Mayo420 MayFest tours

[sgrizzle]

Did anyone who went on a tour take any pictures?  If so please post them.  These lofts will be a great addition to downtown.  And I agree, it would be nice to see one of those older mostly vacant buildings (ahem, Tulsa Club) turned into raw space for condos that you can buy.  I know I would be very interested in something like that.

David Schutler posted one on facebook:
http://www.facebook.com/photo.php?pid=3824203&op=1&o=global&view=global&subj=1430046218&id=608609419

[rdj]

There is more and more groundswell against the Washington politician & Madison Ave ad men created myth that owning your home is the "Great American Dream".

According to Money Magazine the 2009 median price for a home in Tulsa was $111k.  Over 30 years at 6% interest you would pay $240k in principal and interest.  Looking at it from a historical perspective, if you purchased a home in Tulsa for $42k in 1980 assuming it kept up with inflation it would be worth $111k today, or the median home price, a "gain" of $68k.  Now, let's assume you put 20% down on that home, secured a mortgage for $33k at 13.20% (the cost of a mortgage in May 1980), made every payment for 30 years and never refinanced and made necessary repairs/improvements to keep in the same condition as at purchase.  Total principal & interest?  $133k or $22k more than what the inflation adjusted value would be.  That amount doesn't include the cost to buy, sell, taxes, insurance or what the basic necessary repairs/improvements would be.  So you'd be in the "hole" at payoff and need to "pay yourself rent" for the next 5-6 ($320/mo = former mortgage payment) years to be back to even.

Now, if you say the house appreciates at 5% a year (a fair Tulsa MSA appreciation) for 30 years your home would be worth $182k in 2010.  At that point you would be pretty close to break even depending upon the amount of maintenance the home would have required.

As a personal example, I purchased home around TU in 2004 for $89k.  I sold it last year for $126k.  I had made about $10k in improvements beyond the standard upkeep.  Our mortgage was at 6.65%, at closing I recieved a nice check, but then I looked at the statement and saw that I had paid more in interest in those 5 years than I was was making after improvements, my original buying fees & my selling fees.

Living in a rented apartment is a much less risky (no repair budget, meager renters insurance) and in some ways financially savvy way to live.  Major urban areas all over the world have a much lower home ownership % than Tulsa.  NYC had record homeownership levels in 2007 and still only 1/3 of units were owner occupied.  In Tulsa roughly 60-70% of all housing units are owner occupied.  Last I checked personal wealth in NYC was a bit higher than Tulsa.  Obviously there are other conditions that attribute to that, but the point it renting seems to be good for 2/3 of the residents.

As Americans (especially in middle America, where land is cheap) we've allowed the Realtors & home builders coalitions (and politicians with tax credits, deductions & manipulating interest rates) to shape our mindset.

Sorry for the rant, I'm a homeowner myself and think owning a home is great, but many Americans are not fully aware of the cost of owning a home.  As part of the renaissance of our downtown we need to show people that renting a downtown unit is not financial suicide.  As a renter you have much more flexibility to change careers, relationships, etc.

[Conan71]

If owning real estate is a bad deal, then 2/3 of NYC real estate would not be owned by investors who are renting out the property.  I suspect they aren't doing it for long term loss.

I agree rental properties have their place as does ownership.  There are good reasons to rent as you mentioned: if someone anticipates their job or life circumstances will change in the near future, or if they don't want maintenance issues.  Some people can't buy because of poor credit or they don't have enough cash for a down payment.  Perhaps we would not have been through the ugly burst of the housing bubble if the government hadn't espoused the notion that everyone should have a shot at the dream of home ownership.

One of the bigger leaps the example you cited makes is assuming anyone keeps a home to the full term of their mortgage,  that no one pays down their mortgage early by making extra principal payments, nor that the owner didn't refinance to a lower interest rate, or cash out equity at one point which they invested into a business or other substantial investment which has made many returns, or invested in a remodel which further increased the value of the home.  The example also doesn't take into account that the gain in equity could have been cashed out at some point via sale and that equity ploughed into a larger home which also appreciated, nor does it take into account that someone might have paid that house off in 15 years, bought another house and they've been collecting rent on the original house for the past 15 years.

