I can't imagine the stress I'd feel trying to fall to sleep every night in the very investment that was leading to my financial ruin.
I can't imagine the sense of panic that every night in that house was not only costing me what it cost to own and finance, but also actual depreciation of hundreds if not thousands of dollars a night. Depreciation which will go on for weeks, months, years...
I can't imagine the thought of having to go through the process of trying to sell the home, where there are no more buyers, inventory has exploded, the system is corrupt, and the word is out
Tick, tick, tick, tick...
I thank god every night I'm free of the burden of owning a house.
May 07, 2006
I thank god every night that I no longer own a home
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48 comments:
You're right.
The giant sucking sound is turning on in the Olde Country already.
How do the brits say anotherf@uckedborrower.com
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Mortgage repossession orders jump
Fri May 5, 2006 10:16 AM BST12
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LONDON (Reuters) - Orders for mortgage repossessions made in the first quarter of 2006 in England and Wales rose 57 percent on the year,
the government said on Friday.
The Department of Constitutional Affairs said courts ordered 21,997 repossessions in the three months to March, but around half of these were so-called suspended orders.
A suspended order gives the homeowner a chance to catch up with mortgage arrears and does not necessarily entail the home being repossessed.
In the same period, the number of actions entered -- when a claimant begins legal proceedings against an individual for repossession of residential property -- was up 29 percent on the year at 33,442.
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as interest rates go up and up, while values go down and down, and all these interest only's or ARMs adjust, you'll see an incredible, and I mean incredible, surge in foreclosures
So sad.
I know what it feels like to face forclosure. I finally sold at the peak in Oct 05, Thank GOD! I woke up evey morning and had a good cry before I got out of bed, litteraly for about 3 months. Now I rent, have loads of cash and no debt. Things are going my way.
PS The house I sold in Oct 05 is back on the market at a $40,000.00 increase. Duh.
Sold my place 6/05 and left CA for good. My lease was coming due so I put an offer on a house that was 10% below asking. The seller rejected the offer as insulting, that was a month ago, he has since reduced the asking. He did me a great fovor and solidified my determination to wait it out.
I am glad I sold at the top of the market. Now all I do is worry that inflation and the ever falling dollar are will steal my profit.
Yea Yea Yea! I know how to hedge but there are no guarantees in in nothing anymore! other than the fact that it's going to get a lot worse.
I thank god all you renters exist to pay my mortgage. Some fool is paying me 2100 pounds to rent my lot in London on a place that I have had paid off for a decade.
God bless him.
Renters are 2nd class citizens......that's why you pay the most taxes and have the least exemptions.
We rent a place in a great school district. The houses start around here for 300k, for something with termites, that needs a lot of work. Our rent is 825 a month. We don't pay trash, we don't pay property taxes, we don't pay to have our nice yard landscaped and mowed. I am going to learn how to play the guitar, now that I no longer, have to slave away every weekend, cleaning gutters, weeding the yard, ect. The other day, there was a tornado warning, and my main relief thought was, "I won't have to worry about any repairs, or dealing with insurance, if there is any damage". How could this situation possibly be wrong. We are going to save about a thousand dollars a month, and have freetime to boot.
When prices make sense again, we'll buy a house again. Just given the stressfree lifestyle, I'm considering renting for longer and longer.
forgot to add. I would be interested in a foreclosure blog, but don't know the first thing about this. I think it will be awhile before prices really go down. We had a condo on the market in the past, and we were willing to wait a year, before we said, "the heck with it", and started dropping the price.
"Renters are 2nd class citizens......that's why you pay the most taxes and have the least exemptions."
Our fed tax deduction for interest paid was less than the std. deduction. Needless to say, we did not itemize last year. Sold the house to boot. Owning a house isn't all it's cracked up to be.
Not only am I a renter, I vote. More than I can say for absentee landlords. Who would you rather be, a property owner with a voice or a renter with a vote?
