Housing Markets.

[ScottyS]

Originally Posted by sperry

I think you missed my point. If you can build equity faster than the market around you then sure, it's a benefit... but the cheaper houses build equity slower than the more expensive ones, so when it's time to cash in, you still can't afford to move!

Look at my roommate. His house as gone up in value like 80% in the last 10 months. However, he can't move because the cost of houses like his have all gone up that much.

You don't truely build equity until you own property that you're not living at. Paying a mortgage isn't much different than renting until you can afford to move to a new house and rent out the old one.

Also: here are my numbers on that calculator you posted

LINK

Assuming the market flattens out like I expect, I'll *lose* $64,000 in 5 years if I buy a $350,000 home.

And that, friends, is why I'm still in an apartment until I get a more stable, better-paying job (when? ). I figure the factors above, plus taxes and maintenence issues (time AND money) would exceed the bounds of my marginal salary and how I'm interested in spending my time. I'd end up losing in the long run. Now, I DO wish that I could have purchased some land down in Mono County 5 years ago for $12k/lot, when the same lots are selling today for $80k, but we all can't be in the right place at the right time with the right funds....

[AtomicLabMonkey]

Originally Posted by sperry

Assuming the market flattens out like I expect, I'll *lose* $64,000 in 5 years if I buy a $350,000 home.

That's a big assumption; personally I think it's wishful thinking to expect the current real estate market to just be a "bubble" which will burst and bring prices magically back down to "normal". Prices have been trending upwards for at least the past 20 years, especially on the west coast, it's not like it's a new thing... they flatten out at times, but overall they always go up.

[sperry]

Originally Posted by AtomicLabMonkey

That's a big assumption; personally I think it's wishful thinking to expect the current real estate market to just be a "bubble" which will burst and bring prices magically back down to "normal". Prices have been trending upwards for at least the past 20 years, especially on the west coast, it's not like it's a new thing... they flatten out at times, but overall they always go up.

Like I said, I expect them to "flatten out". Those numbers are with a 1% appreciation. And it's not until there's a 5% appreciation that I will make any money in 5 years.

If you think the housing costs can continue to grow geometrically as they have here in the last 3 years, you're gonna get screwed. The way the housing market is in Reno right now gives me the same feeling in my gut that the stock market gave me in 1999.

[AtomicLabMonkey]

Originally Posted by sperry

If you think the housing costs can continue to grow geometrically as they have here in the last 3 years, you're gonna get screwed. The way the housing market is in Reno right now gives me the same feeling in my gut that the stock market gave me in 1999.

I for one completely hope that you're right, because we're going to want to buy a house somewhere in the next few years. I just don't share your optimism about a price bust.

[ScottyS]

Price bust? Dubious. Drastic drop in rate of appreciation? Necessary for a healthy economy.

[qksubi]

I curently live in close prox to scotts rental I have lived in my home since Dec15 2003 closing price on my house was 255,485 Im currently refinancing to get rid of a second mortgage I had my house aprased at 412,000 between my wife and I we have above average salery for reno and I could not buy this house right now If I were scott I would buy a peace of land out off Pyramind Hwy sit on it for a year and sub devide in to 5acre lots sell them and take the cash and build a small house 1850 sqft house with a bad ass shop and there you go

[qksubi]

Originally Posted by ScottyS

Price bust? Dubious. Drastic drop in rate of appreciation? Necessary for a healthy economy.

As long as intrest rates are below 9% it wont happen the prices will level off but will not reduce enough for the average guy to buy his first house on his own you need two incomes or renters to do it it has been that since I ve bought my first house in SoCal if any thing it will cause the growth to slow in places and spark up in others like fernly and fallen

[Dean]

There is no dot com type stupidity in Reno to cause a significant drop in prices IMHO. This is strictly supply and demand situation. NV is just one of the fastest growing states, and the builders can't keep up. if they could, or even get ahead of demand, you would see prices level off, but right now, there appears to be an unending demand.