Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 08-04-2011, 09:52 AM   #41
Moderator
MichaelB's Avatar
 
Join Date: Jan 2008
Location: Rocky Inlets
Posts: 24,455
Quote:
Originally Posted by youbet View Post
Of course you could do this with the profits from any investment. Lots of folks assumed the go-go days of stock market would go on forever (count on 10%/yr!) and spent much of their gains. Borrowing and spending from an appreciated 401k is a good example of this.

I'm not disagreeing with you. Just adding that the type of performance (bubble and burst) and the management of profit (withdraw and spend) we recently saw in personal residences has occurred in other asset classes as well. I'm just a bit surprised people are so amazed by this particular case......
We agree on both counts.
__________________

__________________
MichaelB is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 08-04-2011, 10:05 AM   #42
Full time employment: Posting here.
 
Join Date: Nov 2010
Posts: 588
I have a house for sale currently. Midpack called it when she said that her selling and buying was a wash sale. It is what I hope to do.

I am watching for how the sub-segments of the housing market will change. There is a big cohort of early-year baby boomers hitting the downsize-and-simplify phase of retirement. Mid and late boomers will enter these markets soon. I expect the retirement cottages and condos to sell at market premiums relatively speaking, with a big premium on the houses that are built for an aging independent lifestyle.
__________________

__________________
devans0 is offline   Reply With Quote
Old 08-04-2011, 10:32 AM   #43
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
youbet's Avatar
 
Join Date: Mar 2005
Location: Chicago
Posts: 9,965
Quote:
Originally Posted by devans0 View Post
I expect the retirement cottages and condos to sell at market premiums relatively speaking, with a big premium on the houses that are built for an aging independent lifestyle.
While there may be some financially successful select areas and developments aimed at retiring boomers, I seriously doubt that senior housing will perform at a level I'd describe as "big premium." At least not in the near term. People can only pay "big premium" prices if they can afford "big premium" prices.
__________________
"I wasn't born blue blood. I was born blue-collar." John Wort Hannam
youbet is offline   Reply With Quote
Old 08-04-2011, 10:46 AM   #44
Full time employment: Posting here.
 
Join Date: Nov 2010
Posts: 588
OK, my big premium is what others call a small premium.

The one point I was looking at is that the housing drop works for different people differently. The early boomers made their move BEFORE the drop. Mid boomers will experience the volatility at its extreme, and late boomers will be late for the party.
__________________
devans0 is offline   Reply With Quote
Old 08-04-2011, 11:16 AM   #45
Recycles dryer sheets
Beryl's Avatar
 
Join Date: Jun 2007
Posts: 413
Quote:
Originally Posted by sheehs1
I am reminded by this thread...what some financial brokers/planners were touting....and that is ...."You should take your equity out of your house and put it in the stock market". My own financial guy had this conversation with me. I said...No. Wonder how many said yes.
Can totally relate.

This time last year, I sold my Boulder house 2 years after buying a less expensive (but slightly larger) house. The bank and realtors didn't understand why I didn't purchase a more expensive home since my other house was worth so much, had so much equity, and I was still young and working at a good Megacorp job. Lots of people would have been tempted to 'move up' in my situation but we aren't 'lots of people', are we?

1. I didn't NEED a more expensive house.
2. Home values were not guaranteed
3. I wanted to FIRE from Megacorp
4. I wanted to pay off my new house with the proceeds and wanted more cash for FIRE.

My Boulder home sold after 10 days on the market. (I wasn't greedy but I sold for over twice my purchase price 18 years before.) My current mortgage was paid off the same day. Debt-free! I FIREd 6 months later and still wear the 'silly grin'.
__________________
Retired - Class of 2011
Beryl is offline   Reply With Quote
Old 08-04-2011, 02:39 PM   #46
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Midpack's Avatar
 
Join Date: Jan 2008
Location: Chicagoland
Posts: 11,974
Quote:
Originally Posted by MichaelB View Post
Aside from bubbles, housing is a real money maker for a homebuyer when it is purchased with a large (80%+) long term (>20 years) low fixed rate mortgage and then then there is a long period of significant inflation and deductible interest.
To you and others with this POV, I suspect the number of "investors" who are money ahead on their primary residences in the last decade are very scarce, way more people got burned and hundreds of thousands are still going to.