I realize not everyone falls into the perfect scenario.  From a static example, I get the point the article is making, and if someone could rent for 30 years at a rate which allowed them to save money to an amount equal to what they would have in home equity, then rent isn't such a bad investment.  However, after the 360th payment (assuming no re-fi's along the way), the homeowner is done paying.  With rent, you continue to pay rent for another 20 or 30 years or how ever much longer you live.

[godboko71]

Could a moderator split off the to rent or own debate?

[Cats Cats Cats]

Are there any new condo's downtown going in?

[TurismoDreamin]

I went on this tour during Mayfest. We only toured one room and it was Suite 803.
http://www.mayo420.com/floorplan803.html
It was much more spacious than I had originally thought. The living area and kitchen were loaded with windows and lit up the place nicely. The bedrooms aren't very big but that may have been due to the king-sized beds they placed in each room. Overall, it was nice, but I'm just not interested. Like what others have said, why pay so much for something you'll never own...

[BKDotCom]

According to Money Magazine the 2009 median price for a home in Tulsa was $111k.  Over 30 years at 6% interest you would pay $240k in principal and interest.

You can also pay off your credit card with minimum payments...  nobody thinks that's a good idea.. why is it OK on the biggest debt anyone takes on?

I've worked very hard to put more than the minimum towards our home's principal..   Looks like I'm going to end up paying a total of $55K in interest for the life of my median Tulsa home's mortgage.  Not too shabby.. and I'm aware most can't do this.   But pretending interest is the same as rent (like rent, it's what the homeowner is throwing away).. and figuring in appreciation  ( a meager amount for our average Tulsa home )..    When the house gets payed off, our "rent" will have averaged $193/mo  ($480 without appreciation)...  And the average will continue to go down every month I'm no longer paying interest.

I've obviously payed more than $193/mo... but I consider the rest money saved/invested/put-away/etc.

[nathanm]

You can also pay off your credit card with minimum payments...  nobody thinks that's a good idea.. why is it OK on the biggest debt anyone takes on?

I've worked very hard to put more than the minimum towards our home's principal..   Looks like I'm going to end up paying a total of $55K in interest for the life of my median Tulsa home's mortgage.  Not too shabby.. and I'm aware most can't do this.   But pretending interest is the same as rent (like rent, it's what the homeowner is throwing away).. and figuring in appreciation  ( a meager amount for our average Tulsa home )..    When the house gets payed off, our "rent" will have averaged $193/mo  ($480 without appreciation)...  And the average will continue to go down every month I'm no longer paying interest.

I've obviously payed more than $193/mo... but I consider the rest money saved/invested/put-away/etc.

Owning is right for some people and it's not right for others. Some people prefer not to take the risk of losing money on the house, for example. Some prefer to let others worry about maintenance issues.

Owning a house may turn out to be a great deal if you manage to find one without any hidden issues that need fixing and time the market correctly. It also might turn out to be a terrible deal.

During the bubble, in a lot of areas, rent was cheap compared to a mortgage. Needless to say that's when you don't want to be owning. When rent is significantly more expensive than a mortgage, it may be time to think about buying a house. It is by no means always best to own, especially given how illiquid houses can be at times.

[SXSW]

I took a tour of the two model units last night and was very impressed.  They are the two corner units along Main on the 8th floor.  It was too dark to take pics of the views but they are very nice.  Both are 2 bedroom/2 bath and rent for $1800/month.  Here is a pic of the kitchen:

[OpenYourEyesTulsa]

How are they doing renting this out?  Is it almost full?

[TheTed]

They finally took down that scaffolding that created a creepy (esp. at night) sidewalk tunnel. For joy!!!