LMAO! Real Estate Shill Mag Implies that Now is the Time to Buy a Home!

[El Pinko]

Oh, brother, how tone-deaf are the folks in the real-estate industry?

How's this?


http://realtytimes.com/rtpages/20080102_fivereasons.htm

Five Reasons Houses Beat Stocks
by Blanche Evans
It's high time we told buyers, sellers and homeowners the truth about whether a home is a good investment.


Despite what Wall Street wants you to believe, owning a home isn't the same kind of investment as stocks or bonds. What you get is a USE asset that depreciates over time, while it grows in market value. All you have to do is keep the home in good repair to max out your take.

Here are five reasons why you get more for your money with a house than a worthless sock puppet.

Leverage: with stocks, you put in all your money for a little piece of a company. With a house, you put in a little money to get all of the house.



And it goes on and on with all the great reasons why a house is the best investment...





Now, I'm not saying that this is a good time to buy stock, but a lot of homes in formerly hot areas have lost uwards of 200K in value. How many of us are big enough high rollers to lose that kind of money in the stock market?

Heck, there may actually be a few housing bargains in the hiterlands, but you'd have to be nuts to buy a house right now in most of the bigger cities near the coasts, where prices are still plummeting and foreclosures rising.

I liked this bit- "Lifestyle: Do you want to look at a dumpsite or your children playing in their own back yard? "

Gee, I think I'll take the dumpsite! I mean really! Is that the choice, living by a dumpsite or buying a home? Hear that renters? You're all living by dumpsites!


There is some truth in the article, but the overarching message seems to be that this is the time to buy, and in most areas, it most definitely is NOT.

[Quantess]

1. If you are able to buy a house right now, I would say it IS a good time to buy.

Prices have gone down.

[aquart]

4. They'll go down more.

[Quantess]

6. I think so, too.

The mortgage crisis is only in its infancy.

[asthmaticeog]

7. Depends on where.

First in, first out - some Midwestern cities that are the first and hardest hit are bottoming out now or will be soon.

[MADem]

21. And make a lowball offer!

Problem is getting financing--if you have money and can pay cash you can get a deep discount I'll bet.

[alittlelark]

25. No, it is not a good time to buy... wait 1-3 years

THAT will be the window to buy in. This crash has just begun. Only the desperate will/should buy in this market.

[crim son]

2. Shhhhhh! My home is on the market!

And will have been for two years come mid-March. I know only too well that whatever the realtytimes says, nobody's buying.

[Quantess]

5. It's a lousy time to sell.

But a good time to buy. It's a buyer's market.

[El Pinko]

9. That really depends on the market.

In almost all markets, median home prices have stayed at prretty much 3X median income.

Despite the large drops over the last year, home prices in most of California are still more than 5X median local income, so they have a long ways still to correct before returning to trend.

If you have to buy, you have to buy, but if I was in the market in California, S. Florida, DC metro or any of the other really bubblicious areas, I would wait at least a few more years before even thnking of buying.

[Quantess]

11. My friends in SanDiego sold their house a little more than a year ago.

They made out like bandits. They sold their house at just the right time.
Edit: maybe it was 2 years ago. Anyway, they sold their house at the peak high.

[El Pinko]

13. How fortunate for them - SD is getting hammered now...

Nice town, though...

[crim son]

10. Indeed, for those who can buy without first selling.

I wish I had that good fortune.

[Quantess]

14. Wealthy people have that option.

They can clean up all those rock-bottom-priced foreclosed homes, and hang onto them until the prices go back up, then sell them back to the middle-class rubes for a handsome profit. Nifty, huh.

[crim son]

15. I had wealth, once.

So I have a bit of compassion. Not every rich person is a republican, or an asshole. But that's now what this thread is about.

[Quantess]

17. Did I say they are assholes for being able to do that?

Did I imply "they must be Republicans"?
No, I certainly did not, so don't get defensive. I'm just telling it how it is. I'm being matter-of-fact.

