# Housing prices:Who the hell is buying all these houses anyway? **URL:** \ **Category:** Great Debates\ **Created:** [April 30, 2005, 5:30pm UTC](https://boards.straightdope.com/t/housing-prices-who-the-hell-is-buying-all-these-houses-anyway/301871 "2005-04-30T17:30:09Z")\ **Posts on this page:** 11\ **Page:** 5
**Author:** ![Plan\_B](https://avatars.discourse-cdn.com/v4/letter/p/3ec8ea/32.png) [@Plan\_B](https://boards.straightdope.com/u/Plan_B)\ **Post date:** [May 7, 2005, 10:26pm UTC](https://boards.straightdope.com/t/housing-prices-who-the-hell-is-buying-all-these-houses-anyway/301871/81 "2005-05-07T22:26:31Z")
> [@Sam Stone](#): > > What I don’t understand is why a shack sits on a piece of property worth that kind of money. You’d think if someone could afford a half-million dollars for a house, they’d buy the lot, raze it to the ground, and put a modern house on it. That’s what happens a lot here in Edmonton - in the prime real-estate areas (river valley, lots overlooking the city, etc), the real-estate is just too valuable to allow some 900 sq foot shack. > > I mean, if it’s an old historical house, that’s one thing. But those New Jersey houses look like dumps. > > Is it zoning laws that prevent those areas from being recycled? Having been one of those guys who came darn close to buying some wrecks at various points over the years let me tell you what I think it is. I think the guy buying the $500,000 dump is stretching like crazy. He knows the house is overpriced but there’s nothing else at that price range and as everyone knows it’s always better to buy than to rent. (Thank God I never believed that- see above post). So he borrows from his parents, etc. and gets the money for the down payment. He just doesn’t have the money to raze, design and build on the new site. Nor does he have the money to live in his apartment for the six months that he’s supporting the new place. Just my guess. ---
**Author:** ![Jonathan\_Chance](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/jonathan_chance/32/701_2.png) [@Jonathan\_Chance](https://boards.straightdope.com/u/Jonathan_Chance)\ **Post date:** [May 7, 2005, 11:38pm UTC](https://boards.straightdope.com/t/housing-prices-who-the-hell-is-buying-all-these-houses-anyway/301871/82 "2005-05-07T23:38:09Z")
> [@Sam Stone](#): > > It scares me too, but it makes economic sense for a lot of people. When you can get mortgage money for 5%, and you’re sitting on hundreds of thousands of dollars of equity, it doesn’t make sense to take out 10% car loans and 8% lines of credit. And it makes even less sense to maintain 18% balances on credit cards. So refinancing and using it to pay off higher cost debt makes sense. > > But the problem is that once the credit cards are clear and the overall monthly payments are low, it’s just too easy to take on even more debt. Where people get in trouble is when they load their credit cards up with $20K in purchases, then pay it off by refinancing the mortgage, and then just run the credit cards back up again. And far too many people are doing that. And that’s what’s insane about this. The guy in that article that’s refinanced 5 times in 5 years? What’s the point of that? What’s he doing with the money? I refinanced our place in Virginia in 2001. The status quo had changed so much that I refinanced from a 30 to a 20 year note and still reduced my payment. THAT makes sense. Or refinancing to consolidate debt and get the mortgage interest deduction. That’s great. But it’s not so great if you’re only going back into consumer debt again. That’s a recipe for disaster. Not to mention that all of this is continually based on the fallacy that ‘there is ALWAYS a buyer for what you want to sell’. The simple fact is that while it looks that way it’s simply not true. Sooner or later the music stops and someone is left without a seat. And when that happens bad things occur. ---
**Author:** ![Metacom](https://avatars.discourse-cdn.com/v4/letter/m/ecae2f/32.png) [@Metacom](https://boards.straightdope.com/u/Metacom)\ **Post date:** [May 7, 2005, 11:51pm UTC](https://boards.straightdope.com/t/housing-prices-who-the-hell-is-buying-all-these-houses-anyway/301871/83 "2005-05-07T23:51:25Z")
> [@Jonathan Chance](#): > > Not to mention that all of this is continually based on the fallacy that ‘there is ALWAYS a buyer for what you want to sell’. The simple fact is that while it looks that way it’s simply not true. Sooner or later the music stops and someone is left without a seat. And when that happens bad things occur. Well… Someone isn’t necessarily left without a seat if the people playing the game periodically fuck and make a new player. 😉 ---
**Author:** ![flickster](https://avatars.discourse-cdn.com/v4/letter/f/7bcc69/32.png) [@flickster](https://boards.straightdope.com/u/flickster)\ **Post date:** [May 8, 2005, 3:49am UTC](https://boards.straightdope.com/t/housing-prices-who-the-hell-is-buying-all-these-houses-anyway/301871/84 "2005-05-08T03:49:09Z")
> [@flickster](#): > > Damn, I was still logged into their database, maybe that’s why the link didn’t work. Now logged out, let’s try again. > [Try This](http://www.har.com/search/engine/indexdetail.cfm?mlnum=3536975&class=1&leadid=6&sTYPE=0&backButton=Y) Just to show I didn’t cherry pick an Houston market oddity Check [This](http://har.com/search/engine/indexdetail.cfm?mlnum=2892859&class=1&leadid=6&sTYPE=0&backButton=Y), [This](http://har.com/search/engine/indexdetail.cfm?mlnum=2973798&class=1&leadid=6&sTYPE=0&backButton=Y), and [This](http://har.com/search/engine/indexdetail.cfm?mlnum=8184548&class=1&leadid=6&sTYPE=0&backButton=Y) ---