Debtors ar No Class Citizens and thats what most mortgage owners are!
Foo - all six units I own are worth 325,000 GBP each, for which I rent for 1900-2100 GBP a month. As long as I have at least four of them rented a month, I am cash positive, and I have not had any vacancies for three years.
It seems you Americans like to pay alot for fancy paint and proximity to the pubs.
So foo, tell me again why I should sell my places and buy bonds? I bought my places for 300 GBP for all of them 12 years ago, and they are worth seven times what I paid. I think I have a good handle and understanding of my opportunity costs.
God Bless The Renters.
Renters are poor spellers.........
You pay off your house, and the insurance company and the tax assessors own it, not you.
If you do not see that you are living in fantasyland!
I know. I have paid off property and the insurance company did not cover the catastrophic losses. I rent now. So, let hurricane season begin, I don't care. I have a lot of disposable income now, no worries and my "equity" actually pays me, because it is cash, and not “dead equity”.
30 year fixed rate will help you fight inflation. rents keep going up at least in areas i know. socal, utah, maui, seattle. 950$ monthly rent today will be 1400 in 5 years. in 90 i went to the univ of utah and paid 225rent for 2+2 now those same place rent for 850 to 950. Rents go up so if up can lock in you
To the owner blessing renters: How do you figure you are not losing out on opportunity cost?
Your 12000/mo income minus 8000/mo expenses gives you 4000/mo postive cash flow. If you sold those units for 1.95M, you should come out of escrow with 1.36M after transaction costs, mortgage pay off, and capital gains.
Something paying 4% interest will pay you 4540/mo. Unless there is something you are not telling us (like a refinance with cash out), you are missing out.
I think rents have gone up because of the housing boom. The rents are still raising because owners are trying to lock in high rates(or get as much as they can in prep for higher owner costs(interest, prop tax and insurance). As more properties are unable to sell and more owners feel the squeeze on investment property I would expect more and more rental properties on the market. This will REDUCE the amount of rent that can be charged in general.
I think think like all the Apts >turned Condo> that are now turning back to apartments show this as well.
I am a perfect example of a potential buyer looking the bubble in the face. I am 100+k income family(one 2 year old) with ~350k net asset of wealth (half liquid half retirement). We want to buy a home in north/central florida after moving here a few months ago from Las Vegas. We are ready to put 20% down on a 30yr fixed because we want a home to live in and raise our kid. We rent an apartment now and I personally don't like it.
The thing is of course I am NOT going to buy now or anytime soon. I have been watching the north florida market(and about 15 RE blogs every night :P) for 3 months now and in a NON BUBBLICIOUS market I am not seeing properties sold. FSBO for example just keeps getting bigger and bigger. The kind of home I want is in the range of 400-600k right now and so there are of course some great homes that I would love. They are special and I would rather assume I am not the only one seeing that. These homes are NOT selling instead the prices are comming down. I have seen a 10-35k reduction in prices on homes in this range in just 3 months in a "non-bubble" market.
There are a TON of fools who will not reduce their prices. Many I figure are stuck due to home equity loans and future spending based on what THEY THOUGHT they could sell their home for when they wanted. This just means the price correction will be that much rougher. When the majority of sellers finally do "get it" then prices will plummet hard and fast.
In any case I am moving my money around to protect against the recession(depression) if I can. Instead of buying I will rent a house and keep my purchasing power ready. When we see a home we actually want to live in for a rock bottom price we will buy it. Until then why would I buy? Why would anyone buy right now of all times?
Out At Peak - thx for your concern. The piece of info you are missing is that my rental units are all paid off.
If I sold my places for 2MM, I could get 8125 monthly from bond interest.
As it is now, I get 11150 monthly in rent, plus I get the appreciation of my units.
Best case scenario - I continue to collect my rent and be happy.
Worst case scenrio, housing crashes and my units drop 50% and I still cash out a cool million.
