Living Car Free - The American Dream is up for Rent

http://online.wsj.com/article/SB123845433832571407.html

Are we REALLY supposed to feel sorry for these people?

- 0 down mortgage (obviously variable rate)
- four hour r/t commute
- walked away from their mortgage

Sorry, but these people are as much to blame for the "mortgage crisis" as the banks are.

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I really wish we would quit pushing the home ownership dream on people. The vast majority of people would be better off renting. As the article mentions, it promotes mobility.

What jeff said - home ownership is not a right. I can't see how renting close to work (within biking distance maybe?) and cutting the expense of at least one of the two cars I am sure they have wouldn't let them save enough money to actually afford a down payment.

0% down is just a bad idea.

How could anyone commute that long everyday and find that normal. That to me would be so unhealthy and outright nuts.

Something doesn't add up about that "four hour commute". I'm assuming that unnamed law office is in downtown Chicago.

Google gives 38 minutes by car from Plano to Naperville, then Metrarail shows 34 minutes from Naperville to Chicago Union Station on the 8 AM express train. Add some for waiting time & walking (or using a folding bike). A door to door commute by car should be much faster, shouldn't it?

Something doesn't add up about that "four hour commute". I'm assuming that unnamed law office is in downtown Chicago.

Google gives 38 minutes by car from Plano to Naperville, then Metrarail shows 34 minutes from Naperville to Chicago Union Station on the 8 AM express train. Add some for waiting time & walking (or using a folding bike). A door to door commute by car should be much faster, shouldn't it?

Maybe she has a boyfriend in Naperville? With a numerically challenged husband how would he know? He thinks one way is two hours, it gives her some three hours per day to get wild with young Brad right?

Maybe she has a boyfriend in Naperville? With a numerically challenged husband how would he know? He thinks one way is two hours, it gives her some three hours per day to get wild with young Brad right?
Busted!! :roflmao2:

They moved from Aurora to Plano? Aurora is already well into the exurb boonies. As you pass through, it's a mixture of cornfields and ticky-tacky houses. A commute from Aurora is a long stretch to my mind. Anyone who would move another 20 miles west and expect to commute to Chicago...

I've driven through Aurora a couple of times and it seemed an eternity before we even reached O'Hare.

I guess from Plano it isn't a two hour commute, but it sure is 1 1/2 hour.

I guess from Plano it isn't a two hour commute, but it sure is 1 1/2 hour.
So why isn't the car faster than the express train to downtown?

So why isn't the car faster than the express train to downtown?
Distance from Plano to Naperville is 21 miles. Distance from Plano to downtown Chicago is 40 miles.
Last time I tried it I came through Aurora, then Naperville on highway 88. Traffic was OK from Aurora to Naperville, but really slowed down after.

The route from Plano to Chicago is not on a freeway (but might be a 4 or 6 lane route). I'm guessing 40 miles at an average speed of 25mph. However, I am certainly sure that traffic would be heavier after Naperville, which would explain why the express train might be faster.

(Disclaimer: I know many people who live in Des Moines who state that they can arrive in downtown Chicago from Des Moines in 5.5 hours (a distance of 334 miles...). Last time I tried it, took me 7. )

Perhaps time and distance are a subjective measurement.

Its sad that they use the word "renter" as if its dirty or bad. "Turning the family into RENTERS," cue scary music! I like this quote, "a community of owners is OBVIOUSLY going to be better than a community of renters." Why? What is so obvious about that? I have lived in some amazing rental apartments, studios, and homes, surrounded by other "low lives" who chosen to become "renters".

Its sad that they use the word "renter" as if its dirty or bad. "Turning the family into RENTERS," cue scary music! I like this quote, "a community of owners is OBVIOUSLY going to be better than a community of renters." Why? What is so obvious about that? I have lived in some amazing rental apartments, studios, and homes, surrounded by other "low lives" who chosen to become "renters".

You expected something different from the WSJ?

If I had to guess, remember the guess part, it is because many renters have nothing invested in where they live so they don't take care of it like they were owners. When you check with most police departments is many cities it is the apartment buildings that tend to attract the most police attention. I don't know why this is but it seems to be the case. One of the first homes I ever bought was in a condominium complex. The developer kept a few of the condo’s for him to sell a few at a time for tax purposes. They were rented. That section was always the most run down. I don’t know why this is but that just seems to be what happens. And I am sure there are exceptions but not enough to ignore the perceived rule.

