seeking stability…

[scaredyclassic]

given the tremendous pressue for prices to be high, it is kind of amazing that prices came down. i mean, what if the voices that felt housing would plateau but not plummet had been right. would be kinda weird. seems maybe like it would be dumb to push one’s luck too far and bet against the overwhelming desire of the nation for too long. im as contrarian as the next contrarian, but ya know, it’s hard to be a contrarian in the face of other players who can change the rules whenever they like.

[CA renter]

[quote=UCGal]I think you need to add another category.
People who have medium size mortgages and don’t mind of the price drops below what they paid because they are in the house for the long haul with full intention of paying off the mortgage and living in it till they’re hauled off to the nursing home or mortuary.

Our house is worth less than we paid (at least according to zillow.) But I don’t mind because we’re on track to have it paid off in 9 years and be mortgage free. It seemed ridiculous it was so expensive at the time. But I looked at the purchase as shelter/housing… not as an investment that could/would be cashed out. I think a more affordable/sustainable market is better for everyone. If 50% or more of household budgets are directed at housing, the non-housing portions of the economy suffer.[/quote]

Great post, especailly the part about housing being shelter, not an “investment.” Too many people still have the bubble mentality and think their houses will make them rich. They fail to take into account the fact that they will need to sell the house in order to realize the gains (HELOCs and cash-out refis don’t count because you get an equal amount of debt PLUS interest). If they sell the house, they will have to pay an over-inflated price to buy another house unless they intend to move to Detroit or some other low-cost area. And if everyone tries to cash-out at the same time, you’ll get a “foreclosure crisis.”

Anyway, JOBS are where the money should be. We need to completely refocus and make the non-housing portion of the economy what drives us as we go forward. You’re absolutely right about high housing costs being a negative in a healthy economy.

[CA renter]

[quote=UCGal]I think you need to add another category.
People who have medium size mortgages and don’t mind of the price drops below what they paid because they are in the house for the long haul with full intention of paying off the mortgage and living in it till they’re hauled off to the nursing home or mortuary.

Our house is worth less than we paid (at least according to zillow.) But I don’t mind because we’re on track to have it paid off in 9 years and be mortgage free. It seemed ridiculous it was so expensive at the time. But I looked at the purchase as shelter/housing… not as an investment that could/would be cashed out. I think a more affordable/sustainable market is better for everyone. If 50% or more of household budgets are directed at housing, the non-housing portions of the economy suffer.[/quote]

Great post, especailly the part about housing being shelter, not an “investment.” Too many people still have the bubble mentality and think their houses will make them rich. They fail to take into account the fact that they will need to sell the house in order to realize the gains (HELOCs and cash-out refis don’t count because you get an equal amount of debt PLUS interest). If they sell the house, they will have to pay an over-inflated price to buy another house unless they intend to move to Detroit or some other low-cost area. And if everyone tries to cash-out at the same time, you’ll get a “foreclosure crisis.”

Anyway, JOBS are where the money should be. We need to completely refocus and make the non-housing portion of the economy what drives us as we go forward. You’re absolutely right about high housing costs being a negative in a healthy economy.

[CA renter]

[quote=UCGal]I think you need to add another category.
People who have medium size mortgages and don’t mind of the price drops below what they paid because they are in the house for the long haul with full intention of paying off the mortgage and living in it till they’re hauled off to the nursing home or mortuary.

Our house is worth less than we paid (at least according to zillow.) But I don’t mind because we’re on track to have it paid off in 9 years and be mortgage free. It seemed ridiculous it was so expensive at the time. But I looked at the purchase as shelter/housing… not as an investment that could/would be cashed out. I think a more affordable/sustainable market is better for everyone. If 50% or more of household budgets are directed at housing, the non-housing portions of the economy suffer.[/quote]

Great post, especailly the part about housing being shelter, not an “investment.” Too many people still have the bubble mentality and think their houses will make them rich. They fail to take into account the fact that they will need to sell the house in order to realize the gains (HELOCs and cash-out refis don’t count because you get an equal amount of debt PLUS interest). If they sell the house, they will have to pay an over-inflated price to buy another house unless they intend to move to Detroit or some other low-cost area. And if everyone tries to cash-out at the same time, you’ll get a “foreclosure crisis.”