God Bless The Renters.
Foo - the Americans like fancy paint and proximity to the pubs. Being close to University helps too. Location, location, location.
my flat in london would list for 1.1 million pounds, and gets 2000 pounds a month in rent
in other words, expensive on both sides of the equation, but not even close when it comes to how cheap renting is vs. owning
not even close
I'm sleeping just fine here in Dallas. My friends in Houston, Pittsburgh, Cleveland, and Kansas City are fine too. In fact everyone I know not living in NV, AZ, CA or FL are also doing alright.
Keith - are you seriously paying 2000 pounds (damn!) for rent.....dude that is a lot of money to throw away. That is $45,000 dollars a year you are spending in rent!
You better be living with the Queen and Chuck.
Either buy some property, or pay less in rent........that is crazy.
Why so bitter foo?
This blog is entertaining in a USA Today, National Enquirer kind of way, however when I want to read objective and well-written articles, I visit Ben's blog:
The Housing Bubble
Housing Panic is too sensationalistic and liberal for my taste. I only visit occasionally for the funny pictures (just like I only read the comics on Sundays).
I don't like reading real estate blogs that focus on:
- terrorism
- politics: immigration
- politics: general
- pop culture
- Hillary Clinton
- the price of oil and gold
for paying my rent every month.......
2000 pounds a month? and you are saying you would rather be the renter than the owner?
it's funny when people don't understand basic math.
let's do it for them
2000 pounds a month (by the way, typical rent in london zone 1 - the most expensive city in the world by the way). total cost: 2000 pounds a month.
let's say you buy the same place at 1.1 million pounds. get a nice 30 year fixed at 6.25%. that's 7000 pounds a month to own the same place. plus all the other expenses associated with owning - property taxes, upkeep, condo fees, etc, so probably 8000 pounds a month total.
get it now? I rent for 25% of the cost of owning.
it's all relative folks. yes, 2000 pounds a month is expensive, thank god my client picks up 100% of the bill as part of my compensation.
What matters is the cost of owning vs. the cost of renting. they should be similar, and they're not even close.
Not even close.
Good. Now you understand the housing bubble.
And it's a long, long, long way down.
oh, i forgot the most important point.
if I bought my place for 1.1 million pounds today, knowing I was losing 6000 pounds a month in cashflow, i'd be mortified.
but when the 1.1 million pound place falls to 500,000 pounds, then not only would I be mortified, I'd be bankrupt.
Meanwhile, I'll sleep soundly in my nice rental flat tonight, knowing its someone else who takes on 100% of the risk, with no reward
cheers
as interest rates go up and up, while values go down and down, and all these interest only's or ARMs adjust, you'll see an incredible, and I mean incredible, surge in foreclosures.
Ya and accidental house fires :)
..."Why would anyone buy right now of all times?" I am with you! We have over $500k cash to buy, and can mortgage tons more. I am waiting to get more for my $$ and possibly keep some in the bank! If that makes us as one comment suggests ..." Renters are 2nd class citizens"...that is fine - I'll buy my house when I'm good and ready and park my 2nd class Mercedes there too!
how am i losing 6000 pounds a month when all my properties are paid for? remember.....i paid 300k for all six properties total, and though I thought my properties were worth 2MM, you are saying my props are worth 6.6MM GBP?
the way I see it, i am getting 12,000 GBP a month in rental income on a 100% paid off property
i may not be good at math, but I know that the numbers work out for me
I thank god every night I divorced my crazy wife. Viva la bachelorhood.
I sold on the way up and see no need to hurry out and buy anytime soon; Not only did I get my profit , but I am saving thousands every month in taxes, insurance, payments, maintinance, and travel to suburbia. Not to mention being land locked in a self made prison where any lawyer can attach my only asset.
I have been looking at used campers. I think I'll go see the god ole US of A for a while so I can miss the civil unrest in the city.
