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January 9, 2008 at 9:41 AM #132945January 9, 2008 at 9:43 AM #132661DWCAPParticipant
When factoring in increased costs of living, where are people in their late 20’s to early 30’s with good incomes but short (ie less then 10 year) credit histories and the resulting higher interest rates gonna get that increased buying power? Using the 5.1 income/cost ratio, median prices should be $300000. This is a roughly 10%-20% premium to rents, and low and behold down payments are usually in that range.
As for down payments, ofcourse people use to do it. They always have, always will. I have been saving money since I was 14. I have my down payment. Could have put 20% back in 2005 at the peak. I got lucky, most are not as lucky as I am. What I ment by that is it will affect demand. I dont care how much you want a house, if the bank wont lend and you make too much for some of these questionable government sponsored down payment programs, you cant buy. Prices will have to reflect this.Sorry, post cut off half way.
January 9, 2008 at 9:43 AM #132847DWCAPParticipantWhen factoring in increased costs of living, where are people in their late 20’s to early 30’s with good incomes but short (ie less then 10 year) credit histories and the resulting higher interest rates gonna get that increased buying power? Using the 5.1 income/cost ratio, median prices should be $300000. This is a roughly 10%-20% premium to rents, and low and behold down payments are usually in that range.
As for down payments, ofcourse people use to do it. They always have, always will. I have been saving money since I was 14. I have my down payment. Could have put 20% back in 2005 at the peak. I got lucky, most are not as lucky as I am. What I ment by that is it will affect demand. I dont care how much you want a house, if the bank wont lend and you make too much for some of these questionable government sponsored down payment programs, you cant buy. Prices will have to reflect this.Sorry, post cut off half way.
January 9, 2008 at 9:43 AM #132851DWCAPParticipantWhen factoring in increased costs of living, where are people in their late 20’s to early 30’s with good incomes but short (ie less then 10 year) credit histories and the resulting higher interest rates gonna get that increased buying power? Using the 5.1 income/cost ratio, median prices should be $300000. This is a roughly 10%-20% premium to rents, and low and behold down payments are usually in that range.
As for down payments, ofcourse people use to do it. They always have, always will. I have been saving money since I was 14. I have my down payment. Could have put 20% back in 2005 at the peak. I got lucky, most are not as lucky as I am. What I ment by that is it will affect demand. I dont care how much you want a house, if the bank wont lend and you make too much for some of these questionable government sponsored down payment programs, you cant buy. Prices will have to reflect this.Sorry, post cut off half way.
January 9, 2008 at 9:43 AM #132913DWCAPParticipantWhen factoring in increased costs of living, where are people in their late 20’s to early 30’s with good incomes but short (ie less then 10 year) credit histories and the resulting higher interest rates gonna get that increased buying power? Using the 5.1 income/cost ratio, median prices should be $300000. This is a roughly 10%-20% premium to rents, and low and behold down payments are usually in that range.
As for down payments, ofcourse people use to do it. They always have, always will. I have been saving money since I was 14. I have my down payment. Could have put 20% back in 2005 at the peak. I got lucky, most are not as lucky as I am. What I ment by that is it will affect demand. I dont care how much you want a house, if the bank wont lend and you make too much for some of these questionable government sponsored down payment programs, you cant buy. Prices will have to reflect this.Sorry, post cut off half way.
January 9, 2008 at 9:43 AM #132950DWCAPParticipantWhen factoring in increased costs of living, where are people in their late 20’s to early 30’s with good incomes but short (ie less then 10 year) credit histories and the resulting higher interest rates gonna get that increased buying power? Using the 5.1 income/cost ratio, median prices should be $300000. This is a roughly 10%-20% premium to rents, and low and behold down payments are usually in that range.
As for down payments, ofcourse people use to do it. They always have, always will. I have been saving money since I was 14. I have my down payment. Could have put 20% back in 2005 at the peak. I got lucky, most are not as lucky as I am. What I ment by that is it will affect demand. I dont care how much you want a house, if the bank wont lend and you make too much for some of these questionable government sponsored down payment programs, you cant buy. Prices will have to reflect this.Sorry, post cut off half way.
January 9, 2008 at 12:28 PM #132781anParticipant5yearwaiter,those “house” at the end of Avineda Venusto are manufactured homes. They also have no lot and no drive way. That’s a huge difference than these MM homes we’re talking about now.
January 9, 2008 at 12:28 PM #132967anParticipant5yearwaiter,those “house” at the end of Avineda Venusto are manufactured homes. They also have no lot and no drive way. That’s a huge difference than these MM homes we’re talking about now.
January 9, 2008 at 12:28 PM #132971anParticipant5yearwaiter,those “house” at the end of Avineda Venusto are manufactured homes. They also have no lot and no drive way. That’s a huge difference than these MM homes we’re talking about now.
January 9, 2008 at 12:28 PM #133034anParticipant5yearwaiter,those “house” at the end of Avineda Venusto are manufactured homes. They also have no lot and no drive way. That’s a huge difference than these MM homes we’re talking about now.
January 9, 2008 at 12:28 PM #133071anParticipant5yearwaiter,those “house” at the end of Avineda Venusto are manufactured homes. They also have no lot and no drive way. That’s a huge difference than these MM homes we’re talking about now.
