70% of American own homes, 65% are invested in stocks and bonds!

[sophia jane]

i remember an article some time ago about own v. rent: with a little juggling of figures, the thing came out a dead heat: provided--the 'down payment' that the renter saved was invested, and provided that the renter saved and invested each mo.

the other factor is that the gains of real estate are sometimes miscalcuted. for instance, someone buys for 100,000 and sells 20 years later for 300,000. It sounds enormous, but it's less that 6% per annum compounded monthly. Further the maintenance of a house is at leat 1-2% a year by many estimates. Taking the lower figure, that's $1000 per year on this home just mentioned.

it is true that US homeowners, unlike most others, get to deduct mortgage interest; this would be a huge gift from the governement to the banks, that of course skews the calculation.

You have to remember, too, that neighborhoods change. So, a house purchased and then paid off over twenty years, though it might be a nice house in what was originally a great neighborhood, could easily be end up a great house in a terrible neighborhood, significantly reducing its resale value. This happened to my grandparents; around the time their house was paid off, the town where they lived, a used to be great suburb, began to change and within a few years no one really wanted to live there anymore, and he's stuck with the house.

 

[kendo1]

I've just been looking at the figures for mobile/caravan tenure in England for 2005/2006, owned and rented, from UK Gov sources.
It works out at 0.26%.

It's much the same for Wales, lower in Scotland and N Ireland.

Quite different from the US.

 

[dr_mabeuse]

Damn it, Pure! If we wanted facts, we wouldn't be watching Fox News now, would we?

As to renting vs. owning - don't overlook property taxes, which have been rising at a tremenddous rate. Ours are now almost half of what our mortage payments are, and I know a lot of people who simply can't afford to live in Chicago anymore because of the property taxes.

 

[Pure]

i know doc, i get confused. i keep thinking the 'objectivists' deal with facts and reality-- what's out there.

of course you've no doubt become tainted by the dangerously left wing CNN news. you DO know that ted turner is a leninist, don't ya?

 

[elsol]

In 1984, 7.5 million people were participing in 401K plans
In 2000, 40 million peopel were participating

What's the most common vehicle... the market and bonds.

What's the $$$...1984 = 94 million, 2000 = 2 trillion

How easy is to sign up and manage?

Check, Check... Oh, that fund has a cool name, check... Congratulations, you're signed up.

Do you have a 401K plan? Errr, is that the thing they take out of paycheck for every month? --> That's most people's idea of 'managing' it.

Mind you... I'm not saying capitilism is bad... BELIEVE ME, I'm A HUGE MINE!MINE!MINE! person. I just wouldn't put much into the stock and bonds numbers when the government basically said "We won't tax as much and make it as easy as putting quarters in a piggy bank."

So at least 2 trillion of that growth is based and all forty million if we're going back to the 60s is due to, in my eyes, the government getting involved in an area where YOU (amicus) wouldn't want them involved in anyway... that being wiping people's chin and patting them on the head if they put 30 seconds of thought into investing for the future.

Let's try to work through this...

If I don't do it, the government will take $100 dollars of the $300 dollars I want to put into it anyway. If I do it, not only do I get to keep the $100 dollars but my company will give me another $150.

Let's do that easier... if I don't do it, I get $200 dollars... if I do it I get $450 (mind you in the last 3 years one of my plans saw a profit of 20% so I actually got $540 out of the deal)

$200 dollars or $540... hmm, let me think about that... I'll take investing in the market and bonds, please!

And I know people that still do NOT do it.

I didn't 'get it' about the market... I got that the government and companies I worked for were basically paying me to do it.

 

[R. Richard]

As to renting vs. owning - don't overlook property taxes, which have been rising at a tremenddous rate. Ours are now almost half of what our mortage payments are, and I know a lot of people who simply can't afford to live in Chicago anymore because of the property taxes.

True, Dr_M. However renters also have to pay property taxes. Obviously the renter does not pay property taxes directly, the landlord just raises the rent to cover yet another expense. Also, the renter does not get to deduct the property taxes his/her rent covers.