I can understand the desire to own your own home. I can understand moving from the urban environment. I just can’t understand a 4 hour commute. It doesn’t take that long to drive from LA to San Diego.

If I had to guess, remember the guess part, it is because many renters have nothing invested in where they live so they don't take care of it like they were owners. When you check with most police departments is many cities it is the apartment buildings that tend to attract the most police attention. I don't know why this is but it seems to be the case. One of the first homes I ever bought was in a condominium complex. The developer kept a few of the condo’s for him to sell a few at a time for tax purposes. They were rented. That section was always the most run down. I don’t know why this is but that just seems to be what happens. And I am sure there are exceptions but not enough to ignore the perceived rule.

I can understand the desire to own your own home. I can understand moving from the urban environment. I just can’t understand a 4 hour commute. It doesn’t take that long to drive from LA to San Diego.

Its a good point. However, there are many rental areas where the rent is a lot more expensive that some of the mortgages on a very cheap home. So I would think that an expensive rental community would have less crime than a poor "owners" community. I also could be wrong but it seems like what real matters in relative income level and not "renters" vs. owners. Just guessing...

How could anyone commute that long everyday and find that normal. That to me would be so unhealthy and outright nuts.

Plus One.. Living so far from everything is unsustainable.. It's a false dream.. Had they had visions of being farmers then their dream might have been possible...

"We could actually own something and afford it," says Ms. Discianno, who was able to pay the early payments of $1,500 a month. It was great for the kids, she says. "Friends can come see them, instead of them always going somewhere else."

Their home cost what I make in a month after taxes. What kind of a responce can I make other than that?

I lived in the Chicago area; Plano really was just that far out from anything. Yeah, the homeowners were really dumb, and they should move now. But that leaves behind the buildings; what's the town gonna do now?

Its a good point. However, there are many rental areas where the rent is a lot more expensive that some of the mortgages on a very cheap home. So I would think that an expensive rental community would have less crime than a poor "owners" community. I also could be wrong but it seems like what real matters in relative income level and not "renters" vs. owners. Just guessing...

You must not have grasped the concept pointed out in the fifth paragraph of the OP article:
Lawrence Summers, economic adviser to President Barack Obama, has often explained it this way: "No one in the history of the world ever washed a rented car."

If I had to guess, remember the guess part, it is because many renters have nothing invested in where they live so they don't take care of it like they were owners. When you check with most police departments is many cities it is the apartment buildings that tend to attract the most police attention. I don't know why this is but it seems to be the case. One of the first homes I ever bought was in a condominium complex. The developer kept a few of the condo’s for him to sell a few at a time for tax purposes. They were rented. That section was always the most run down. I don’t know why this is but that just seems to be what happens. And I am sure there are exceptions but not enough to ignore the perceived rule.


True, but many owners of rental properties only look at cash flow. Money spent on maintenance is money not in the pocket. We have a few such houses in our neighborhood - the owners won't spend money on some of the basic maintenance tasks that are really the responsibility of the owners and not the tenants.

True, but many owners of rental properties only look at cash flow. Money spent on maintenance is money not in the pocket. We have a few such houses in our neighborhood - the owners won't spend money on some of the basic maintenance tasks that are really the responsibility of the owners and not the tenants.

There is no disagreement here. I was only pointing out what most communities believe not if it was right or wrong. I have belonged to a few home owners associations both for single family dwellings and apartments converted to condo’s and renters are always a concern. Not because of renters individually but because it seems to increase the chances of problems with the property. It could quite well be the owners of the rental property trying to squeeze every penny out of the property I can’t say. Whatever the reason renters and owners seem to be at odds whenever they mix in a living situation.

The article barely alluded to the most interesting point:


"Some observers believe the growth of rental property is the first in a series of steps that will transform today's exurbs into tomorrow's low-income housing."