**Author:** ![Quartz](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/quartz/32/267_2.png) [@Quartz](https://boards.straightdope.com/u/Quartz)\ **Post date:** [May 8, 2005, 8:36am UTC](https://boards.straightdope.com/t/housing-prices-who-the-hell-is-buying-all-these-houses-anyway/301871/85 "2005-05-08T08:36:25Z")
Y’all should be glad you don’t live in SE England. I have a 3-bedroom - 2x 10’x12’ and 1x 8’x8’ - semidetached house in a non-premium area and it’s worth over US$300K ---
**Author:** ![fifty-six](https://avatars.discourse-cdn.com/v4/letter/f/5daacb/32.png) [@fifty-six](https://boards.straightdope.com/u/fifty-six)\ **Post date:** [May 8, 2005, 10:19am UTC](https://boards.straightdope.com/t/housing-prices-who-the-hell-is-buying-all-these-houses-anyway/301871/86 "2005-05-08T10:19:22Z")
Alan Greenspan has not critisized our exuberance as being irrational so we may continue to buy willy-nilly with low cost money live happily with continued price increases and instant wealth. There is no top till it drops… ---
**Author:** ![CBCD](https://avatars.discourse-cdn.com/v4/letter/c/9fc348/32.png) [@CBCD](https://boards.straightdope.com/u/CBCD)\ **Post date:** [May 8, 2005, 12:26pm UTC](https://boards.straightdope.com/t/housing-prices-who-the-hell-is-buying-all-these-houses-anyway/301871/87 "2005-05-08T12:26:35Z")
> [@flickster](#): > > Just to show I didn’t cherry pick an Houston market oddity > Check [This](http://har.com/search/engine/indexdetail.cfm?mlnum=2892859&class=1&leadid=6&sTYPE=0&backButton=Y), [This](http://har.com/search/engine/indexdetail.cfm?mlnum=2973798&class=1&leadid=6&sTYPE=0&backButton=Y), and [This](http://har.com/search/engine/indexdetail.cfm?mlnum=8184548&class=1&leadid=6&sTYPE=0&backButton=Y) I’ll take [# Selection Number Two from your offerings](http://har.com/search/engine/indexdetail.cfm?mlnum=2973798&class=1&leadid=6&sTYPE=0&backButton=Y), flicktster. Please tell me about the neighborhood. $190K - wow! ---
**Author:** ![flickster](https://avatars.discourse-cdn.com/v4/letter/f/7bcc69/32.png) [@flickster](https://boards.straightdope.com/u/flickster)\ **Post date:** [May 8, 2005, 1:04pm UTC](https://boards.straightdope.com/t/housing-prices-who-the-hell-is-buying-all-these-houses-anyway/301871/88 "2005-05-08T13:04:51Z")
> [@CBCD](#): > > I’ll take [# Selection Number Two from your offerings](http://har.com/search/engine/indexdetail.cfm?mlnum=2973798&class=1&leadid=6&sTYPE=0&backButton=Y), flicktster. Please tell me about the neighborhood. $190K - wow! It’s located in a mostly residential area in the Northeastern part of the Houston metro area near Lake Houston. I’ve been out in that area a couple of times and it’s like the majority of the “bedroom communities” in the Houston suburbs. It’s about 15 miles to Bush Intercontinental Airport and 30 miles to downtown Houston. ---
**Author:** ![Wesley\_Clark](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/wesley_clark/32/20581_2.png) [@Wesley\_Clark](https://boards.straightdope.com/u/Wesley_Clark)\ **Post date:** [May 8, 2005, 2:58pm UTC](https://boards.straightdope.com/t/housing-prices-who-the-hell-is-buying-all-these-houses-anyway/301871/89 "2005-05-08T14:58:11Z")
> [@flickster](#): > > It’s located in a mostly residential area in the Northeastern part of the Houston metro area near Lake Houston. I’ve been out in that area a couple of times and it’s like the majority of the “bedroom communities” in the Houston suburbs. It’s about 15 miles to Bush Intercontinental Airport and 30 miles to downtown Houston. Jesus, i’m checking [realtor.com](http://realtor.com) and alot of 3000 sq ft homes built in the last 30 years are only 150k in Houston. I’d move there if it weren’t 110F all the time. ---
**Author:** ![Spoke](https://avatars.discourse-cdn.com/v4/letter/s/a88e57/32.png) [@Spoke](https://boards.straightdope.com/u/Spoke)\ **Post date:** [May 10, 2005, 8:40pm UTC](https://boards.straightdope.com/t/housing-prices-who-the-hell-is-buying-all-these-houses-anyway/301871/90 "2005-05-10T20:40:38Z")
> [@Wesley Clark](#): > > Jesus, i’m checking [realtor.com](http://realtor.com) and alot of 3000 sq ft homes built in the last 30 years are only 150k in Houston. I’d move there if it weren’t 110F all the time. There’s the rub, all right. I’ll bet the electricity bill in Houston runs more than a typical mortgage in most other towns. ---
**Author:** ![Wesley\_Clark](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/wesley_clark/32/20581_2.png) [@Wesley\_Clark](https://boards.straightdope.com/u/Wesley_Clark)\ **Post date:** [May 10, 2005, 9:37pm UTC](https://boards.straightdope.com/t/housing-prices-who-the-hell-is-buying-all-these-houses-anyway/301871/91 "2005-05-10T21:37:40Z")
> [@spoke-](#): > > There’s the rub, all right. I’ll bet the electricity bill in Houston runs more than a typical mortgage in most other towns. Taxes are also high too, many of those homes had $4500 a year in property taxes. Plus in another thread people talked about how flood insurance was alot higher so a 150k house could end up with 1400 a month in payments in the end. [Previous page](https://boards.straightdope.com/t/housing-prices-who-the-hell-is-buying-all-these-houses-anyway/301871.md?page=4)