Rates dropping like a brick.

[temeculaguy]

Walter/Scardey, it’s actually quite simple, what you are doing without realizing it is the best hedge against inflation/devaluation. You are about to enter escrow while rates are around 4%, (for gods sake get a fixed rate) and you are buying property in an area where the prices are at a low or a norm, you are paying half peak and a fair price. You sir, are in the drivers seat on this one. This has happened before, it will happen again. We have had zero inflation for a while so we owe the gods some abnormal inflation, the pendulum will swing, just like it swung back in real estate, things find balance.

In the 1970’s my folks bought a house, a nice place for about 30k, their mort was about $400 (rates were higher then) and rent was about $300. 15 years later, I rented a cruddy apartment in a cheaper area for almost twice what my folks big house cost them, why? Inflation? Renters get hurt during inflationary times, renters have been having a great time for a few years now, rents have been stable, but that will likely change. Wages tend to go up at a slower pace, but they do catch up, the only thing that stays constant is a mortgage. This works for walter but San Diego is still one of the top ten worst places to buy compared to rents. Since the government cant get the prices of houses to rise, they can get the rents to go up and that will get people out from being underwater, it’s like the easy button at staples.

Is it a government conspiracy? Is it just the cycle of things? It doesn’t really matter, it will more than likely happen, having everything in cash is not the correct play if you think it will happen. Stocks benefit too, coomodities have a blast. If you fear something, get insurance for it.

Inflation/devaluation is not a “day trade” it’s an econimic fact and one that should be hedged against. You don’t need canned food and ammo, you just need to be defensive. I have a close friend who has been living in a South American country for about 20 years, they lived through hyperinflation and currency collapse, while owning a business. They made a killing during those times on real estate, their business lost money while their rentals became cash cows overnight. As an example, if I were to buy a 100k condo near my house that rents for 1k a month (something I’ve been exploring, but the prices have risen to 120k and the rent is the same, so I held off), if a 10-1 devaluation were to occur like it did in the country my friend lives in, I would still only owe the bank 100k, but rent would be 10k a month, it would be paid off in a year. I doubt we see anything like that, but if that is what you are afraid off, that is how you make it work for you. Stop seeing clouds scardey, look for the silver lining, it’s always there if you look.

[scaredyclassic]

TG i appreciate and understand what you’re saying. it’s just the doing it. If i am completely honest with myself, I’d be upset with a 33-50% drop in house price soon after I moved in, even if I planned to live there the rest of my life. If the half million house slipped down to 350,000, which doesnt seem that unlikely if the mortgage market goes Tilt, and i have to sit 8 years until inflation blows like a built up steam kettle, I’d be irritated, and kind of ansxious till the whole morass really had hit bottom during the intital plunge. Yeah i could be philosophical, jus ride it out. I guess I would be sad to have missed th eopportunity to buy at (or in the vicinity of) a true bottom. I’m not saying time it perfectly. i’m just saying being int he ballpark of a true bottom.

Maybe I’m just buying over what my stomach can tolerate. if the house were 225 and fell 33%, I wouldn’t be upset over $60,000. That’s anumber I can grapple with. but 150,000 irritates me.

For you to mention “50% off the high” just well doesn’t seem to add anything for me. That high price is meaningless. means nothing. it was never a price anyone could really ever pay. So why refer to it at all in the calculus of determining whether one got a good deal. I must make a memo to myself never to do so int he future. Now 20 or 30 or 50% off a “fair price”, that’s a good deal. Just not sure we’re quite there yet. And the risks of wages exploding? I just don’t see it roughly on the horizon. I’m sure it’s out there somewhere, on the stormy seas of the future. But I just don’t see it now. Would your advice work out int he end? I bet it would. Do i want to take the ride to get there? I’m not sure I would like it. But then again, I hate rollercoasters and other rides involving sudden movements. Intellectually I think i shoudl get on the ride TG describes. But my stomach says no. I have in the past ignored my gut and been very wrong about things.

But man, this is a nice house.

it’s sometimes hard to tell if your’e actually seeing clouds or just have cataracts. While I cannot believe how low rates have gotten, doesn’t it seem like that’s the only thing keeping the price in place. the opposite thread title, “Rates shooting up like a rocket”, which is certainly out there, might be the better time to buy.

[scaredyclassic]

TG i appreciate and understand what you’re saying. it’s just the doing it. If i am completely honest with myself, I’d be upset with a 33-50% drop in house price soon after I moved in, even if I planned to live there the rest of my life. If the half million house slipped down to 350,000, which doesnt seem that unlikely if the mortgage market goes Tilt, and i have to sit 8 years until inflation blows like a built up steam kettle, I’d be irritated, and kind of ansxious till the whole morass really had hit bottom during the intital plunge. Yeah i could be philosophical, jus ride it out. I guess I would be sad to have missed th eopportunity to buy at (or in the vicinity of) a true bottom. I’m not saying time it perfectly. i’m just saying being int he ballpark of a true bottom.