My prediction: It seems to me that gas prices are going to go up enormously in not too many years. This will make wealthy communities in the exurbs less desirable, and property values will decline sharply. Wealthy people will wnt to move somewhere they don't hae to drive as much. At the same time, poor communities in the inner city and inner suburbs will suddenly become more popular, hence more expensive. Poor people will suddenly need to move somewhere cheaper.

There could be a "swap" of communities, with the poor moving to the exurbs and the wealthy moving into town. This would be similar to "white flight" only in a reverse direction.

BTW, I'm in an interesting situation. I rented a beautiful upstairs apartment in an older home close to the city center. My landlord (private individual) didn't pay the mortgage and was foreclosed on. this happeed on 12/27/08. Three months later, I'm still living in the apartment. I have heard nothing from whoever now owns the house. I'm starting to believe that the new owner (presumably the mortgage holder, Countrywide Mortgage) has "walked away" from the property. I'm squatting rent-free, although I am paying for maintenence, repairs and utilities.

BTW, I'm in an interesting situation. I rented a beautiful upstairs apartment in an older home close to the city center. My landlord (private individual) didn't pay the mortgage and was foreclosed on. this happeed on 12/27/08. Three months later, I'm still living in the apartment. I have heard nothing from whoever now owns the house. I'm starting to believe that the new owner (presumably the mortgage holder, Countrywide Mortgage) has "walked away" from the property. I'm squatting rent-free, although I am paying for maintenence, repairs and utilities.

Send me a PM and I will inform you where to send your rent check so that you can do the right thing and ease your guilty conscience.

I'm starting to believe that the new owner (presumably the mortgage holder, Countrywide Mortgage) has "walked away" from the property. I'm squatting rent-free, although I am paying for maintenence, repairs and utilities.
If the utilities for the house are in your name, it's harder for anyone to force you out by having them cut off.

There could be a "swap" of communities, with the poor moving to the exurbs and the wealthy moving into town. This would be similar to "white flight" only in a reverse direction.
Isn't this what goes on with gentrification? This seems to be happening in DC, some neighborhoods that 15 years ago were considered trashy are now more fashionable. But this is also following the expansion of the subway system.
Funny thing is that I was just talking to a suburban woman who has this idea that the best place to live is as far away from mass transit as possible. She lives in a "wealthy exurb" of huge houses and poor bus service. She's stuck in the past, she's mystified by the fact that house prices near metro stops haven't gone down much while she's underwater on her two rental houses. She's renting them for less than her mortgage payments.

You must not have grasped the concept pointed out in the fifth paragraph of the OP article:
Lawrence Summers, economic adviser to President Barack Obama, has often explained it this way: "No one in the history of the world ever washed a rented car."

Yes I do understand the point but maybe you missed mine. High end rental properties include high end groundskeepers, maintenance, and many other fancy things. Have you ever lived in one? What I am saying is that a wealthy rental area maybe better than a low income owner area. This means that the stigma on rental properties does not lie in the fact that you dont "own" where you live but just in that MOST rental properties are for lower income people. In the future this could change. It is certainly not true for many places in Europe where buying is much more difficult. Everyone rents and they dont seem to mind. Some very nice, bling bling rentals in London I can tell you! The idea that everyone has the right to or automatically should buy a house just because they can afford it.

Im not trying to be rude but do you "grasp my concept?" I dont mind answering your questions but tone it down a bit bud:thumb:

True, but many owners of rental properties only look at cash flow. Money spent on maintenance is money not in the pocket. We have a few such houses in our neighborhood - the owners won't spend money on some of the basic maintenance tasks that are really the responsibility of the owners and not the tenants.
One thing that mystifies me is the difference between a renter and an owner who has 0% down on a property that is now worth less than 2 years ago. I've owned houses more many years and there is a very thin line between the two..even if you have some actual cash into the property. In fact, the difference might just be only in that owners can write off mortgage interest.

- 0 down mortgage (obviously variable rate)


My loan could have been 0 down and fixed interest rate. I chose to put money down (was not forced) and I also chose to buy down one point. This loan was through BOA in 2007.



- walked away from their mortgage


It is a free country, isn't it? The rules of the game were set BEFORE they purchased their house. The bank and the community and the buyer all agreed on the rules to the game. All these people are doing is playing by the rules.



Sorry, but these people are as much to blame for the "mortgage crisis" as the banks are.


