- This topic has 60 replies, 17 voices, and was last updated 12 years, 3 months ago by
bearishgurl.
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July 31, 2012 at 5:24 PM #20025July 31, 2012 at 5:37 PM #749311
spdrun
ParticipantSolution should be to make mortgages assumable. Won’t happen, though.
Also d/k why you need a huge house to breed sprogs. Under 1000 sf was average till the mid-60ies, and people had more kids then than now in the US. In short, the prices of McHouses out in Outer Lizardia will plummet, and I’ll laugh at the rubes who bought there and are now trying to sell.
July 31, 2012 at 5:43 PM #749314sdrealtor
ParticipantYoung first time buyers will need to grow in the careers and have much higher incomes to move up. Right now the gap between entry level homes and move up homes as well move up homes and high end homes is smaller than it usually is. Combine this with low rates and for those with equity there is lots of opportunity to move up now. I have a few friends that recently moved to RSF because of this.
For young first timers count on slow appreciation, continued saving and hard work to earn that next step up. A government supported low down mortgage got you in and getting to the next level is up to you. Isnt that the way it should be?
July 31, 2012 at 5:52 PM #749315The-Shoveler
ParticipantWell besides the location -location – location rule.
Back in the days when there was inflation and a house was a good investment
1950’s – 2005. there was always the buy as much house as you can possible afford rule, being that it would put you in a better position 10 or so years later due to inflation etc…Also I think it’s funny that people think that were going to start suddenly building 500 to 1000 high rise downtown condo buildings for the next 100 million in population we are expecting to grow in the next 30 years.
Sprawl , get used to it, even in NY most people live out in the burbs and commute via train etc…July 31, 2012 at 6:15 PM #749317ParticipantGoing with the sprawl rule again, what worked (well at least in L.A.) was to buy your first house, then 10 or so years you either rented it or sold it and moved a little further out to a bigger place(mostly to new construction but not always), then the growth would eventually find you. West-lake, Valencia, Irvine etc…
Will that strategy work again?
Good possibility in the right places I think.July 31, 2012 at 6:36 PM #749319
CoronitaParticipant[quote=matt-waiting]What will happen when all these first time buyers who are locking in super low interest rates want to sell and buy a larger home when rates are significantly higher? Will they have to bite the bullet and pay off their 3.5% loan only to take out a larger loan at 6,7,8 percent?
Say for example, right now I have a smallish house at a fixed rate of 3.5%, but in a few years want to “move up,” sell, and buy a bigger house. I am guessing when that time comes, rates will be much higher. Any way around this? If not, doesn’t this create a disincentive for more expensive real estate purchases in the future? …
Will I be stuck in my 2 bedroom house with my 5 kids and 2 baby mamas because I refuse to pay off a 3.5% loan?[/quote]
Well, depending on how much you paid for it, and how much your monthly is, there is the option of looking to see if you can convert it into a rental.
A lot of things can happen from now until you “move up”. The nice thing is you only need to “move up” if the dollars are there. I mean if you can afford to move up now, now’s probably not a bad idea to be looking.
Also, what makes you so sure rates are going to move up quickly?
Third, if rates do go up, it’s probably means the economy is going to recover somewhat in general. If you’re in a good career, you might as well do better too. Easier to make more money in a good economy than in a bad one you know.
July 31, 2012 at 8:18 PM #749326ParticipantAlso I think it’s funny that people think that were going to start suddenly building 500 to 1000 high rise downtown condo buildings for the next 100 million in population we are expecting to grow in the next 30 years.
Sprawl , get used to it, even in NY most people live out in the burbs and commute via train etc…There’s only so much land that doesn’t suck in CA. A lot of people would rather live in condo buildings downtown or within a few mi of the coast than in “lizardland” as BG calls it.
July 31, 2012 at 9:12 PM #749327profhoff
Participant2 baby mamas?
July 31, 2012 at 9:13 PM #749328SK in CV
Participant[quote=The-Shoveler]Well besides the location -location – location rule.
Back in the days when there was inflation and a house was a good investment
1950’s – 2005. there was always the buy as much house as you can possible afford rule, being that it would put you in a better position 10 or so years later due to inflation etc…[/quote]
It really didn’t always work out that way. Believe it or not, the bubble that burst a few years ago was not the first one. There were two other significant bubbles that collapsed in the last 40 years.
July 31, 2012 at 11:23 PM #749331an
Participant[quote=spdrun]
Also I think it’s funny that people think that were going to start suddenly building 500 to 1000 high rise downtown condo buildings for the next 100 million in population we are expecting to grow in the next 30 years.
Sprawl , get used to it, even in NY most people live out in the burbs and commute via train etc…There’s only so much land that doesn’t suck in CA. A lot of people would rather live in condo buildings downtown or within a few mi of the coast than in “lizardland” as BG calls it.[/quote]
LOL, thanks for a good laugh.August 1, 2012 at 8:29 AM #749335UCGal
Participant[quote=profhoff]2 baby mamas?[/quote]
Actually his current/new place might work with 2 baby mamas…. It’s a 2 unit place.
Install one in the front, one in the back…Problem solved.
August 1, 2012 at 8:54 AM #749336ParticipantAnd a frying-pan-proof wall between the two apts?
August 1, 2012 at 9:03 AM #749337(former)FormerSanDiegan
ParticipantYour current purchase likely pencils out right now as a rental. If, when you are looking at moving up, rates are signficantly higher, it is likely that inflation and rents will be significantly higher. Keeping your primary as a rental may be the best option at that point.
One of the best things we did was to keep our first house when we moved up.August 1, 2012 at 9:13 AM #749338matt-waiting
ParticipantKeeping it as a rental may work (or maybe just rent to the baby mamas), but I imagine that on the macro level, most people will need the equity to purchase the larger house.
I have never lived in a time when rates were significantly higher than a few years earlier. What happened in the 80s when rates were high?
What does that do to the demand for “move up type properties?” It would seem like the incentive would be against trading in a 3.5% loan for a 6% plus loan.
August 6, 2012 at 10:09 AM #749556run_in_SD
Participant[quote=spdrun]Solution should be to make mortgages assumable. Won’t happen, though.
[/quote]
Ahh, but FHA loans are assumable. In ten years, you can pass that low sub 4% FHA loan to the next buyer. The problem is finding a buyer that is savy enough to realize the savings that low interest rate will gain.
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