Maybe I’m just buying over what my stomach can tolerate. if the house were 225 and fell 33%, I wouldn’t be upset over $60,000. That’s anumber I can grapple with. but 150,000 irritates me.

For you to mention “50% off the high” just well doesn’t seem to add anything for me. That high price is meaningless. means nothing. it was never a price anyone could really ever pay. So why refer to it at all in the calculus of determining whether one got a good deal. I must make a memo to myself never to do so int he future. Now 20 or 30 or 50% off a “fair price”, that’s a good deal. Just not sure we’re quite there yet. And the risks of wages exploding? I just don’t see it roughly on the horizon. I’m sure it’s out there somewhere, on the stormy seas of the future. But I just don’t see it now. Would your advice work out int he end? I bet it would. Do i want to take the ride to get there? I’m not sure I would like it. But then again, I hate rollercoasters and other rides involving sudden movements. Intellectually I think i shoudl get on the ride TG describes. But my stomach says no. I have in the past ignored my gut and been very wrong about things.

But man, this is a nice house.

it’s sometimes hard to tell if your’e actually seeing clouds or just have cataracts. While I cannot believe how low rates have gotten, doesn’t it seem like that’s the only thing keeping the price in place. the opposite thread title, “Rates shooting up like a rocket”, which is certainly out there, might be the better time to buy.

[scaredyclassic]

TG i appreciate and understand what you’re saying. it’s just the doing it. If i am completely honest with myself, I’d be upset with a 33-50% drop in house price soon after I moved in, even if I planned to live there the rest of my life. If the half million house slipped down to 350,000, which doesnt seem that unlikely if the mortgage market goes Tilt, and i have to sit 8 years until inflation blows like a built up steam kettle, I’d be irritated, and kind of ansxious till the whole morass really had hit bottom during the intital plunge. Yeah i could be philosophical, jus ride it out. I guess I would be sad to have missed th eopportunity to buy at (or in the vicinity of) a true bottom. I’m not saying time it perfectly. i’m just saying being int he ballpark of a true bottom.

Maybe I’m just buying over what my stomach can tolerate. if the house were 225 and fell 33%, I wouldn’t be upset over $60,000. That’s anumber I can grapple with. but 150,000 irritates me.

For you to mention “50% off the high” just well doesn’t seem to add anything for me. That high price is meaningless. means nothing. it was never a price anyone could really ever pay. So why refer to it at all in the calculus of determining whether one got a good deal. I must make a memo to myself never to do so int he future. Now 20 or 30 or 50% off a “fair price”, that’s a good deal. Just not sure we’re quite there yet. And the risks of wages exploding? I just don’t see it roughly on the horizon. I’m sure it’s out there somewhere, on the stormy seas of the future. But I just don’t see it now. Would your advice work out int he end? I bet it would. Do i want to take the ride to get there? I’m not sure I would like it. But then again, I hate rollercoasters and other rides involving sudden movements. Intellectually I think i shoudl get on the ride TG describes. But my stomach says no. I have in the past ignored my gut and been very wrong about things.

But man, this is a nice house.

it’s sometimes hard to tell if your’e actually seeing clouds or just have cataracts. While I cannot believe how low rates have gotten, doesn’t it seem like that’s the only thing keeping the price in place. the opposite thread title, “Rates shooting up like a rocket”, which is certainly out there, might be the better time to buy.

[scaredyclassic]

TG i appreciate and understand what you’re saying. it’s just the doing it. If i am completely honest with myself, I’d be upset with a 33-50% drop in house price soon after I moved in, even if I planned to live there the rest of my life. If the half million house slipped down to 350,000, which doesnt seem that unlikely if the mortgage market goes Tilt, and i have to sit 8 years until inflation blows like a built up steam kettle, I’d be irritated, and kind of ansxious till the whole morass really had hit bottom during the intital plunge. Yeah i could be philosophical, jus ride it out. I guess I would be sad to have missed th eopportunity to buy at (or in the vicinity of) a true bottom. I’m not saying time it perfectly. i’m just saying being int he ballpark of a true bottom.

Maybe I’m just buying over what my stomach can tolerate. if the house were 225 and fell 33%, I wouldn’t be upset over $60,000. That’s anumber I can grapple with. but 150,000 irritates me.

