Giving in

[bluehairdave]

[quote=deadzone][quote=AN][quote=SD Realtor]For the most part they will also enjoy a quality of life that FOR THEM is superior to those who rent.[/quote]
I can attest to this statement. My quality of life is SO MUCH better now than when I was renting. There’s something to be said about knowing your mortgage payment for 30 years. Even if I don’t have another raise for 30 years and my house does not increase in value for 30 years, I know I can afford the monthly payment easily while still be able to save for retirement/college/travel/etc. Also, in 30 years, I know I can retire and have very little expense for shelter.[/quote]

True, but on the flip side you are pretty much a slave to the mortgage now. You will most likely be below water for many years to come so you will have little opportunity to upgrade. Basically you are stuck in your house. Furthermore, it really depends on your mortgage payment. How much is it compared to rent for the same place?

Bottom line, if mortgage payments are not significantly more than comparable rent and your are happy with your house for the long run (I mean next 30 years) then you made the right move.[/quote]

Not everyone is broke or worried about being upside down. For us its been great owning a home. I bought in 2007 and I could sell my home for what we bought it for but id lose a large amount after realtor fees etc… But I am still buying another home and upgrading. We know plenty of people who are upgrading and that would be the market who are buying now in the area we have been looking.

I will rent my place and loose some money each month but the interest write off will more than make up for that loss until its time to sell.

any after downpayment our mortgage is much less thatn what we would pay to rent a house like the one were looking at.

For us we would rather not have to worry about moving every year or so and eventually a home is always a good investment if you hold onto it long enough and can afford it.

To recoup. Some people are still taking the bull by the horn and thriving even in this economy and are getting married, having kids and buying bigger houses. Life is still going on for many of us.

Irregardless of what the news and naysayers might be reporting.

[jpinpb]

deadzone – FWIW, I would not have been able to have purchased the place I got if I tried 2 years ago. They were still asking peak prices. I think there are still plenty of places that have been clinging on price. Not sure if that will change. I suppose if rates rise, lowering of jumbo, etc may be a factor, along w/what banks do w/their inventory. I don’t think we’re out of the woods entirely.

[jpinpb]

deadzone – FWIW, I would not have been able to have purchased the place I got if I tried 2 years ago. They were still asking peak prices. I think there are still plenty of places that have been clinging on price. Not sure if that will change. I suppose if rates rise, lowering of jumbo, etc may be a factor, along w/what banks do w/their inventory. I don’t think we’re out of the woods entirely.

[jpinpb]

deadzone – FWIW, I would not have been able to have purchased the place I got if I tried 2 years ago. They were still asking peak prices. I think there are still plenty of places that have been clinging on price. Not sure if that will change. I suppose if rates rise, lowering of jumbo, etc may be a factor, along w/what banks do w/their inventory. I don’t think we’re out of the woods entirely.

[jpinpb]

deadzone – FWIW, I would not have been able to have purchased the place I got if I tried 2 years ago. They were still asking peak prices. I think there are still plenty of places that have been clinging on price. Not sure if that will change. I suppose if rates rise, lowering of jumbo, etc may be a factor, along w/what banks do w/their inventory. I don’t think we’re out of the woods entirely.

[jpinpb]

deadzone – FWIW, I would not have been able to have purchased the place I got if I tried 2 years ago. They were still asking peak prices. I think there are still plenty of places that have been clinging on price. Not sure if that will change. I suppose if rates rise, lowering of jumbo, etc may be a factor, along w/what banks do w/their inventory. I don’t think we’re out of the woods entirely.

[SD Realtor]

No there is no chance that we are out of the woods. However kids grow up fast, and last time I checked, you cannot take money with you when you croak.

The bottom line is that for some people buying works and for others it does not. For the most part, people who post here are bright and make good money, well over the average. Many of them have families or are starting a family. I cannot think of a single Pigg who made a purchase and did not understand the risks. It should be intuitively obvious that these people had other priorities over the possible risk premium. Personally I think taking advantage of these rates for rental property is a great opportunity for long term additions to portfolios but not necessarly San Diego rentals.

