Immigration Voice - Forums
Register Get Involved Contact Lawmakers Advocacy Discussion Image Image Image Image

Go Back   Immigration Voice > General Information > Interesting Topics
Click to log in with Facebook
Interesting Topics This forum is to discuss any topic of interest to members and to gossip about anything that members prefer. All the terms of the forum and terms of use of the website do apply to this forum.

Reply
 
LinkBack Thread Tools Display Modes
  #1 (permalink)  
Old 06-05-2009, 12:07 AM
Senior Member
Priority Date
:
Dec-05
Category
:
EB2
I140 Mailed Date
:
03/02/2004
Chargeability
:
India
Processing Stage
:
I-485
I485 Mailed Date
:
07/30/2007
Compare
Join Date: Apr 2009
Posts: 275
hiralal is infamous around these parts hiralal is infamous around these parts hiralal is infamous around these parts hiralal is infamous around these parts
Default time to buy a home ? long term prospects

here is a good point about long term housing prospects. I for one am glad that GC delay saved me from buying a house.
this is from an article
------------------------------------
Why do I think housing is in the tank for the long term?

First, I listen to people smarter than I am - a key to success from investing to recreation league baseball. When my rec team had its first losing season - after twelve consecutive great seasons (two per year) I did the logical and hired a professional coach. They were winners the next season. Ditto for analyzing stuff - and I follow Ivy Zelman and Whitney Tilson. They have been dead on about the mortgage meltdown - and see a larger one coming.

Listening to them, reading data and being objective has led me to see the key to a rebound in housing is clearing inventory - too much supply and too little demand, and since lower than five percent interest rates have not spurred buying, supply is the issue. Supply comes from the sale of existing homes, the sale of new homes, and the sale of foreclosed homes.

* Typically ten to fifteen percent of Americans sell or want to sell their home in a given year. Recent survey data shows the number is now 30%. Keep that in mind.
* New home sales are incredibly low. Market wisdom said home building stocks would rise once the new housing start rate hit a million and inventory became tight. New home starts are roughly half of that and there ain't no rebound. As the poet said, times, they be a changing.
* People are not selling, and builders are not building, not just because people are not buying - it is because prices are low and going lower and the driver here is foreclosures. Data can be found here, there and everywhere but the salient data points are a) banks are accelerating foreclosures, b) the next wave of resets of mortgages, the cause of most foreclosures, does not peak until the summer of 2011, c) banks are already sitting on more than half a million homes they have not listed for sale, and the whopper is d) the New York Times has reported that there are nineteen million empty housing units and only six million are listed for sale.

This last point, when combined with another couple of million foreclosed homes, then with desire for people wanting to sell their home as soon as they can, means excess inventory for as far as the eye can see. I originally projected housing prices would, nationally, bottom at the end of 2011 and prices would begin to pick up in mid 2012. I may have been premature. With resets peaking in mid-2011, defaults will probably peak in early Q4 2011; this means foreclosure listings will peak in mid-summer 2012, after the peak selling season, not good for managing down inventory. Assuming demand picks up - a near heroic assumption at this time as interest rates will be higher and unemployment could be the same or higher at that time - you will start to see inventory declining in a meaningful way until 2013 at the earliest.

I have focused on supply - was I too cavalier about demand? Well, that is more problematic - resets, defaults and foreclosures are fourth grade math and although the only thing I knew about housing was my own mortgage before this mess started, I can do fourth grade math and every forecast I have made about foreclosures and inventory has been right within a 30-45 day period.

Using fourth grade math as our primary tool does have value in estimating demand. Roughly 40% of demand in the peak year - 2006 - was sub-prime or near sub-prime - and these buyers are out of the market for a considerable period of time. And a very large percentage - some analysts estimate as high as a third - of all sales were for investment and second homes. Most of this demand is gone for the foreseeable future. Add tightening credit standards, recession ravaged incomes and personal balance sheets, and a new frugality and it is hard to see demand in 2013 or 2014 climbing past 50% of demand in 2006. Even if the FHA does not go bust - which it will, requiring another Treasury bailout.
Bookmark and Share Compare Reply With Quote


2 out of 2 members found this post helpful.
  #2 (permalink)  
Old 06-05-2009, 03:41 AM
Senior Member
Priority Date
:
Mar-06
Category
:
EB2
I140 Mailed Date
:
05/01/2006
Chargeability
:
India
Processing Stage
:
I-485
I485 Mailed Date
:
06/30/2007
Compare
Join Date: Jul 2006
Posts: 452
JazzByTheBay has much to be proud of JazzByTheBay has much to be proud of JazzByTheBay has much to be proud of JazzByTheBay has much to be proud of JazzByTheBay has much to be proud of JazzByTheBay has much to be proud of JazzByTheBay has much to be proud of JazzByTheBay has much to be proud of
Default Thanks for posting...

