Confused with the current market

[sdcellar]

AN, you have to include the $100K whether you sell the house or not. The expense is incurred as principal payments over the course of the loan. I do get why you were thinking of it another way, since if you do sell before 30 years, you will have to figure the principal payed down offset by sales price. (and I’m not picking on you either. can’t forget I had a $90K oops).

So, this means that you have to use your second scenario where the lower price wins by $52K. The reason I have it as less that you do ($14K) is because I used 28% for the tax break (vs. 37%), 1.05% for the property tax rate (vs. 1.09%), and most importantly, didn’t apply annual prop 13 basis increase. I had considered that, but also knew that it would take more work and just improve my numbers anyway (also, isn’t it a 2% annual increase?)

That said, I’ve since realized that along those lines, the buyer of the more expensive house can help themselves tremendously by appealing the value when the prices drop. E.g., just a few years in, you can get the basis dropped to the $500K number. I don’t remember how long you can keep it there, but you can probably do it until real appreciation occurs. When/if this happens, the advantage swings back to the lower priced house because the original bases will come back into play. Even so, if you got to take advantage of that for like 10 years or something, that would be great.

[an]

Well, based on all of those calculations and the assumptions we put forth, it seems like its inflection point is somewhere between 3 and 4 years of rent. Assuming the monthly payment stay where they are, if you predict rates will go up to 7.238% in less than 4 years, then it’s better to wait. However, if you think rates will stay around today’s level (+/- 1%) in the next 4 years, then buying today would be a better deal.

[an]

Well, based on all of those calculations and the assumptions we put forth, it seems like its inflection point is somewhere between 3 and 4 years of rent. Assuming the monthly payment stay where they are, if you predict rates will go up to 7.238% in less than 4 years, then it’s better to wait. However, if you think rates will stay around today’s level (+/- 1%) in the next 4 years, then buying today would be a better deal.

[an]

Well, based on all of those calculations and the assumptions we put forth, it seems like its inflection point is somewhere between 3 and 4 years of rent. Assuming the monthly payment stay where they are, if you predict rates will go up to 7.238% in less than 4 years, then it’s better to wait. However, if you think rates will stay around today’s level (+/- 1%) in the next 4 years, then buying today would be a better deal.

[an]

Well, based on all of those calculations and the assumptions we put forth, it seems like its inflection point is somewhere between 3 and 4 years of rent. Assuming the monthly payment stay where they are, if you predict rates will go up to 7.238% in less than 4 years, then it’s better to wait. However, if you think rates will stay around today’s level (+/- 1%) in the next 4 years, then buying today would be a better deal.

[an]

Well, based on all of those calculations and the assumptions we put forth, it seems like its inflection point is somewhere between 3 and 4 years of rent. Assuming the monthly payment stay where they are, if you predict rates will go up to 7.238% in less than 4 years, then it’s better to wait. However, if you think rates will stay around today’s level (+/- 1%) in the next 4 years, then buying today would be a better deal.

[sdcellar]

Yeah, and that’s the part that none of us really know. I think prices will come down a bit more. I have no idea on interest rates, other than they’re more likely to go up rather than down, but all bets (for me) are off on timeframe.

This whole rising interest rate/lowering price thing is interesting in theory, but I’m just sticking with a) finding the house I want to buy and b) making sure it’s not rent/buy stupid. Other things for sure, but those are at the top of my list.

[sdcellar]

Yeah, and that’s the part that none of us really know. I think prices will come down a bit more. I have no idea on interest rates, other than they’re more likely to go up rather than down, but all bets (for me) are off on timeframe.

This whole rising interest rate/lowering price thing is interesting in theory, but I’m just sticking with a) finding the house I want to buy and b) making sure it’s not rent/buy stupid. Other things for sure, but those are at the top of my list.

[sdcellar]

Yeah, and that’s the part that none of us really know. I think prices will come down a bit more. I have no idea on interest rates, other than they’re more likely to go up rather than down, but all bets (for me) are off on timeframe.

This whole rising interest rate/lowering price thing is interesting in theory, but I’m just sticking with a) finding the house I want to buy and b) making sure it’s not rent/buy stupid. Other things for sure, but those are at the top of my list.

[sdcellar]

Yeah, and that’s the part that none of us really know. I think prices will come down a bit more. I have no idea on interest rates, other than they’re more likely to go up rather than down, but all bets (for me) are off on timeframe.

This whole rising interest rate/lowering price thing is interesting in theory, but I’m just sticking with a) finding the house I want to buy and b) making sure it’s not rent/buy stupid. Other things for sure, but those are at the top of my list.

[sdcellar]

Yeah, and that’s the part that none of us really know. I think prices will come down a bit more. I have no idea on interest rates, other than they’re more likely to go up rather than down, but all bets (for me) are off on timeframe.

This whole rising interest rate/lowering price thing is interesting in theory, but I’m just sticking with a) finding the house I want to buy and b) making sure it’s not rent/buy stupid. Other things for sure, but those are at the top of my list.

[qcomer]

I have been frustrated as I have had 3-4 short sale offers rejected by lender. I have now excluded them from my search despite short sales making 40% of the market right now. What benefit do banks have with going through with a short sale instead of foreclosure? And real estate agents are extremely reluctant to work with short sales. Any idea, how many of these contingent short sales will end up in foreclosure or come back on market?

[qcomer]

I have been frustrated as I have had 3-4 short sale offers rejected by lender. I have now excluded them from my search despite short sales making 40% of the market right now. What benefit do banks have with going through with a short sale instead of foreclosure? And real estate agents are extremely reluctant to work with short sales. Any idea, how many of these contingent short sales will end up in foreclosure or come back on market?

[qcomer]

I have been frustrated as I have had 3-4 short sale offers rejected by lender. I have now excluded them from my search despite short sales making 40% of the market right now. What benefit do banks have with going through with a short sale instead of foreclosure? And real estate agents are extremely reluctant to work with short sales. Any idea, how many of these contingent short sales will end up in foreclosure or come back on market?

[qcomer]

I have been frustrated as I have had 3-4 short sale offers rejected by lender. I have now excluded them from my search despite short sales making 40% of the market right now. What benefit do banks have with going through with a short sale instead of foreclosure? And real estate agents are extremely reluctant to work with short sales. Any idea, how many of these contingent short sales will end up in foreclosure or come back on market?

[Author]

Posts