Going back to what JP said, I think that when (not if) rates rise significantly, and I mean I believe we will be in for triple bk slider sized rates, then pricing will suffer (perhaps significantly). The problem is I have thought rates would be rising since the turn of the century and they have defied my prediction. So maybe they go up in a year and maybe not for 10 years.

Still, two things are very clear. Time on this planet is short, I mean DAMN short. I blink my eyes and boom, 6 years go by and my kids are aready in 1rst grade. I remember them being born like it is yesterday. Second, buying is not for everyone so if you wanna stick to your guns because you think rates are gonna skyrocket, then that is okay. However stick to your guns for the right reasons. If you feel that everyone has bought and now there will be a shortage of organic buyers then that is very much incorrect. For a place like San Diego, especially the more desireable areas, there will ALWAYS be buyers.

[SD Realtor]

No there is no chance that we are out of the woods. However kids grow up fast, and last time I checked, you cannot take money with you when you croak.

The bottom line is that for some people buying works and for others it does not. For the most part, people who post here are bright and make good money, well over the average. Many of them have families or are starting a family. I cannot think of a single Pigg who made a purchase and did not understand the risks. It should be intuitively obvious that these people had other priorities over the possible risk premium. Personally I think taking advantage of these rates for rental property is a great opportunity for long term additions to portfolios but not necessarly San Diego rentals.

Going back to what JP said, I think that when (not if) rates rise significantly, and I mean I believe we will be in for triple bk slider sized rates, then pricing will suffer (perhaps significantly). The problem is I have thought rates would be rising since the turn of the century and they have defied my prediction. So maybe they go up in a year and maybe not for 10 years.

Still, two things are very clear. Time on this planet is short, I mean DAMN short. I blink my eyes and boom, 6 years go by and my kids are aready in 1rst grade. I remember them being born like it is yesterday. Second, buying is not for everyone so if you wanna stick to your guns because you think rates are gonna skyrocket, then that is okay. However stick to your guns for the right reasons. If you feel that everyone has bought and now there will be a shortage of organic buyers then that is very much incorrect. For a place like San Diego, especially the more desireable areas, there will ALWAYS be buyers.

[SD Realtor]

No there is no chance that we are out of the woods. However kids grow up fast, and last time I checked, you cannot take money with you when you croak.

The bottom line is that for some people buying works and for others it does not. For the most part, people who post here are bright and make good money, well over the average. Many of them have families or are starting a family. I cannot think of a single Pigg who made a purchase and did not understand the risks. It should be intuitively obvious that these people had other priorities over the possible risk premium. Personally I think taking advantage of these rates for rental property is a great opportunity for long term additions to portfolios but not necessarly San Diego rentals.

Going back to what JP said, I think that when (not if) rates rise significantly, and I mean I believe we will be in for triple bk slider sized rates, then pricing will suffer (perhaps significantly). The problem is I have thought rates would be rising since the turn of the century and they have defied my prediction. So maybe they go up in a year and maybe not for 10 years.

Still, two things are very clear. Time on this planet is short, I mean DAMN short. I blink my eyes and boom, 6 years go by and my kids are aready in 1rst grade. I remember them being born like it is yesterday. Second, buying is not for everyone so if you wanna stick to your guns because you think rates are gonna skyrocket, then that is okay. However stick to your guns for the right reasons. If you feel that everyone has bought and now there will be a shortage of organic buyers then that is very much incorrect. For a place like San Diego, especially the more desireable areas, there will ALWAYS be buyers.

[SD Realtor]

No there is no chance that we are out of the woods. However kids grow up fast, and last time I checked, you cannot take money with you when you croak.

