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Reasons people buy homes and reasons people rent, including the bad ones

By golfplan18   2012 Nov 21, 12:21am   637 views   1 comment   watch (0)   quote      

http://ochousingnews.com/news/reasons-people-buy-homes-and-reasons-people-rent-including-the-bad-ones-2

The need for shelter is basic, often closely followed by the desire for community. In the United States, this often translates into a desire to take on a very large mortgage to buy real estate. These basic human emotions drive much of the activity in real estate markets. Most people buy because it is the right time for them. Their career, age, family circumstances all come together to push people toward ownership at different times. Some are fortunate and buy at the bottom of the real estate cycle. Some are not so fortunate and buy at the peak. The most...

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1   upisdown     2012 Nov 21, 1:00am  ↑ like   ↓ dislike   quote    

Good article, and it covered all the right things in relation to buying versus renting. The problem is that people base most of their decision to buy on emotion and advice from parents/friends that were able to buy a house when it was dirt cheap, and all the increase in value is inflation. Some got lucky and when the day came to update/repair/replace roofs, fixtures or finishes, that prices hadn't risen much or labor rates didn't rise and affect the prices much.
I'd like to see an article of buying in a certain year, factor in the life of all products and compare the replacement costs of them. Schiller has approximated about 1-1.5 return after those updates, but I think many times people aren't that lucky as to when things wear out and are forced to pay whatever price that is current. But others also get massive increase because of changing demographics too.

Also, the one other thing is what is the best kind of debt to have, and that is debt that pays for itself. Does that house work for you, or do you work for it?

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