It's reassuring to see one's thought process wasn't entirely illogical after all.

Now, if you talk to real estate agents, you'll be told this is "the best time to buy".

jazz


Quote:
Originally Posted by hiralal View Post
here is a good point about long term housing prospects. I for one am glad that GC delay saved me from buying a house.
this is from an article
------------------------------------
Why do I think housing is in the tank for the long term?

First, I listen to people smarter than I am - a key to success from investing to recreation league baseball. When my rec team had its first losing season - after twelve consecutive great seasons (two per year) I did the logical and hired a professional coach. They were winners the next season. Ditto for analyzing stuff - and I follow Ivy Zelman and Whitney Tilson. They have been dead on about the mortgage meltdown - and see a larger one coming.

Listening to them, reading data and being objective has led me to see the key to a rebound in housing is clearing inventory - too much supply and too little demand, and since lower than five percent interest rates have not spurred buying, supply is the issue. Supply comes from the sale of existing homes, the sale of new homes, and the sale of foreclosed homes.

* Typically ten to fifteen percent of Americans sell or want to sell their home in a given year. Recent survey data shows the number is now 30%. Keep that in mind.
* New home sales are incredibly low. Market wisdom said home building stocks would rise once the new housing start rate hit a million and inventory became tight. New home starts are roughly half of that and there ain't no rebound. As the poet said, times, they be a changing.
* People are not selling, and builders are not building, not just because people are not buying - it is because prices are low and going lower and the driver here is foreclosures. Data can be found here, there and everywhere but the salient data points are a) banks are accelerating foreclosures, b) the next wave of resets of mortgages, the cause of most foreclosures, does not peak until the summer of 2011, c) banks are already sitting on more than half a million homes they have not listed for sale, and the whopper is d) the New York Times has reported that there are nineteen million empty housing units and only six million are listed for sale.

This last point, when combined with another couple of million foreclosed homes, then with desire for people wanting to sell their home as soon as they can, means excess inventory for as far as the eye can see. I originally projected housing prices would, nationally, bottom at the end of 2011 and prices would begin to pick up in mid 2012. I may have been premature. With resets peaking in mid-2011, defaults will probably peak in early Q4 2011; this means foreclosure listings will peak in mid-summer 2012, after the peak selling season, not good for managing down inventory. Assuming demand picks up - a near heroic assumption at this time as interest rates will be higher and unemployment could be the same or higher at that time - you will start to see inventory declining in a meaningful way until 2013 at the earliest.

I have focused on supply - was I too cavalier about demand? Well, that is more problematic - resets, defaults and foreclosures are fourth grade math and although the only thing I knew about housing was my own mortgage before this mess started, I can do fourth grade math and every forecast I have made about foreclosures and inventory has been right within a 30-45 day period.

Using fourth grade math as our primary tool does have value in estimating demand. Roughly 40% of demand in the peak year - 2006 - was sub-prime or near sub-prime - and these buyers are out of the market for a considerable period of time. And a very large percentage - some analysts estimate as high as a third - of all sales were for investment and second homes. Most of this demand is gone for the foreseeable future. Add tightening credit standards, recession ravaged incomes and personal balance sheets, and a new frugality and it is hard to see demand in 2013 or 2014 climbing past 50% of demand in 2006. Even if the FHA does not go bust - which it will, requiring another Treasury bailout.
__________________
--
http://morejazzbythebay.wordpress.com/
YouTube: http://www.youtube.com/user/jazzbythebay
Proud member of IV California/NorCal
I was in Washington, D.C.

on Sep 18th 2007

---------------------------------------------
Bookmark and Share Compare Reply With Quote