Anyway, JOBS are where the money should be. We need to completely refocus and make the non-housing portion of the economy what drives us as we go forward. You’re absolutely right about high housing costs being a negative in a healthy economy.

[CA renter]

[quote=UCGal]I think you need to add another category.
People who have medium size mortgages and don’t mind of the price drops below what they paid because they are in the house for the long haul with full intention of paying off the mortgage and living in it till they’re hauled off to the nursing home or mortuary.

Our house is worth less than we paid (at least according to zillow.) But I don’t mind because we’re on track to have it paid off in 9 years and be mortgage free. It seemed ridiculous it was so expensive at the time. But I looked at the purchase as shelter/housing… not as an investment that could/would be cashed out. I think a more affordable/sustainable market is better for everyone. If 50% or more of household budgets are directed at housing, the non-housing portions of the economy suffer.[/quote]

Great post, especailly the part about housing being shelter, not an “investment.” Too many people still have the bubble mentality and think their houses will make them rich. They fail to take into account the fact that they will need to sell the house in order to realize the gains (HELOCs and cash-out refis don’t count because you get an equal amount of debt PLUS interest). If they sell the house, they will have to pay an over-inflated price to buy another house unless they intend to move to Detroit or some other low-cost area. And if everyone tries to cash-out at the same time, you’ll get a “foreclosure crisis.”

Anyway, JOBS are where the money should be. We need to completely refocus and make the non-housing portion of the economy what drives us as we go forward. You’re absolutely right about high housing costs being a negative in a healthy economy.

[CA renter]

[quote=UCGal]I think you need to add another category.
People who have medium size mortgages and don’t mind of the price drops below what they paid because they are in the house for the long haul with full intention of paying off the mortgage and living in it till they’re hauled off to the nursing home or mortuary.

Our house is worth less than we paid (at least according to zillow.) But I don’t mind because we’re on track to have it paid off in 9 years and be mortgage free. It seemed ridiculous it was so expensive at the time. But I looked at the purchase as shelter/housing… not as an investment that could/would be cashed out. I think a more affordable/sustainable market is better for everyone. If 50% or more of household budgets are directed at housing, the non-housing portions of the economy suffer.[/quote]

Great post, especailly the part about housing being shelter, not an “investment.” Too many people still have the bubble mentality and think their houses will make them rich. They fail to take into account the fact that they will need to sell the house in order to realize the gains (HELOCs and cash-out refis don’t count because you get an equal amount of debt PLUS interest). If they sell the house, they will have to pay an over-inflated price to buy another house unless they intend to move to Detroit or some other low-cost area. And if everyone tries to cash-out at the same time, you’ll get a “foreclosure crisis.”

Anyway, JOBS are where the money should be. We need to completely refocus and make the non-housing portion of the economy what drives us as we go forward. You’re absolutely right about high housing costs being a negative in a healthy economy.

[temeculaguy]

DWCAP, nice post, bonus points for chris farley reference!!! Fretting over values is usually a sport for buyers and marginal owners. Most people buy and hold based on affordability and not profitability. Buy and hold is a poplular strategy, not a old fashioned and outdated philosiphy. Look at UCgal’s scenario, she’s not alone, today’s value is less important than her ability to pay the debt and more importantly, her ability to pay off the debt.

scardey, the market has stabilized to some degree, two years ago, it was moving faster than zillow or appraisers could keep up with. It has leveled off, if it goes up or down in the coming years, it will likely be in very small ways with a few exceptions, which is a good thing.

My own anectdote, after my much talked about (by me) purchase some 14 months ago, my place has appreciated about 30%. A model match just went pending for 30% more than I paid and should be valued lower as it lacks a view and has a smaller lot. Am I excited, do I feel excited that I properly guessed the overcorrection, actually I don’t. At this point, my home value is not too relevent. I’ve got a fixed 5% mortgage, my total housing costs (piti) are less than 25% of my income, over the next two decades, the mortgage will not go up, yet my income more than likely will. In time, the 25% number will decrease. If the value of my home goes too high in that time, there may be temptation to borrow from that equity, it will also impact my teenagers ability to buy when they reach that phase of their lives. The best scenario for me would be slow or no appreciation.