 

[R. Richard]

i remember an article some time ago about own v. rent: with a little juggling of figures, the thing came out a dead heat: provided--the 'down payment' that the renter saved was invested, and provided that the renter saved and invested each mo.

Quite true. PROVIDED that the renter has the discipline to save the down payment and invest the "savings" each month. Most people with that sort of discipline are owners, not renters. Also, there is an assumption that monthly rent is cheaper than the monthly payment for an owner. The assumption is very often flawed. The owner of the rental house will charge what the market will bear. What the narket will bear is usually very close to what it would cost to own. HOWEVER, the renter does not have to come up with a down payment. Also, a renter may be force to move each time his/her lease runs out. The homeowner faces no such problem.

the other factor is that the gains of real estate are sometimes miscalcuted. for instance, someone buys for 100,000 and sells 20 years later for 300,000. It sounds enormous, but it's less that 6% per annum compounded monthly. Further the maintenance of a house is at leat 1-2% a year by many estimates. Taking the lower figure, that's $1000 per year on this home just mentioned.

Assuming that the house buyer puts down $20K, the gain is actually 14.5% per annum, ignoring the perhaps 6% that the $20K down payment would bring in. However, the gain on the $20K is taxable, year by year. The 14.5% is not taxable until the house is sold and even then there are tax breaks.

If a renter does not think that the renter is paying for the maintenance, then the renter is living in a dream world. The landlord will keep the rent at a level that pays for the maintenance after the mortgage, etc. is taken out.

it is true that US homeowners, unlike most others, get to deduct mortgage interest; this would be a huge gift from the governement to the banks, that of course skews the calculation.

The US government wants its citizens to buy a house. They offer incentives. Take the incentives!

 

[R. Richard]

One other advantage to owning, versus renting. If you own, you normally live in a neighborhood where your neighbors are also owners. Owners are better neighbors than renters.

 

[Liar]

Owners are better neighbors than renters.

Why?

I assume one could argue that they are invested financially in the market value of the neighborhood. But I just thought such a blurt needs a rationale.

Otoh, renters know they can't fuck around, or else they get evicted. If NFH (Neighbor From Hell) buys the house next door, who's gonna tell him to move?

 

[R. Richard]

Why?

I assume one could argue that they are invested financially in the market value of the neighborhood. But I just thought such a blurt needs a rationale.

Otoh, renters know they can't fuck around, or else they get evicted. If NFH (Neighbor From Hell) buys the house next door, who's gonna tell him to move?

Obviously, both the owner neighbor and the renter neighbor situations have potential drawbacks.

However, only the owner neighbor has a financial stake in his situation. If the owner/NFH gets too far out of line it will wind up hurting his/her/their financial situation. Also, an owner wants to see property increase in value. To the emd of increasing property values, an owner may well add amenities to the property. Even if the increase in value is such that the owner can no longer afford to pay property taxes, the owner can take the money and run to someplace cheaper.

A tenant has no real financial stake in the neighborhood. An increase in property values will only result in an increase in rent for the tenant. A tenant is very unlikely to add amenities to a property.

If you are not convinced, as a realtor which makes the best neighbor. [Of course, the realtor likes to sell houses to owners, but a realtor also gets fees from leasing houses.]

 

[kendo1]

I had a neighbour from hell. Two of them actually.

We didn't realise at the time we bought the property that the neighbours on each side had arranged to buy it together. That was the start of our problems.
We eventually had to move due to the abuse the children were getting from them. The police helped, but could not stop it.

Our new neighbours are wonderful. Couldn't ask for better.

 

[Pure]

stats, etc. question for OGG

There are lots of comparative EU housing statistics at

http://www2.vrom.nl/Docs/internationaal/housingStats2002.pdf

They simply include 'mobile dwellings' , undifferentiated.