  #3 (permalink)  
Old 06-05-2009, 12:46 PM
Member
Priority Date
:
Jul-06
Category
:
EB2
I140 Mailed Date
:
08/30/2006
Chargeability
:
India
Processing Stage
:
I-485
I485 Mailed Date
:
06/30/2007
Compare
Join Date: Jan 2008
Posts: 68
kak1978 has a reputation beyond repute kak1978 has a reputation beyond repute kak1978 has a reputation beyond repute kak1978 has a reputation beyond repute kak1978 has a reputation beyond repute kak1978 has a reputation beyond repute kak1978 has a reputation beyond repute kak1978 has a reputation beyond repute kak1978 has a reputation beyond repute kak1978 has a reputation beyond repute kak1978 has a reputation beyond repute
Default



Althought this is just for seattle area, this trend is more or less the same nationwide.

According to this graph we need to wait out atleast one more year for the Rent - to- Price ratio to come down to the historical averages. But you get the Federal first -time home owner credit of $8000 (more in CA) only if you buy before the end of this year. So in my opinion, a good time to buy a house is in the month of december this year, if not the best time to buy. Now this is with an assumsion that mortgage rates don't rise substantially.

Last edited by kak1978; 06-05-2009 at 12:54 PM.
Bookmark and Share Compare Reply With Quote


  #4 (permalink)  
Old 06-05-2009, 01:12 PM
Senior Member
Priority Date
:
Dec-06
Category
:
EB2
I140 Mailed Date
:
Chargeability
:
India
Processing Stage
:
I-485
I485 Mailed Date
:
Compare
Join Date: Jan 2007
Posts: 929
sledge_hammer is infamous around these parts sledge_hammer is infamous around these parts sledge_hammer is infamous around these parts sledge_hammer is infamous around these parts sledge_hammer is infamous around these parts sledge_hammer is infamous around these parts sledge_hammer is infamous around these parts sledge_hammer is infamous around these parts sledge_hammer is infamous around these parts sledge_hammer is infamous around these parts sledge_hammer is infamous around these parts
Default

Reading the article I take it that the writer is only concerned about the profitability of buying a house in the current situation. He's not of the opinion that buying a house is bad investment, ever! But a good investor does not try to time the market; it is, in my opinion, even if you tried, an art and not a science. So now maybe the best time to buy actually!

But I have also seen many ignorant, anti-capitalist, anti-government, conspiracy theorist freaks out there, blogging from their basement, and writing articles suggesting that the government is somehow brain washing the public into buy a house so that they'll become the government’s slaves for the rest of their lives. These guys have actually never ever made any real money. They come up with short sighted calculations to prove that renting for life is better than owning a home. In my opinion no one should be listening to these people. I have yet to hear from a successful investor, or a businessman, or anyone that has what you may call reasonable wealth, saying that real estate is bad in the long run. I would take these people's advice any day because they have the money to show for their sound investment strategies, one of them being investment in a house, or a piece of real estate.

We as immigrants who are not sure of where we'll be in the next 5 years may want to consider the fact before investing in a house. But anyone else that has no such worries would be foolish not to buy a house thinking it is a doomed investment.

Last edited by sledge_hammer; 06-05-2009 at 01:16 PM.
Bookmark and Share Compare Reply With Quote


0 out of 1 members found this post helpful.
  #5 (permalink)  
Old 06-05-2009, 01:12 PM
Senior Member
Priority Date
:
Jun-06
Category
:
EB2
I140 Mailed Date
:
01/20/2007
Chargeability
:
India
Processing Stage
:
I-485
I485 Mailed Date
:
07/02/2007
Compare
Join Date: Sep 2006
Posts: 167
shukla77 is infamous around these parts shukla77 is infamous around these parts shukla77 is infamous around these parts shukla77 is infamous around these parts shukla77 is infamous around these parts shukla77 is infamous around these parts
Default 8000 $ credit

Does anyone know that the closing has to be before November 30th in order to get this 8K tax benefit?
Bookmark and Share Compare Reply With Quote