As you know, the housing bubble was people over-leveraging themselves into homes with the support even encouragement of politicians, mortage firms and banks/Wall St. They believed real estate could only go up, hence you got to live in a great house and make a ton of money "investing" at the same time. They were all so sure they even spent the "equity" via HELOCs.

Didn't work out at all for millions, despite the very few who played it to their advantage.

I am trying to separate the investment aspect from home ownership itself. Do any of you think that more homeowners benefitted from the housing crash than otherwise? Sure hasn't read that way in the media over the past several years.

Again, if you own a home and expect to continue to own your home, buying and selling are largely a wash unless you move from Manhattan to Little Rock or the like. How many people in California got trapped trying to do just that...
__________________
No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57

Target AA: 60% equity funds / 35% bond funds / 5% cash
Target WR: Approx 2.5% Approx 20% SI (secure income, SS only)
Midpack is offline   Reply With Quote
Old 08-04-2011, 02:54 PM   #47
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Moemg's Avatar
 
Join Date: Jan 2007
Location: Sarasota,fl.
Posts: 10,035
Quote:
Originally Posted by Midpack View Post
.

I am trying to separate the investment aspect from home ownership itself. Do any of you think that more homeowners benefitted from the housing crash than otherwise? Sure hasn't read that way in the media over the past several years.

..

I know of several young couples who got rid of their houses in short sales ,rented for a year and bought a similar house at a bargain price . I don't agree with the ethics of it but it doesn't bother them.
__________________
Moemg is offline   Reply With Quote
Old 08-04-2011, 03:00 PM   #48
Moderator
ziggy29's Avatar
 
Join Date: Oct 2005
Location: Texas
Posts: 15,612
Quote:
Originally Posted by Midpack View Post
Do any of you think that more homeowners benefitted from the housing crash than otherwise? Sure hasn't read that way in the media over the past several years.
Maybe not the crash, but the bubble for sure, at least in my case. The reason we own our home free and clear without a mortgage is because we bought a house in San Jose in 1997 and sold it in 2003 for almost double what we paid for it. That tax-free profit is what enabled us to pay cash for this house, no mortgage needed.

So yes, even I get lucky once in a while.
__________________
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)

RIP to Reemy, my avatar dog (2003 - 9/16/2017)
ziggy29 is offline   Reply With Quote
Old 08-04-2011, 03:06 PM   #49
Moderator
MichaelB's Avatar
 
Join Date: Jan 2008
Location: Rocky Inlets
Posts: 24,455
Quote:
Originally Posted by Midpack View Post
To you and others with this POV, I suspect the number of "investors" who are money ahead on their primary residences in the last decade are very scarce, way more people got burned and hundreds of thousands are still going to.

As you know, the housing bubble was people over-leveraging themselves into homes with the support even encouragement of politicians, mortage firms and banks/Wall St. They believed real estate could only go up, hence you got to live in a great house and make a ton of money "investing" at the same time. They were all so sure they even spent the "equity" via HELOCs.

Didn't work out at all for millions, despite the very few who played it to their advantage.

I am trying to separate the investment aspect from home ownership itself. Do any of you think that more homeowners benefitted from the housing crash than otherwise? Sure hasn't read that way in the media over the past several years.

Again, if you own a home and expect to continue to own your home, buying and selling are largely a wash unless you move from Manhattan to Little Rock or the like. How many people in California got trapped trying to do just that...
To clarify, my POV is that owning a residence is an investment. Given that, I don't think any current homeowner has or will benefit from the housing crash. It is a net loss on homeowners, taxpayers and the country.