I can't find figures about the extent of 'mobile homes' in UK, except the following. Many housing stats as in the US, lump brick and mortar and mobile dwellings. In the UK, I've found, they are called
"Park Homes." Here are some numbers, but not with respect to the whole housing picture in England --Ogg?:


Friday 29 September 2006 10:00

http://www.gnn.gov.uk/content/detail.asp?NewsAreaID=2&ReleaseID=230569

Department for Communities and Local Government (National)

Improved rights for park home residents introduced

Greater protection for at least 200,000 residents of park homes comes into force in England on Sunday 1 October, including a right for qualifying residents' associations to be consulted by the site owner about the operation and management of their park.

The changes will automatically apply to all existing agreements and to new agreements. Other key measures include:

* a right to the quiet enjoyment of the park home together with the pitch and restrictions as to when a site owner may enter the pitch.
* a pitch fee review mechanism, including a presumption that the pitch fee will only be increased or decreased in accordance with the Retail Price Index (RPI).

* removal of the five year rule used in determining whether a home is detrimental to the park. Now only the current condition of the home will be taken into account when the court considers a case.

* a requirement that, except in emergencies, a park home may only be moved with the express agreement of the court.
Housing Minister Baroness Andrews said the new measures would significantly improve residents' rights on park home sites.

"The changes will make a positive contribution to the development of a growing industry by increasing transparency and introducing significant improvements to the rights of park home owners."


Changes are also being made to the information that must be included in the written statements setting out residents' rights and obligations that site owners have to issue to anyone considering buying a park home. This includes information upfront about such matters as the pitch fee and any additional sums that may be payable. The statements will also contain the new implied terms.
Park Homes, which are by definition caravans used for residential purposes, are found on approxiamtely 2000 sites throughout England.

 

[Roxanne Appleby]

I just noticed that this thread has over 60 posts, and shuddered at what that implies. Sure enough, a simple good news statistic about the most prosperous nation in history, one that enables more people to live better lives and have more freedom and choice that any other nation or society in history, and by an astoundingly large margin, is twisted into an "America sucks" and "Bush Lied" fest (figuratively speaking.)

Unbelievable.

(Sadly, not unbelievable.)

PS. Good for Britain on this statistic.

PPS. The statistic has little to do with politics, except that a strong economy for several years helps it of course. Homeownership has been quite high for a a number of years in the US. The investment in financial assets is growing rapidly, though.

 

[Guest]

 

[Liar]

Rox, what thread are you reading? The "America sucks" blurts are quite absent in this thread.

It started with a statistic, with the added comment that basically implied that the numbers cited was proof that the US was way ahead of the poor backward social democratic Europe. (pretty much a "Everywhere but America sucks" blurt. Kind of like your "any other nation or society in history, and by an astoundingly large margin" )

What most posts have adressed was that the numbers are pretty much comparable all though Western Europe and North America (did we see any Canadian numbers?). Probably in the anglofied pacific too (Oz and NZ).

Please, show me the America bashing. Because I don't see it.

 

[Roxanne Appleby]

Rox, what thread are you reading? The "America sucks" blurts are quite absent in this thread ... Please, show me the America bashing. Because I don't see it.

First off, good for western Europe that they too have high homeower rates.

As I said, I just scanned the thread. Pasted below a sampling from the first page. There is a health dose of bashing, and more posts seeking to undermine what truly is a good news story.

"There are more people poor and starving in your country than, well - any supposed 1st world county. How terrific is that?"

". . . your 'triumphs' may come off as a bit biased when you trumpet every small success that's happened while the Republicans have been in power . . ."

". . . home ownership includes condos . . . Really, it's the banks that own those homes. Americans just rent them...unless they can manage to pay off a 15-30 year loan, which, alas, many can't." (I like that "many" - cute.)

". . . you aspire to the American Dream (facade really) . . ."

"This pretty little 70% doesn't make the real dirt and grit of America."

