Latest Fiscal Cliff Deal….

[bearishgurl]

[quote=deadzone]I agree with FLU that we need to spend our money on hard assets while it is still worth something. But what to buy?

I already bought my dream sports car nearly three years ago so that is checked off. I bought a fair amount of gold bullion around the same time while gold was still around 1200 or less an ounce. But now gold is relatively expensive. As far as real estate, houses are still mostly out of my price range in any area I really want to live even with low interest rates (unless I sold my dream car and gold which I don’t want to do). Stock market is pure day trading casino right now and there is no safe way to invest that nets any meaningul incojme

So what else can we do with our money, any ideas? Lately I’ve just blown a lot going to restaurants, sporting events and concerts, etc. for short term fun. But as far as investing..??[/quote]

If you’ve got money to blow, deadzone, consider investing in rental property. It wouldn’t need to be located in an area YOU would be willing to live in.

[an]

Flu, i wish its as easy as you make it out to be. Like we’ve been saying, inventory sucks balls right now.

[Coronita]

[quote=AN]Flu, i wish its as easy as you make it out to be. Like we’ve been saying, inventory sucks balls right now.[/quote]

I agree inventory sucks. But even more reason to keep trying. I’m actually entertaining looking in parts of LA. Some of the nicer areas haven’t recovered (yet).

You know what really concerns me? Holding cash will suck bigtime and so will depending on a regular paycheck. If we really have a devaluation that is severe in the future, buying overpriced home(s) right now my end up looking like a no brainer few years later…

And me thinks it’s just gonna get harder and harder for individuals to own in more than one ways. A lot of these tax changes is probably a precursor to what will happen to more people… The job market isn’t gonna get better in terms of pay. Pay isn’t gonna go up inflation adjusted. You might have a nominal higher salary, but inflation adjusted not really. Fixed income people are gonna eat it, and I suspect we’ll have a lot of those people as they approach retirement.. And then some tax rules probably won’t end up being inflation adjusted, so you end up with less money then before in your pocket. It’s gonna make it that much harder for people to “save”, on top of how in America savers are already punished…

Meanwhile, people who have accumulated RE,stock, etc can probably more easily borrow cheaper credit (as it is now) with asset collateral for cheap loans, and this will most likely continue… Just look at this current predicament. Some folks use cash to buy up an investment property, and then 6 months later cash out refi at a relatively low interest with high LTV, with still a decent return on the property..Then the take the cash and put into another investment property, probably at near all cash offer too or close to it…

Let this thing run for a few years, how is this really going to be a good environment for first time home buyers? So despite what some political diehards are you have from both parties, I haven’t seen anything material that suggests that either party is really doing anything to restore the middle class, or help people starting out.. And this sort of cliff compromise I think suggests that, same old, same old. Kick the can down the road. The divide between rich and poor is gonna get a lot wider…And some of the bottom rich are gonna end up being the new middle class.

So I guess just to survive, start by keeping your living costs down…Rent isn’t gonna get cheaper either most likely in the forseable future.

[an]

I’m just afraid that price will sky rocket (10%+) in the next year and that would really squeezes out the margin, unless rent rises as well. I don’t think I would ever consider LA. If I can’t find any condo in MM, I might consider small SFR in MM instead. We’ll have to wait and see but cap rate for SFR is not nearly as good and you need more capital per transaction.

[Coronita]

[quote=AN]I’m just afraid that price will sky rocket (10%+) in the next year and that would really squeezes out the margin, unless rent rises as well. I don’t think I would ever consider LA. If I can’t find any condo in MM, I might consider small SFR in MM instead. We’ll have to wait and see but cap rate for SFR is not nearly as good and you need more capital per transaction.[/quote]

What if rates fall lower :). If rates drop another .5% from this point, how much worse do you think inventory is gonna be?

Also, the more I think about it….How long do we expect pitiful savings rates in a CD?

I predict we’ll see 30 years below 3% and and 15 years around 2% before we seem them rise. Well, at least over the next 4 years. The fiscal policy appears to be same old same old. I’m refinancing and counting on another one 6 months from now.

Also, primaries will look like excellent rentals in the forseable future so it would be a good time to upgrade.

[an]

I agree about hording cash sucks. I was under that assumption when saving returns dips below 3%. I’m already minimizing my spending as much as possible (well as much as I wanted to) and now, I’m in the accumulating stage for hard assets. The writing is on the wall. We’re not going to see inflation sooner or later and I don’t really care if my income matches inflation (although in our profession, I think it would), as long as hard assets and stocks outpace inflation. Lets hope for high inflation soon. Here’s for a 1970-80 repeat.

WRT to rates falling, I’m betting on that too. I don’t know how much worse inventory will be. In MM, there’s only 20 houses and 5 condos for sale right now. So, it can’t possibly get much worse. Those active ones are over prices as well, which is why they’re there. If it gets worse, that would mean we’d have to see price increase another 20%, because those lingering are 10-20% above market price today.

I’m going to continue this negative points refi for a few more years and hoping we’ll see a 1970 repeat after the $h!t hits the fan.

[an]

[quote=flu]Also, primaries will look like excellent rentals in the forseable future so it would be a good time to upgrade.[/quote]
Yep, my primary is a pretty decent rental today with cap rate around 4-6%. If rates drops some more, that might be 5-8%. There are only a handful of places I want to upgrade to, and they’re not for sale right now and I’m not sure when they’ll go on sale since the owners bought it many many years ago. So, I’m sitting tight waiting for one of them to come online. All the while, I’m trying to scoop up as many rentals as I can.

[Coronita]

[quote=AN]I agree about hording cash sucks. I was under that assumption when saving returns dips below 3%. I’m already minimizing my spending as much as possible (well as much as I wanted to) and now, I’m in the accumulating stage for hard assets. The writing is on the wall. We’re not going to see inflation sooner or later and I don’t really care if my income matches inflation (although in our profession, I think it would), as long as hard assets and stocks outpace inflation. Lets hope for high inflation soon. Here’s for a 1970-80 repeat.

WRT to rates falling, I’m betting on that too. I don’t know how much worse inventory will be. In MM, there’s only 20 houses and 5 condos for sale right now. So, it can’t possibly get much worse. Those active ones are over prices as well, which is why they’re there. If it gets worse, that would mean we’d have to see price increase another 20%, because those lingering are 10-20% above market price today.

I’m going to continue this negative points refi for a few more years and hoping we’ll see a 1970 repeat after the $h!t hits the fan.[/quote]

Well, I’m sure if prices were adjusted 5%-10% in MM, we’d see a lot more inventory right now….And then people would get use to it, and then if rates dropped another 0.5%, you would have another buying frenzy… I predict that people are kinda still sticker shock with 1/1 going for $150, 2/2 going for $220, and some MM SFH that went for $350 going for $400. Rates fall again, people won’t care (again).

[Coronita]

oh oh.. Senate voting on the deal now… Time to turn on C-SPAN…

[Coronita]

….Itemized deductions capped, starting at a threshold of $250,000 for individuals and $300,000 for households.

[Coronita]

…higher taxes income taxes >$400k individual, $450k household: 39.6%….

If you’re a couple making >$450k…Morale of the story, get a divorce….

[Coronita]

…AMT… permanently adjusted for inflation… (I’ll see it when I believe it)..

..Unemployment benefits extended for another year… Cool, time to blog more…

[Coronita]

Senate passes cliff deal 89-8…

[Coronita]

delete.

[SD Realtor]

Good times man! No spending problem here dude. At some point in the future historians will look back and marvel at the stupidity of our leadership.

[Author]

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