Liar Loan said:
I completely disagree. Renting is a viable alternative if all you need is a place to live. Maximizing ROI (or minimizing losses) should be everybody's goal when it comes to housing. And for most people it is, whether they admit it or not, but they rationalize their bad decision-making by saying "It doesn't matter if I overpaid because I plan to stay put for a long time." Meanwhile they are paying more principal, more interest, more taxes, more mello, and will have less funds for a future move up.
Depends... you may build more equity in your home than whatever you save renting because if people are bad at math and making rational decision about money like you contend, how well will they invest or save whatever the difference is?
It's not as cut and dried as you posit. Hence the "math and risk assessment" caveat in my original statement.
When I bought in 2006 and the property dropped by 60%, renting was by far the better alternative. I just didn't see it at the time because I wanted to own something so badly (emotional decision-making).
So what? Non-fundamentals is a reality, People do it all the time, that's life. Just because you hindsighted this and came up short doesn't necessarily mean it would be a bad decision for EVERYONE. Maybe if you bought that property in Irvine instead, it would not have taken so long to recoup.
When I bought my second place in 2010, it made complete sense to purchase because monthly ownership costs were actually cheaper than renting at the time. Even though there were many fearful voices saying not to buy because prices would keep falling - both online and in real life (hello awgee) - I had run the numbers and made the decision based on fundamentals this time. Prices didn't take off right away, but it truly didn't matter because I was paying less than it would cost to rent the same place.
Timing matters. ROI matters. Just look at all the emotional voices on this thread for proof.
Again, if you are living in it... timing can becomes less of an issue because a home is a personal choice and you want certain things you may not be able to wait for.
If someone wanted to live in a Woodbury hood when it was new and they could choose their floorplan, lot, etc... they had to buy then and not wait it out hoping the same model/lot comes up for resale when prices are lower (which is very hard to time).
Timing matters... but is also very inaccurate because of so many variables.
Have you bought a car recently? Everyone is at MSRP or higher and obviously you should wait until the chip shortage subsides but some people need to buy now. So they do the math, asses their risk and decide.
ROI is time dependent and if you stay long enough, the better. People who bought after the 2013-2017 "peak" (since some of you said 2018+ was the slowdown) have some great ROI right now. Most who bought in Irvine in 05-06 is making at least 50% ROI right now. The Irvine house I sold less than 10 years ago is up over 30%. If you are living in it and can afford it, you don't really worry about ROI until you sell.
Home buying **IS** an emotional process... that's why you are so mad at all these TI people who bought in Irvine and are not feeling the pain you keep predicting.
And I bet you "love" your 3CWG and big lot.