Scardey, you need to look at potential purchase of your primary home as fixed rent costs, not an investment strategy. Buy the house that you can afford and can suit your needs for the longest amount of time, not the one that you can make the most profit from. If it were to go up or down in value, the only thing that is really affected is your mind. If you made a fundamentally sound, long term financial decision, it really doesn’t matter.

[temeculaguy]

DWCAP, nice post, bonus points for chris farley reference!!! Fretting over values is usually a sport for buyers and marginal owners. Most people buy and hold based on affordability and not profitability. Buy and hold is a poplular strategy, not a old fashioned and outdated philosiphy. Look at UCgal’s scenario, she’s not alone, today’s value is less important than her ability to pay the debt and more importantly, her ability to pay off the debt.

scardey, the market has stabilized to some degree, two years ago, it was moving faster than zillow or appraisers could keep up with. It has leveled off, if it goes up or down in the coming years, it will likely be in very small ways with a few exceptions, which is a good thing.

My own anectdote, after my much talked about (by me) purchase some 14 months ago, my place has appreciated about 30%. A model match just went pending for 30% more than I paid and should be valued lower as it lacks a view and has a smaller lot. Am I excited, do I feel excited that I properly guessed the overcorrection, actually I don’t. At this point, my home value is not too relevent. I’ve got a fixed 5% mortgage, my total housing costs (piti) are less than 25% of my income, over the next two decades, the mortgage will not go up, yet my income more than likely will. In time, the 25% number will decrease. If the value of my home goes too high in that time, there may be temptation to borrow from that equity, it will also impact my teenagers ability to buy when they reach that phase of their lives. The best scenario for me would be slow or no appreciation.

Scardey, you need to look at potential purchase of your primary home as fixed rent costs, not an investment strategy. Buy the house that you can afford and can suit your needs for the longest amount of time, not the one that you can make the most profit from. If it were to go up or down in value, the only thing that is really affected is your mind. If you made a fundamentally sound, long term financial decision, it really doesn’t matter.

[temeculaguy]

DWCAP, nice post, bonus points for chris farley reference!!! Fretting over values is usually a sport for buyers and marginal owners. Most people buy and hold based on affordability and not profitability. Buy and hold is a poplular strategy, not a old fashioned and outdated philosiphy. Look at UCgal’s scenario, she’s not alone, today’s value is less important than her ability to pay the debt and more importantly, her ability to pay off the debt.

scardey, the market has stabilized to some degree, two years ago, it was moving faster than zillow or appraisers could keep up with. It has leveled off, if it goes up or down in the coming years, it will likely be in very small ways with a few exceptions, which is a good thing.

My own anectdote, after my much talked about (by me) purchase some 14 months ago, my place has appreciated about 30%. A model match just went pending for 30% more than I paid and should be valued lower as it lacks a view and has a smaller lot. Am I excited, do I feel excited that I properly guessed the overcorrection, actually I don’t. At this point, my home value is not too relevent. I’ve got a fixed 5% mortgage, my total housing costs (piti) are less than 25% of my income, over the next two decades, the mortgage will not go up, yet my income more than likely will. In time, the 25% number will decrease. If the value of my home goes too high in that time, there may be temptation to borrow from that equity, it will also impact my teenagers ability to buy when they reach that phase of their lives. The best scenario for me would be slow or no appreciation.

Scardey, you need to look at potential purchase of your primary home as fixed rent costs, not an investment strategy. Buy the house that you can afford and can suit your needs for the longest amount of time, not the one that you can make the most profit from. If it were to go up or down in value, the only thing that is really affected is your mind. If you made a fundamentally sound, long term financial decision, it really doesn’t matter.

[temeculaguy]

DWCAP, nice post, bonus points for chris farley reference!!! Fretting over values is usually a sport for buyers and marginal owners. Most people buy and hold based on affordability and not profitability. Buy and hold is a poplular strategy, not a old fashioned and outdated philosiphy. Look at UCgal’s scenario, she’s not alone, today’s value is less important than her ability to pay the debt and more importantly, her ability to pay off the debt.

scardey, the market has stabilized to some degree, two years ago, it was moving faster than zillow or appraisers could keep up with. It has leveled off, if it goes up or down in the coming years, it will likely be in very small ways with a few exceptions, which is a good thing.

