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davelj
Participant[quote=Scarlett]
Let see then in our case what that would mean. ONe income = 75K. 3 x that. $225K. Can you tell me what kind of decent house we can buy with that in lets say UC (older, non-tract houses, stable retiree neighborhood), or in PQ or in SR? That’s right. ZERO. No, it would buy a 2 bdr small apt. A 3 bdr 1500 sf house is about TWICE that, at least. Which is why we need to spend both incomes. q.e.d.[/quote]
Plenty available down in Chula Vista – a very middle class community – in your price range. Or perhaps there’s something about Chula Vista that you find objectionable…
The word “decent” when applied to almost anything is quite subjective, yes?
Participant[quote=Scarlett]
Let see then in our case what that would mean. ONe income = 75K. 3 x that. $225K. Can you tell me what kind of decent house we can buy with that in lets say UC (older, non-tract houses, stable retiree neighborhood), or in PQ or in SR? That’s right. ZERO. No, it would buy a 2 bdr small apt. A 3 bdr 1500 sf house is about TWICE that, at least. Which is why we need to spend both incomes. q.e.d.[/quote]
Plenty available down in Chula Vista – a very middle class community – in your price range. Or perhaps there’s something about Chula Vista that you find objectionable…
The word “decent” when applied to almost anything is quite subjective, yes?
Participant[quote=Scarlett]
Let see then in our case what that would mean. ONe income = 75K. 3 x that. $225K. Can you tell me what kind of decent house we can buy with that in lets say UC (older, non-tract houses, stable retiree neighborhood), or in PQ or in SR? That’s right. ZERO. No, it would buy a 2 bdr small apt. A 3 bdr 1500 sf house is about TWICE that, at least. Which is why we need to spend both incomes. q.e.d.[/quote]
Plenty available down in Chula Vista – a very middle class community – in your price range. Or perhaps there’s something about Chula Vista that you find objectionable…
The word “decent” when applied to almost anything is quite subjective, yes?
Participant[quote=Scarlett]Back in the 1950 and 1960, the median home price was roughly just below TWO times the median household income – which was then predominantly ONE income.
Nowadays, the median home price is roughly THREE times the median household income – which is at least 1.5 full-time incomes, if not close to TWO incomes. In San Diego that ratio is probably even larger.
[/quote]As has been pointed out here before, this is largely a matter of choice. The size of the average house in the U.S. has more than doubled since 1960. So, people CHOOSE to spend more today on housing than they used to – wisely or not, mind you. I’m quite certain that if you cut your housing (size) expectations in half (to live like those folks in the ’50s and ’60s)… the ratios will follow accordingly. But I’m betting you have no interest in doing so… what with the Jones’ big house and all…
Participant[quote=Scarlett]Back in the 1950 and 1960, the median home price was roughly just below TWO times the median household income – which was then predominantly ONE income.
Nowadays, the median home price is roughly THREE times the median household income – which is at least 1.5 full-time incomes, if not close to TWO incomes. In San Diego that ratio is probably even larger.
[/quote]As has been pointed out here before, this is largely a matter of choice. The size of the average house in the U.S. has more than doubled since 1960. So, people CHOOSE to spend more today on housing than they used to – wisely or not, mind you. I’m quite certain that if you cut your housing (size) expectations in half (to live like those folks in the ’50s and ’60s)… the ratios will follow accordingly. But I’m betting you have no interest in doing so… what with the Jones’ big house and all…
Participant[quote=Scarlett]Back in the 1950 and 1960, the median home price was roughly just below TWO times the median household income – which was then predominantly ONE income.
Nowadays, the median home price is roughly THREE times the median household income – which is at least 1.5 full-time incomes, if not close to TWO incomes. In San Diego that ratio is probably even larger.
[/quote]As has been pointed out here before, this is largely a matter of choice. The size of the average house in the U.S. has more than doubled since 1960. So, people CHOOSE to spend more today on housing than they used to – wisely or not, mind you. I’m quite certain that if you cut your housing (size) expectations in half (to live like those folks in the ’50s and ’60s)… the ratios will follow accordingly. But I’m betting you have no interest in doing so… what with the Jones’ big house and all…
Participant[quote=Scarlett]Back in the 1950 and 1960, the median home price was roughly just below TWO times the median household income – which was then predominantly ONE income.
Nowadays, the median home price is roughly THREE times the median household income – which is at least 1.5 full-time incomes, if not close to TWO incomes. In San Diego that ratio is probably even larger.
[/quote]As has been pointed out here before, this is largely a matter of choice. The size of the average house in the U.S. has more than doubled since 1960. So, people CHOOSE to spend more today on housing than they used to – wisely or not, mind you. I’m quite certain that if you cut your housing (size) expectations in half (to live like those folks in the ’50s and ’60s)… the ratios will follow accordingly. But I’m betting you have no interest in doing so… what with the Jones’ big house and all…
Participant[quote=Scarlett]Back in the 1950 and 1960, the median home price was roughly just below TWO times the median household income – which was then predominantly ONE income.
Nowadays, the median home price is roughly THREE times the median household income – which is at least 1.5 full-time incomes, if not close to TWO incomes. In San Diego that ratio is probably even larger.
[/quote]As has been pointed out here before, this is largely a matter of choice. The size of the average house in the U.S. has more than doubled since 1960. So, people CHOOSE to spend more today on housing than they used to – wisely or not, mind you. I’m quite certain that if you cut your housing (size) expectations in half (to live like those folks in the ’50s and ’60s)… the ratios will follow accordingly. But I’m betting you have no interest in doing so… what with the Jones’ big house and all…
Participant[quote=barnaby33]
It turns out that while the foreclosure numbers are staggeringly high, at least in San Diego that has not translated into improved market conditions and or affordability.[/quote]
How does a 40%+ peak-to-trough decline and sub-5% mortgage rates not translate into “improved market conditions or affordability”? I think what you meant to say is that foreclosures have not translated into “conditions that allow me to own a home of the size-range, neighborhood, quality, etc. that I’ve fantasized about,” which is a very different concept from “general affordability.”
