NY Houses 4 Sale: If I had only done this and that back then.....

December 20, 2006

If I had only done this and that back then.....

The other night a friend of my husbands was over and we were all chatting about the "if I only did this" and "If I would have only known" type stories. The two men have known each other since they were six. They went all through elementary school and high school together. While we were chatting they remembered a time in the late 80's - (they were in their early 20's at the time) they both had been working and saving while living at home, so they were able to save up a good chunk of money each on their own. They had an opportunity to buy a two family home, on a corner lot, R4 Zoning with a property size of 60x110, in College Point. They remember that at the time the asking price for this house was $220,000. They would have been able to purchase the home for $200,000. Out of fear and not knowing "what the market would do" they backed out of the deal. They both felt relieved that they were not going to buy any real estate and "burden" themselves with a mortgage payment. Their parents were happy that they did not buy this property for the fact that they would have gone "bankrupt".

I know that while I was growing up, not one person ever talked to me about buying real estate. Not one person said to buy or not to buy. This was not ever taught to my generation. I was taught to work and save - work and save. That was it. But what was I saving for?

Fast forward to today: IF they would have bought that property and held on to it or rented it out - they both would have made alot of money. Today the going price for that property would have been well over $650,000, if not more. But they opted to go a different route. My husband bought a co-op and sold that 12 years later for the same price that he bought it for. My husband's friend opened a gym and is currently selling that for about $100,000 more than what it cost him 15 years later. What would have been the better route to go? You tell me?

Back in the 90's the real estate market bottomed out. The interest rates were high (I know this because my husband was paying over 12% at the time). People were foreclosing on their homes left and right. There was no equity and the homes just were not selling - the banks would not lend even millionaires money. This is what people remember and this is what I hear people tell me is going to happen or I should say - is happening today. Well, I beg to differ.

There are alot of things that are different today than they were in the 90's. Maybe there is a slow deflating of price homes but in all honesty there is no bubble bursting here. Yes, there is more inventory but that has nothing to do with the foreclosures. There will always be foreclosures. That is a fact. Just like there will always be real estate sales. People's needs will always change and they will have to sell their homes. I don't think that ALL the homes that are currently up for sale are people who are choking to pay their next mortgage payment.

It is true the prices of homes are coming down - but it did not crash. No one can tell me that buying a home to live in is a stupid thing to do. I am not standing on my soapbox just because I want people to buy real estate from me - if you can't afford it - don't buy it. But still even today buying a house is better than renting and paying someone else's mortgage. But do it within your means and do not treat your home as if it is bank of America - that is when you will get into trouble.

I actually think that had people bought a home and treated it like a castle and a retirement cushion, instead of an ATM then no one would be feeling or thinking that the market is crashing. Its not crashing, at least not where I am standing.

Posted on December 20, 2006 in Real Estate - NY | Permalink

Tags: Buying, college point, housing bubble, real estate, whitestone