  #6 (permalink)  
Old 06-05-2009, 01:27 PM
Senior Member
Priority Date
:
Jun-04
Category
:
EB3
I140 Mailed Date
:
06/10/2006
Chargeability
:
India
Processing Stage
:
I-485
I485 Mailed Date
:
07/29/2007
Compare
Join Date: Jul 2007
Posts: 250
qasleuth has a reputation beyond repute qasleuth has a reputation beyond repute qasleuth has a reputation beyond repute qasleuth has a reputation beyond repute qasleuth has a reputation beyond repute qasleuth has a reputation beyond repute qasleuth has a reputation beyond repute qasleuth has a reputation beyond repute qasleuth has a reputation beyond repute qasleuth has a reputation beyond repute qasleuth has a reputation beyond repute
Default

Totally agree ! To add, the decision to buy a house for people like us (who are stuck in this muck) also depends on the life situation you are in. Meaning, the decision to buy a house inspite of the uncertainity was over-weighed by the fact that my kids need to enjoy certain things. Watching them play with kids of their age in the neighborhood, riding a bicycle or playing with the water sprinkler while I sip my beer is priceless.

Quote:
Originally Posted by sledge_hammer View Post
Reading the article I take it that the writer is only concerned about the profitability of buying a house in the current situation. He's not of the opinion that buying a house is bad investment, ever! But a good investor does not try to time the market; it is, in my opinion, even if you tried, an art and not a science. So now maybe the best time to buy actually!

But I have also seen many ignorant, anti-capitalist, anti-government, conspiracy theorist freaks out there, blogging from their basement, and writing articles suggesting that the government is somehow brain washing the public into buy a house so that they'll become the government’s slaves for the rest of their lives. These guys have actually never ever made any real money. They come up with short sighted calculations to prove that renting for life is better than owning a home. In my opinion no one should be listening to these people. I have yet to hear from a successful investor, or a businessman, or anyone that has what you may call reasonable wealth, saying that real estate is bad in the long run. I would take these people's advice any day because they have the money to show for their sound investment strategies, one of them being investment in a house, or a piece of real estate.

We as immigrants who are not sure of where we'll be in the next 5 years may want to consider the fact before investing in a house. But anyone else that has no such worries would be foolish not to buy a house thinking it is a doomed investment.
__________________
Join the Ohio State Chapter
Send an email to iv-ohio@googlegroups.com with your name and telephone #. Will call, verify and sign you up. It is that simple !
http://groups.google.com/group/iv-ohio
Bookmark and Share Compare Reply With Quote


  #7 (permalink)  
Old 06-05-2009, 01:33 PM
Member
Priority Date
:
Mar-05
Category
:
EB2
I140 Mailed Date
:
Chargeability
:
India
Processing Stage
:
I-140+I-485
I485 Mailed Date
:
Compare
Join Date: Aug 2008
Posts: 47
bajrangbali has a spectacular aura about bajrangbali has a spectacular aura about
Default Good Analysis!

Good analysis there dude!
While no one can predict future, the least we could do is prepare ourselves for good and bad times.
IMO people should look at purchasing only if these conditions apply:

1) Current rent payment is more than mortgage+prop tax+other monthly fees for new home
2) Homes in relatively stable areas (where unemployment is not too high, diversity of job opportunities)
3) Homes whose prices have not risen significantly in the past 5yrs (anything > 40% since 2001..please stay away)
4) Planning to stay in the house for a MIN 2yrs

One would argue why buy now if it might go lower...
if above conditions are met..it would be a relatively safe buy and aboveall...people remember... time does not wait for anyone...we grow older everyday..make a decision regarding what we need for us and our family within the reasonable limits...go for it and enjoy it..
an old friend of mine always says...live life..love life...be life
and i believe she is right..
__________________
PD: Mar 05
Bookmark and Share Compare Reply With Quote


  #8 (permalink)  
Old 06-05-2009, 01:37 PM
Senior Member
Priority Date
:
Jun-04
Category
:
EB3
I140 Mailed Date
:
06/10/2006
Chargeability
:
India
Processing Stage
:
I-485
I485 Mailed Date
:
07/29/2007
Compare
Join Date: Jul 2007
Posts: 250
qasleuth has a reputation beyond repute qasleuth has a reputation beyond repute qasleuth has a reputation beyond repute qasleuth has a reputation beyond repute qasleuth has a reputation beyond repute qasleuth has a reputation beyond repute qasleuth has a reputation beyond repute qasleuth has a reputation beyond repute qasleuth has a reputation beyond repute qasleuth has a reputation beyond repute qasleuth has a reputation beyond repute
Default

Quote:
Originally Posted by shukla77 View Post
Does anyone know that the closing has to be before November 30th in order to get this 8K tax benefit?

