Jacksonville a Top City to Buy instead of Rent

[Cricket]

If you already bought why the hell worry about what you could be paying in today's market for the same house as long as you can make the mortgage (which you should have known anyway when you bought) and you plan to stay in the house for 5 - 6 years. If you bought it as an investment you bought it for the wrong reason. When I buy a car, I consider the manufacturer, whether it fits my needs, and if I can put at least 100k miles on the sucker. She is worth 20% less anyway the minute I leave the parking lot.  Worse for a house. I don't think about Joe Blow down the block in the same size house worth a whole lot less.

[mtraininjax]

The development of "Old San Jose" will be building new homes on the site, no more condos, as their is more interest in homes, than condos and really little money available for condos.

[Bativac]

If you already bought why the hell worry about what you could be paying in today's market for the same house as long as you can make the mortgage (which you should have known anyway when you bought) and you plan to stay in the house for 5 - 6 years.

It's funny you mention this - my monthly house note just went up over $100 thanks to not enough money in the escrow account for taxes, apparently. So now it's $125 more than I signed up for when I took on the mortgage.

It's not too big a deal but suddenly, I can see how people who "did the right thing" - were truthful about their income, put in a cash down payment, bought within their means, etc - can still get screwed.

[fsujax]

the same freaking thing just happend to me! last year I had a huge surplus in my escrow, now this year instead of getting a check I get a higher monthly payment. WTH???

[peestandingup]

If you already bought why the hell worry about what you could be paying in today's market for the same house as long as you can make the mortgage (which you should have known anyway when you bought) and you plan to stay in the house for 5 - 6 years. If you bought it as an investment you bought it for the wrong reason. When I buy a car, I consider the manufacturer, whether it fits my needs, and if I can put at least 100k miles on the sucker. She is worth 20% less anyway the minute I leave the parking lot.  Worse for a house. I don't think about Joe Blow down the block in the same size house worth a whole lot less.

Thats not it. Its that values fell so far, so fast that now people are literally stuck in their homes & cant sell them. So your "live in it for 5-6 years & shut up" mentality doesn't change that fact.

We've had our house for going on 4 years now & all signs point to a market that isn't coming back for a very long time (and it probably shouldn't anyway. it was an artificial bubble after all). We could probably stay in it another 4 years & still wouldn't be able to sell it for anywhere near what we owe. And there's no Gov program, no help from the banks, etc that is alleviating that part of this mess. Which is why it will just continue on & on. The system was setup with the presumption that housing always increases in value. It doesn't know what to do when they plummet & stay there (which is why I said people dont need to buy period unless they're really really sure that they will be staying in the house most of their lives).

Thats why people are ending up bailing on their homes. Its not that they're greedy or want a "better deal", its that they literally can't sell it when/if the time comes to move & have tried going through all the normal means to fix it (and there just arent any). People lose jobs & have to get work where they can these days, so being anchored to a house doesn't exactly make sense when your family can't eat. So "doing the right thing" sorta takes a backseat these days. The "right thing" is to be able to provide for your family no matter what, not be a servant to some no-name giant banking entity.

Granted there are those people who bought for the wrong reasons (flippers) or can pay & plan on staying for most of their lives but just want a better deal, but there's another side to it too.

[PeeJayEss]

Howdy!

Some of this assumes a logical market movements without major distortions though, doesn't it? Because from my recent experiences, the residential rental market around town is so completely distorted that I completely buy Trulia's rankings.

Agreed. Being relatively new to the area, I am pretty amazed by the disparity between home prices and rent. I haven't been here long enough to observe, and I don't feel like looking for actual "facts," but it seems as though the rent prices are more in line with 2006 or 2008 house prices rather than reflective of the current market (I imagine rent prices are supposed to lag behind home prices, but they seem pretty far behind).

