In article
<4761eb09-b7c1-4a36-8de5-5d07a223fc1e[at]y38g2000hsy.googlegroups.com> ,
iarwain <iarwain_8[at]hotmail.com> wrote:

- quote -

The problem that renting a house out does not solve the problem
for an owner. At the moment, they market price for rentals is
far less than what it costs to own a home. So by renting it out,
you don't earn enough to pay for the house, and as a result, many
of those have already gone into foreclosure. In addition, with
renting a house, the renters often use and abuse the house far
more than an owner would. As a result, the value of the house
drops rapidly when there are renters in place. If you are trying
to sell a house, either as the person with the mortgage, or as
the bank after taking the house back, the last thing you want is
a renter in there beating up the house and dogs going wee-wee on
the expensive carpet, or cats sharpening their claws on the
imported hardwood floors.

The reason that you see so many home forsale is that people
who already had a house were buying 2nd and 3rd homes on speculation.
The sales of home to home were mostly between speculators. When
the music stopped, a group of speculators all got caught with
2 or 3 homes that they suddenly couldn't sell, couldn't rent,
and couldn't pay for.

The housing issue is not going to be solved until the current
excess inventory of houses is absorbed by new homeowners. That
will take time. The faster prices fall on existing homes, the
more quickly the crisis will be over.

BTW, the houses that you see forsale are only the tip of the
iceberg. In the community where I live, a 49 unit townhouse
association, I know of several people who want to sell, but don't
even bother listing because they are upside down at the new lower
values, or see the same unit across the street that has been for
sale for 18 months.

People say that we have never seen a market like this before.
That has been true every day since Ogg sold Nog his first rock
home and clay tablet stock certificate.

-john-

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John A. Weeks III * * * * * 612-720-2854 * * * * * *john[at]johnweeks.com
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I live in a small town. I can't help but notice there are for sale
signs all over the place here, I've never seen so many houses for sale
at once. But at the same time, I know someone who has been trying to
find a place to rent, and there is very little available. Doesn't
that seem odd? If people aren't buying houses shouldn't that open up
an opportunity for renters? Where is everybody living? Unless
everybody is just moving out of town it's a puzzle to me. Is this an
unusual situation or is this happneing in your area also? What is
going on, anybody know?

------ Misc.invest.financial-plan is a moderated newsgroup where Moderators strive
to keep the conversations on-topic for financial planning. Other posting
guidelines include a request for brevity and another for trimming posts to
which we respond. For all of the other tips and suggestions, see "FROM THE
MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the
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