[crim son]

18. Oh, sorry. I was being nostalgic, actually.

I didn't mean to sound irate.

[Quantess]

23. If I had lots of money to play with, that's what I'd be doing.

And I don't condemn anyone for making smart investments. They are just responding naturally to the mortgage crisis. For them, it is an opportunity. They'd be foolish not to.

The real assholes are the ones who allowed ARMs and lax lending policies to become so out of control. Alan Greenspan, for example.

[jody]

3. If one can afford to buy, now is a good time. n/t

[El Pinko]

12. There are some markets where it's a good time, but most markets, no...

The really bad bubble areas are still overinflated and need to fall back to 2001 levels before the corrrection is complete.

and then there's this:




http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x2833649

[GainesT1958]

8. Kind of like the bank branch...

Whose parking lot is filled with repo'd cars...they're basically desperate to clear 'em out.

Yeah, those mortgage rates are so low, might as well get an A.R.M. that's 97% interest. Then the cycle can repeat itself. Don't any of these folks want to see an actual stable market?:eyes:

Buying a foreclosed home just feels too much like "blood money" to me!:mad:

B-)

[Wizard777]

16. If you don't need credit to buy it. Absolutely! n/t

[stahbrett]

19. Not a real-estate expert, but if it's a bad time to sell a house, it's probably a good time to buy

At least that's what I've always thought - if there isn't a big demand to buy houses, the sellers are more desperate, and the buyers can be pickier.

[Bluebear]

20. With the number of foreclosures out there, now IS a great time to buy

[El Pinko]

22. It's a better time to buy than 2006. But prices still have a long way to fall in CA, DC, etc.

nt

[alittlelark]

27. No, it is not. Wait at least one year... watch the trends.

This bust has just begun. W/in 1-3 years there will be an optimal 'buy market'.


This is not one of them.

[El Pinko]

30. Yup. Here's an idea of how far things have to correct before returning to trend.

Look into the median income in your local area. If the median house price in your area is still well over 3X the median income, your area is still going to fall further.

[Warpy]

24. Gotta feel sorry for the poor bastards

because it seems like everybody's gotten the message that now is NOT the time to buy. If you're used to making a killing on commissions, you're going to write silly articles talking the market up or consider going to school to fix AC and heating.

The banks have gotten the message, too, and they're backing off to accepting 10% down minimum and a PITI that is 33% of a person's take home pay. I know mortgages around here are falling through at the last minute all over the place.

In addition, housing has never been an investment. It's shelter, a job (meaning owning and managing rentals), a hedge against rising rent. However, as an investment, it's not a good one. Equity in normal markets builds too slowly and costs far too much in terms of monthly interest payments.

Buying a very modest house in an area of the country that didn't see a huge bubble in prices but is seeing rising rents might still be a good idea. You will likely lose that down payment and then some, but if you've been careful about keeping those monthly payments low enough, you'll be back in positive territory eventually. You'll be way ahead of the game if rents are really skyrocketing, and I expect them to in any area that wasn't overbuilt with glitzy condos.

Plus, you can paint the walls yellow and purple if it's your own.

[EFerrari]

26. This is a good time to buy a house if you can.

It's a messed up time to try to hang onto one.

[alittlelark]

31. It is NOT a good time to BUY....

Wait 1-3 years, perhaps more. Rentals will go down along w/ housing prices.... BARGAIN w/ your landlord (he/she is scared as well).

Wait until the avg mortgage price on a home in your area = 1/3 the 'middle/ upper salary in your area.


Until then 'Avast Hope All Yee Who Enter (the housing mortgage bubble)'

[EFerrari]

33. Well, I think you're right insofar as the market will only get better for buyers.

Ack.

It's such a mixed blessing because it will get much worse for so many people. But, your point is well taken.

[alittlelark]

34. Hubby and I have 2/3 of our assets in International currencies

Recognizing that this maelstrom was coming 2 years ago. The sad thing is that I can be happy about that.

