US Real Estate

Is this a good time to buy US Real Estate?

  • Yes.
  • No.
  • Maybe.

0 voters

I wrote out a long post but it didn’t make it through. Never mind.

If you could buy real estate in the US now, would you? Why or Why not?

No. Because it’s in America. Why on earth would anyone want to live there? :slight_smile:

If you mean for investment purposes, while certain types of land might be an investment, houses are not, as has become painfully obvious recently. Farmland, for instance, has an inherent value because the world population isn’t getting any smaller and arable land will always be valuable for what it can produce; in a Judgement Day scenario (in the James Cameron sense) it might even keep you alive. A house (especially an American house) is simply a shoddy pile of timber and cheap engineered materials. Its value is entirely determined by what a buyer will pay for it, which in turn rests on nebulous things like zoning laws, neighbourhood ‘quality’, commute distance, etc. Even then, its value is described in terms of a currency which has no physical underpinning except the say-so of the US government. I wouldn’t consider staking my future on something with so many built-in what-ifs.

Depending on what you’re buying I’d say yes. (Not in Detroit, from what I’ve heard.) Based on the principle of buy low, sell high, and people will always need places to live.

Would I buy a single property to rent out in a country I wasn’t living in? No. Too much insecurity. If you’ve got money and want to invest in property, it probably better to buy shares.

Wow. Almost 100 views and two brave souls replied. Thanks Petrichor and Finley!

A lot of what I try to post from work doesn’t go through. I’ll try again now.

I have this habbit, or hobby maybe, of checking out house prices in the States. I started doing that when I first went back “home” about seven years ago. There was a lot of construction going on, and these new McMansion type houses were selling for more than $300,000 + and I knew there just wasn’t the money in the local economy to support so much of that. I got very curious about it because that was back in 2005–when I left my home town in 1999 the average home price was betwen 50-100,000.

Then the sub-prime mortgage thing happened and I went, “OHhhhh.”

So, now it’s kinda fun sometimes to see just what these places sell for now. In my totally unqualified opinion, those places in and near my home town are still over priced today. But there are other places where it’s hard to imagine finding prices lower than they are today–especially looking at REO properties. I found one the other day in Georgia that is selling for less than 1/3 what it sold for new 4 years ago.

I do this partly because it’s entertaining, partly because it’s like checking the pulse of a dying patient. But I think I might like to buy a house some day, too. I haven’t made up my mind, really, but as I watch house prices fall I can’t help thinking that if I’m going to do it, I might as well do it now.

Some of my reasons are: Mom never owned a house. Now she’s in a nursing home and if I want to see her, I have to pay for hotels for the duration. Not only this, but not owning a house myself means that if I ever go “home” for any kind of visit, I have to stay with friends, or get more hotels. An extended visit would mean great expense or inconvenience.

It’s something to leave behind for my kid.

I didn’t plan on ever living in the States again, but I did. In 2005 I moved back “home” for almost seven years. It was a very, very difficult seven years. As I don’t have much family other than my mom, I don’t have anything at all to start from. If I had to do that again, I’m not sure I could. If I owned a home, I’d at least have a place to start.

If I do ever move back to the States, I don’t want to teach there again. If the house is paid for, there are other things I could do that would earn enough to meet our needs without having to be in the classroom again.

If I bought the house now, I (think) I could have it paid off in 2 or 3 years, using rental income to supliment mortgage payments a bit. Of course, I’d also have the expense of having it managed and would have to live with worrying about what those people were doing in/to my house.

And, of course, I’d have to make a trip this summer to wherever to look at potential houses and what repairs they might need. But I need to go back this summer anyway. If I don’t buy the house, though, I may just go to Hawaii.

Anyway, that’s the kind of stuff I’m thinking about.

And I did look into buying here, but I can’t buy here until I have saved 100% of the sales price for the house because us white folk cain’t be trusted with a mortgage all our own, apparently!

Therea re two possible viewpoints. One is that Bernanke is going to turbocharge the printing presses and cause hyperinflation. If you get a fixed-rate mortgage, theoretically you can pay it off in ten years with toilet paper.

The other is that real estate prices are still dropping in real terms and that Bernanke cannot completely destroy the currency without destroying the economy. If he stops, then real deflation will kick in like in Japan.

If you have a secure job and are being paid in a strong currency (for example, AUD), buying isn’t a bad idea. I don’t if Taiwan would count on either front.

I voted no:

  • bankrupt municipalities raising taxes
  • unemployment still high
  • lending still tight
  • dollar still falling
  • gas prices rising

I think the bottom has yet to come. I have tenants in my house. I would never buy a property with the intent of renting it unless it was a commercial venture. Not worth the hassle. And my tenants PAY their rent, in full and generally on time. Most of my landlord friends are not so lucky.