My own anectdote, after my much talked about (by me) purchase some 14 months ago, my place has appreciated about 30%. A model match just went pending for 30% more than I paid and should be valued lower as it lacks a view and has a smaller lot. Am I excited, do I feel excited that I properly guessed the overcorrection, actually I don’t. At this point, my home value is not too relevent. I’ve got a fixed 5% mortgage, my total housing costs (piti) are less than 25% of my income, over the next two decades, the mortgage will not go up, yet my income more than likely will. In time, the 25% number will decrease. If the value of my home goes too high in that time, there may be temptation to borrow from that equity, it will also impact my teenagers ability to buy when they reach that phase of their lives. The best scenario for me would be slow or no appreciation.

Scardey, you need to look at potential purchase of your primary home as fixed rent costs, not an investment strategy. Buy the house that you can afford and can suit your needs for the longest amount of time, not the one that you can make the most profit from. If it were to go up or down in value, the only thing that is really affected is your mind. If you made a fundamentally sound, long term financial decision, it really doesn’t matter.

[temeculaguy]

DWCAP, nice post, bonus points for chris farley reference!!! Fretting over values is usually a sport for buyers and marginal owners. Most people buy and hold based on affordability and not profitability. Buy and hold is a poplular strategy, not a old fashioned and outdated philosiphy. Look at UCgal’s scenario, she’s not alone, today’s value is less important than her ability to pay the debt and more importantly, her ability to pay off the debt.

scardey, the market has stabilized to some degree, two years ago, it was moving faster than zillow or appraisers could keep up with. It has leveled off, if it goes up or down in the coming years, it will likely be in very small ways with a few exceptions, which is a good thing.

My own anectdote, after my much talked about (by me) purchase some 14 months ago, my place has appreciated about 30%. A model match just went pending for 30% more than I paid and should be valued lower as it lacks a view and has a smaller lot. Am I excited, do I feel excited that I properly guessed the overcorrection, actually I don’t. At this point, my home value is not too relevent. I’ve got a fixed 5% mortgage, my total housing costs (piti) are less than 25% of my income, over the next two decades, the mortgage will not go up, yet my income more than likely will. In time, the 25% number will decrease. If the value of my home goes too high in that time, there may be temptation to borrow from that equity, it will also impact my teenagers ability to buy when they reach that phase of their lives. The best scenario for me would be slow or no appreciation.

Scardey, you need to look at potential purchase of your primary home as fixed rent costs, not an investment strategy. Buy the house that you can afford and can suit your needs for the longest amount of time, not the one that you can make the most profit from. If it were to go up or down in value, the only thing that is really affected is your mind. If you made a fundamentally sound, long term financial decision, it really doesn’t matter.

[moneymaker]

All good points, I think you can look at it in many different ways. Even an investor wants the price to be low when buying and then from that point start going up. The most important thing is relative value and the best way to compare that is by looking at rents. If you can buy a place and have a fixed payment within 10% of rents then in my opinion it is a no brainer. For complex analysis the delta is what is really important,not where is it now but where is it going. I’m of the opinion that it is in most everyone’s best interest if we have inflation,which really does feel weird.

[moneymaker]

All good points, I think you can look at it in many different ways. Even an investor wants the price to be low when buying and then from that point start going up. The most important thing is relative value and the best way to compare that is by looking at rents. If you can buy a place and have a fixed payment within 10% of rents then in my opinion it is a no brainer. For complex analysis the delta is what is really important,not where is it now but where is it going. I’m of the opinion that it is in most everyone’s best interest if we have inflation,which really does feel weird.

[moneymaker]

All good points, I think you can look at it in many different ways. Even an investor wants the price to be low when buying and then from that point start going up. The most important thing is relative value and the best way to compare that is by looking at rents. If you can buy a place and have a fixed payment within 10% of rents then in my opinion it is a no brainer. For complex analysis the delta is what is really important,not where is it now but where is it going. I’m of the opinion that it is in most everyone’s best interest if we have inflation,which really does feel weird.

[moneymaker]

All good points, I think you can look at it in many different ways. Even an investor wants the price to be low when buying and then from that point start going up. The most important thing is relative value and the best way to compare that is by looking at rents. If you can buy a place and have a fixed payment within 10% of rents then in my opinion it is a no brainer. For complex analysis the delta is what is really important,not where is it now but where is it going. I’m of the opinion that it is in most everyone’s best interest if we have inflation,which really does feel weird.

[Author]

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