Dream House or Nightmare?

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Oh please people. They didn't do anything wrong. People have been investing in real estate long before the last big boom and will be investing in real estate long after. People building big nice homes have nothing to do with rising housing costs. The real estate market is about as close as you can get to a true supply and demand curve. The housing boom was due to cheap money for a long period of time which increased demand. As a real estate investor who has owned rental homes for many years, here is my advice to anyone using real estate as an investment vehicle. The trick to investing in real estate is simple. You can never put yourself in a position where you have to sell, EVER!!! You have to buy when you don't need to buy and sell when you don't need to sell. If you look at average appreciation over long periods of time you will see around an average of 5% appreciation in most markets over the long haul. I always use a 3% appreciation figure for my own investments. Even at 3%, real estate will outperform most other investments by the ability to leverage the banks money. The reason people got into so much trouble over the past few years is they ignored rule #1. They put themselves into a position of needing to sell at some point in time. In the case of the couple in the article, the worst thing that will happen is they will have to hold on to the house longer then planned. It may take them 20 years to recoup their investment. Investing in real estate is not bad or evil. It is a math equation and nothing more. If you can't afford the current standard of living, go back to school and learn how to play the game better. This is what makes America great. We have free choice to achieve or not to. We do not want government squashing the American dream through increased control over our lives. Let the free market strive and be an American and go out there and get it. The only limitation people have is the one they allow themselves to believe.

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GEEZ, it's a house, a home, it's not an ATM machine. If you are not selling within the next 3 or 4 years, who cares?? I owned plenty of properties that went both up and down over time. However, in the long run a house is a good investment.

How exactly is this a nightmare? It was a bad financial move, but hardly a nightmare. His house is still standing, he's not facing health hazards from shoddy construction, he can meet his financial obligations regarding the house, it is supposedly his dream home.... hardly sounds nightmarish to me. Anyone with a hint of a finance background could have told him that real estate is a long term investment and not a quick turn around. Being a contractor he should have known that the market is unstable and the boom would be short lived. Suck it up Mr. Elliot, you are better off than most Americans and you need to learn to appreciate that. Mr. McGinn, this was utter fluff and perhaps you need to get your head out of the gated communities and go out into the real world and discover what nightmare truly is.

the problem now a days is that we are a throw away society it use to be when someone built their dream house it was to live in it for a life time. Raise their family a place where their grandchildren would visit a HOME not a house. So that these problems are coming up is because the greedy get greedier

I also agree with summermac on this one. They should have known that there would be a chance that they would have to be in for the long haul on this one. They might as well just ride out the storm, and if they absolutely MUST sell, they should sell it themselves and not enlist any professional help. There is even a website that is tailor made for selling your home, and it is only $1 to list. In fact, I believe it is free right now because it just recently launched. www.anythingforsalebyowner.com for anyone who is interested.

I don't think these people understand the nature of the business cycle. What goes artificially up has to at some point level off and begin to fall. If home prices went up 52% between 2000 and 2005 and have now fallen some 8% whoopdee-do. You're still ahead of the game if you were holding real estate in 2000. My advise to the Elliott's is to hold on to that house and over time they'll most likely do alright. Take some lessons from your parents and stop being so greedy!

I agree with Stormy....poor, poor wealthy people. Lets find more valid things to write about. People are losing their homes of a decision in going with an arm loan. Or Slapping a good 750,000 into a "dream" home. But because of more valid issues like healthcare and what high premiums they are paying. Having a special needs child and having my insurance not covering certain procedures. Losing your home because of those kind of reasons, I find are more tolerable.

We built our home in June 2006, nowhere near the Elliots but we spent $297,900. We had a conventional loan and no problem with payments. Four months later we were relocated out of state. Immediately we placed the house on the market for exactly what we paid, a month later we were told we would be lucky to get $260,000 for the home. The house has been for sell for slightly over a year and we just received our best offer of $219,000. We are now attempting a short sale with our lender and the house will be in foreclosure if that does not work out. So what about those of us who bought responsibly, but due to circumstances beyond our control we now face a finacial crisis? How were we supposed to know we would be transfered and the housing market would crumble? The house now appraises at $230,845!!!

To me, a "dream home" is not something everyone has. However, in this day and age, everyone has their "dream home" because of creative financing and need to keep up with the Joneses, the Smiths, the Browns, the Garcias, the Wongs, and the Singhs. Due to this excessive spending and rocket-fueled housing prices, my husband and I are unable to buy even a modest house. Even a modest house here in CA is selling at a quarter million ($250K) for a fixer-upper. Also, everyone thinking they have to have at least 3,000 sq. ft. instead of a modest 1,500 like most of our parents raised us in. I'd love to have a dream house, but by the time I can afford one, I'll be close to retirement and wanting something smaller.

boo-hoo like every one else is saying. hey elliott's call HGTV and go in their show "my house is worth what" it might make you fell better..

FIRST OF ALL HOW LONG DO THEY PLAN ON LIVING IN THE HOUSE. SECOND IF THEY ENJOY THE HOUSE WHO CARES WHAT ITS WORTH TODAY. THIRD WHO IS TO SAY THAT THE MARKET WON'T COME BACK WITH A VENGANCE IN 10 YRS... BUT IF THE MARKET DOESN'T COME BACK THATS WHAT YOU GET FOR TRYING TO KEEP UP WITH THE JONES. IT IS STILL BETTER THAN BUYING A 100K AUTO.

All I have to say is-----Welcome to the Real World!!! They sound as greedy as can be, it serves them right to go through this, all they were going to do was try to stick it to someone else when they sold it. It's like what they say- what comes around goes around, it just appears they are the ones getting stuck!!! Suck it up and be an adult.

ljd132002
My husband and I built our dream home in 2004 - a 2000 square foot split level home on 5 acres. Is our 3 BR/2BA home crowded with 2 dogs and 2 kids? Darn right it is, but I love it. Not a single area in our home is wasted space - it's all used in some way. I always shake my head in wonder when someone builds a home with 4 or 5 bathrooms - for what? So you can all use the facilities at the same time? Besides that, it's wonderful not being housepoor and being able to afford fun weekend activities. Since we did most of the work ourselves with the help of family, we are even more fortunate to NOT have a huge mortgage.