"That home ownership figure includes owners of dinky condos and trailers. I also doubt if that many people actually own securities. They probably include those persons who have 401 accounts or other retirement accounts. . . . individual account holders have little or nothing to say about what happens to the money that is invested . . ." (Yes, many people own financial instruments via retirmement accounts. So what? The last is not true - most plans offer a wide variety of investment options.)

"Let it be said, the 'home ownership" includes mobile homes . . . deaths in hurricanes etc. disproportionately affect those in mobile homes."

" . . . this article puts it all in a very real perspective: 'RECORD 75 MILLION AMERICANS NOW PRETENDING THEY OWN THEIR OWN HOMES- Low Interest Rates Help Many Fulfill The American (Banker's) Dream' "

Edited to add: Nothing personal against those who posted these.

 

[Roxanne Appleby]

Rox, you are ordinarily level-headed, so it surprises me a bit that you can find the rise in home ownership simple good news and ignore the much larger rise in foreclosures.

Jammies, of course foreclosures are way up! We are starting to unwind a massive bout of housing inflation, and a lot of people did stupid things near the top of the "rally," as always happens in such cases. ("Flipping," buying too much house with zero-principle loans, etc.) Too bad for those people, but it does not take away from the good news story here. The absolute numbers are still tiny compared to the numbers of people who will never default.

 

[Pure]

roxanne: you simply ignore the debt situation of many homeowners. i posted some stats, but don't let facts get in the way of your Republican party devotion.

personally i don't find living in a trailer park part of the American Dream, but to each her own. iiirc i posted a South Carolina statistic of 20%, for such 'homes', and that's ignoring urban rural diffs.

also iirc i posted some links to European stats with some countries in the 50s or 60s, which isn't bad for slave states.

it's too bad you don't want to look at facts, but simply seize on opportunity to 'reply' to some polical remarks with your own.

---
IS it possible that there is any respect or characteristic for which the US is NOT superior to the rest of the world? (just curious).

 

[SweetPrettyAss]

First off, good for western Europe that they too have high homeower rates.

As I said, I just scanned the thread. Pasted below a sampling from the first page. There is a health dose of bashing, and more posts seeking to undermine what truly is a good news story.

"There are more people poor and starving in your country than, well - any supposed 1st world county. How terrific is that?"

". . . your 'triumphs' may come off as a bit biased when you trumpet every small success that's happened while the Republicans have been in power . . ."

". . . home ownership includes condos . . . Really, it's the banks that own those homes. Americans just rent them...unless they can manage to pay off a 15-30 year loan, which, alas, many can't." (I like that "many" - cute.)

". . . you aspire to the American Dream (facade really) . . ."

"This pretty little 70% doesn't make the real dirt and grit of America."

"That home ownership figure includes owners of dinky condos and trailers. I also doubt if that many people actually own securities. They probably include those persons who have 401 accounts or other retirement accounts. . . . individual account holders have little or nothing to say about what happens to the money that is invested . . ." (Yes, many people own financial instruments via retirmement accounts. So what? The last is not true - most plans offer a wide variety of investment options.)

"Let it be said, the 'home ownership" includes mobile homes . . . deaths in hurricanes etc. disproportionately affect those in mobile homes."

" . . . this article puts it all in a very real perspective: 'RECORD 75 MILLION AMERICANS NOW PRETENDING THEY OWN THEIR OWN HOMES- Low Interest Rates Help Many Fulfill The American (Banker's) Dream' "

Edited to add: Nothing personal against those who posted these.

I am the one who posted the part that I have bolded. I am far from being an America basher, and I believe the USA is the greatest nation in the history of the world. However, I do like to keep things in perspective.

 

[SeaCat]

I think, and I can only speak for Americans and only speculatively, it's because owning one's home is a sort of status symbol, a sign of wealth and prosperity. Realistically, as the article Mat linked shows, being in debt for $200,000 isn't actually a sign of wealth, nor does it particularly bring about prosperity or security, but it is definitely a status thing, and so such high numbers would indicate, to those who subscribe to the theory, that the American economy is booming, that more people have greater wealth, that capitalism is a success.