It is December 1st not November 30th.

http://www.federalhousingtaxcredit.com/2009/faq.php
__________________
Join the Ohio State Chapter
Send an email to iv-ohio@googlegroups.com with your name and telephone #. Will call, verify and sign you up. It is that simple !
http://groups.google.com/group/iv-ohio
Bookmark and Share Compare Reply With Quote


  #9 (permalink)  
Old 06-05-2009, 01:43 PM
Senior Member
Priority Date
:
May-07
Category
:
EB3
I140 Mailed Date
:
08/10/2007
Chargeability
:
Philippines
Processing Stage
:
I-485
I485 Mailed Date
:
08/10/2007
Compare
Join Date: Mar 2009
Posts: 153
validIV will become famous soon enough validIV will become famous soon enough
Default

Sorry but no matter how you spin it, owning a home is better than renting. Renting is not smart. period. your money is gone every month. You are not getting that money back.

When you own a home, the money goes towards a mortgage, and although most of it goes to interest at first, all interest paid is tax deductible which is a huge chunk of change every year. I get more money back as an owner than a renter and in the long run I save more AND own the home.

30 year renter vs 30 year home owner? That is not rocket science.


Quote:
Originally Posted by hiralal View Post
here is a good point about long term housing prospects. I for one am glad that GC delay saved me from buying a house.
this is from an article
------------------------------------
Why do I think housing is in the tank for the long term?

First, I listen to people smarter than I am - a key to success from investing to recreation league baseball. When my rec team had its first losing season - after twelve consecutive great seasons (two per year) I did the logical and hired a professional coach. They were winners the next season. Ditto for analyzing stuff - and I follow Ivy Zelman and Whitney Tilson. They have been dead on about the mortgage meltdown - and see a larger one coming.

Listening to them, reading data and being objective has led me to see the key to a rebound in housing is clearing inventory - too much supply and too little demand, and since lower than five percent interest rates have not spurred buying, supply is the issue. Supply comes from the sale of existing homes, the sale of new homes, and the sale of foreclosed homes.

* Typically ten to fifteen percent of Americans sell or want to sell their home in a given year. Recent survey data shows the number is now 30%. Keep that in mind.
* New home sales are incredibly low. Market wisdom said home building stocks would rise once the new housing start rate hit a million and inventory became tight. New home starts are roughly half of that and there ain't no rebound. As the poet said, times, they be a changing.
* People are not selling, and builders are not building, not just because people are not buying - it is because prices are low and going lower and the driver here is foreclosures. Data can be found here, there and everywhere but the salient data points are a) banks are accelerating foreclosures, b) the next wave of resets of mortgages, the cause of most foreclosures, does not peak until the summer of 2011, c) banks are already sitting on more than half a million homes they have not listed for sale, and the whopper is d) the New York Times has reported that there are nineteen million empty housing units and only six million are listed for sale.

This last point, when combined with another couple of million foreclosed homes, then with desire for people wanting to sell their home as soon as they can, means excess inventory for as far as the eye can see. I originally projected housing prices would, nationally, bottom at the end of 2011 and prices would begin to pick up in mid 2012. I may have been premature. With resets peaking in mid-2011, defaults will probably peak in early Q4 2011; this means foreclosure listings will peak in mid-summer 2012, after the peak selling season, not good for managing down inventory. Assuming demand picks up - a near heroic assumption at this time as interest rates will be higher and unemployment could be the same or higher at that time - you will start to see inventory declining in a meaningful way until 2013 at the earliest.

I have focused on supply - was I too cavalier about demand? Well, that is more problematic - resets, defaults and foreclosures are fourth grade math and although the only thing I knew about housing was my own mortgage before this mess started, I can do fourth grade math and every forecast I have made about foreclosures and inventory has been right within a 30-45 day period.