You guys a so, so fun to read. (:
I am laughing out loud. You guys rock.
"..."Why would anyone buy right now of all times?" I am with you! We have over $500k cash to buy, and can mortgage tons more. I am waiting to get more for my $$ and possibly keep some in the bank! If that makes us as one comment suggests ..." Renters are 2nd class citizens"...that is fine - I'll buy my house when I'm good and ready and park my 2nd class Mercedes there too!"
I knew I wasn't the only one out there. That 2nd class citizen thing cracks me up. I'll take a 2nd class Mercedes if it's a 3 year old cream puff that some sucker paid the depreciation on...:)
I guess owners have the superiority complex again people who rent but it seems to me this is mostly based on the appreciation concept. When the market turns and for that period of depreciating value the owners get shafted. So while owners make money during real estate booms is it any wonder non-owners gloat during busts? Busts allow savvy non-owners to become profitable owners.
In the end knowing the market and buying low make all the difference. Hat tip to the internet for information exchange :P
Is This guy an Idiot or what?
Anonymous said...
( Foo - all six units I own are worth 325,000 GBP each, for which I rent for 1900-2100 GBP a month. As long as I have at least four of them rented a month, I am cash positive, and I have not had any vacancies for three years.)
Then he says:
(If I sold my places for 2MM, I could get 8125 monthly from bond interest.
As it is now, I get 11150 monthly in rent, plus I get the appreciation of my units.)
Excuse me what do you mean by "..As long as I have four of them rented, I am cashflow positive...?
MORON!
"I thank god every night that I no longer own a home"
Most of my friends and co-workers think I am the real estate god. I have been warning them off buying a house (live in house) for two years. Those that took my advise are thanking me profusely. Those that did not have a beaten look about them. I wish I could have done more to convince them that it was a bad investment but you give them the facts and what they do with them is of course their decission.
Rents are going to go down. We sold a condo in the past already, due to a very poor rental market in Albuquerque. My husband was renting office space, and when he moved, the owner of the complex begged him to allow him to still keep his signage up, so that the place appeared to be at least half full. His sister from CA had advised him to buy rental property in ALB. I had another friend who ended up declaring bankrupcy, due to trying to rent her house out to a family with good references, who fell on hard times, and went so far as to steal her appliances out of her house.
So, we recently moved to Austin, and our landlord told me that their used to be a waiting list for our current 4-plex area. Now there are NUMEROUS for rent signs. Many units sitting empty. When the condos bought by speculators hit the market- watch out below! RENTS ARE GOING DOWN!
I am very happy with my current debt surf. As I count my gold coins he is happily mowing, painting, and serving me quite well. Ah yes, market liquidity and prices are declining before my eyes, what a pity. My serf is learning the new order of society very quickly. He knows that I will continue to throw him scraps as long as he never provokes my by asking for more. Even though I am so very generous to him, he understands that I will toss him into the desperation of market forces should he dare utter the words “rent increase” in my presence.
Tom
Bully for you, those that were able to buy at a good price or finance at a low rate. That is not the case for everyone.
The average home prices in my neighborhood is $578K. For that you get a very nice townhouse. You also are required to pay HOA ($675 quarterly is the cheaper one) and a neighborhood association to keep the streets lovely. Add to this taxes, utilities and the lifestyle to keep up with the Joneses.
I get all this for under 2,000 monthly plus some of the best schools in my state. The garbage gets picked up in front of my garage. I pay only light, phone.
Maybe the end of the year when they get more realistic and I can buy a home assesed at $245K for $300K and not $800K.
But if not, I suspect there will be some desperate HO's ready to rend for even less than I pay now.
Rent? Mwahahahahhahaa!!!!!
How about owning a 4800 sq ft. home on 2.5 acres with an electric bill of $100/mo. Of course, I built it and for only $200,000. How? If you have to ask, you are not capable. Current value $350000 and I pay $500/mo. Taxes? I am ripping off the county on those. How? Once again, if you have to ask...