Residential housing prices have declined to near or perhaps below long term trend, so new buyers will benefit from a lower price.
__________________
MichaelB is offline   Reply With Quote
Old 08-04-2011, 03:11 PM   #50
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Midpack's Avatar
 
Join Date: Jan 2008
Location: Chicagoland
Posts: 11,974
Quote:
Originally Posted by ziggy29 View Post
Maybe not the crash, but the bubble for sure, at least in my case. The reason we own our home free and clear without a mortgage is because we bought a house in San Jose in 1997 and sold it in 2003 for almost double what we paid for it. That tax-free profit is what enabled us to pay cash for this house, no mortgage needed.

So yes, even I get lucky once in a while.
I give up...
Quote:
Do any of you think that more homeowners benefitted from the housing crash than otherwise?
__________________
No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57

Target AA: 60% equity funds / 35% bond funds / 5% cash
Target WR: Approx 2.5% Approx 20% SI (secure income, SS only)
Midpack is offline   Reply With Quote
Old 08-04-2011, 03:15 PM   #51
Thinks s/he gets paid by the post
Bimmerbill's Avatar
 
Join Date: Jan 2006
Posts: 1,631
So, accelerate my mortgage payments or pump the $ into retirement savings?
__________________
Bimmerbill is offline   Reply With Quote
Old 08-04-2011, 03:15 PM   #52
Moderator
ziggy29's Avatar
 
Join Date: Oct 2005
Location: Texas
Posts: 15,612
Quote:
Originally Posted by Midpack View Post
I give up...
In case it wasn't blatantly obvious, I was making a side comment about the bubble and crash and how it could affect "ordinary" folk differently. I did come out ahead in the crash because the house I bought afterward is much cheaper, and even if it loses 20% of its value it's a lot less than I gained on the CA home.

But no, I don't think most people *did* benefit, if you insist on a direct answer to your question. Those of us who were "unintentional market timers", so to speak, did -- but that was just dumb luck.
__________________
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)

RIP to Reemy, my avatar dog (2003 - 9/16/2017)
ziggy29 is offline   Reply With Quote
Old 08-04-2011, 03:16 PM   #53
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
REWahoo's Avatar
 
Join Date: Jun 2002
Location: Texas Hill Country
Posts: 42,107
Quote:
Originally Posted by Bimmerbill View Post
So, accelerate my mortgage payments or pump the $ into retirement savings?
Yes!
__________________
Numbers is hard

When I hit 70, it hit back

Retired in 2005 at age 58, no pension
REWahoo is offline   Reply With Quote
Old 08-04-2011, 03:33 PM   #54
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Feb 2007
Posts: 5,072
Quote:
Originally Posted by ziggy29 View Post
....
But no, I don't think most people *did* benefit, if you insist on a direct answer to your question. Those of us who were "unintentional market timers", so to speak, did -- but that was just dumb luck.

No free lunch... somebody won and somebody lost. Sometimes that loss wound up with taxpayers and investors (in banks and mortgage companies) in the case of defaults and short-sales.

For that matter... in this case if you gained... the people that bought your house probably took a bit hit.

Gotta wonder if they still own it or defaulted on the loan.
__________________
chinaco is offline   Reply With Quote
Old 08-05-2011, 12:22 AM   #55
Dryer sheet aficionado
lovinglife1's Avatar
 
Join Date: Sep 2010
Posts: 36
In terms of investments, my rental properties are valued lower post 2007, however, the property taxes have reduced and rental demand is up in my area....so, as long as i am not selling in the near term, I am ahead at least on cash flow....Hopefully, in 10+ years, I will realize an asset gain.
__________________

__________________
lovinglife1 is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
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 Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Putnam: 10% Is Optimal Retirement Equity Allocation mickeyd FIRE and Money 39 12-24-2013 02:18 PM
Middle-Income Boomers Expect Tough Retirement mickeyd FIRE and Money 27 07-27-2011 08:44 AM
GAO Report on Retirement Income Purron FIRE and Money 5 07-17-2011 03:27 PM
Mid 40's looking for soft retirement in 8yrs, 9 months and 23 days sspribyl Hi, I am... 0 07-17-2011 01:34 PM

 

 
All times are GMT -6. The time now is 10:55 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.