For you to mention “50% off the high” just well doesn’t seem to add anything for me. That high price is meaningless. means nothing. it was never a price anyone could really ever pay. So why refer to it at all in the calculus of determining whether one got a good deal. I must make a memo to myself never to do so int he future. Now 20 or 30 or 50% off a “fair price”, that’s a good deal. Just not sure we’re quite there yet. And the risks of wages exploding? I just don’t see it roughly on the horizon. I’m sure it’s out there somewhere, on the stormy seas of the future. But I just don’t see it now. Would your advice work out int he end? I bet it would. Do i want to take the ride to get there? I’m not sure I would like it. But then again, I hate rollercoasters and other rides involving sudden movements. Intellectually I think i shoudl get on the ride TG describes. But my stomach says no. I have in the past ignored my gut and been very wrong about things.

But man, this is a nice house.

it’s sometimes hard to tell if your’e actually seeing clouds or just have cataracts. While I cannot believe how low rates have gotten, doesn’t it seem like that’s the only thing keeping the price in place. the opposite thread title, “Rates shooting up like a rocket”, which is certainly out there, might be the better time to buy.

[scaredyclassic]

TG i appreciate and understand what you’re saying. it’s just the doing it. If i am completely honest with myself, I’d be upset with a 33-50% drop in house price soon after I moved in, even if I planned to live there the rest of my life. If the half million house slipped down to 350,000, which doesnt seem that unlikely if the mortgage market goes Tilt, and i have to sit 8 years until inflation blows like a built up steam kettle, I’d be irritated, and kind of ansxious till the whole morass really had hit bottom during the intital plunge. Yeah i could be philosophical, jus ride it out. I guess I would be sad to have missed th eopportunity to buy at (or in the vicinity of) a true bottom. I’m not saying time it perfectly. i’m just saying being int he ballpark of a true bottom.

Maybe I’m just buying over what my stomach can tolerate. if the house were 225 and fell 33%, I wouldn’t be upset over $60,000. That’s anumber I can grapple with. but 150,000 irritates me.

For you to mention “50% off the high” just well doesn’t seem to add anything for me. That high price is meaningless. means nothing. it was never a price anyone could really ever pay. So why refer to it at all in the calculus of determining whether one got a good deal. I must make a memo to myself never to do so int he future. Now 20 or 30 or 50% off a “fair price”, that’s a good deal. Just not sure we’re quite there yet. And the risks of wages exploding? I just don’t see it roughly on the horizon. I’m sure it’s out there somewhere, on the stormy seas of the future. But I just don’t see it now. Would your advice work out int he end? I bet it would. Do i want to take the ride to get there? I’m not sure I would like it. But then again, I hate rollercoasters and other rides involving sudden movements. Intellectually I think i shoudl get on the ride TG describes. But my stomach says no. I have in the past ignored my gut and been very wrong about things.

But man, this is a nice house.

it’s sometimes hard to tell if your’e actually seeing clouds or just have cataracts. While I cannot believe how low rates have gotten, doesn’t it seem like that’s the only thing keeping the price in place. the opposite thread title, “Rates shooting up like a rocket”, which is certainly out there, might be the better time to buy.

[briansd1]

[quote=SD Realtor]Saving dollars right now is a fools game. How can anyone say policies like this are good for savers.
[/quote]

I agree with you.

I was just saying that it’s not all bad for savers who also have debts that they can refinance at lower rates. They save on interest payments.

Look at the savers in Japan who suffered for 20 years already.

We are going on 5 years so we may yet have an American “lost decade”.

Maybe we should borrow in US Dollars at low rates and invest abroad just like the Japanese do.

[briansd1]

[quote=SD Realtor]Saving dollars right now is a fools game. How can anyone say policies like this are good for savers.
[/quote]

I agree with you.

I was just saying that it’s not all bad for savers who also have debts that they can refinance at lower rates. They save on interest payments.

Look at the savers in Japan who suffered for 20 years already.

We are going on 5 years so we may yet have an American “lost decade”.

Maybe we should borrow in US Dollars at low rates and invest abroad just like the Japanese do.

[briansd1]

[quote=SD Realtor]Saving dollars right now is a fools game. How can anyone say policies like this are good for savers.
[/quote]

I agree with you.

I was just saying that it’s not all bad for savers who also have debts that they can refinance at lower rates. They save on interest payments.

Look at the savers in Japan who suffered for 20 years already.

We are going on 5 years so we may yet have an American “lost decade”.

Maybe we should borrow in US Dollars at low rates and invest abroad just like the Japanese do.

[briansd1]

[quote=SD Realtor]Saving dollars right now is a fools game. How can anyone say policies like this are good for savers.
[/quote]

I agree with you.

