4-5 years ago, I was strongly considering buying a condo. I went condo shopping with a friend that is a real-estate agent. What I wanted and what I could afford were two different things.
It did not make sense for me to buy a condo then since I would have pay more each month to live in less desirable building and location. The biggest attraction to buying was a fixed expense for a mortgage instead of paying rent that had gone up every year by $100/month at my apartment complex.
I never bought a condo. It turns out that would have been at the peak of the housing bubble and I would have been underwater in a serious way. As it is, I still have money in the bank and no stress for owing mortgage payments that be vastly overpriced.
A Bloomberg report came out today (technically tomorrow since it is 10 PM on the 7th here and the report is dated 11/8/11 at 12:325 AM) that 28.6% of US homeowners are underwater on their mortgages. That is a disaster that will take decades to unravel.
In related news, the SEC concluded that investers ‘misled’ by Citigroup lost $700M. The SEC is going to fine Citigroup $285M since all the investor losses were ”not necessarily” the result of misconduct. Citigroup sold a complex investment (aka derivative) to investors while simultaneously investing in a position that profited $160M by the investment tanking. The only Citigroup employee charged was a mid-level employee at a Citigroup subsidiary.
The good news is that Citigroup made $3,800M in profit in the third quarter this year. In response to the questions from Judge Rakoff who has a hearing on why this was not fraud, the SEC argued that the judge is not entitled “to evaluate claims that the government did not make and to inquire as to why they were not made.”
I am grateful I did not get stuck underwater on a mortgage like more than 28% of American homeowners are now. That was perhaps my biggest concern in buying a condo. It would have sucked big time to have that nightmare come true.
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