The bottom line is that for some people buying works and for others it does not. For the most part, people who post here are bright and make good money, well over the average. Many of them have families or are starting a family. I cannot think of a single Pigg who made a purchase and did not understand the risks. It should be intuitively obvious that these people had other priorities over the possible risk premium. Personally I think taking advantage of these rates for rental property is a great opportunity for long term additions to portfolios but not necessarly San Diego rentals.

Going back to what JP said, I think that when (not if) rates rise significantly, and I mean I believe we will be in for triple bk slider sized rates, then pricing will suffer (perhaps significantly). The problem is I have thought rates would be rising since the turn of the century and they have defied my prediction. So maybe they go up in a year and maybe not for 10 years.

Still, two things are very clear. Time on this planet is short, I mean DAMN short. I blink my eyes and boom, 6 years go by and my kids are aready in 1rst grade. I remember them being born like it is yesterday. Second, buying is not for everyone so if you wanna stick to your guns because you think rates are gonna skyrocket, then that is okay. However stick to your guns for the right reasons. If you feel that everyone has bought and now there will be a shortage of organic buyers then that is very much incorrect. For a place like San Diego, especially the more desireable areas, there will ALWAYS be buyers.

[SD Realtor]

No there is no chance that we are out of the woods. However kids grow up fast, and last time I checked, you cannot take money with you when you croak.

The bottom line is that for some people buying works and for others it does not. For the most part, people who post here are bright and make good money, well over the average. Many of them have families or are starting a family. I cannot think of a single Pigg who made a purchase and did not understand the risks. It should be intuitively obvious that these people had other priorities over the possible risk premium. Personally I think taking advantage of these rates for rental property is a great opportunity for long term additions to portfolios but not necessarly San Diego rentals.

Going back to what JP said, I think that when (not if) rates rise significantly, and I mean I believe we will be in for triple bk slider sized rates, then pricing will suffer (perhaps significantly). The problem is I have thought rates would be rising since the turn of the century and they have defied my prediction. So maybe they go up in a year and maybe not for 10 years.

Still, two things are very clear. Time on this planet is short, I mean DAMN short. I blink my eyes and boom, 6 years go by and my kids are aready in 1rst grade. I remember them being born like it is yesterday. Second, buying is not for everyone so if you wanna stick to your guns because you think rates are gonna skyrocket, then that is okay. However stick to your guns for the right reasons. If you feel that everyone has bought and now there will be a shortage of organic buyers then that is very much incorrect. For a place like San Diego, especially the more desireable areas, there will ALWAYS be buyers.

[drboom]

[quote=SD Realtor]As we have all discussed, monthly payment is a much stronger measure of affordability then sales price.[/quote]

Sorry, and not to pick on you, but this popular but essentially meaningless statement is right out of the Realtor(tm) playbook.

Among other things, a higher sales price means higher property taxes in perpetuity, a higher down payment, higher insurance (possibly), higher sales transaction costs[1], etc.–and if you contend that higher sales prices can be made more “affordable” with lower interest rates, then you’d better account for the fact that the tax benefit as a portion of your mortgage payment is correspondingly lower. You’d better also factor in the time value of money for all the higher up front costs just mentioned.

Furthermore, a higher purchase price makes it less likely that you’ll get your money back out if you sell. For a lot of people a house purchase is a leveraged bet on rising home prices, and their bet is their down payment. Leverage works both ways, right? While not falling under the head of month-to-month “affordability”, this is an important consideration that folks in the RE industry–not necessarily you, so calm down–don’t like the sheeple to think about.

No, the best broad measure of “affordability” is sales price. Everything else is risky financial engineering at best and greedy boosterism at worst.

Besides, didn’t our esteemed host already make a strong case that interest rates have little correlation with selling price? This would tend to knock a huge hole in theories that make monthly payments the centerpiece of “affordability” calculations.

[1] These are paid by the buyer, period. OK?

[quote]I thing those that made the purchases will for the most part be fine regardless of market conditions as long as they have an income stream to continue paying the mortgages. For the most part they will also enjoy a quality of life that FOR THEM is superior to those who rent.[/quote]

Yes, and the intangibles count for a lot. It pays to be hard nosed about such things, however.

