a house you plan on living in for a long time....take the ride like everybody else! Get 'er done!!!
Comment: I am not sure if the Elliotts are braging or compleining here but I would like to take this opportunity to recognize Mr. Daniel McGinn for his obiously superior journalistic skills in uncovering this rare and heartbreaking story. Way-To-Go Sherlock.
Comment: Poor Roger, "I got this beautiful home, that I actually build myself, using my God given skills and talents. But heck, society saids that my skill and talents are worthless, because this beautiful house I built to enjoy and live the rest of my life in with my wife, is losing it $750,000.00 value". I say..be thankful, and if you really want to feel that the house is worth it's value, turn it into a abused women shelter/retreat bed and breakfast!
Comment: Enter Your Comment
Comment: Rogers a cry baby.....be happy you've both got great jobs to pay for the monster you sooo greedly built. No tears here.
Comment: I think Roger and many people like him don't appreciate that fact that they have a home many people would die to have......do you both still have a job? I could feel sorry for you if you lost your jobs...but a turn in the market is a shame but not a disaster......suck it up and get on with your life. No tears here for you.
Comment: most people are worried where the next meal will come from and why disposable income is now paying for fruits and vegetables, not to mention hygene essentials...give me a break ..if you build in an area that is booming with construction you get what you play for.....excess...now drop the cup behind you to catch the run off!
Comment: The thing I find most amusing about this story is the simple fact that the guy built the house expecting to make a profit off of it. Every financial expert will tell you don't buy a house expecting to make a profit off of it. You buy a house as an investment for your family and in the long run you will sell it for more than you paid for it, but not necessarily make a profit when you figure in taxes, maintenance, insurance and the like. Someone buy this guy a copy of any Dave Ramsey book out there.
Comment: Enter Your Comment
Comment: I find it interesting that so many people go to church on Sunday but when the housing market falls we all freak out. It is such a luxury problem ( to be worried about a 3/4 mil home ). Snap out of it! Get real. Besides even if it takes years to recover, good realestate always does.
Comment: Enter Your Comment
Comment: There is a reality to all of this, your house is worth what some one is willing to pay. With that said there is one common demonator, the Media. The Media has been selling the Bubble and the Bust for some time, doing so repeatedly. The culprit is Mid East Oil, Opec and yes once again the Media. We live in a world where the Media can suggest and the public will deliver. A rumor is only as good as the source and the source's ability to continue to spread the message. Why does the Media have so much Power? Because the Media World is changing, all of the Media is searching for First Out, Best or Most Shocking and last Credibility. There is no Honor in the Media, they've become so Driven the only thing that counts is the Story. An example of this is the Dan Rather Story about George W. Bush, stories fed to him by Lies and MisDeeds.
Oh Dan feels Scorned, but what about us, we bought it hook line and sinker. Well the same has happened in he Housing Market. Now we enter OPEC, Oil Shortages and Demand. We should be demanding the SAUDIS increase Oil Porduction, or we Must Drill in some of the Off Limit areas, if we do not we sill suffer and it won't be pretty.
Think about this, in Board Rooms Traders and CEO's aren't really worried yet, however they will when there is such a decline, the bottom will fall out. The Traders will have nothing to Trade or better yet no one to sell to.
Environmentalist ,are the next real enemy,.Oh there is nothing wrong wanting the Planet to be free of Pollutants, however it should be done by real Science, not some nit wit with too much money. in most cases inherited money having no other Venue other than a bunch of nimrods lookiing for some one to follow.
In Washington State, the Environmental Community and their Partner Government have in the Name of Environmental Protection have lost over 10,000 Acres of Agriculture Land in the last 10 Years.
Citizens of this Country have to come to the Realization that Science not a bunch of Environmental Attorney's with other place to work have decided what is to be protected.
When one takes all the components of this equation into consideration we Must realize our inability to furnish Oil from within our own lands has not hurt the nitwit that inherited all of their money, but it sure has hurt the family with young children and both parents working and trying to just make ends meet.
The quest for Clean Air and the elimination of Global Warming is the next culprit, again there is nothing wrong with wanting Clean Air, but again let's be real. Again in Washington State, The Hate Bush State and the Save the Salmon at all cost, when there is no shortage State, let's look there. More specifically, let's take a look at the policies that driven the major cities into Traffic Gridlock. The largest Region consisting of the Three Major Counties, King Pierce and Snohomish have a No New Roads and No Widening Policies and a policy to only want to build Light Rail and a
Comment: I find the conversation about home values odd. The way I understand economics, if your house doesn't sell for much, chances are you won't have to pay as much for your next home anyway. It's all relative - looking at the issue through a strictly numeric lens is rather silly. I'm actually in the process of moving right now. Sure, I took a nasty blow in the amount the old house sold for, but so did the people whose house I'm buying. In fact, they took more of a blow because they wanted to sell fast, so they insisted on selling "As Is". Whatever. I'm looking for a place to raise my kids, and I love the new house. I fully plan on living there for the next 30 or even 60 years. And color me unperturbed if, by the time my kids sell the house to put me in a home for the elderly (or in the ground, whichever comes first), I fail to net much of a profit. I'm still betting that, whatever the number is, it will still reflect the amount of capital needed to live comfortably at that time.
