yep...there will be a small window of rising rates and stagnating prices that i'll probably ultimately aim for...
See...this rock/hard spot people like me are in is this....since i'm not selling a house affording me a larger chunk to put down...I'm losing because my income isn't growing 8% per year to keep up with the appreciation going on.
pretty frustrating...and all I can really do is root for a downturn. which then means the economy isn't doing well and/or i'm catching a falling knife.
looking at buying a house strictly as a territorial...as a place to live rather than an investment, is the only way I can justify buying anytime soon.
Buying a house should always be an investment for people who are not paying cash for one. With interest rates this low it even escalates. You are getting literally a zero return when you rent a property. Do some very well research on how to buy a house, where to buy a house, and what makes home values increase in 3-7 years. Always buy a house with the intentions of keeping it 5 years or more, selling anything sooner then that expect a loss is the rule of thumb. So long as the interest is a tax deduction and the housing market continues to increase, homes are better than any long term mutual fund.
The only way home prices are going to take a down turn for very long is if the economy truly crashes, and at that point if you aren't holding gold/sivler or other things of the such, it won't matter where your cash is.
They should be...If not, it's a major dick move to the realtor. Damn Window shoppers.
Great credit here too. Was offered 3.66 with 20% down, and 3.8% with 5-10% down on $300k yesterday. Went with the latter.
Flipping Houses 102..
It's all cyclical boys, coming around again. Everything in life is.
This crash, when it comes, will be worse than the previous crash.
If you were paying attention in 2008, pay attention again, as it's coming.
Back in 2008, their were signs. My biggest sign was when cab drivers told me
they only drive the minimum to keep hack license, meantime owned 10 properties
that they were flipping. That was the era of no-doc loans, people buying houses
worth 200,000, they were paying 300,000, planning on selling within a year for 400,000.
It can't sustain that growth level. Buying a house was meant to live there for the
duration ( or most of the duration ) of the entire 30 year mortgages that they took.
And conventional mortgages at that. That's 25% down, no, you do not walk away when
upside down, you live through it.
What has caused this again..Very easy, Wall St and Quantitative easing. For 9 years we
have had stimulus packages in place, ZERO % fed rate. AND, 89 billion a month pumped into
economy in the form of govt backed treausries..
And Wall St controls most of the Fed, that would be Goldman Sachs and the rest of the crooks.
When they package these mortgages that are upside down and sell them to the public..oops..
You ever heard the phrase, "Let's dress up this pig and sell it".. That's what they do..
So even though we are past these so called no-doc loans, the normalcy of putting down
a reasonable % i.e. 25% to buy a home, they still offer at little as 5% down of APPRAISED
value loans through Freddie/Fanny/Hud,etc..
Easy concept when you have no place else to put your money.
Whatever happened to savings accounts.?
Whatever happened to savings bonds.?
Where can you buy a CD that pays anything.?
Nowhere, nowhere and nowhere is the answer.
So all money must to to 2 places, Wall St and/or housing, which creates the bubble we are at again.
And if it goes up too fast, will come down faster..
Look up QE2 for yourself, and watch the Fed meetings, scary they just didn't raise rates, by them
not raising rates this time, makes the bubble bigger.
There was 1 Fed lady from KC area that voted to raise rates, the rest are paid off by Goldman..
Look up a guy names Milton Friedman who was a professor of economics at U of Chicago,
the natural flow of money vs bolstering economy and fixing markets,
the government needs to stop and let the markets decide for themself where it trades at...
Only then, will a fair price evolve..
If too big to fail did not wake you up..
If the big short did not wake you up...
Stay asleep..
It's all cyclical boys, coming around again. Everything in life is.
This crash, when it comes, will be worse than the previous crash.
If you were paying attention in 2008, pay attention again, as it's coming.
Back in 2008, their were signs. My biggest sign was when cab drivers told me
they only drive the minimum to keep hack license, meantime owned 10 properties
that they were flipping. That was the era of no-doc loans, people buying houses
worth 200,000, they were paying 300,000, planning on selling within a year for 400,000.
It can't sustain that growth level. Buying a house was meant to live there for the
duration ( or most of the duration ) of the entire 30 year mortgages that they took.
And conventional mortgages at that. That's 25% down, no, you do not walk away when
upside down, you live through it.
What has caused this again..Very easy, Wall St and Quantitative easing. For 9 years we
have had stimulus packages in place, ZERO % fed rate. AND, 89 billion a month pumped into
economy in the form of govt backed treausries..
And Wall St controls most of the Fed, that would be Goldman Sachs and the rest of the crooks.
When they package these mortgages that are upside down and sell them to the public..oops..
You ever heard the phrase, "Let's dress up this pig and sell it".. That's what they do..
So even though we are past these so called no-doc loans, the normalcy of putting down
a reasonable % i.e. 25% to buy a home, they still offer at little as 5% down of APPRAISED
value loans through Freddie/Fanny/Hud,etc..
Easy concept when you have no place else to put your money.
Whatever happened to savings accounts.?
Whatever happened to savings bonds.?
Where can you buy a CD that pays anything.?
Nowhere, nowhere and nowhere is the answer.
