[an]

Your company doesn’t match doesn’t mean there’s no tax break. There are several tax break out there for retirement account. The money you put away in 401k, regardless of match is tax deferred, that that in itself will help you in taxes. Then there’s Roth IRA, although you have to invest w/ after tax $, the $ you make from it is tax FREE. Like CB said, tax break means nothing if your asset is worth less than it was before. Here’s now low I think it’ll go, based on what happened the last cycle: I know someone who bought a 3bed/2bath house in Mira Mesa in 1998, their mortgage came out to be about $1000/month. At that same time, rent on a 2 bed/2bath apartment was $900/month. So, it it can happen before in 1998, in the midst of .com boom, it can happen again.

[an]

I went there last weekend to inquire about this. The price already include the “$30k” in upgrades. I put $30k in quotation because it doesn’t seems like 1/2 of the feature is upgrades and I don’t think it adds up to $30k unless you count crazy mark ups. Anyways, the price ($459k) is only for plan one. According to their website, plan 1 is the 2nd most expensive plan, but in reality, the plan 3 we like are selling @ full price ($532k). So this add to me is just bait and switch.

[an]

What do you mean around here? I live in San Diego too. Oh, and regard mid-20s home buyers around me, I’m sure they are stretched to the hilt to pay their mortgage, so not all of them should buy. I’m just saying that my generation want IT and want IT now. What ever “IT” is. That’s why you get this insanity. Instead of waiting till they save 20% down and make enough to comfortably afford a 30 year mortgage + save for retirement, they go and get the IO ARM. So, that’s just some insight on why I see/know many mid-20s owning homes.

[an]

Sorry, I forgot the mid-30’s reference is from the OP. I’m in my mid-20’s and have been investing for awhile now. I would think that most first time home buyers’ age is getting younger. Maybe because it’s due to the bubble, but I know many mid-20’s who bought their first home already. In a non bubble area, rent should cover mortgage cost, so if your income can support the mortgage payment, I don’t see why you would not just buy and rent it out when you’re ready to move again.

[an]

So that mean if you start investing in your mid 20s, you can stay 100% invested in the stock market for 30 years and still be able to diversify when you hit your mid 50s. Starting to invest in your mid 20s is not that far fetched.

[an]

I would think a 401k and other retirement vehicle would be a much better way to force people to save. With a house, you can tap the equity without penalty. So if you do too often, you’re basically renting. While 401k and the like, you’ll be hit w/ a penalty if you withdraw. If you quit or change jobs, you would have to pay back the loan you made of it. You can also only borrow 1/2 of the money you have in there. Bottom line is, they make it very hard to borrow. Also, since it’s automatic, people don’t see it in their pay check, so they adjust their spending accordingly. Savers will be savers regardless of what they use to save it in, i.e. retirement account or a house. A spender will spend. Even if they have a house, they would tap the equity to satisfy their spending habit. So I guess, nothing can force people to save except themselves.

[an]

In crease in desperate seller will bring down price much faster than increase in sellers in general. So this new data of 10% increase in desperate seller is great news even when supply decreased 20%.

[an]

PS, why are you asking us to pick a fund that will perform in the short term now. Weren’t you emphasizing long term when you say funds can’t average more than 10%? Also, no one can tell the future. If we could, we wouldn’t be here. We’d be retired already. Of course past performance doesn’t not guaranty future’s earning. However, it give you a good idea of the possibility. Especially when they average over 10% for over 20 years. It’s not easy to average over 10% over 20 years. The whole point is long term, isn’t it. If you’re talking short term, then you’re talking about timing the market. No one can time the market consistently. If they could, the secret would leaked out and everyone else can too.

[an]

I guess there’s always a way to spin the numbers. I wonder what they’ll say in a couple of years when price declined over 5 years period. They probably start using 10 years :-).

[an]

PS, if you noticed, all the funds I listed average well over 10% for over 20 years. So, yes, there will be years where it went down, but there are also years where it went up. That’s why you take a average over a long period of time, like 20+ years. I don’t know what you’re trying to about it going down in 2000-2002 but so did the index funds and the index itself.

[an]

dead cat bounce? :-D.

[an]

There are plenty of funds that average over 10% in the long term. Here are some example (they’re all averaging over 10% over the last 10 years, which include one of the biggest crash in history after 1929):
FSLBX – average 14.5% over 21 years
VGHCX – average 19.3% over 22 years
FSPHX – average 17% over 25 years
ACRNX – average 16.3% over 36 years
FLISX – average 16.2% over 22 years

I can go on and on but you can find the same list from your brokerage’s fund screener.

[an]

Seems like Standard Pacific Homes just blinked again. I just saw an ad in the UT for Airoso stating price starting @ $463k + $20k in closing cost + $30k in upgrades. On SPH’s website, it’s still saying the starting price is @ $537k, which is already lower than what they were selling it for mid to late last year.

[an]

CNN had an article cover these exact questions. The summary is that taxes will not be raised. Democrats want to keep the economy good so they can make a run for the white house in 2008. So don’t expect any drastic change. In the past, when you have opposite parties in the legislative and executive branches economy tend to do very well, especially the stock market. Just like the Republican control of the legislative when Clinton was in power. The reason economy do well in this condition is that no major laws will come out since they will veto each other. Wall Street loves it when there’s no major shock.

[an]

Prices going back to 2003 levels and pricing going to a level where buyers can afford a traditional mortgage at 40% of income are not necessarily mutually exclusive.
Correct, it’s all relative to the specific area you’re referring to. However, in most of San Diego, it’s quite different. In some area, we are already at 2003 price or early 2004 price. No one know how deep and fast this will fall. We just have to wait and see.

[Author]

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