I personally find the levels of debt and consumer spending alarming, even as I contribute to it. How can we claim successes of the American economy with such a high debt rate and such high bankruptcy rates??

Hmmmmm, how can I explain this.

I am in I suppose a unique, well maybe not so unique position.

AS I mentioned before I recently picked up a Mobile Home. I paid for a two bedroom home less than I had been paying for a one bedroom house. (I paid $1K for the Mobile Home and I was paying $1200.00 a month to rent the house.) The rent I was paying is at the lower end in this area.

Okay so for $1K I own the Mobile Home. It is mine, I can do whatever the hell I want to it. The work I do on it is for me, not for anyone else.

Yes I do pay lot rental for the land it sits on. Call this a monthly fee. Well included in this fee is my Cable, ($41.00 a month) Water and Sewer, ($150.00 and $75.00 a month for two people) Trash Pickup, ($75.00 a month) and Landscaping (Roughly $100.00 a month) (These prices are down due to the entire park paying.) Subtract this from the Lot Fee of $601.00 and you can see I'm getting quite the deal. Oh and I do not pay property taxes.

Oh I admit that there are down sides to living here. The Mobile Homes are close together. Mobile Homes are notorious for not withstanding Hurricanes well. (By next spring mine will be much better at withstanding them than most.) There are rules I have to live by. And at some time in the future the owners of the park may decide to sell the property to some developer for a ton of money. (I somehow don't see this happening any time soon.)

The good points? I pay a very small amount of money to live here compared to renting. I do not have to worry about my rent going up every year. I do not live here at the whim of a landlord. I do not have to ask the landlord for permission to make improvements. (I do have to ask my wife but,,,,,) I do not have to worry about the landlord deciding he/she can walk in and do an inspection whenever they want. (Like my last place.) I do not have to ask for permission to have guests stay here for more than a day. I can have a pet or pets and I don't have to worry about the landlord finding out.

Cat

 

[Roxanne Appleby]

---
IS it possible that there is any respect or characteristic for which the US is NOT superior to the rest of the world? (just curious).

I wish the food here was as good as in Tuscany.

 

[SweetPrettyAss]

Originally Posted by Pure
---
IS it possible that there is any respect or characteristic for which the US is NOT superior to the rest of the world? (just curious).

I wish the food here was as good as in Tuscany.

Soccor players aren't as good either.

 

[R. Richard]

Oh I admit that there are down sides to living here. The Mobile Homes are close together. Mobile Homes are notorious for not withstanding Hurricanes well. (By next spring mine will be much better at withstanding them than most.) There are rules I have to live by. And at some time in the future the owners of the park may decide to sell the property to some developer for a ton of money. (I somehow don't see this happening any time soon.)

The good points? I pay a very small amount of money to live here compared to renting. I do not have to worry about my rent going up every year. I do not live here at the whim of a landlord. I do not have to ask the landlord for permission to make improvements. (I do have to ask my wife but,,,,,) I do not have to worry about the landlord deciding he/she can walk in and do an inspection whenever they want. (Like my last place.) I do not have to ask for permission to have guests stay here for more than a day. I can have a pet or pets and I don't have to worry about the landlord finding out.

Cat

Actually, you do live in a trail park at the whim of a landlord. You may have a lease, but the lease can be broken if the trailer park is sold [as you pointed out in the first paragraph, above.] Thus, you have some of the benefits of home ownership, but not all. Actually, your situation is somewhat similar to the owner of a condominium.

Another point that should concern the Literotica reader is that you bought what your description indicates was a wreck and you then rehabbed it [good work!] However, the average Literotica reader might not have the skills to do such work [They call me ten thumbs.]

 

[JamesSD]

(I confess I skimmed most of this thread)

Has anyone mentioned that the US is in a MASSIVE housuing bubble right now? It's exaggerated here in San Diego, where almost no one who works here can actually afford to buy...

