Will Housing Turn Around This Time?

**Firehawk** · 02-Mar-08, 08:57 AM

I'm seriously worried.

Will housing become a commodity like a vehicle has? I mean, in this day and age nobody fixes anything anymore, they just buy new when it breaks. The housing, especially in Michigan, is headed that way it seems. I mean at what point will the values quit dropping? I bet my house is down 50k right now, and obviously the nicer the area, the more it's probably down. I'm very concerned. Why bother fixing my home up at this point for any reason other than personal preference? I'm currently remodeling my basement but for a gameroom to use, not with the expectation that I'm going to get 5% value out of it any more. It's scary.

Will it turn around? This feels like a recession (or almost recession depending on what you believe) unlike any other. Being in Michigan, we're losing the auto-industry, including white collar engineering jobs. That hasn't happened before. Why should I expect it will turn around? Just because history says so? I don't think we've been through this situation before.

02-Mar-08, 10:06 AM

I tell this to people all the day, particularly young ones like you.

Even though the paper value of your home may be down (mine is probably too), the utility value of it to you has not likely gone down one cent. You probably enjoy your home as much as you did when it had more paper value and maybe even more. That is the value that really counts in my opinion, unless you want to sell the "farm" on short notice and head for the hills. Then the paper value of you home becomes real because you might have to accept a going out of business sale price.

My advice is keep your home in good condition and enjoy its utility value. Quit reading the newspaper and internet news lines about how bad it is and concentrate on how good you can make it for you.

You can always come to California and become an actor. I don't think they as a profession are experiencing any economic rough times right now.

CF-OC_gal · 02-Mar-08, 12:27 PM

That is wise old man advice! I agree with that except, like the bathroom scale , keep your eyes on it everyday so that you become desensitzed to the media hype. I waited out a 2 year real estate slump in the 90's when selling my house. I did very well with the next one.

BTW - It's not true that celebs in California are not hit by the housing downturn. Read this and decide whether you want to pick up a bargain:

http://lifewise.canoe.ca/Forbes/2008/02/13/4844440.html

The only time a drop in prices is going to hurt you is if you are moving or re-mortgaging (usually young first time home-owners). If your job is relocating you, then the difference in the cost of living and potential loss from selling a home should be picked up by your new employer. If not then it probably is not a good offer (unless there are other opportunity costs worth the risk).

The Flash · 02-Mar-08, 01:27 PM

Thanks great advice peireni. I just hope prices are low by the time im ready to go house hunting.

**Firehawk** · 02-Mar-08, 02:05 PM

Quote:

Originally Posted by pierini

I tell this to people all the day, particularly young ones like you.

Even though the paper value of your home may be down (mine is probably too), the utility value of it to you has not likely gone down one cent. You probably enjoy your home as much as you did when it had more paper value and maybe even more. That is the value that really counts in my opinion, unless you want to sell the "farm" on short notice and head for the hills. Then the paper value of you home becomes real because you might have to accept a going out of business sale price.

My advice is keep your home in good condition and enjoy its utility value. Quit reading the newspaper and internet news lines about how bad it is and concentrate on how good you can make it for you.

You can always come to California and become an actor. I don't think they as a profession are experiencing any economic rough times right now.

That is a fine solution for someone who doesn't intend to move for 20 years. This is definitely not my dream home, but I don't also want to take a hit on it. I think it's always smart to try and think ahead.

02-Mar-08, 03:18 PM

Dave, don't rule out the possibility that the home you currently live in may one day be a rental property as you step up to your next home. That has been my model and it has served me really well.

We naturally go shopping when things are on sale when buying televisions, appliances, and cars. So why not do that now that real estate is on sale.

If I wanted to play more monopoly I'd be buying right now. I'm trying to achieve true prosperity and go back in the other direction. A box spring mattress in a small 1-bedroom apartment with a zig-zag man poster on the wall, an awesome stereo sound system sitting on a homemade shelving unit made of cinder blocks and wooden planks with all my albums stacked up ever so neatly, with the black light on and incense burning. But you are a young college-educated man with at least 40 more years of earnings. A perfect candidate to play monopoly.

