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**Peterli** · 08-04-2007, 01:02 AM

i am just wondering, if housing value almost doubles in four years, and income is now where near following the same pattern, then would that mean eventually more people will end up in apartments.. i think that is a reasonable thought. but also housing is going up because more people are buying.. so i bet that once the houses become to expensive.. less people will buy.. and eventually things will go back to normal.. right? so probably we should all sell our houses and buy them again when they are cheap.. heh.

Oh, I think I misinterpreted what you were saying regarding people who already own homes versus renters...

Still, things even out. Say, houses double in value over four years, and the young/renting population can't afford them. Well, then two things happen. (1) The price of houses will tend to dip as demand for them cools off. (2) The price of rentals will increase because of increased demand, making buying a better alternative.

I'm looking to be a first time home-owner myself, so I don't have a lot of experience on the subject firsthand, but I've done a lot of research. My aim is to buy a place I can afford with a fixed loan and then I'll be in a position to ride out any market fluctuations until I'm comfortable selling. I think people get into the most trouble when they get into creative financing, like ARM's or zero-down loans, buy more house than they can afford, and depend on the house to appreciate. Then, if it doesn't, they're hosed - their mortgage payments start to skyrocket and they become desperate to sell. And, I believe that there are enough people doing this at any given time to allow you to find a reasonable deal on a home purchase. If you're willing to do a little fixer-up work, you could always buy a house in foreclosure.

08-04-2007, 01:02 AM	#22
Peterli Join Date Oct 2005 Posts 458 Senior Member	i am just wondering, if housing value almost doubles in four years, and income is now where near following the same pattern, then would that mean eventually more people will end up in apartments.. i think that is a reasonable thought. but also housing is going up because more people are buying.. so i bet that once the houses become to expensive.. less people will buy.. and eventually things will go back to normal.. right? so probably we should all sell our houses and buy them again when they are cheap.. heh. Oh, I think I misinterpreted what you were saying regarding people who already own homes versus renters... Still, things even out. Say, houses double in value over four years, and the young/renting population can't afford them. Well, then two things happen. (1) The price of houses will tend to dip as demand for them cools off. (2) The price of rentals will increase because of increased demand, making buying a better alternative. I'm looking to be a first time home-owner myself, so I don't have a lot of experience on the subject firsthand, but I've done a lot of research. My aim is to buy a place I can afford with a fixed loan and then I'll be in a position to ride out any market fluctuations until I'm comfortable selling. I think people get into the most trouble when they get into creative financing, like ARM's or zero-down loans, buy more house than they can afford, and depend on the house to appreciate. Then, if it doesn't, they're hosed - their mortgage payments start to skyrocket and they become desperate to sell. And, I believe that there are enough people doing this at any given time to allow you to find a reasonable deal on a home purchase. If you're willing to do a little fixer-up work, you could always buy a house in foreclosure.
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