No. Not at all. If I go to a doctor, and the doctor say I need to take a certain medicine, should I listen? If I do listen, and it turns out the medicine is bad for me, is it my fault? Replace "doctor" with "financial planner" and then you have the housing mess we got ourselves into.



I really wish we would quit pushing the home ownership dream on people. The vast majority of people would be better off renting. As the article mentions, it promotes mobility.

Here, I completely concur.

Traffic is the reason why the train (which does not have to slow down for auto traffic in rush hour) is faster than driving when commuting to downtown Chicago from the far western suburbs.

Chicago is a very spread out metropolitan area. I live on the north side of the city and I can get to downtown Milwaukee in rush hour faster than I can get to the far western suburbs of Chicago.

Fortunately for me, I can walk to the El (Short for elevated train which goes into a subway near downtown) and be downtown in Chicago door to door (7 miles) in 35 minutes during rush hour. The sad truth is that even our mass transit train systems have to travel more slowly in rush hour because there are more trains on the tracks than the tracks can handle.

7 miles in 35 minutes is only 14 MPH. You guys have bad traffic.

Yes I do understand the point but maybe you missed mine. High end rental properties include high end groundskeepers, maintenance, and many other fancy things. Have you ever lived in one? What I am saying is that a wealthy rental area maybe better than a low income owner area. This means that the stigma on rental properties does not lie in the fact that you dont "own" where you live but just in that MOST rental properties are for lower income people. In the future this could change. It is certainly not true for many places in Europe where buying is much more difficult. Everyone rents and they dont seem to mind. Some very nice, bling bling rentals in London I can tell you! The idea that everyone has the right to or automatically should buy a house just because they can afford it.

Im not trying to be rude but do you "grasp my concept?" I dont mind answering your questions but tone it down a bit bud:thumb:

However when you rent even in London you build your landlord’s equity or a corporation’s and your rent is a total loss. When you buy, present downturn aside, you are building equity. For instance equity in one house can pay off the second house bought earlier so you can retire early and have no rent. It works even better if you rent the smaller home till the kids leave and you downsize back to the smaller home. Some used to call it a property ladder. It is what the landlord is trying to do on a larger scale. Just saying.

However when you rent even in London you build your landlord’s equity or a corporation’s and your rent is a total loss. When you buy, present downturn aside, you are building equity. For instance equity in one house can pay off the second house bought earlier so you can retire early and have no rent. It works even better if you rent the smaller home till the kids leave and you downsize back to the smaller home. Some used to call it a property ladder. It is what the landlord is trying to do on a larger scale. Just saying.

Yes I agree completely but with every investment of large amounts of cash there is risk. You say, current economic downturn aside, but they happen all the time! A house is an investment with risk. You could buy the house and gas prices could go up rendering it too far from the city and the price goes down. You could discover mold and have to invest thousand or you could get hit with a flood, whatever. There is a myriad of things that can go wrong with your investment just like an investment in the stock market. Yes you are getting equity but its not without risk. Renters are essentially paying for the privilege of not having to take on risk. If I rent a home and suddenly the market tanks I lose nothing. My land lord on the other hand is SOL. Im not saying I am against home ownership but just that it should not been the end all and renting should not be looked down on as if it is a bad word. I think we can agree on that right?

Renting is fine if the cost of home ownership is out of reach of one's budget, but one should consider home ownership if rent prices are roughly the same as mortgage payments. Our mortgage payments (now paid off) were less than the current going rate for a small two bedroom apartment here locally, while the value of our house has tripled over the years. After personally dealing with, watching other family members' and friends' ordeals with landlords and property management groups, plus the fact that our income and housing prices were at their best making home ownership an attractive option. The best outcome was finding a inexpensive house that met our needs only a half block away!

I have several dislikes about renting, one is that any improvements made at the rental, stay with the rental with most landlords only paying for the materials but not the labor, and one is out on any sweat equity. I've dealt with property managements while helping family members, and one of my favorite stories is their getting a 90 day eviction notice that the owner decided to sell the property shortly after my calling management on several safety violations.
Another is that the local rentals I've dealt with continuously increase their the rent with no or substandard improvements to the point of hearing other renters coming back years later to an apartment that's exactly the same, as well as the same owner, but at twice the price.