Thats why people are ending up bailing on their homes. Its not that they're greedy or want a "better deal", its that they literally can't sell it when/if the time comes to move & have tried going through all the normal means to fix it (and there just arent any). People lose jobs & have to get work where they can these days, so being anchored to a house doesn't exactly make sense when your family can't eat. So "doing the right thing" sorta takes a backseat these days. The "right thing" is to be able to provide for your family no matter what, not be a servant to some no-name giant banking entity.

I don't think you can discount greed as a cause of the problem. Purchasing a home that is priced at the absolute limit of your means, when those means can change abruptly, is greedy. A great deal of foresight is required when buying a home. At the risk of sounding unsympathetic, if you are not absolutely sure of the security of your job, you should not count on that level of income for the next 30 years. Losing a job or your house losing a significant amount of its value is horrible, but those are possibilities one should consider when entering into a multiple decade agreement (just as the perpetual upward motion of housing prices should never be an assumption - and the housing bubble was fairly-widely forecasted prior to its bursting). I don't think you can fault the bank for asking you to make modest monthly payments after they give you 300k upfront to buy a house. Where I think you can fault them is in giving you 300k when you could only realistically afford 150k (and for packaging a bunch of these into magical bundles of confusion that they proceed to sell back and forth with other banks). But they get burned just as badly (if not worse) when you stop making payments. You are out a home that the bank owned 80% of anyway and get a black mark on your credit history. The bank, however, is out 300k and now has to unload a home that you may or may not have destroyed on your way out. Not to sympathize with them too much.

I agree that owning really is not right for everyone, especially someone that wants geographic flexibility. But if you are willing to stay within your means, even if you don't plan to hold onto it for many years, now is not the worst time you could think of to buy.

Maybe for basic necessities like housing, food & oil/gas, they should just cost whatever the materials & labor costs to produce them, instead of letting pure speculation determine their worth?? Seems like that's where we run into trouble.

Absolutely. Housing prices are completely artificial. Banks own most of them and the government subsidizes them so that they can give us houses we can't afford for 3.5% down. Actually, I'd put it mostly on the government.

[stjr]

I own a house and have rented houses to others.  Renting and owning are two different markets which explains why the relative relationship in monthly/annual costs fluctuates.

Renters typically consists of newcomers still learning the area, people who can't muster down payments (often young people just starting out or people with lower incomes who can't manage to save enough), those with lousy credit that can't get a mortgage, people who don't plan to stay "still" for more than a few months or years due to their itch to move on or changing job assignments, and those who just don't want the hassle of maintaining real estate (often single moms).  Homeowners are often the opposites of all the above. The numbers of people who find themselves in the above categories determines the demand for each and the resulting rental rates or home prices.

There aren't that many people who are indifferent to renting or owning and will make their decision strictly based on the best economic choice at the moment.

By the way, the strict economics of owning vs. renting can vary greatly by neighborhood.  It's probably almost always cheaper to rent in premium areas (such as waterfront, upscale subdivisions) as the ratio of rent to value will drop substantially.  In low priced neighborhoods, you are more likely to find the opposite.  Rents will only go so low or it's just not worth the hassle to a landlord to rent.  Also, the inherent value of having a roof over one's head is roughly the same for all of us.  After that, its just the amenities of the house, neighborhood, and location.  At the margin, the market will support less and less rent for greater increments of value.  For a property owner, it really makes almost no sense to rent out much more than a "starter" house if the landlord is looking for real investment returns.  Higher priced housing is rented usually because the landlord wants to just "carry" the property at minimal expense until certain other conditions are more favorable for disposal or moving back in.  Most neighborhoods fall in the big middle of rent vs. buy economics and one must do the research and run the numbers to truly see which is best.

If you know you are going to live in a home less than 7 to 10 years, it more likely pays to rent in most cases.  Not only is the cycle too short to weather the market's ups and downs but the transaction costs of buying and selling a home and taking out a mortgage are significant and will likely eat up much or all of the appreciation historically averaged for homes.