Using fourth grade math as our primary tool does have value in estimating demand. Roughly 40% of demand in the peak year - 2006 - was sub-prime or near sub-prime - and these buyers are out of the market for a considerable period of time. And a very large percentage - some analysts estimate as high as a third - of all sales were for investment and second homes. Most of this demand is gone for the foreseeable future. Add tightening credit standards, recession ravaged incomes and personal balance sheets, and a new frugality and it is hard to see demand in 2013 or 2014 climbing past 50% of demand in 2006. Even if the FHA does not go bust - which it will, requiring another Treasury bailout.
Bookmark and Share Compare Reply With Quote


  #10 (permalink)  
Old 06-05-2009, 01:53 PM
Member
Priority Date
:
Jan-06
Category
:
EB2
I140 Mailed Date
:
2006-04-10
Chargeability
:
India
Processing Stage
:
I-140+I-485
I485 Mailed Date
:
2007-08-04
Compare
Join Date: Jan 2007
Posts: 90
suavesandeep is a glorious beacon of light suavesandeep is a glorious beacon of light suavesandeep is a glorious beacon of light suavesandeep is a glorious beacon of light suavesandeep is a glorious beacon of light suavesandeep is a glorious beacon of light
Default

Quote:
Originally Posted by bajrangbali View Post
Good analysis there dude!
While no one can predict future, the least we could do is prepare ourselves for good and bad times.
IMO people should look at purchasing only if these conditions apply:

1) Current rent payment is more than mortgage+prop tax+other monthly fees for new home
2) Homes in relatively stable areas (where unemployment is not too high, diversity of job opportunities)
3) Homes whose prices have not risen significantly in the past 5yrs (anything > 40% since 2001..please stay away)
4) Planning to stay in the house for a MIN 2yrs

One would argue why buy now if it might go lower...
if above conditions are met..it would be a relatively safe buy and above all...people remember... time does not wait for anyone...we grow older everyday..make a decision regarding what we need for us and our family within the reasonable limits...go for it and enjoy it..
an old friend of mine always says...live life..love life...be life
and i believe she is right..
I think we are in unprecedented times...Who would have thought real estate would ever crash ?. At least i never saw this coming and i guess most of those smart investors/economists did not see this coming.

My friend in bay area bought his house 3 years back in a decent school district and he is more than 150K under water. He is going to be stuck in the house now till his house appreciates to the original principal. If he wants to move out of the house he will have to pay the 150k difference from his pocket.

This is what scares the shit of me. I really don't care too much if the house i buy after doing all the valid calculations as described above does not appreciate for a long time. Also I am not buying the house for investment reasons. But i dont want to be in a situation where 5 years down the line after i bought the house i have lost money on the house and would need to shell out money from my pocket to move out like my friend is today. I am sure 2 years from now which will be 5 years for my friend he will still be under water.

Like most Americans i would like to buy a smaller home which i can afford now since we are a small family and may be 5 years from now may want to move to a bigger home in a better location.

But how things look currently it looks like i may be stuck in the house for a long long time and the standard advise of "buy a home if you plan to stay at least in the house for 5 years" may not apply. Imagine in the worst case being stuck in the same house for 30 years. May not be a big deal but just puts more pressure on you to buy that perfect house which you are sure you will be happy to live there for the next 30 years if needed.

This is what spooks me the most of the current housing market. Again this concern is due to unprecedented times we are in, I am sure 5 years back this would not concern me.

Any thoughts?
__________________
Donated $200 so far. Attended San Jose Rally .

"It's nice to be important, but it's more important to be nice"

Last edited by suavesandeep; 06-05-2009 at 02:09 PM.
Bookmark and Share Compare Reply With Quote


  #11 (permalink)  
Old 06-05-2009, 02:27 PM
Senior Member
Priority Date
:
Sep-04
Category
:
EB2
I140 Mailed Date
:
07/24/2007
Chargeability
:
India
Processing Stage
:
I-140+I-485
I485 Mailed Date
:
07/24/2007
Compare
Join Date: Oct 2006
Posts: 151
sk2006 is infamous around these parts sk2006 is infamous around these parts sk2006 is infamous around these parts sk2006 is infamous around these parts sk2006 is infamous around these parts sk2006 is infamous around these parts sk2006 is infamous around these parts
Default

Buying a house would be a BIG Mistake right now..