I also wish that foreclosures were coming on in a more fast and furious manner than they have, but… I have not been disappointed with the resulting pricing… as Rich has pointed out (and I agree), home prices in SD are fairly reasonable from a historical perspective. And while there are certainly some “bargain” areas, there are also some areas that remain stubbornly overpriced.
Participant[quote=barnaby33]
It turns out that while the foreclosure numbers are staggeringly high, at least in San Diego that has not translated into improved market conditions and or affordability.[/quote]
How does a 40%+ peak-to-trough decline and sub-5% mortgage rates not translate into “improved market conditions or affordability”? I think what you meant to say is that foreclosures have not translated into “conditions that allow me to own a home of the size-range, neighborhood, quality, etc. that I’ve fantasized about,” which is a very different concept from “general affordability.”
I also wish that foreclosures were coming on in a more fast and furious manner than they have, but… I have not been disappointed with the resulting pricing… as Rich has pointed out (and I agree), home prices in SD are fairly reasonable from a historical perspective. And while there are certainly some “bargain” areas, there are also some areas that remain stubbornly overpriced.
Participant[quote=barnaby33]
It turns out that while the foreclosure numbers are staggeringly high, at least in San Diego that has not translated into improved market conditions and or affordability.[/quote]
How does a 40%+ peak-to-trough decline and sub-5% mortgage rates not translate into “improved market conditions or affordability”? I think what you meant to say is that foreclosures have not translated into “conditions that allow me to own a home of the size-range, neighborhood, quality, etc. that I’ve fantasized about,” which is a very different concept from “general affordability.”
I also wish that foreclosures were coming on in a more fast and furious manner than they have, but… I have not been disappointed with the resulting pricing… as Rich has pointed out (and I agree), home prices in SD are fairly reasonable from a historical perspective. And while there are certainly some “bargain” areas, there are also some areas that remain stubbornly overpriced.
Participant[quote=barnaby33]
It turns out that while the foreclosure numbers are staggeringly high, at least in San Diego that has not translated into improved market conditions and or affordability.[/quote]
How does a 40%+ peak-to-trough decline and sub-5% mortgage rates not translate into “improved market conditions or affordability”? I think what you meant to say is that foreclosures have not translated into “conditions that allow me to own a home of the size-range, neighborhood, quality, etc. that I’ve fantasized about,” which is a very different concept from “general affordability.”
I also wish that foreclosures were coming on in a more fast and furious manner than they have, but… I have not been disappointed with the resulting pricing… as Rich has pointed out (and I agree), home prices in SD are fairly reasonable from a historical perspective. And while there are certainly some “bargain” areas, there are also some areas that remain stubbornly overpriced.
Participant[quote=barnaby33]
It turns out that while the foreclosure numbers are staggeringly high, at least in San Diego that has not translated into improved market conditions and or affordability.[/quote]
How does a 40%+ peak-to-trough decline and sub-5% mortgage rates not translate into “improved market conditions or affordability”? I think what you meant to say is that foreclosures have not translated into “conditions that allow me to own a home of the size-range, neighborhood, quality, etc. that I’ve fantasized about,” which is a very different concept from “general affordability.”
I also wish that foreclosures were coming on in a more fast and furious manner than they have, but… I have not been disappointed with the resulting pricing… as Rich has pointed out (and I agree), home prices in SD are fairly reasonable from a historical perspective. And while there are certainly some “bargain” areas, there are also some areas that remain stubbornly overpriced.
Participant[quote=davelj]
While TARP was, admittedly, just a part of the overall “assistance” given to financial institutions… this thread was about TARP, so I’m sticking to the topic at hand. TARP may be a horrible program in all sorts of ways (particularly with respect to moral hazard), but… the CPP money will get paid back, which few of you believed would happen. Not to worry, I don’t expect anyone to post acknowledging they were wrong about this.[/quote]
[quote=briansd1]
I always believed you Dave. Mathematically, it makes sense.Infuse banks with huge capital, then lend them unlimited amounts of money at near zero % which they can turn around and lend at a nice margin. [/quote]
Sorry to nitpick, but this is factually incorrect. The “lending” that your referencing here are discount window borrowings and these are matched up on the asset side of the balance sheet with cash and short-term securities, on which there is no meaningful spread (if any at all). Now… as the Fed lowers rates, deposit rates and FHLB borrowing rates ALSO decline, on which the banks then make a “nice margin” (using your words). But… there is no margin on the discount window borrowings – that’s just for liquidity. Just making a technical point.
[quote=briansd1]
Notice that while banks’ cost of capital is near zero, the cost of debt for everybody else has not proportionately dropped. [/quote]
This is also incorrect. The banks’ “cost of capital” is most certainly not near zero. In fact, it’s quite high historically (recall that cost of equity, which is high right now, is a major component of the overall cost of capital). Discount window borrowings are just one small part of the “cost of capital” calculation, and the biggest liability on a bank’s balance sheet is deposits – which are not “capital.” I think what you meant to say is that the cost of borrowing money – from whatever source – for the large banks is low (but not near zero) from a historical perspective. But overstating your case doesn’t make it stronger.
[quote=briansd1]
I was against the bank bailouts at first, but after some reflection, I believe that it was the right thing to do to save our financial system from collapse. I only wished that at least the top bank excecs had been fired.[/quote]Who knows. I agree that far more folks should’ve been fired. The TBTF execs are, for the most part, a bunch of dirtbags protecting their turf at all costs.
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