[El Pinko]

35. THus far, the opposite has been true in bubble areas.

Rents were stagnant mid-decade in the SF bay area as everyone rushed into the home market.

Now many are fleeing (or being foreclosed from) the home-market and driving demand for rental apartments and properties. Vacancies are extremely low in SF now and rents have gone up a lot over the last year.

There may be downward pressure on rents in outlying and overbuilt areas, but rents will probably only go higher in SF, NYC etc.

[alittlelark]

37. Bottom Line - Do Not Buy!!!

I got called out here, please reference my other posts this evening.

[EvolveOrConvolve]

28. Smart investors are getting back into the market now

For example, in my area you can buy a home that sold for $250K two years ago for about $130K (or less) now on the foreclosure market. Rent it out for $1,000 a month, put in $5,000 in upgrades to increase the value $20,000 and wait for the correction. A house like this won't hit the $250K value any time soon, but 4 year investment plan can bring an 8% - 10% return per year in cash and on paper plus a potential resale profit of $60K - $70K. It's very easy to get a 60% return over four years if you plan right. This is also provided you have the cash on hand to purchase the property outright - trying to carry the costs of a mortgage are insane right now even with interest rates low. One bad tenant and you start losing ground fast instead of gaining.

It's also a great time for first time home buyers to snag up a bargain home at rock bottom mortgage rates. In many areas, there are more foreclosures than investors (since the get-rich-quick, no-money-down schemes don't work when the mortgage industry is requiring 10% down payments). I've found that mortgage companies are starting to look at short sales again, they're so desperate to get out from under these bad loans. Several investors I know are getting houses for $50K or more under the current (low!) market values and simply flipping them for a quick buck.

Real estate, no matter how the market is acting is a pretty solid investment vehicle. My wife and I own four homes (one we live in), and our earned income from working last year was about $40,000 between the two of us.

[alittlelark]

36. Uh, yeah......

You are telling people to BUY (really) at the (almost) peak of the 'housing bubble'?


Uh, yeah.



Yo!!! Wait 1-3 years, pay attn to market trends, then BUY.

The poster is either standing to gain from ignorance or is leading you down th 'primrose path'.

[EvolveOrConvolve]

38. In many areas the bubble has already burst

and housing prices have dropped to profitable levels. Why wait 1-3 years to buy when prices will have already risen in many places? That's insane, and will cost many people thousands of dollars.

If you look at trends, many mid-size markets are seeing a decrease in current inventories, and the laws of supply and demand dictate that as scarcity increases, prices rise. Many many regional markets are "at the bottom" (or near it), and with sweet interest rate deals it's definitely a buyer's market.

I'm seeking to impart some knowledge, and the crack about gaining from other's ignorance is uncalled for. How the hell will I stand to profit from educating some here at DU who only hear about the doom and gloom of the market. The bubble popping is the best thing that could have happened for many. It has lowered prices to affordable levels again (in many markets), and the dropping of interest rates is the icing on the cake. Many folks who were priced out of homes even 2 years ago can now afford to buy a home for their families.

I'll grant you that some areas, especially on the coasts, still have sky-high prices, but for the average American first time home buyer it is a good time to start looking.

[leftofthedial]

29. well it's certainly somewhat better than having bought one three years ago

now that prices have come down . . .

[alittlelark]

32. A CALL OUT to anyone that clicks on this link

... the housing market has only begun its collapse.

These things are usually months long. Wake'Grow' UP.... this one is for the record books, but hopefully won't be as bad as the 'Great Depression' (scary how many economists see it as such)

This one will be 1+ years long.... Don't ask, I just Know.

It's gonna be WAYYY ugly, and your happy real estate smilies will slit their wrists.



The smart thing is to stay out now, invest in substative improvements if you own (do not sell)...........and just hang tight. If you need to sell it will be a 'fire sale' - even here in the Bay Area.