Well, except for "exotic" financing deals, to the point where there are people who "own" thier home, but don't actually pay a penny towards the principle each month, only the interest. In the long haul, these people will almost always be worse off than renters.

Being someone who is 2-5 years away from buying his first home, this is actually something I'm fairly obsessed with. The bubble is likely to bottom out around 2009-2011... something to keep in mind for anyone who is actually thinking of buying right now (your milage may vary depending on your particular region).

 

[SeaCat]

Actually, you do live in a trail park at the whim of a landlord. You may have a lease, but the lease can be broken if the trailer park is sold [as you pointed out in the first paragraph, above.] Thus, you have some of the benefits of home ownership, but not all. Actually, your situation is somewhat similar to the owner of a condominium.

Another point that should concern the Literotica reader is that you bought what your description indicates was a wreck and you then rehabbed it [good work!] However, the average Literotica reader might not have the skills to do such work [They call me ten thumbs.]

Yes I do in a way live here at the whim of the Landlord/owner. However as I sit here and watch them bring in one or two Triple Wides a week I get the feeling this place will be here for a while. (Figure $150K a piece at roughly two a week for the past two months. That a considerable investment.)

As for it being a wreck, maybe and maybe not. Yes it had some damage. The roof had a small leak in it. I fixed that in less than a day. The rest of it I found in my inspections, and none of it is a big deal. Most of it is mainly cosmetic. We moved in as soon as we bought the place.

Okay, the damage is as follows:

The ceiling in the kitchen has a slight sag to it.
There are three soft spots in the walls.
There are two soft spots and one small hole in the flooring.
Several of the windows don't open and close as they are supposed to.
The rugs look like shit.

I could fix all of this within a month, and do so quite easily.

However I chose not to. Why? Easy, because I intend to live here for a long while and with this in mind I plan on making this the strongest, most comfortable Mobile Home in southern Florida.

How do I plan on doing this? Actually it's quite easy. None of it is rocket science, and none of it is overly difficult. I have already started.

The ceiling is currently gone. All of the wood stringers are now in the front yard. (1/2"x1/2" wooden stringers) These are being replaced by 1"x1" stringers. Between and above the stringers will be insulation. The ceiling will be Sheetrock held up with wooden, (1"x2"'s varnished) strips screwed to the stringers.

The window frames, which are simple wooden boxes nailed together, will be removed and replaced with screwed together boxes. (I don't like the old ones because they are nailed together, and they have some rot which is not surprising. This place was made in 1969.)

When I am done with this I will start on the exterior walls. Each wall section, (3" thick Particle Board) will be removed. The support beams will be inspected and replaced. (2"x4"'s) Each wall section will be replaced by a sandwich of 3/4" plywood and 1" insulating Styrofoam. (This will increase the wall strength by about ten) Nothing too difficult here. Just time consuming.

The floors, ahhhh the floors are going to be a bit of a pain for a couple of reasons. The first will be keeping the Herd, (Our cats) from climbing through the holes. The second will be supporting the things like the cabinets and Tub while I redo the floors. You see we shall be removing the floor coverings from all of the rooms. Any damaged floor sections will be repaired at this time. (I will also use this opportunity to gain easy access to the underside of the trailer and repair or replace things like water lines and A/C ducting.) The bedrooms will have new carpeting installed. The bathrooms will be tiled, or covered in Linoleum, and the living room as well as the front room will have Perga Flooring. (Goes together like a childs puzzle.)

As for the outside, I have already replaced the three storm shutters which were missing. I also have all of the straps I need and four of the twelve anchors I need to fully secure this place. (I'm heading down to the Mobile Home Depot on Friday to get the rest of the anchors.) So by next spring this place will be a RedNeck Palace and as able to survive a Hurricane as most of the newer homes around here.

Oh I should add that while I'm redoing the walls I'll be adding another electrical system. This one is completely seperate and will have an attachment outside as well as several plugs inside. It is a dedicated line just for the generator.

None of this work is hard or complicated. It just takes effort, something I am willing to put into the place.

Cat