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  • From: tvoivozhd <tvoivozd AT infionline.net>
  • To: homestead AT lists.ibiblio.org
  • Subject: Re: [Homestead] The lull before the real estate storm
  • Date: Wed, 26 Jan 2005 13:40:30 -0500

Gene GeRue wrote:


How many people can afford to pay a half million dollars for a house?


Lots of people. I am continually impressed by the fact that there are thousands of people here in Phoenix who not only can pay a half million or more for a house but often do so for cash. My latest and greatest home sale so far will close in a few days for 725,000. The buyers are a fortyish couple who work hard in their own business, which among other contracts provides training software for the U.S. Army through a prime contractor.


tvoivozhd---If you own your own profitable business it is possible-----but the vast majority of the population works at a job for someone else . I won't look it up, but the median family income is probably forty to fifty thousand dollars


One of the motivations leading to the homestead life is the ability to live on a much lower income than in cities. So some homesteaders tend to forget how much money urbanites make. How about your children? I bet several of them can afford homes in this price range.

Yeah, three of them could, but they aren't that wasteful of money---which is a major reason why they could. afford it. The money is better employed in their business.'

The typical scenario in house investment is that most young people start modestly, fix up and improve, sell, and invest the profit in something more expensive that they can now afford with rising wages as they gain age and experience. The average cycle is now five years. California is a classic example of this pattern, and where it has been happening for the last thirty-five years. With the wonderful tax law now allowing a single to gain 250,000 profit or a couple to gain 500,000 profit tax-free after two years residency, there are many people who work this system as they do any job. Serious money has been and will be made.

There are always business ups and downs. As for the right time to buy or sell, the challenges are much the same no matter the price range. They are also similar in stock investments. The unassailable fact about real estate is that everyone needs it.

tvoivozhd---around here and everywhere else I have been, a large, multiple-story house is for conspicuous consumption, most of the space unused. Nobody, I repeat NOBODY really NEEDS that. I have also seen thousands of these reduced to tax-foreclosed empty shells big mansions along the Outer Drive in Chicago---even owned one once---a twelve-bedroom on a 3/4 acre lakefront lot forty miles from Madison, Wisconsin. Had two stoker-fed furnaces to heat it, and needed both. Impeccable shape, built entirely of beautiful oak, dining room could seat thirty comfortably Had a huge kitchen and pantry, cloakroom half the size of the average bedroom and a music room the same size.. Paid $4500 for it.



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