...Who on earth wants to move every five years, anyway? Moving's a nightmare.
Comment: I find the conversation about home values odd. The way I understand economics, if your house doesn't sell for much, chances are you won't have to pay as much for your next home anyway. It's all relative - looking at the issue through a strictly numeric lens is rather silly. I'm actually in the process of moving right now. Sure, I took a nasty blow in the amount the old house sold for, but so did the people whose house I'm buying. In fact, they took more of a blow because they wanted to sell fast, so they insisted on selling "As Is". Whatever. I'm looking for a place to raise my kids, and I love the new house. I fully plan on living there for the next 30 or even 60 years. And color me unperturbed if, by the time my kids sell the house to put me in a home for the elderly (or in the ground, whichever comes first), I fail to net much of a profit. I'm still betting that, whatever the number is, it will still reflect the amount of capital needed to live comfortably at that time.
...Who on earth wants to move every five years, anyway? Moving's a nightmare.
Comment: k
Comment: I just bought a house in kansas for 207000 dollars with fix rate for 30 years. I think it is wrong idea to purchase house for short term expectations. You will make monthly payments and you will get your money when are you selling. also it will appreciate and you will get extra money but you have to stay in your house at least 7 years otherwise you loose money in short term. It is better than renting a house. Also you have to buy something according to your budget. You can start establishing a solid aquity and you can use this to borrow money or get loan for kids education etc....you will get better rate from the banks.
Comment: Enter Your Comment
Comment:
I don't understand why everyone thinks home prices should keep going up. I think they should go down. Affordable housing is what this country needs.
I paid $155,000 for my home eight years ago. I would rather it be worth $100,000 tommorrow than $1,000,000.
This way my taxes won't get out of hand.
Also lower home prices mean I won't have to spend so much for my replacement home. My depreciated equity is worth just as much as it was eight years ago if I use it to buy another home.
It's not fair to young buyers looking for that first house either. Damn the seller who wants $175,000 for a house that he paid $60,000 for.
When I look at homes I always find out what the seller paid for it and base my offer on that figure.
I say let the prices fall. It's really a good thing for any one with brains.
Comment:
I too am in this same scenario. Bought a house that I thought would appreciate significantly. It was going to be more than just a great place to live, it was going to help us to retire without a pension. (Pensions were eliminated from my husbands company benefits during the stock market downturn a few years back.)
But, here is how I look at it: It is still a wonderful place to live. I no longer expect to make a profit. I hope that I can afford to stay here long enough to see the value go back up, so that it does not cost me anything to sell it.
I believe that day traders inflated the stock market, and flippers artificially inflated the housing market.
The correction that happened to the stock market is the same thing that is happening to the real estate market.
We must weed all of this out, and wait for the natural market to settle and correct itself. Hopefully the government can keep it's nose out long enough for this to happen quickly, so that the housing market can continue on it's slow and steady increase.
Comment: Enter Your Comment
Comment: Enter Your Comment
Comment: It is not just the big houses that are feeling the depreciation. I own a small condo in Denver, which I have not been able to sell for the past year and a half. Therefore, I have had to rent it out when I moved away from Denver. I just recently tried to refinance my adjustable mortgage and cannot do that either, without bringing a big chunk of money to closing. With all of the foreclosures in the area, my condo has dropped 10% as well. Since I am renting the property, I can only borrow 90% of the homes value. I am sure that I am not the only one who is having this problem currently either.
Comment: It's not just the larger homes that are decreasing in value. It is also the smaller condos. I own a small condo in Denver and have not been able to sell it during the past year and a half. Therefore, I have had to rent it out, becasuse I do not live in Denver anymore. Well, I just went to refinance and now and cannot do that either, without bringing money to the table. Due to the foreclosures in the area, my condo has depreciated $10,000, and I can only borrow 90% of the value.
Comment: It's ironic that jason1976???s suggestion for bargain homes was to use zip code 15022; that zip happens to be my childhood hometown. What's missing is the fact that many of the industries have closed in that area and that there are very few good paying jobs. Location remains the dominate factor in determining housing costs.
I currently reside in Sedona, AZ and the housing crunch has affected this area as well. The average house costs over $500k and two years ago buyers had to pay list price or better to buy a home here. Buyers are reluctant to lower prices as no-one wants to sell at a minimum gain or loss. However, I???ve seen house reduced from $70-100K on the medium price range to over $300k on higher end homes.
These numbers are a little disconcerting and it makes you wonder how this nationwide mess got started. Of course the banks/mortgage companies should take the majority of the blame with their ???creative financing??? packages to unqualified applicants, but the media is not too far behind fanning the flames of doom and inciting panic.
