[carlsbadworker]

[quote=sdduuuude]
One day, I guess.

What is it about “Japan had 0% rates and still lost a decade” that people don’t understand ?
[/quote]

The reason that Japan had 0% rates but it still has deflation is because the famous phenomenon known as “carry-trade”. The rest of the world’s economy was booming at that time. So naturally, people took money from Japan central bank and invested it elsewhere. So the printing press does not work as a tool to fight deflation over there.
I would argue the same circumstance does not exist now for US economy. Therefore, the printing press will show its full blown effect one day.

[carlsbadworker]

[quote=sdduuuude]
One day, I guess.

What is it about “Japan had 0% rates and still lost a decade” that people don’t understand ?
[/quote]

The reason that Japan had 0% rates but it still has deflation is because the famous phenomenon known as “carry-trade”. The rest of the world’s economy was booming at that time. So naturally, people took money from Japan central bank and invested it elsewhere. So the printing press does not work as a tool to fight deflation over there.
I would argue the same circumstance does not exist now for US economy. Therefore, the printing press will show its full blown effect one day.

[carlsbadworker]

[quote=sdduuuude]
One day, I guess.

What is it about “Japan had 0% rates and still lost a decade” that people don’t understand ?
[/quote]

The reason that Japan had 0% rates but it still has deflation is because the famous phenomenon known as “carry-trade”. The rest of the world’s economy was booming at that time. So naturally, people took money from Japan central bank and invested it elsewhere. So the printing press does not work as a tool to fight deflation over there.
I would argue the same circumstance does not exist now for US economy. Therefore, the printing press will show its full blown effect one day.

[carlsbadworker]

[quote=sdduuuude]
One day, I guess.

What is it about “Japan had 0% rates and still lost a decade” that people don’t understand ?
[/quote]

The reason that Japan had 0% rates but it still has deflation is because the famous phenomenon known as “carry-trade”. The rest of the world’s economy was booming at that time. So naturally, people took money from Japan central bank and invested it elsewhere. So the printing press does not work as a tool to fight deflation over there.
I would argue the same circumstance does not exist now for US economy. Therefore, the printing press will show its full blown effect one day.

[carlsbadworker]

[quote=sdduuuude]
One day, I guess.

What is it about “Japan had 0% rates and still lost a decade” that people don’t understand ?
[/quote]

The reason that Japan had 0% rates but it still has deflation is because the famous phenomenon known as “carry-trade”. The rest of the world’s economy was booming at that time. So naturally, people took money from Japan central bank and invested it elsewhere. So the printing press does not work as a tool to fight deflation over there.
I would argue the same circumstance does not exist now for US economy. Therefore, the printing press will show its full blown effect one day.

[carlsbadworker]

I think rent has very direct correlation with income. So with unemployment rate rising, the rent will surely drop. However, unless you are predicting 20%+ unemployment rate, there is not much rooms for rents to drop especially in low-price area. Also I always ignore the current house rent price but prefer to use 3-bedrooms apartment rental price. I have never seen apartment rental goes down by much although they sometimes offer promotions to effectively lower their rents. But that’s all temporary, and if you expect to live in the house yourself, you should be able to ride it out.

So I agree with ANN above, although I would change his formula a little bit. I think it is prefect safe to buy if PITI < 3-bedroom-rents for self use. But for investment, I think I would like to see mortgage < 50%* rents (assume 20% down), we are not there yet. That's my floor of real estate market price in doomsday scenario (i.e. another 25-30% drop in town like Temecula). If I still have job at that time, I would happily pick up an investment property at that time. If I don't have a job at that time, I would have wished that I had bought now when I still have verifiable W2 income to get the best mortgage rate. I will just use my remaining cash to ride out the down turn instead of being able to have a rental property to my name. The economy will recover one day or another. I believe at least we agree on that, right?

[carlsbadworker]

I think rent has very direct correlation with income. So with unemployment rate rising, the rent will surely drop. However, unless you are predicting 20%+ unemployment rate, there is not much rooms for rents to drop especially in low-price area. Also I always ignore the current house rent price but prefer to use 3-bedrooms apartment rental price. I have never seen apartment rental goes down by much although they sometimes offer promotions to effectively lower their rents. But that’s all temporary, and if you expect to live in the house yourself, you should be able to ride it out.

So I agree with ANN above, although I would change his formula a little bit. I think it is prefect safe to buy if PITI < 3-bedroom-rents for self use. But for investment, I think I would like to see mortgage < 50%* rents (assume 20% down), we are not there yet. That's my floor of real estate market price in doomsday scenario (i.e. another 25-30% drop in town like Temecula). If I still have job at that time, I would happily pick up an investment property at that time. If I don't have a job at that time, I would have wished that I had bought now when I still have verifiable W2 income to get the best mortgage rate. I will just use my remaining cash to ride out the down turn instead of being able to have a rental property to my name. The economy will recover one day or another. I believe at least we agree on that, right?

