Quote: As I read the below, it occured to me that we on this very forum have had many discussions about selling, renting, or not fulltiming, due to home equity and the values of same.
You read what I read and tell me who the smart one are.
"In fact, Americans' equity in their homes - usually their single biggest asset - now has dropped to the lowest level on ****record in figures going back to the end of World War II. Homeowners' portion of equity fell to 46.2 percent, which means the amount of debt tied up in their homes exceeds the equity they have built up."
Yep keep that albatross.
This has nothing to do with home ownership. This has to do with people taking out their equity in second mortgages (mostly to buy toys such MH's, TT's, etc.). We have had a bad year but my home which has increased over 100% in the past ten years only decreased by about 2% in the last year.
Backasswards examples. Why do people justify owning a home, or by not owning stocks by always screaming Enron, unless they actually owned Enron, which they didn't?
Others claim "making so much money," when they sold their home, need to compare this same "money" to what they lost vs. the same time value that money didn't gain by not being in the S&P 500 total stock market index's average annual increase of 11.8% compounding the past 70 years running. Use real life comparisons, not bogus wolf crying Enron BS!
The fact is, no home over 10 years can touch the stock market's return for that same 10 year span. Homes and the money people plow into them are costly liabilities, they always have been against the S&P 500 index.
Then there's the guy from CA that claims "he made $200K from his home" the past 12 months. Unfortunately, "he doesn't have the $200K in his hands to show anybody." And if he did, he would have either spent it, or invested it in either more real estate or securities. Fact is, he's too afraid to do either, so no, he "didn't make money" on his home. This particular guy will likely die in that home in 25-30 years "thinking he made money." LMAO!
* This post was
edited 06/19/08 04:52pm by Skid Row Joe *
Interesting logic...... he either spent or invested the money..... therefore he didn't make the money??????
To compare the stock market to RE, one must factor in the benefit of having a place to live..... you can't live in your portfolio. Try subtracting the cost of renting a place to live from the stock market profit to get an accurate comparison.
Another way to look at this would be to compare the non owner occupied housing to the non owner occupied portfolio. $20,000 down, tenant pays off loan over 15 to 30 years, Vs $20,000 invested in the market.
I guess the good thing is that people have money to invest..... What a country.
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