Sub-Prime losses we have been hearing in main stream media is just the begining.
Wait until 2010 when Alt-A and ARMs taken in 2005/6 start resetting.
It will be a big mess.


and

NEVER LISTEN TO REAL ESTATE AGENT'S ADVICE!
Bookmark and Share Compare Reply With Quote


  #12 (permalink)  
Old 06-05-2009, 02:31 PM
Senior Member
Priority Date
:
Sep-04
Category
:
EB2
I140 Mailed Date
:
07/24/2007
Chargeability
:
India
Processing Stage
:
I-140+I-485
I485 Mailed Date
:
07/24/2007
Compare
Join Date: Oct 2006
Posts: 151
sk2006 is infamous around these parts sk2006 is infamous around these parts sk2006 is infamous around these parts sk2006 is infamous around these parts sk2006 is infamous around these parts sk2006 is infamous around these parts sk2006 is infamous around these parts
Default

Quote:
Originally Posted by validIV View Post
Sorry but no matter how you spin it, owning a home is better than renting. Renting is not smart. period. your money is gone every month. You are not getting that money back.
When you own a home, the money goes towards a mortgage, and although most of it goes to interest at first, all interest paid is tax deductible which is a huge chunk of change every year. I get more money back as an owner than a renter and in the long run I save more AND own the home.

30 year renter vs 30 year home owner? That is not rocket science.
..And those who bought in the bubble lost money much faster than they would have "Lost" the money renting! Some of them even lost the whole House along with their Credit score!

LOL.
Bookmark and Share Compare Reply With Quote


  #13 (permalink)  
Old 06-05-2009, 02:42 PM
Senior Member
Priority Date
:
Nov-06
Category
:
EB3
I140 Mailed Date
:
01/02/2007
Chargeability
:
India
Processing Stage
:
I-485
I485 Mailed Date
:
07/27/2007
Compare
Join Date: Jul 2007
Posts: 101
puddonhead has a reputation beyond repute puddonhead has a reputation beyond repute puddonhead has a reputation beyond repute puddonhead has a reputation beyond repute puddonhead has a reputation beyond repute puddonhead has a reputation beyond repute puddonhead has a reputation beyond repute puddonhead has a reputation beyond repute puddonhead has a reputation beyond repute puddonhead has a reputation beyond repute puddonhead has a reputation beyond repute
Default

Quote:
Originally Posted by validIV View Post
Sorry but no matter how you spin it, owning a home is better than renting. Renting is not smart. period. your money is gone every month. You are not getting that money back.

When you own a home, the money goes towards a mortgage, and although most of it goes to interest at first, all interest paid is tax deductible which is a huge chunk of change every year. I get more money back as an owner than a renter and in the long run I save more AND own the home.

30 year renter vs 30 year home owner? That is not rocket science.
I doubt it is as clear cut as you make it to be. Rent vs. buy has two components in each option - the monthly cost and the long term saving/investment. Let me take the example of the apartment I live in. It would cost about 360k (I am not considering the closing cost, the cost to buy new appliances and so on when you move in etc) if we were to buy it as a condo in the market. We rent it for $1300.

Buy:
Monthly Cost:
Interest (very simplistic calculation): 5% on 180k on average over 30 years. i.e. $750 per month. After Tax deduction cost ~$700 (you lose on standard deduction if you take property tax deduction - so effective saving is wayyy lower than the marginal tax rate).

Property Tax: $400 per month.

Maintenance/depreciation of appliances: assume $200 per month (easily could be more).
Total: 1300.
Long term investment: $360k at 3% per annum (long term housing price increase trend).
You pay for this saving with leverage and $1000 amortization every month for the loan principal.

Loss of flexibility/Risk : Not sure how to quantify.

Rent:
Monthly cost = $1300.
Long Term Saving (assuming you put the same $1000 every month in a normal high yeild savings account - a Reward Checking maybe) - you will get a risk free 5%.

So in this case you are paying the same monthly cost for house purchase vs rent. but you are losing out on the additional 2% per month in investment return.

Plus - buying gets you into a lot riskier position.