[carlsbadworker]

I think rent has very direct correlation with income. So with unemployment rate rising, the rent will surely drop. However, unless you are predicting 20%+ unemployment rate, there is not much rooms for rents to drop especially in low-price area. Also I always ignore the current house rent price but prefer to use 3-bedrooms apartment rental price. I have never seen apartment rental goes down by much although they sometimes offer promotions to effectively lower their rents. But that’s all temporary, and if you expect to live in the house yourself, you should be able to ride it out.

So I agree with ANN above, although I would change his formula a little bit. I think it is prefect safe to buy if PITI < 3-bedroom-rents for self use. But for investment, I think I would like to see mortgage < 50%* rents (assume 20% down), we are not there yet. That's my floor of real estate market price in doomsday scenario (i.e. another 25-30% drop in town like Temecula). If I still have job at that time, I would happily pick up an investment property at that time. If I don't have a job at that time, I would have wished that I had bought now when I still have verifiable W2 income to get the best mortgage rate. I will just use my remaining cash to ride out the down turn instead of being able to have a rental property to my name. The economy will recover one day or another. I believe at least we agree on that, right?

[carlsbadworker]

I think rent has very direct correlation with income. So with unemployment rate rising, the rent will surely drop. However, unless you are predicting 20%+ unemployment rate, there is not much rooms for rents to drop especially in low-price area. Also I always ignore the current house rent price but prefer to use 3-bedrooms apartment rental price. I have never seen apartment rental goes down by much although they sometimes offer promotions to effectively lower their rents. But that’s all temporary, and if you expect to live in the house yourself, you should be able to ride it out.

So I agree with ANN above, although I would change his formula a little bit. I think it is prefect safe to buy if PITI < 3-bedroom-rents for self use. But for investment, I think I would like to see mortgage < 50%* rents (assume 20% down), we are not there yet. That's my floor of real estate market price in doomsday scenario (i.e. another 25-30% drop in town like Temecula). If I still have job at that time, I would happily pick up an investment property at that time. If I don't have a job at that time, I would have wished that I had bought now when I still have verifiable W2 income to get the best mortgage rate. I will just use my remaining cash to ride out the down turn instead of being able to have a rental property to my name. The economy will recover one day or another. I believe at least we agree on that, right?

[carlsbadworker]

I think rent has very direct correlation with income. So with unemployment rate rising, the rent will surely drop. However, unless you are predicting 20%+ unemployment rate, there is not much rooms for rents to drop especially in low-price area. Also I always ignore the current house rent price but prefer to use 3-bedrooms apartment rental price. I have never seen apartment rental goes down by much although they sometimes offer promotions to effectively lower their rents. But that’s all temporary, and if you expect to live in the house yourself, you should be able to ride it out.

So I agree with ANN above, although I would change his formula a little bit. I think it is prefect safe to buy if PITI < 3-bedroom-rents for self use. But for investment, I think I would like to see mortgage < 50%* rents (assume 20% down), we are not there yet. That's my floor of real estate market price in doomsday scenario (i.e. another 25-30% drop in town like Temecula). If I still have job at that time, I would happily pick up an investment property at that time. If I don't have a job at that time, I would have wished that I had bought now when I still have verifiable W2 income to get the best mortgage rate. I will just use my remaining cash to ride out the down turn instead of being able to have a rental property to my name. The economy will recover one day or another. I believe at least we agree on that, right?

[carlsbadworker]

That’s Jim Klinge’s territorial, isn’t it? I have no idea how good his service is, but he did have a nice website that informs the buyer of the current market condition: http://bubbleinfo.com.

[carlsbadworker]

That’s Jim Klinge’s territorial, isn’t it? I have no idea how good his service is, but he did have a nice website that informs the buyer of the current market condition: http://bubbleinfo.com.

[carlsbadworker]

That’s Jim Klinge’s territorial, isn’t it? I have no idea how good his service is, but he did have a nice website that informs the buyer of the current market condition: http://bubbleinfo.com.

[carlsbadworker]

That’s Jim Klinge’s territorial, isn’t it? I have no idea how good his service is, but he did have a nice website that informs the buyer of the current market condition: http://bubbleinfo.com.

[carlsbadworker]

That’s Jim Klinge’s territorial, isn’t it? I have no idea how good his service is, but he did have a nice website that informs the buyer of the current market condition: http://bubbleinfo.com.

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