I’ve also got a property in the UK that I can’t get rid of (because the local council have granted liquor licenses to every alternate building in the street and it is now a ghetto) and that I’m too scared to rent out (because, unlike pilam99, I don’t expect tenants to either behave themselves or pay the rent). I would never buy a house as “something to leave my kids” - why would you want to leave them with a liability? - or as a source of income or nest-egg. I’ve never seen anyone make that work except businesses dedicated to the job, with an army of lawyers on call.

It is convenient to have somewhere to stay if you “go home” … but if you intend to stay in Taiwan, sooner or later you need to accept that this is home, and the people whose sofas you sleep on should be able to accept it too.

I’d almost suggest buying a small condo just to have someplace to stay when you go home, but the monthly fees add up. Even a cheap one would burn $300 or $400 per month in taxes plus condo association dues. Over a year, that adds up to a month of hotel room charges, and you don’t have to worry about some idiot burning the hotel down.

Farmland will be the most valuable real estate investment in the US over the next few years as there is a ever growing food shortage and imports become more expensive. The US dollar is going down the tubes, but farms can always export and earn other currencies. Housing on the other hand won’t be as popular for some time likely. There is no shortage of housing in the US and a growing class of poor and starving people.

[quote=“finley”]I’ve also got a property in the UK that I can’t get rid of (because the local council have granted liquor licenses to every alternate building in the street and it is now a ghetto) and that I’m too scared to rent out (because, unlike pilam99, I don’t expect tenants to either behave themselves or pay the rent). I would never buy a house as “something to leave my kids” - why would you want to leave them with a liability? - or as a source of income or nest-egg. I’ve never seen anyone make that work except businesses dedicated to the job, with an army of lawyers on call.

It is convenient to have somewhere to stay if you “go home” … but if you intend to stay in Taiwan, sooner or later you need to accept that this is home, and the people whose sofas you sleep on should be able to accept it too.[/quote]

I’ve thought of that, too. I guess because there’s no house left to me–so I feel the inconvenience and frustration.

I’m fine with Taiwan as home, but Taiwan isn’t as fine with me being at home here. I feel like my rental dollars here are wasted because I CAN’T buy untl I’ve saved the entire price of the house–I can’t use my rent towards mortgage costs.

Also, I have a kid who’s a dual citizen. He may study in the States again, at least or University. It would be nice if he had a “home” at “home.” You know what I mean.

This is a good consideration, as well. Perhaps just buy a tract of land somewhere and then rent it for farming later? Hmm.

I’d agree with that 100%. I don’t think people realise that the world is on a knife-edge regarding food supplies, especially in the US which is dependent on mechanised agriculture but is fast running out of mined phosphates (US gov’t estimate runout in about 30 years, assuming no new major deposits are discovered). I’d say there is a 50-50 chance of mass famine in ‘advanced’ countries within our lifetimes. If you have some farmland that hasn’t been ruined by non-organic methods, you might be OK.

Very true. I pay GBP170 a month on my place in local taxes and service/maintenance charges - even though I don’t live there and don’t use any services provided by the local council. If you were to go home once a year, GBP2040 buys a month’s worth of hotel room.

This is a great time to buy if you’ve decided that’s what you want to do. It’s totally a buyer’s market, even in places like upstate NY where (surprisingly) the whole bubble and economic downturn has not yet seriously impacted real estate prices. (It’s just starting now – we’re seeing a handful of foreclosures locally, but nothing like other areas of the US).

Consider, though, that while land is a great investment, and houses are too (IMO – long-term you rarely lose unless the area itself goes downhill, like in an urban setting) there is upkeep involved, and it has to be periodic and steady to minimize the cost. Mr. Iron and I have been looking at various properties lately – we fantasize about owning a small farm near enough to the city for Mr. Iron to commute – but all the properties available at reasonable prices have been let go too long. There’s essentially no way to bring them back unless you have as much money again as the purchase price to dump into the project.

Renting is a pain in the neck as well, even if you do live locally. If you’re overseas, I think the only way to do it realistically is to hire an agent (not just rely on a friend or family member) and eat the expense. IMO even if you break even, you’re gaining equity as inflation does tend to generally trend upward, and a dollar today is worth more than it will be in the future. Basically someone else is buying a piece of property for you, that way.

I think you’ve hit the nail on the head. You’re in a challenging situation, living in Taiwan as a single parent with a dual-nationality child and no family to speak of back in the States. You’re right to give the situation careful consideration and think long-term, especially in realizing that while you might like Taiwan, Taiwan’s affections for foreigners not married to their own are somewhat more fickle.

I wish I’d bought one of those little condos over the MRT station at Roosevelt Rd. and Shita Road years back, though…

If push really came to shove, there’d be another Race for Africa, with various Western nations, plus new kids on the block such as China (which is already doing this) simply switching to importing a lot of food. If it got even worse than that, then those countries would basically forcibly carve up Africa and take its agricultural land and/or products. That’s assuming that much of Western Europe hasn’t essentially been colonised by the developing world, including Africa, by then. I bet they’d still fuck over their own though. That’s what humans do.