I beleive that beats anyone's rent. Put that in your pipe and smoke it.
Those of us who are renting, mostly, would rather be homeowners. We just won't pay the inflated prices NOW. We don't think renting historically is so great, but in our short term current world, it is making us rich. keep on smokin.
I don't know where one can pay a hundred dollars for electric for a 4800 square foot home. Wherever you are, stay until they bury you. That's an incredible deal. That is not available anywhere I want to live.
I'm betting he lives in Canada. I pay less than $1500 /year in taxes on a two-unit dwelling near the city centre (10 minute drive, 25 minute busride). Its assessed at $110,000, current market value of $170,000, and my renter pays my $91,000 mortgage to the penny (P&I). My electic bill is roughly $100/month and my annual oil bill is roughly $2000-$2500 (though sure to go up). Keep in mind, those are Canadian dollars that are worth 90 cents in $US. But don't get me wrong, I'd sooner slash my wrists than buy American real estate right now.
Dear Mr. current value $350,000. Soon you will recognize that your house is like a tree with its roots hardening from the cement of disappearing liquidity. When your tree fails to bear its golden fruit and begins to wither from the coming disease you may then stop counting your money each time you mow the lawn. It is silly to throw stones at the renters who are tended to by their debt serfs and move about as freely as birds. I hope that you are forever content with the view and always grateful for having shelter.
Tom
Zillow says my primary residence is worth 450k. I bought it for 200k in 03'.Whoopie I guess. You see, I could give a rats ass if its worth 450k or 45k now. I bought it because it was big enough for my family and the right price. I bought it because at the time the cost was 2.5 times my salary. I bought with a 30yr fixed below 5% and my payment is 1300 a month. Most people I know dont even pay that in rent. Dont get me wrong, I want this thing to crash and soon. I am sick and tired of all this bubble sheeat and I do want some good friends to own a home. I thank god every night that I have a nice home for my family and it costs me less than renting. Just the flip side.
I too disagree with renting BUT....I rent a great house for $1,500 a month with a huge yard (for my two doggies) and I have a 6 month lease which I paid off cash, thanks to making a killing on my house at the peak of the selling frenzy. Sellers in my area have reduced an average of 30K. With some reducing already by 100K. yes by 100K. so $1,500 monthyl rent mulitplied by 6 months is 9K. Add in a some tax write offs that I lost by renting vs. owning, and say i lose my security deposit because my dog chews through a few of the walls. Round all that off to 12K. If I buy a home that has been reduced between the 30K-100K range I will have saved big money. So I lost 12K by renting but I can buy a house that was reduced by 60K. That 48K I saved. Those type of numbers work for me. And just as an FYI for all those greedy investors that were here all last year, well now you've got one greedy buyer. I am looking for desperate investors that are willing to reduce and sell in the 200K below sales price range. I can show my greed just like them. If you can't beat them, join them! And believe me I can wait a lot longer than you can. Renting is STRESS free. No yard work, no responsibility. If you think there are no price reductions happening step into the real world. Just walk into ANY open house in my neighborhood on ANY weekend. EVERY and I mean EVERY investor home resale in my area has REDUCED. And I live in the heart of Scottsdale, AZ. Right in the middle of the action. New homes and investor properties 30-50 miles from town are being dropped and foreclosed on left and right. I canceled a home with my builder that I made the mistake in purchasing and at first they were angry and let me know how much money I was turning away. They've since called and sweetened their offer. A 20,000 pool incentive and the earnest money they kept when I cancelled ($7,500) goes back into my pocket. So the 20K plus the $7,500 reduction in price. And you know what, I still ain't buying. I wish them luck in selling. The price will come down more and more.
I'm not looking left or right. I only know that I have near zero debt and I sleep well at night. If the shiite hits the fan, I'll still be okay.
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