January 9, 2008 at 1:20 PM #132786EugeneParticipantwhy use Dec 2000 as your ‘base’ year, SD was already 3-4 years into the bubble at that point
I disagree, SD was barely out of the 90’s bust. Speculative bubble took off in 2003 because interest rates were falling a few years straight and it led people to believe that housing was taking off to the Moon.
What I ment was the people who the bank wants to lend to dont want to live in this area generally
One of the fallacies of the housing bubble was that you should buy the biggest house that the bank is willing to lend you money for. In a healthy market (especially in a declining market), living in a house costs you money because appreciation alone does not cover your interest payments. The bigger the house, the more it hurts your cash flow. So, you should buy the smallest house that will “work” for you. MM is not Carmel Valley but MM is not a ghetto, either. It’s like driving a Camry instead of a Lexus. Sure everyone likes Lexi but does it make most financial sense for everyone to stretch to make payments for them? or is it better to have 3-4 times the market value of the Lexus in your bank before you go and buy one?
That gives us a ratio of 5.1 years of income to cost of house (median income to median house).
Yes – ratio of median house to median income is higher than in 2000 – but all that money is borrowed and cost of borrowing is significantly lower today – so I say it’s a wash.
The same 1300 SFT home near Rancho Bernardo High school at Avinida Venusto end of street also ready to get at around 300K.
It’s a manufactured house …
January 9, 2008 at 1:20 PM #132972EugeneParticipantwhy use Dec 2000 as your ‘base’ year, SD was already 3-4 years into the bubble at that point
I disagree, SD was barely out of the 90’s bust. Speculative bubble took off in 2003 because interest rates were falling a few years straight and it led people to believe that housing was taking off to the Moon.
What I ment was the people who the bank wants to lend to dont want to live in this area generally
One of the fallacies of the housing bubble was that you should buy the biggest house that the bank is willing to lend you money for. In a healthy market (especially in a declining market), living in a house costs you money because appreciation alone does not cover your interest payments. The bigger the house, the more it hurts your cash flow. So, you should buy the smallest house that will “work” for you. MM is not Carmel Valley but MM is not a ghetto, either. It’s like driving a Camry instead of a Lexus. Sure everyone likes Lexi but does it make most financial sense for everyone to stretch to make payments for them? or is it better to have 3-4 times the market value of the Lexus in your bank before you go and buy one?
That gives us a ratio of 5.1 years of income to cost of house (median income to median house).
Yes – ratio of median house to median income is higher than in 2000 – but all that money is borrowed and cost of borrowing is significantly lower today – so I say it’s a wash.
The same 1300 SFT home near Rancho Bernardo High school at Avinida Venusto end of street also ready to get at around 300K.
It’s a manufactured house …
January 9, 2008 at 1:20 PM #132976EugeneParticipantwhy use Dec 2000 as your ‘base’ year, SD was already 3-4 years into the bubble at that point
I disagree, SD was barely out of the 90’s bust. Speculative bubble took off in 2003 because interest rates were falling a few years straight and it led people to believe that housing was taking off to the Moon.
What I ment was the people who the bank wants to lend to dont want to live in this area generally
One of the fallacies of the housing bubble was that you should buy the biggest house that the bank is willing to lend you money for. In a healthy market (especially in a declining market), living in a house costs you money because appreciation alone does not cover your interest payments. The bigger the house, the more it hurts your cash flow. So, you should buy the smallest house that will “work” for you. MM is not Carmel Valley but MM is not a ghetto, either. It’s like driving a Camry instead of a Lexus. Sure everyone likes Lexi but does it make most financial sense for everyone to stretch to make payments for them? or is it better to have 3-4 times the market value of the Lexus in your bank before you go and buy one?
That gives us a ratio of 5.1 years of income to cost of house (median income to median house).
Yes – ratio of median house to median income is higher than in 2000 – but all that money is borrowed and cost of borrowing is significantly lower today – so I say it’s a wash.
The same 1300 SFT home near Rancho Bernardo High school at Avinida Venusto end of street also ready to get at around 300K.
It’s a manufactured house …
January 9, 2008 at 1:20 PM #133039EugeneParticipantwhy use Dec 2000 as your ‘base’ year, SD was already 3-4 years into the bubble at that point
I disagree, SD was barely out of the 90’s bust. Speculative bubble took off in 2003 because interest rates were falling a few years straight and it led people to believe that housing was taking off to the Moon.
What I ment was the people who the bank wants to lend to dont want to live in this area generally
One of the fallacies of the housing bubble was that you should buy the biggest house that the bank is willing to lend you money for. In a healthy market (especially in a declining market), living in a house costs you money because appreciation alone does not cover your interest payments. The bigger the house, the more it hurts your cash flow. So, you should buy the smallest house that will “work” for you. MM is not Carmel Valley but MM is not a ghetto, either. It’s like driving a Camry instead of a Lexus. Sure everyone likes Lexi but does it make most financial sense for everyone to stretch to make payments for them? or is it better to have 3-4 times the market value of the Lexus in your bank before you go and buy one?
That gives us a ratio of 5.1 years of income to cost of house (median income to median house).
Yes – ratio of median house to median income is higher than in 2000 – but all that money is borrowed and cost of borrowing is significantly lower today – so I say it’s a wash.
The same 1300 SFT home near Rancho Bernardo High school at Avinida Venusto end of street also ready to get at around 300K.
It’s a manufactured house …
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