Some people here may like to strictly rent, and may not have a choice but to do so, but in my case, I'm glad that I made the choice to buy a home.

Yes I agree completely but with every investment of large amounts of cash there is risk. You say, current economic downturn aside, but they happen all the time! A house is an investment with risk. You could buy the house and gas prices could go up rendering it too far from the city and the price goes down. You could discover mold and have to invest thousand or you could get hit with a flood, whatever. There is a myriad of things that can go wrong with your investment just like an investment in the stock market. Yes you are getting equity but its not without risk. Renters are essentially paying for the privilege of not having to take on risk. If I rent a home and suddenly the market tanks I lose nothing. My land lord on the other hand is SOL. Im not saying I am against home ownership but just that it should not been the end all and renting should not be looked down on as if it is a bad word. I think we can agree on that right?

You all are mixing decisions that should be separate- paying for shelter and investing in real estate. They are two different things. Real estate agents and financial planners encourage people to confuse the two. They try to get you to use your home a a poker chip. Depending on how the market in your locality is going, sometimes you can get the shelter you want at the best cost through renting and sometimes through buying.

Yes I agree completely but with every investment of large amounts of cash there is risk. You say, current economic downturn aside, but they happen all the time! A house is an investment with risk. You could buy the house and gas prices could go up rendering it too far from the city and the price goes down. You could discover mold and have to invest thousand or you could get hit with a flood, whatever. There is a myriad of things that can go wrong with your investment just like an investment in the stock market. Yes you are getting equity but its not without risk. Renters are essentially paying for the privilege of not having to take on risk. If I rent a home and suddenly the market tanks I lose nothing. My land lord on the other hand is SOL. Im not saying I am against home ownership but just that it should not been the end all and renting should not be looked down on as if it is a bad word. I think we can agree on that right?

We still don’t disagree. ;) It is just what was being said about the American dream. The dream part was to be part of the success story. And to be part of any success you have to risk something. I wasn’t saying there isn’t risk, same with the stock market. I agree it was like going to Atlantic City no more and no less. The dream isn’t as strong in some other places because of class structure. Some people feel trapped in a class that will always rent and can never afford to take the risk, and that will continue for generations. To a degree I think we are moving towards that system a bit and I am not sure how long the dream will stay alive. But it is not all that different from many Asian cultures’s dream. In several examples like China and Viet Nam the government has to suppress the desire of the people to own the land. In the Native American culture of the Navajo they are tied to the land between their 4 sacred mountains where the Navajos tend to live today. They just don’t tend to be tied to the individual property like the traditional American dream. I guess what I am saying is the American dream isn’t pushed on people it developed even before there was an America.

Rent.?.. Correct word...?.. When ever the economy gets back on track.?... The energy world of last summer will return as our next challenge... Life in the exurbs is not for rent. It's gone, gone.. Unless the city's functions goes out there too.

You all are mixing decisions that should be separate- paying for shelter and investing in real estate. They are two different things. Real estate agents and financial planners encourage people to confuse the two. They try to get you to use your home a a poker chip. Depending on how the market in your locality is going, sometimes you can get the shelter you want at the best cost through renting and sometimes through buying.

Good point. I have a friend who rents his dwelling but owns several investment properties.

BTW, I'm in an interesting situation. I rented a beautiful upstairs apartment in an older home close to the city center. My landlord (private individual) didn't pay the mortgage and was foreclosed on. this happeed on 12/27/08. I'm squatting rent-free, although I am paying for maintenence, repairs and utilities.

This is a weird situation but in a way good for your wallet. I've seen news reports where real estate agents or new owners of foreclosed properties will pay the squatting tenants to move. They sometimes give you more than a month to move. It could be as much as a year before they get to you. Some banks want people living in properties so that they will remain in good condition. Other banks want everybody out of the foreclosed properties immediately because of liability.

Save your money and be prepared to call a moving company or rent a truck to move your stuff quickly. Keep plenty of boxes on hand just in case the sheriff shows up and says get out in 24 hours. With the money you are saving you could pay for a storage facility rental and a hotel room for a while during your search for a new place to live.

I'm really interested in how this pans out for you. Please post updates to this thread.