I was just saying that it’s not all bad for savers who also have debts that they can refinance at lower rates. They save on interest payments.

Look at the savers in Japan who suffered for 20 years already.

We are going on 5 years so we may yet have an American “lost decade”.

Maybe we should borrow in US Dollars at low rates and invest abroad just like the Japanese do.

[briansd1]

[quote=SD Realtor]Saving dollars right now is a fools game. How can anyone say policies like this are good for savers.
[/quote]

I agree with you.

I was just saying that it’s not all bad for savers who also have debts that they can refinance at lower rates. They save on interest payments.

Look at the savers in Japan who suffered for 20 years already.

We are going on 5 years so we may yet have an American “lost decade”.

Maybe we should borrow in US Dollars at low rates and invest abroad just like the Japanese do.

[andymajumder]

Given where US is the world economic scenario, the dollar should be lower in value…short term it does hurt developing countries (Brazil,India) but there is enough internal demand developing in these countries..hence they will not be as dependent on exports in future as they are now (not sure about China though). If you have access to these countries, i.e. if you are an immigrant from these developing countries or have relatives there try and invest there. May not be right time to get into Indian stocks which is up 150% since late 2008, but real estate in many big cities in India is still cheap, compared to where it will be in 10 yrs.
Cheaper dollar will help get USA out of its current mess, yes quality of life will gradually degrade for many and may have already sharply degraded for some (but that’s kind of unavoidable given where things stand and are headed).
Cheaper dollar will slow down outsourcing, will make US exports more competitive, reduce the value of our debt, probably create some manufacturing jobs, will increase the profits and hence share price of many US multinatinals who earn large part of their profits from outside US and also reduce the consumption of chinese imports – what’s not to like about any of these things.

[andymajumder]

Given where US is the world economic scenario, the dollar should be lower in value…short term it does hurt developing countries (Brazil,India) but there is enough internal demand developing in these countries..hence they will not be as dependent on exports in future as they are now (not sure about China though). If you have access to these countries, i.e. if you are an immigrant from these developing countries or have relatives there try and invest there. May not be right time to get into Indian stocks which is up 150% since late 2008, but real estate in many big cities in India is still cheap, compared to where it will be in 10 yrs.
Cheaper dollar will help get USA out of its current mess, yes quality of life will gradually degrade for many and may have already sharply degraded for some (but that’s kind of unavoidable given where things stand and are headed).
Cheaper dollar will slow down outsourcing, will make US exports more competitive, reduce the value of our debt, probably create some manufacturing jobs, will increase the profits and hence share price of many US multinatinals who earn large part of their profits from outside US and also reduce the consumption of chinese imports – what’s not to like about any of these things.

[andymajumder]

Given where US is the world economic scenario, the dollar should be lower in value…short term it does hurt developing countries (Brazil,India) but there is enough internal demand developing in these countries..hence they will not be as dependent on exports in future as they are now (not sure about China though). If you have access to these countries, i.e. if you are an immigrant from these developing countries or have relatives there try and invest there. May not be right time to get into Indian stocks which is up 150% since late 2008, but real estate in many big cities in India is still cheap, compared to where it will be in 10 yrs.
Cheaper dollar will help get USA out of its current mess, yes quality of life will gradually degrade for many and may have already sharply degraded for some (but that’s kind of unavoidable given where things stand and are headed).
Cheaper dollar will slow down outsourcing, will make US exports more competitive, reduce the value of our debt, probably create some manufacturing jobs, will increase the profits and hence share price of many US multinatinals who earn large part of their profits from outside US and also reduce the consumption of chinese imports – what’s not to like about any of these things.

[andymajumder]

Given where US is the world economic scenario, the dollar should be lower in value…short term it does hurt developing countries (Brazil,India) but there is enough internal demand developing in these countries..hence they will not be as dependent on exports in future as they are now (not sure about China though). If you have access to these countries, i.e. if you are an immigrant from these developing countries or have relatives there try and invest there. May not be right time to get into Indian stocks which is up 150% since late 2008, but real estate in many big cities in India is still cheap, compared to where it will be in 10 yrs.
Cheaper dollar will help get USA out of its current mess, yes quality of life will gradually degrade for many and may have already sharply degraded for some (but that’s kind of unavoidable given where things stand and are headed).
Cheaper dollar will slow down outsourcing, will make US exports more competitive, reduce the value of our debt, probably create some manufacturing jobs, will increase the profits and hence share price of many US multinatinals who earn large part of their profits from outside US and also reduce the consumption of chinese imports – what’s not to like about any of these things.

[Author]

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