In my own case, I couldn’t afford to rent the joint I bought at the “bottom” in June 2009. I reckon the return on my down payment is well in excess of 10%/year net just figuring the difference between my all-in costs (ignoring tax benefits, etc.) and what rent would be. If worse comes to worst, my family will move into our motor home and we’ll rent the place out for enough of a profit to keep food on the table.

I wouldn’t have bought under any other terms: either the place is a no-brainer as a rental property or it’s dumb to buy (or you have money to speculate/gamble with, which I don’t). Why tie up so much money in a depreciating “asset” otherwise?

But other folks have other ideas. As long as “owning” your subdivided little slice of Southern California heaven doesn’t keep you awake at night, I suppose it’s a good buy. 🙂

[drboom]

[quote=SD Realtor]As we have all discussed, monthly payment is a much stronger measure of affordability then sales price.[/quote]

Sorry, and not to pick on you, but this popular but essentially meaningless statement is right out of the Realtor(tm) playbook.

Among other things, a higher sales price means higher property taxes in perpetuity, a higher down payment, higher insurance (possibly), higher sales transaction costs[1], etc.–and if you contend that higher sales prices can be made more “affordable” with lower interest rates, then you’d better account for the fact that the tax benefit as a portion of your mortgage payment is correspondingly lower. You’d better also factor in the time value of money for all the higher up front costs just mentioned.

Furthermore, a higher purchase price makes it less likely that you’ll get your money back out if you sell. For a lot of people a house purchase is a leveraged bet on rising home prices, and their bet is their down payment. Leverage works both ways, right? While not falling under the head of month-to-month “affordability”, this is an important consideration that folks in the RE industry–not necessarily you, so calm down–don’t like the sheeple to think about.

No, the best broad measure of “affordability” is sales price. Everything else is risky financial engineering at best and greedy boosterism at worst.

Besides, didn’t our esteemed host already make a strong case that interest rates have little correlation with selling price? This would tend to knock a huge hole in theories that make monthly payments the centerpiece of “affordability” calculations.

[1] These are paid by the buyer, period. OK?

[quote]I thing those that made the purchases will for the most part be fine regardless of market conditions as long as they have an income stream to continue paying the mortgages. For the most part they will also enjoy a quality of life that FOR THEM is superior to those who rent.[/quote]

Yes, and the intangibles count for a lot. It pays to be hard nosed about such things, however.

In my own case, I couldn’t afford to rent the joint I bought at the “bottom” in June 2009. I reckon the return on my down payment is well in excess of 10%/year net just figuring the difference between my all-in costs (ignoring tax benefits, etc.) and what rent would be. If worse comes to worst, my family will move into our motor home and we’ll rent the place out for enough of a profit to keep food on the table.

I wouldn’t have bought under any other terms: either the place is a no-brainer as a rental property or it’s dumb to buy (or you have money to speculate/gamble with, which I don’t). Why tie up so much money in a depreciating “asset” otherwise?

But other folks have other ideas. As long as “owning” your subdivided little slice of Southern California heaven doesn’t keep you awake at night, I suppose it’s a good buy. 🙂

[drboom]

[quote=SD Realtor]As we have all discussed, monthly payment is a much stronger measure of affordability then sales price.[/quote]

Sorry, and not to pick on you, but this popular but essentially meaningless statement is right out of the Realtor(tm) playbook.

Among other things, a higher sales price means higher property taxes in perpetuity, a higher down payment, higher insurance (possibly), higher sales transaction costs[1], etc.–and if you contend that higher sales prices can be made more “affordable” with lower interest rates, then you’d better account for the fact that the tax benefit as a portion of your mortgage payment is correspondingly lower. You’d better also factor in the time value of money for all the higher up front costs just mentioned.

