I would like to tell you that you really shouldn’t be thinking about the fact that you’re paying for property you don’t own, or you shouldn’t even be thinking at all about the fact that you’re paying for property you don’t own.
Searsport is one of those rare real estate deals that is actually worth it. When I bought my beachfront house in 2008, I immediately bought a piece of beachfront property back in 1997. I didn’t know that I was paying for that property until years later when I visited the property and found that it had been sitting vacant for 10 years. When I went to sell it, I found out that the property was actually worth double what I paid for it.
When I finally bought my home in 2013, I had the same feeling that I had when I bought my house in 2009. I still feel it. I paid $70/year for the property and it was sitting in my driveway all the time. I had no idea what I was paying for the property, but I actually paid for it. It was a $40/year deal, but I paid it myself.
If you buy a house with a loan or a mortgage, it is going to be worth less than you could have paid for it, and therefore they are going to have a value drop. That is the theory that I used with my mortgage.
I was just thinking about what’s going to happen. I was thinking that I would be able to get out of my house and walk out the door (or walk into the kitchen) and leave the house and go to work. It was a little scary. It felt like I was making progress on my first mortgage, and you know what that looks like when you make it through the door into the kitchen.
The fact is that it’s not a good sign. It’s not a good sign that the drop-off is going to be as drastic as the drop off in prices. If it is that dramatic, then it’s a sign that something is amiss. A sign that you should have gotten more than you paid for. A sign that you should have paid for it a lot more.
The drop off in home prices and home sales in the first quarter of 2017 was the worst since the S&P 500 index hit a record in the third quarter of 2007. In fact, it’s more than the entire first quarter of 1987. The drop off in both home sales and home prices was the worst since the late 1990s recession. Even more disturbing was the fact that we haven’t seen a major increase in home prices since the beginning of the Great Recession.
This is not to say that we should not be concerned about these recent changes in the economy. We have a strong economy and there are many ways to improve it. But we have to be careful not to make the market too much of a bubble.
I read somewhere, and it has been confirmed, that the drop in home values was not because of something as mundane as foreclosures. It was more likely because the new home buyers were more likely to be looking for a house in the high price ranges and the prices they were getting for them were much lower than the prices they were getting for their old homes. This is why we have seen a huge increase in buyer activity during the housing market downturn.
I agree. And it’s not only because of what happens in the market. The other reason is the fact that it’s easier to buy a home in a high price range. And when you have a big enough down payment on a house in a high price range, it’s not so difficult to acquire a home. I think this is why so many people are buying houses in the high price ranges.