Years ago I knew the housing bubble would burst. I sold my house at its maximum value. Hurricane Katrina came just one month later. If it weren't for that storm creating a housing shortage in the area, the value of it would have gone down just like most areas around the country.

I love renting without the liabilities of ownership. If only the neighbors were quieter and the walls were thicker I'd be totally happy about my apartment. If I find a place that is better I can just move at the end of my lease for the price of moving. I don't need to spend thousands of dollars on attorney fees or sales commissions.

BTW, I'm in an interesting situation. I rented a beautiful upstairs apartment in an older home close to the city center. My landlord (private individual) didn't pay the mortgage and was foreclosed on. this happeed on 12/27/08. Three months later, I'm still living in the apartment. I have heard nothing from whoever now owns the house. I'm starting to believe that the new owner (presumably the mortgage holder, Countrywide Mortgage) has "walked away" from the property. I'm squatting rent-free, although I am paying for maintenence, repairs and utilities.You might want to open a bank account and deposit your rent payment there each month. That way, if somebody eventually shows up demanding back rent, you're covered. If not, you have money in the bank.

However when you rent even in London you build your landlord’s equity or a corporation’s and your rent is a total loss. When you buy, present downturn aside, you are building equity. For instance equity in one house can pay off the second house bought earlier so you can retire early and have no rent. It works even better if you rent the smaller home till the kids leave and you downsize back to the smaller home. Some used to call it a property ladder. It is what the landlord is trying to do on a larger scale. Just saying.

I've had friends and family try to make similar arguments to me when I moved out of my friends house (where I was renting a room). Building equity is not all it's cracked up to be. Sure, it might look nice on paper but consider all the costs of owning a home - often you are paying higher utilities, you are responsible for all repairs - minor or major, all appliances, and so forth. I pay rent to my landlord, and if anything breaks they come and fix it. If you take the total costs of owning and compare with the costs of renting, how much equity are you REALLY building? You may find that you could take the money you are saving by renting, put it into an IRA and come out ahead in the long run.

I have nothing against ownership, I think it is great I and hope to own my own home someday. But, it's not the financial magic arrow that many in this country seem to believe it.

I pay rent to my landlord, and if anything breaks they come and fix it.Built in to your rental price.

And they still make a profit. Figure what you're paying in profit to the landlord, plus the amount of the principal the landlord is paying down each month, is money you could be putting into equity.

I've had friends and family try to make similar arguments to me when I moved out of my friends house (where I was renting a room). Building equity is not all it's cracked up to be. Sure, it might look nice on paper but consider all the costs of owning a home - often you are paying higher utilities, you are responsible for all repairs - minor or major, all appliances, and so forth. I pay rent to my landlord, and if anything breaks they come and fix it. If you take the total costs of owning and compare with the costs of renting, how much equity are you REALLY building? You may find that you could take the money you are saving by renting, put it into an IRA and come out ahead in the long run.

I have nothing against ownership, I think it is great I and hope to own my own home someday. But, it's not the financial magic arrow that many in this country seem to believe it.

I agree there is nothing magic about it.

Still because rents are set to cover the cost of the house payment and to make some profit the renter making the same amount of money wouldn’t have much more to save than the home owner. When someone buys rental property they factor in utilities, taxes, and normal repairs and set the rent accordingly. Most landlords don’t decrease the utilities on the off season so they can offset the increased cost when it is hot or cold. If costs go up they simply raise the rent.

But I agree that both renters and owners need to get control of their savings rather than spending everything they make. And if the home owner pays off their house at least they can live without the worry of a landlord raising the rent. Plus they have something to leave to their children.

The one thing we like about home ownership is the fact that we can discuss on when and how much any "rent" increases will be. I usually watch what a house of our type and size are renting for locally, and then charge ourselves that amount. By charging ourselves the going rental rate, we've been able to pay any bill, planned or unplanned, still have a sizable profit margin in reserve, even back when we were making mortgage payments, feeding/clothing a family of four.

Well, one thing we should have learned in the last couple years is that home ownership is an investment. Like all invesments, there is a high degree of risk involved. Any investment can tank--as we can see with the average value of homes declining by some 30 % in just a couple years--and values are still heading down. It's been estimated that it might take up to 20 years of normal growth for residential real estate to match its value of 4 years ago.

