[quote=joec]I think using PIIGS is a bad example and a different beast because all those counties don’t control their own currency and have to answer to Germany.
Had to quickly look up as I didn’t care for PIIGS, but (Portugal, Italy, Ireland, Greece and Spain) you can see all those are old EU countries with a ton of problems like massive youth unemployment, no fiscal policy (Greece now), high unemployment, yadda yadda yadda…
I’ve said many times, the fed would raise rates ONLY to get off zero, and even then, they are being so slow about it. The problem with current renters and I can understand their bitterness is that if rates are low for say 20-30 years, you’ve pretty much “used up” 20 or 30 prime years of your life. Japan is still stuck at lower rates (off 0 I think now). For all we know, if rates go up, people who have locked in will just rent places out. With such small inventory, rents will probably go up. Also, they may get more aggressive with longer term loans like 40 years, (100 years in Japan I hear) like what they are doing with car loans so payment may stay the same, but housing prices just don’t move much.
If you enjoy renting, that’s all great and good, if you hate rent increases (why we bought actually) and like a known housing payment on a commodity you MUST have to live in, then buying is such a load off your head.
You can always look for investment properties if you want to after your primary residence, but people should really (much easier for families) just live within their means in terms of a house and don’t see it as an investment. It’s just shelter and after 30 years, maybe it will be cheap shelter at that point. Much harder for the single folks here I think since you can tell from the posts how their mindset is very different from people who worry about a family/pets/etc…
SD Realtor, did you purchase a place yet? I don’t think I’ve seen a note here after following this place for almost 10 years, you’ve mentioned buying yet.
Also, for people renting, be cautious of your own renter bias just assuming things will collapse or go down. Similar to what AN said, a lot of buyers (even poor me) would try to hold on to our homes if we’re already at a much lower rate or our payments are significantly lower than comparable rents.[/quote]
Agree about those countries not controlling their own currencies. Just pointing out that interest rates can go up during deflationary times. Of course, if people start to question the value of our currency, that’s another story… I’ve long said that we should avoid stepping into Japan’s shoes. I certainly don’t want to trade places with them, but fear that we are going there.
The portions of your post that I’ve bolded, above, are spot on. This is largely why we wanted to buy, as well. It’s largely psychological, but when you have a family, stability is #1. It’s not a matter of whether or not a house is a good investment; some of us just want to settle into a home.