So all money must to to 2 places, Wall St and/or housing, which creates the bubble we are at again.
And if it goes up too fast, will come down faster..
Look up QE2 for yourself, and watch the Fed meetings, scary they just didn't raise rates, by them
not raising rates this time, makes the bubble bigger.
There was 1 Fed lady from KC area that voted to raise rates, the rest are paid off by Goldman..
Look up a guy names Milton Friedman who was a professor of economics at U of Chicago,
the natural flow of money vs bolstering economy and fixing markets,
the government needs to stop and let the markets decide for themself where it trades at...
Only then, will a fair price evolve..
If too big to fail did not wake you up..
If the big short did not wake you up...
Stay asleep..
I wrote this a few days ago, was working , never had a chance to post...
Since ten, 3 of the FEDS have come out against Janet Yellen , interest rates have to go up the free market will
decide the rates...
Another Fed voter just jumped ship, says rates must go up if what you say about economy is true...
St Louis Chairman James Bullard..she is crazy, thy had 9 years of zero interest and 89 billion of month pumped in...
time the free market takes over and let the chips fall, vs bailouts...
Since ten, 3 of the FEDS have come out against Janet Yellen , interest rates have to go up the free market will
decide the rates...
Another Fed voter just jumped ship, says rates must go up if what you say about economy is true...
St Louis Chairman James Bullard..she is crazy, thy had 9 years of zero interest and 89 billion of month pumped in...
time the free market takes over and let the chips fall, vs bailouts...
Housing is not so dramatically cyclical though...it is viewed as so since the last bubble and all the QE...but prior to that, hadn't it pretty much made a b line up?
I just ran some data in FactSet...and the avg house price is up 55% since 1999. From 169K to 264K
I believe inflation will ultimately, inevitably push housing higher in the long run. Prices are so absurd now that the days of putting down 25% will never come again because wages will never keep up...and this fact is creating a caste system here.
A lot of folk will not ever truly be able to afford housing at these prices...and they may eventually get fed up with this and take some kind of action.
The fact is...whether your house goes up or down in value for the next few years...it will eventually go back up whether from a healthy economy or straight inflation.
But rates will never get any lower than this point in time...making buying an overpriced house still a decent idea.
A 30 year mortgage on a $300K house now will put you around $2K monthly pmts all in with taxes, etc (in DFW) for a total of $778K.
A 30 year mortgage on a $300K house with a rate of 6% will put you at a monthly payment close to $2400 and a total of $896K
A 30 year mortgage on a $250K house with a rate of 6% will put you at a monthly payment close to $2000 and a total of $747K.
So which will happen first? It seems rates will rise...and that cools the market down a bit...but that heats up your payments. It's a lose lose altogether...but living in cramped quarters sucks.
Great reply...we are in same ballpark...
whats the solution..?
we live in an era that has 30 year mortgages, when I grew up it was 30 years and about 25% down
and called a conventional mortgage...the rules changed and flipping houses became a "game".
in England, and I am sure other countries, they now do 40 year mortgages...scary..
in in most of those cases,people are buying homes to live in for life...
my preference, if affordable, is to take 15 year mortgage and pay off the principle faster, vs making diuble payments,etc...
however, the housing market in my area, southeast Florida, palm beach, may be different than yours,.
i know the Texas market is crazy also, forget California, especially SF, they are similar to Manhattan..
point is, if their was somewhere else for people to put their money, as there was a handful a years back, a la CD's,
even savings accounts, this market would be priced fairer ..
you our ever hear of a starter home.?
thats where young married couple buys 1st house for 100,000, put 20-25% down, borrow 75,000,
and pay 800 a month mortgage plus 200 in taxes...
they do do not exist anymore...
come to Florida and see...scary...
fed needs to raise rates yesterday, and stop this bubble before it gets too big..w
whats the solution..?
we live in an era that has 30 year mortgages, when I grew up it was 30 years and about 25% down
and called a conventional mortgage...the rules changed and flipping houses became a "game".
in England, and I am sure other countries, they now do 40 year mortgages...scary..
in in most of those cases,people are buying homes to live in for life...
my preference, if affordable, is to take 15 year mortgage and pay off the principle faster, vs making diuble payments,etc...
however, the housing market in my area, southeast Florida, palm beach, may be different than yours,.
i know the Texas market is crazy also, forget California, especially SF, they are similar to Manhattan..
point is, if their was somewhere else for people to put their money, as there was a handful a years back, a la CD's,
even savings accounts, this market would be priced fairer ..
you our ever hear of a starter home.?
thats where young married couple buys 1st house for 100,000, put 20-25% down, borrow 75,000,
and pay 800 a month mortgage plus 200 in taxes...
they do do not exist anymore...
come to Florida and see...scary...
fed needs to raise rates yesterday, and stop this bubble before it gets too big..w
I guess I should add that $1 in 2000 is worth $1.40 today/end of 2015...that leaves 15% of pure appreciation...<1%/year.
So even if housing begins going down in nominal value at some point...it will still be appreciating in real numbers thanks to chopper Ben and the gang.
So even if housing begins going down in nominal value at some point...it will still be appreciating in real numbers thanks to chopper Ben and the gang.