**Firehawk** · 02-Mar-08, 04:11 PM

No money, and I'll be attempting to go back to college and switch careers over the next 3 years. Not in the cards for me to buy another house without selling this one. Let's not get too far off track on the original topic.

westside24 · 02-Mar-08, 04:45 PM

Quote:

Originally Posted by The Flash

Thanks great advice peireni. I just hope prices are low by the time im ready to go house hunting.

thats what were gettig at homie... right now IS a good time to buy... Prices are at all time lows, theres millions of houses out there, that have been listed for a long time, people are willing to sell at very low prices...

right now is a good time for house hunting, just be careful with 100% financing and pay attention to what type of loan you get.

Granted were losing the auto industries, but thats because gas is becoming very expensive... so when you think about it, when the cars of our near future (Hybrids and Electric powered cars and etc.) begin selling in mass quantities because they wont cost an arm and leg, its seems to me like jobs will increase again. it might take time, and im not saying that the auto industry is the only thing driving the economy up or down, im just talking and theorizing, I just wanted to add a comment to firehawks topic.

**Firehawk** · 02-Mar-08, 04:57 PM

We're losing the auto industry here because of the cost of wages. You can pay Mexicans a fraction what you pay Americans to put things together. It's just a matter of time before all the white collar jobs get outsourced as well. In Detroit, there's no other market here, that's why it hurts so much.

westside24 · 02-Mar-08, 05:11 PM

yea... which is why im voting for hilary <---not just because she promises to create however many jobs, but I voted for bush-cheney both terms, and its gotten us no where, and I was kinda young for the clinton days, but Ie never heard anything bad about his time, and so I gotta believe hilary and bill together will do a swell job, and if they dont... well be in the same boat as we are i now...

can I ask, what do you think needs to happen to turn the auto industry, and housing around?

The Flash · 03-Mar-08, 11:11 AM

Quote:

Originally Posted by westside24

thats what were gettig at homie... right now IS a good time to buy... Prices are at all time lows, theres millions of houses out there, that have been listed for a long time, people are willing to sell at very low prices...

right now is a good time for house hunting, just be careful with 100% financing and pay attention to what type of loan you get.

Granted were losing the auto industries, but thats because gas is becoming very expensive... so when you think about it, when the cars of our near future (Hybrids and Electric powered cars and etc.) begin selling in mass quantities because they wont cost an arm and leg, its seems to me like jobs will increase again. it might take time, and im not saying that the auto industry is the only thing driving the economy up or down, im just talking and theorizing, I just wanted to add a comment to firehawks topic.

Right now is a great time to buy, just not for me lol. I'm in my final semester at college (while thinking about furthering my schooling) and I'm not looking forward to paying off those college loans.

**LiftGirl** · 03-Mar-08, 11:16 AM

Quote:

Former Guns N' Roses guitarist Slash (also known as Saul Hudson) feels he overpaid for his Spanish-style Hollywood Hills home, which has a pool, a separate gym and stunning views. He bought the house in January 2006 for $6.2 million. He sold it last December for $5.7 million. Slash is suing his former real estate agent, claiming the house was neither as big nor as private as the agent claimed. The case is ongoing in California Superior Court.

Really? Did he not look at the house before spending $6.2 million? Shouldn't he have noticed that is was not as large as claimed?

FH, what does it matter as long as you are not selling the house right now? A house is not an investment, it's a home (unless you're Donald Trump). What about your car or your groceries? You never get full return on them.

**Firehawk** · 03-Mar-08, 12:45 PM

A house IS an investment especially if you plan to move at all. It's smart to think ahead and maximize a profit rather than jsut thinking emotionally about it (i know that is what women tend to do, no offense).

Cars/groceries are commodities.

**LiftGirl** · 03-Mar-08, 12:59 PM

Quote:

Originally Posted by Firehawk

A house IS an investment especially if you plan to move at all. It's smart to think ahead and maximize a profit rather than jsut thinking emotionally about it (i know that is what women tend to do, no offense).

Cars/groceries are commodities.

Of course you want to maximize profits, but market forces are something you can't do anything about.

luke.w · 03-Mar-08, 02:23 PM

geez, and I was worried when houses where going sky high, I only know it's a buyers market now cause my fiance works in the industry.

couple years ago I literly thought what I lived in just was not worth the price, it make me sick to think about looking or even ripping someone else off on what it was supposedly worth, IMO there was something really wrong there??????