I just don’t buy this notion that the developed world would sit back and starve. The liberals in the West would be shilling for conquest just as loudly as everyone else if it looked like they’d be missing out on their three McHappy Meals per day. Hasn’t anyone seen that movie The Road (based upon the Cormack McCarthy novel) with Viggo Mortensen? Faced with starvation, all moral concerns fly out the window. In the same respect, what makes anyone with arable land think that either the government or roving gangs wouldn’t confiscate it if it got to that? What, even in the U.S. where people have more guns than in most Western nations, people would take on the U.S. military under martial law? I really don’t think so. Anything you did grow there more than three tomatoes and a basil plant in a pot they’d be confiscating and rationing right back to you (and others). All of these survivalist wet dreams are such nonsense.

Crop prices are high because the ethanol lobby is fucking everyone up the ass with ethanol in gasoline. Yeah, it makes really great sense to burn half the corn crop. There’s a growing backlash. If people’s engines start getting destroyed from the new 15% limit, you can kiss the farmland bubble goodbye.

If push really came to shove, there’d be another Race for Africa, with various Western nations, plus new kids on the block such as China (which is already doing this) simply switching to importing a lot of food. [/quote]

Oh, obviously. When the shit hits the fan, the guns will come out. They always do. And Africa does have a lot of phosphate-rich soil. But there’s an awful amount of effort is involved in setting up and running farms (at least using the industrial model), and humanity isn’t known for its forward planning. While fat westerners are slaughtering people in Africa, taking their land, and attempting a massive agricultural ramp-up while being shot at by guerrillas, people are still going to have trouble getting food (Africans, presumably, will have more immediate issues on their minds).

In the best case - the US and Europe becoming dependent on ordinary trade for their agricultural needs - politicians would get the jitters. That’s an awfully ticklish situation to be in, and the guns might eventually come out anyway, just as a knee-jerk reaction.

Of course, we could all start using fully-organic agriculture and recycling nutrients, and then everything would be OK (cue hysterical laughter). But that’s another thread.

Housecat, I would think long and hard before buying a place to rent out in the States. I can see a few holes in your plan. First of all, if you do find a tenant, you aren’t going to be able to stay in your house when you go home, so one of your main reasons is kieboshed from the outset. If you don’t find a tenant, you’re going to have to find the money to pay your rent and a mortgage.

I’m not any authority on buying property in the US, but it does cost money just to buy. There are real estate agent fees, solicitors fees, mortgage set up fees and so on here in the UK, so I imagine it’s much the same in America. Then if house prices continue to fall you’re going to be in negative equity. If you can’t rent your place out you’ll be forced to sell and you’ll still owe the bank money while having nothing to show for it.

Just owning a property you’ll incur costs. As well as maintenance costs there will be insurance and whatever the US equivalent of Council Tax is here (I assume). Here, if you’re property is unoccupied for long periods of time you’ll struggle to find any company prepared to insure it. You also run the risk of squatters breaking in and wrecking the place.

If you find a tenant you’ll have to pay management fees to an agent (which will include a fee to find another tenant whenever someone moves out) and landlord’s insurance. I don’t know how mortgage repayments compare to rental fees in the States, but if most of your property’s value is mortgaged you’ll need to be very sure the rental value is a fair way in excess of your mortgage repayments.

On a side note, can you get a US mortgage if you’re living in another country?

If you have spare cash it will be much less risky for you to invest it in some low risk investments. If you feel property is on the up then you could put your money there. That way you’re spreading the risk across a lot of other people’s properties, rather than putting all your precious cash in one high risk investment. One of the main advantages with this is that you can get that money out again quickly if you need to. You don’t have to sit around waiting for your house to sell. You can still have something to leave your boy - whether it’s a house or money it won’t make a huge amount of difference.

Wot Petrichor said.

It sounds a nice idea, but in practice it’ll end up costing you more than you think, both in money and grey hairs; unless, of course, you’re really thinking about moving “back home” for good, which is a whole different story.

there are a lot of shadow inventory, there are tons of foreclosed houses in bank’s books that’s not yet released to the market, gov pay them to not release them to the market to do further damage to the market. so the problem is very big, the housing market isn’t going to recover for 10, 15 years I heard. but it’s really cheap to buy now…I guess if you get one to live in that’s ok…but get one to invest in I am not sure about that, maybe if you find a really good deal and it’s in a good area…i wonder if the housing market will go down more?

Really? One hears these sorts of things, but I wonder if there are any credible sources backing it up. I’m not disagreeing, just curious what you’re basing the assertion on.

Really? One hears these sorts of things, but I wonder if there are any credible sources backing it up. I’m not disagreeing, just curious what you’re basing the assertion on.[/quote]
There are low inventories all over the place, especially in corn and wheat. However, there is plenty of productive farmland in the U.S. that can be farmed . . . IF the U.S. government will quit its ridiculous ethanol subsidies and stop paying farmers to let their land sit idle (1930s Depression-era policies that were meant to make farming profitable, but which instead largely destroyed family farms).

In other words, as Finley wrote, we’re all doomed. . . .