Comment: I wish people would STOP trying to blame the fact that they OVERPAID for their home on Banks and Mortgage cos. I guarantee that EVERY single buyer when walking into one of these places, has been told that they SHOULD get a FIXED RATE mortgage. And the majority of them said , , well, then I can't afford this house! And then, AND ONLY THEN, is when the loan officers offer them other financial packages. Supposedly so that they buyer can "AFFORD" the home. Problem is THEY CAN'T AFFORD THE HOME. but please let's not act like these poor louts (that think their prospective home will be worth 100k more in six months after their "FLIP" ) are going in with their eyes wide SHUT. They know that they can't afford the home they are trying to buy, and are willing to get it ANY WAY THEY CAN. So how about a 3/1 ARM, 5/1 interest only, thats the way you can get into this house. IT'S SICKENING. So the moral of the story is these folks GAMBLED THEIR FUTURE and got caught with their hand in the cookie jar. 70% of the loans in our area (so.cal) were written on adjustable rate mortgages in the last 5 years. And now those loans are adjusting up. We have houses all over our neighborhood that are being foreclosed upon, literally HUNDREDS OF THEM. And HERE'S THE KICKER OF THEM ALL, these same folks who paid ZIP to get into the houses are blaming the same banks and Mort. cos and saying that they were MISLED INTO LOANS. WHAT a FREAKIN JOKE! They only tell you 40 - 50 times on loan documents what your expectations are and how the monthly price WILL GO UP. or should we feel sorry and bail out these folks that were smart enough to buy a $700k dollar home, but can't add. IT'S SIMPLY LAUGHABLE. P.S. - these are also the same folks that are not paying their property taxes, GUESS THE GOVERNMENT FOOLED THEM TOO!
Comment: I would like to see a story on were the lowest prices are going for homes in the usa. or what state has the lowest prices. I know homes in areas of Pa go cheap. and others go for alot of money. but its still a good deal compaired to other states. or a store about what state gives you the best home for the money.
Comment: I could not be happier about this! I hope to see all the big city yuppies that have moved into my formerly great state of Oregon go broke, then GO HOME! we are sick of your selfish self centered beliefs, and you careless about anyone but yourself lifestyle.
Comment: A sentiment shared by most residents of small towns. Years back, I researched for small towns to settle in and read the postings on Sperling's Best Places to find some very angry folks that felt they were getting squeezed out of their home towns by big spenders in California (check out the impact this had on Cedar City, Utah, which because of low supply -- planners didn't see "them" coming -- saw houses and rents rise by 30%+ in 1 year). Basically, in the housing heydey, Californians were selling their homes for nice profits and paying cash (paying no mind to the cost/value) for homes in small towns with small economies. Who can compete with that? Looks like those days are gone, or at least matters are under better control now and the coming days. And, hopefully, some of the hideous developments springing up will be mowed down -- not likely, but we can dream, can't we?
Comment: When I say "small towns with small economies" what I'm getting at is that people moving into smaller areas should be aware of the values of land tied to that area. In numbers, a mass migration of people can devastate the local townsfolk and really foul up the economy by throwing money about. Think what happens if you travel abroad and overpay how that effects that local economy -- with merchants now chasing after travelers' dollars instead of pricing items at prices locals can afford. Or, for instance, the trend for Americans retiring to Mexico, to stretch their thin savings much farther than they could have imagined here. Nice for Americans, not so nice for the locals, unless they have outstanding city planners, who set aside land to build affordable housing (communities, after all, need teachers, firefighters, mechanics, cashiers, right?).
Comment: I find it very difficult to care. How can you complain ? it is just speculative...correct? Want a real thrill! take out a second go to Vegas. Good Luck.
Comment: It warms my heart to see this happening, I am sick of these big money yuppies coming into my state and communities and destroying them with their bi diesed big city way! go back to the city and take your rushed and careless lifestyle with you!
Comment: I'm in California and saw this coming years ago. People have monthly budgets to spend money to buy cars and homes. If interest rates are 20%-they can buy 5 times value. If 10%-10 times value. At an extreme-1%-100 times value. If rates go real low, prices soar. It rates go up, prices crash. The fall is tied to the rate of rise. I read that the blame is placed on the poor credit risk, a breakdown in lending policies, SIV, ... etc. It is a matter of lots of businesse making lots of money (lenders and investors) and people getting a lot for their money (buyers). It is now time to pay the piper.
Comment: Apologies for posting too frequently here. Just did a bit of research to get a bead on when there will likely be a bounceback. Seems that experts are saying anything from sometime in 2008 to much longer. If it's purely tied to supply and demand -- and there's a lot of supply, old and new, on the market -- then it will be a long wait for this to shake out. But I'm thinking that as boomers age and downshift and sell off larger homes, there will be another glut of those types of homes on the market. I know, thin on logic, as all boomers don't retire at the same time, choose to sell their homes/move, and might not own large homes. Do you folks know of any metrics to guide us?
Comment: I'm in California and I saw this coming years ago. People have a monthly budget and they use it to buy cars and homes. If the rate is 20%, I can buy 5 times value. If 10%-ten times value. At an extreme-1%-100 times value. So value gets tied to interest rates. When rates go down low, prices can soar. When rates go down-VALUE CRASHES. With leverage, it doens't take much. For get about-its the poor credit slob who is at fault...It's the banks lowering standards...Its SIV. It is people making lots of money (banks and investors) and spenders getting a lot for their dollar. It is now time to pay the piper.
