Single, but Laying Down Roots [Now, 21% of all home purchases are by single women buyers]

The NY Times - Business Section ^ | Jan 18, 2004 | ABBY ELLIN

[Ladysmith]

Huh! Bugger me! I'm one who is usually behind the times. LOL

[Ronaldus Magnus]

Six desperate responses to one post, that must be a record! All that verbage and not one of your anecdotes backs up the brainless and still un-retracted assertion you made in post #5 that real estate prices in Florida will never go down. Really, your half-witted claim sounds like the kind of lie a deceitful real estate agent would make to a potential buyer.

[sitetest]

Dear tortoise,

Your assumptions are relatively unrealistic.

Most folks in 1971 did not pay $60,000 cash for a house. More likely they put 10% or maybe even 20% down, and paid some closing costs. Perhaps transaction costs were in the range of $2000 - $3000 for a total $14,000 or $15,000 out-of-pocket cash. In most areas of the country, the closing costs would have been significantly lower, but in Maryland, because we have very transfer taxes, etc., that wouldn't be too far off.

Interests rates were still fairly low at that point (I remember my parents got 7.25% in 1969), and the mortgage was likely around $350 per month for principal and interest. I don't know what rent for this particular house might have been in 1971, but I'd be willing to bet if the house is now worth $500,000, to rent it would currently run about $2500 per month or more. In 1971, a house worth about $60,000 would have rented in this region for $400 - $500 per month. I'd wager that total rent over 33 years likely would have exceeded total mortgage payments, including taxes and insurance. In the Washington area, property taxes on a $500,000 property would range from about $400 per month to about $750 per month, depending on the jurisdiction. Insurance could easily be less than $100 per month. So, assuming the fellow paid his 30-year mortgage all the way to the end, as he made his last, 360th payment, he likely paid something like $850 - $1200 per month. Of course, after that 360th mortgage payment, he's just paying taxes and insurance.

Now, that doesn't take into account things like maintenance, etc. Yet, one can see that over the course of a few decades, the advantage of the mortgage vis a vis rent becomes dramatic, and the added savings could easily pay for upkeep, renovations, etc.

And we haven't taken into account the tax savings. In the early years of the mortgage, when most of the principal and interest is INTEREST, the tax savings are significant. In the later years, as property taxes increase, they, too, are tax-deductible. Of course, none of the increasingly-escalating rent payments is ever deductible.

In the meanwhile, the gentleman's likely investment of about $15,000 is now worth about $500,000. That's a compounded rate of return of about 11%. Not all that bad. That's the great thing about leverage. If I put 20% down, even a 4% annual increase in the value of my property is actually a 25% increase in the value of my equity.

Again, homeownership doesn't make most folks wealthy. But in most cases, for folks who plan to live for some time in their home, homeownership can be one of the ways for regular folks to accumulate modest wealthy.


sitetest

[summer]

Re your post #242 - no links, again, I see. Just insults and your opinion. Maybe there's no links to info on your posts because there is no info to support your opinion. Just a thought...

[summer]

But in most cases, for folks who plan to live for some time in their home, homeownership can be one of the ways for regular folks to accumulate modest wealthy.

I agree. Thanks for your thoughtful posts, sitetest.

[summer]

LOL...

[sitetest]

Thanks.

[Ronaldus Magnus]

Maybe there's no links to info on your posts because there is no info to support your opinion. Just a thought...

The burden of proof is with the one who made the assertion. Nothing you have posted substantiates your preposterous statement in post #5 that real estate values in Florida will never fall. It's a ludicrous thing to say, and spending all this time defending it is making you look like the fool and liar you probably are.

[summer]

LOL...your posts are a riot. Thank you for entertaining me here.

[summer]

:)

[k2blader]

this trend of women buying their own homes, is, to me, an encouraging and uplifting trend to follow.

Agreed.