I just love it when random people drop by this blog and get the feeling that they need to set me straight. Here's a recent example of this phenomenon that I found particularly amusing.
The discssion (sic) is really lame for those who have a choice between buying a home or renting a home. For many there is no choice, they will rent all their lives as my mother did because she was far too poor to buy anything. For those with a choice the decision is to pay-off the landlord's mortgage or to pay-off your own. Millions of old people have some security because they own their own home free and clear. As for prices, they will go up, supply and demand ditcate (sic) this. No they will not come down. Population grows geometrically and land does not grow, there is a finite amount. People need to be in cities, that's where the jobs are and they by their numbers will drive up the price of homes.Let's see how many of the boilerplate pro-real estate, anti-bubble arguments Mr./Ms. anonymous managed to cram in there:
If you can buy without overextending you should. If you think you will make more money in the future and you are wiating (sic) to buy consider housing has gone up consistantly (sic) at about 7% per year. That is 7% of the average priced home today of $350,000 or $24,500/year. Wait long enough and you will not be able to buy. I should say no one can guarantee that homes will continue to go up, but baring (sic) a nuclear war and major distruction (sic), I think we have to go with the numbers.
Have a great day...
- paying the landlord's mortgage
- home ownership = security
- population growth
- not making any more land
- job creation
- home prices never go down
- buy now or be priced out forever!
At any rate, I hate to disappoint you anonymous, but I'm going to go ahead and continue this "really lame discssion" for a while longer. Maybe we'll see you again in about a year.
(anonymous comment, About the Blogger, 09.12.2006)
Update: An anonymous commenter below brings up a very good point:
The thing is, most of those arguments are ORDINARILY true. That's what makes the bubble so dangerous, people understand that homeownership is usually better than renting. What they don't understand is that there are some situations where buying is suicide.I totally agree that under ordinary circumstances, some of the above sentiments are true. I suppose that would make it conventional wisdom. The problem is that people are blindly accepting conventional wisdom in a very unconventional time, when critical thinking is called for.