Furthermore, a higher purchase price makes it less likely that you’ll get your money back out if you sell. For a lot of people a house purchase is a leveraged bet on rising home prices, and their bet is their down payment. Leverage works both ways, right? While not falling under the head of month-to-month “affordability”, this is an important consideration that folks in the RE industry–not necessarily you, so calm down–don’t like the sheeple to think about.

No, the best broad measure of “affordability” is sales price. Everything else is risky financial engineering at best and greedy boosterism at worst.

Besides, didn’t our esteemed host already make a strong case that interest rates have little correlation with selling price? This would tend to knock a huge hole in theories that make monthly payments the centerpiece of “affordability” calculations.

[1] These are paid by the buyer, period. OK?

[quote]I thing those that made the purchases will for the most part be fine regardless of market conditions as long as they have an income stream to continue paying the mortgages. For the most part they will also enjoy a quality of life that FOR THEM is superior to those who rent.[/quote]

Yes, and the intangibles count for a lot. It pays to be hard nosed about such things, however.

In my own case, I couldn’t afford to rent the joint I bought at the “bottom” in June 2009. I reckon the return on my down payment is well in excess of 10%/year net just figuring the difference between my all-in costs (ignoring tax benefits, etc.) and what rent would be. If worse comes to worst, my family will move into our motor home and we’ll rent the place out for enough of a profit to keep food on the table.

I wouldn’t have bought under any other terms: either the place is a no-brainer as a rental property or it’s dumb to buy (or you have money to speculate/gamble with, which I don’t). Why tie up so much money in a depreciating “asset” otherwise?

But other folks have other ideas. As long as “owning” your subdivided little slice of Southern California heaven doesn’t keep you awake at night, I suppose it’s a good buy. 🙂

[drboom]

[quote=SD Realtor]As we have all discussed, monthly payment is a much stronger measure of affordability then sales price.[/quote]

Sorry, and not to pick on you, but this popular but essentially meaningless statement is right out of the Realtor(tm) playbook.

Among other things, a higher sales price means higher property taxes in perpetuity, a higher down payment, higher insurance (possibly), higher sales transaction costs[1], etc.–and if you contend that higher sales prices can be made more “affordable” with lower interest rates, then you’d better account for the fact that the tax benefit as a portion of your mortgage payment is correspondingly lower. You’d better also factor in the time value of money for all the higher up front costs just mentioned.

Furthermore, a higher purchase price makes it less likely that you’ll get your money back out if you sell. For a lot of people a house purchase is a leveraged bet on rising home prices, and their bet is their down payment. Leverage works both ways, right? While not falling under the head of month-to-month “affordability”, this is an important consideration that folks in the RE industry–not necessarily you, so calm down–don’t like the sheeple to think about.

No, the best broad measure of “affordability” is sales price. Everything else is risky financial engineering at best and greedy boosterism at worst.

Besides, didn’t our esteemed host already make a strong case that interest rates have little correlation with selling price? This would tend to knock a huge hole in theories that make monthly payments the centerpiece of “affordability” calculations.

[1] These are paid by the buyer, period. OK?

[quote]I thing those that made the purchases will for the most part be fine regardless of market conditions as long as they have an income stream to continue paying the mortgages. For the most part they will also enjoy a quality of life that FOR THEM is superior to those who rent.[/quote]

Yes, and the intangibles count for a lot. It pays to be hard nosed about such things, however.

In my own case, I couldn’t afford to rent the joint I bought at the “bottom” in June 2009. I reckon the return on my down payment is well in excess of 10%/year net just figuring the difference between my all-in costs (ignoring tax benefits, etc.) and what rent would be. If worse comes to worst, my family will move into our motor home and we’ll rent the place out for enough of a profit to keep food on the table.

I wouldn’t have bought under any other terms: either the place is a no-brainer as a rental property or it’s dumb to buy (or you have money to speculate/gamble with, which I don’t). Why tie up so much money in a depreciating “asset” otherwise?

But other folks have other ideas. As long as “owning” your subdivided little slice of Southern California heaven doesn’t keep you awake at night, I suppose it’s a good buy. 🙂

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