I have seen the proponents of buying fails to take a couple of factors into account:
1. Real Estate, historically, is not a good investment. It is even worse than the best savings accounts available. And you could easily save your monthly amortization in better savings vehicles.
2. Tax deduction from interest means you lose on standard deduction. In the above example - a family of 3 with 1 earner will have NO saving from housing tax deduction. They would be better off using the standard deduction. If there are 2 earners - they could try to work around this by filing separately and one taking deduction for housing interest and the other taking the standard deduction. But even that will probably not save you any money since many other tax rates are stacked up against single filers.
__________________
High Five
--------------
http://immigrationvoice.org/forum/sh...ad.php?t=20183
Bookmark and Share Compare Reply With Quote


1 out of 2 members found this post helpful.
  #14 (permalink)  
Old 06-05-2009, 02:52 PM
Senior Member
Priority Date
:
Dec-06
Category
:
EB2
I140 Mailed Date
:
Chargeability
:
India
Processing Stage
:
I-485
I485 Mailed Date
:
Compare
Join Date: Jan 2007
Posts: 929
sledge_hammer is infamous around these parts sledge_hammer is infamous around these parts sledge_hammer is infamous around these parts sledge_hammer is infamous around these parts sledge_hammer is infamous around these parts sledge_hammer is infamous around these parts sledge_hammer is infamous around these parts sledge_hammer is infamous around these parts sledge_hammer is infamous around these parts sledge_hammer is infamous around these parts sledge_hammer is infamous around these parts
Default

First off, a house is really both an investment and a home. I would disagree with anyone that says it is one and not the other.

When you look at a house as an investment, one has to realize that there is a certain risk involved. So unless you are ready to lose some money if you made a bad decision, you should not invest. The most important thing to remember is that "investing" is never a bad decision. But investing w/o analyzing the risk involved is definitely bad. At the cost of sounding like any financial advisor, diversification is the key. Don't put all your eggs in one basket.

1. You do not want to buy a house because the real estate market may collapse.
2. You do not want to invest in stocks because the stock market could go down.
3. You do not want to buy gold because their track record for long term returns is a joke.
4. You do not want to park your money in a savings account because the interest doesn't even beat inflation.

Then what is an average investor to do?

The answer is "diversify" to minimize risk. Each of the above is a solid investment if you know how to play it. We need to invest in house, gold, stocks, bonds, savings account, etc, and be prepared to take a the risk of losing some money in any one.

Quote:
Originally Posted by sk2006 View Post
..And those who bought in the bubble lost money much faster than they would have "Lost" the money renting! Some of them even lost the whole House along with their Credit score!

LOL.

Last edited by sledge_hammer; 06-05-2009 at 02:58 PM.
Bookmark and Share Compare Reply With Quote


0 out of 1 members found this post helpful.
  #15 (permalink)  
Old 06-05-2009, 03:00 PM
Senior Member
Priority Date
:
Mar-06
Category
:
EB2
I140 Mailed Date
:
Chargeability
:
India
Processing Stage
:
I-485
I485 Mailed Date
:
Compare
Join Date: May 2009
Posts: 224
Blog Entries: 1
simple1 has a spectacular aura about simple1 has a spectacular aura about
Default h1b and housing.

The arguments like the following works for gc/usc only, who can stay put even after loosing job. The H1b has to leave the country.
- best time to buy
- inflation level of the real high prices
- lock low interest rates now.
- clean/strong foreclosure houses available now.
- federal incentive to buy house.
- downpayment assistance.
- etc.
__________________
Not a Legal Advice. Consult a good attorney before jumping in.
Bookmark and Share Compare Reply With Quote


Reply

Bookmarks


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is On
Trackbacks are Off
Pingbacks are Off
Refbacks are On

Similar Threads
Thread Thread Starter Forum Replies Last Post
Long-term international assignment on H-1B quadric Non-Immigrant Visa 6 09-24-2009 09:40 AM
Long term stay in India while on AP redford Travel out of country and re-entry during/after 485 filing 5 06-30-2009 02:06 AM
Long term effects of july fiasco mambarg Retrogression, priority dates and Visa bulletins 19 08-06-2007 01:41 PM
short and long term disability insurance bodhi_tree All other Green Card Issues 7 07-13-2007 10:56 AM
H1 Status and long term disability Ankit Non-Immigrant Visas 25 04-06-2007 02:09 PM



All times are GMT -4. The time now is 07:15 AM.


Powered by vBulletin® Version 3.7.4
Copyright ©2000 - 2019, Jelsoft Enterprises Ltd.
(c)ImmigrationVoice.org