The problem with investing in a home for the average person is that it breaks the first rule of investment, which is to diversify your portfolio. this means that you should have a good portion of you worth tied up in something else beside your home. At least if you're carfree, there's a good chance that you can afford to invest in other areas and still own a home.

Well, one thing we should have learned in the last couple years is that home ownership is an investment. Like all invesments, there is a high degree of risk involved. Any investment can tank--as we can see with the average value of homes declining by some 30 % in just a couple years--and values are still heading down. It's been estimated that it might take up to 20 years of normal growth for residential real estate to match its value of 4 years ago.

The problem with investing in a home for the average person is that it breaks the first rule of investment, which is to diversify your portfolio. this means that you should have a good portion of you worth tied up in something else beside your home. At least if you're carfree, there's a good chance that you can afford to invest in other areas and still own a home.

Roody, our original standpoint for owning a home was not for financial gain, but more on the order of getting away from a landlord's quirky whims, plus have more control of what we can do to our living place. Gone are the fears of having to uproot the family due of a landlord's poor fiscal management or deciding to sell the property.

Our property value has dropped, but it's still worth far more than what we paid for it, even with the added improvements factored in.
We received a loan for our home through one of the toughest banks around, making sure that we could even buy in the first place, and we didn't seem fortunate while going through the bank's proccessing procedure at the time, but looking back, it proves that we were indeed.

The easy interest only/variable rate balloon loans and high market prices, and subsequent budget breaking payments of recent years only spelled disaster in my book.

Roody, our original standpoint for owning a home was not for financial gain, but more on the order of getting away from a landlord's quirky whims, plus have more control of what we can do to our living place. Gone are the fears of having to uproot the family due of a landlord's poor fiscal management or deciding to sell the property.

Our property value has dropped, but it's still worth far more than what we paid for it, even with the added improvements factored in.
We received a loan for our home through one of the toughest banks around, making sure that we could even buy in the first place, and we didn't seem fortunate while going through the bank's proccessing procedure at the time, but looking back, it proves that we were indeed.

The easy interest only/variable rate balloon loans and high market prices, and subsequent budget breaking payments of recent years only spelled disaster in my book.

I wouldn't be surprised if you bought your home before 2004. Almost everybody who bought since then has property that's now worth less than they paid for it.

I'm not against home ownership by any means. I do think that people should realize that it's a financial gamble, and they shouldn't have all their eggs in the basket of their home.

Last year there was a news story about home ownership. The reporter showed a graph of the average rent payment for a house and the average costs of owning a house. It showed that the home owner and renter were paying about the same price to live over a thirty or forty year period. In some years it was better to be a renter and in other years it was better to be paying a mortgage.

Somehow they did a calculation that showed the home owner with a paid off mortgage still didn't come out ahead very much. I can't give good details about it because I wasn't paying close attention to the whole story. I just watched the graphic explanation and the conclusion of the story. The report said that owning a home is not really the great investment that most people believe it is.

One day when I decide which city/state/country is the best place for me to live, I'll buy a house there. Until then I'll rent and let someone else mow the lawn and shovel the snow off the sidewalks.

In many areas if not most? You never really own your property...they keep coming after you for taxes in one form or another. AFAIK there is no place in the US where you don't pay some sort of annual property tax.

Aaron:)

In many areas if not most? You never really own your property...they keep coming after you for taxes in one form or another. AFAIK there is no place in the US where you don't pay some sort of annual property tax.

Aaron:)Well, you still own your home (assuming the mortgage is paid off), you just owe the gummint various taxes to pay for various services.

Now, if you own rental property, you get a sweet deal, because your renters pay the taxes for you.

I think we all agree any investment has risk. The dream we are talking about has or had risks. But the reward goes to those who minimise those risks. Landlords run the same risk and have the extra worry if their community passes rent control. But like any other investment people need to look at what they can afford and stay within that budget. I have rented before and all in all it wasn't too bad. except the landlord cold tell me if I could have a pet and where I could park and how many could stay at my house and for how long. And like someone pointed out they can tell you when you have to move.

But the American dream is in trouble and it indeed may take years for it to recover.