[Fearful]

The tax credit is for new houses, not resales.

[Fearful]

The tax credit is for new houses, not resales.

[Fearful]

The tax credit is for new houses, not resales.

[Fearful]

[quote=Bob]
Lucky for you, I have considerable knowledge of the bond market and fed policy.
…
So far, Bernanke’s actions seem to be working in the short term, as buying treasuries has had the effect of lowering mortgage rates to record low levels
[/quote]
If you had considerable knowledge of the bond market and fed policy you would not have made that statement. To the extent that the Fed has affected mortgage rates, it has done so by buying mortgage backed securities, not treasurys.

Direct funding of the GSEs by the Treasury has affected mortgage rates also. I do not know which effect has been greater.

Eric

[Fearful]

[quote=Bob]
Lucky for you, I have considerable knowledge of the bond market and fed policy.
…
So far, Bernanke’s actions seem to be working in the short term, as buying treasuries has had the effect of lowering mortgage rates to record low levels
[/quote]
If you had considerable knowledge of the bond market and fed policy you would not have made that statement. To the extent that the Fed has affected mortgage rates, it has done so by buying mortgage backed securities, not treasurys.

Direct funding of the GSEs by the Treasury has affected mortgage rates also. I do not know which effect has been greater.

Eric

[Fearful]

[quote=Bob]
Lucky for you, I have considerable knowledge of the bond market and fed policy.
…
So far, Bernanke’s actions seem to be working in the short term, as buying treasuries has had the effect of lowering mortgage rates to record low levels
[/quote]
If you had considerable knowledge of the bond market and fed policy you would not have made that statement. To the extent that the Fed has affected mortgage rates, it has done so by buying mortgage backed securities, not treasurys.

Direct funding of the GSEs by the Treasury has affected mortgage rates also. I do not know which effect has been greater.

Eric

[Fearful]

[quote=Bob]
Lucky for you, I have considerable knowledge of the bond market and fed policy.
…
So far, Bernanke’s actions seem to be working in the short term, as buying treasuries has had the effect of lowering mortgage rates to record low levels
[/quote]
If you had considerable knowledge of the bond market and fed policy you would not have made that statement. To the extent that the Fed has affected mortgage rates, it has done so by buying mortgage backed securities, not treasurys.

Direct funding of the GSEs by the Treasury has affected mortgage rates also. I do not know which effect has been greater.

Eric

[Fearful]

[quote=Bob]
Lucky for you, I have considerable knowledge of the bond market and fed policy.
…
So far, Bernanke’s actions seem to be working in the short term, as buying treasuries has had the effect of lowering mortgage rates to record low levels
[/quote]
If you had considerable knowledge of the bond market and fed policy you would not have made that statement. To the extent that the Fed has affected mortgage rates, it has done so by buying mortgage backed securities, not treasurys.

Direct funding of the GSEs by the Treasury has affected mortgage rates also. I do not know which effect has been greater.

Eric

[Fearful]

[quote=patb][quote=scott-at-alumni]Maintenance number seems high – I’ve got 3 older (pre-1980) SFHs rented and I haven’t had major problems yet, except for 1 furnace replacement, in 10 years of renting them out. And how did the 1% for maintenance become $200/month? I must have missed something. 1% would be less than $200/year.

[/quote]

I usually figure Proeprty/casualty and Liability as running the same as
local taxes, if it’s a bit lower, cool, as for 1% of the maintenance, what i was
thinking was 1% of the property value, per year. college kids are
rough on a project, so, it’s a good number there.

i just don’t like the idea of running a rental anywhere you can’t
get to in 25 minutes.

[/quote]
Absolutely those maintenance and overhead costs could be overstated. However, the original post article seems to miss the point, often repeated in these forums and among savvier investors, that real estate had better do a lot more than just cover the costs to offset the risk that a bad tenant gets in there and that the value of the property goes down. The real estate boom years mentality, which will take a long time to unwind, is that you can tolerate even negative cash flow because the value of the property goes up. Realistic is something more like that you demand 10-20% better than cash outflow to compensate for the risk.

What else do you expect from Business Week, let alone its Lifestyle section.

[Fearful]

[quote=patb][quote=scott-at-alumni]Maintenance number seems high – I’ve got 3 older (pre-1980) SFHs rented and I haven’t had major problems yet, except for 1 furnace replacement, in 10 years of renting them out. And how did the 1% for maintenance become $200/month? I must have missed something. 1% would be less than $200/year.

[/quote]

I usually figure Proeprty/casualty and Liability as running the same as
local taxes, if it’s a bit lower, cool, as for 1% of the maintenance, what i was
thinking was 1% of the property value, per year. college kids are
rough on a project, so, it’s a good number there.

i just don’t like the idea of running a rental anywhere you can’t
get to in 25 minutes.

[/quote]
Absolutely those maintenance and overhead costs could be overstated. However, the original post article seems to miss the point, often repeated in these forums and among savvier investors, that real estate had better do a lot more than just cover the costs to offset the risk that a bad tenant gets in there and that the value of the property goes down. The real estate boom years mentality, which will take a long time to unwind, is that you can tolerate even negative cash flow because the value of the property goes up. Realistic is something more like that you demand 10-20% better than cash outflow to compensate for the risk.

What else do you expect from Business Week, let alone its Lifestyle section.

[Fearful]

[quote=patb][quote=scott-at-alumni]Maintenance number seems high – I’ve got 3 older (pre-1980) SFHs rented and I haven’t had major problems yet, except for 1 furnace replacement, in 10 years of renting them out. And how did the 1% for maintenance become $200/month? I must have missed something. 1% would be less than $200/year.

[/quote]

I usually figure Proeprty/casualty and Liability as running the same as
local taxes, if it’s a bit lower, cool, as for 1% of the maintenance, what i was
thinking was 1% of the property value, per year. college kids are
rough on a project, so, it’s a good number there.

i just don’t like the idea of running a rental anywhere you can’t
get to in 25 minutes.

[/quote]
Absolutely those maintenance and overhead costs could be overstated. However, the original post article seems to miss the point, often repeated in these forums and among savvier investors, that real estate had better do a lot more than just cover the costs to offset the risk that a bad tenant gets in there and that the value of the property goes down. The real estate boom years mentality, which will take a long time to unwind, is that you can tolerate even negative cash flow because the value of the property goes up. Realistic is something more like that you demand 10-20% better than cash outflow to compensate for the risk.

What else do you expect from Business Week, let alone its Lifestyle section.

[Fearful]

[quote=patb][quote=scott-at-alumni]Maintenance number seems high – I’ve got 3 older (pre-1980) SFHs rented and I haven’t had major problems yet, except for 1 furnace replacement, in 10 years of renting them out. And how did the 1% for maintenance become $200/month? I must have missed something. 1% would be less than $200/year.

[/quote]

I usually figure Proeprty/casualty and Liability as running the same as
local taxes, if it’s a bit lower, cool, as for 1% of the maintenance, what i was
thinking was 1% of the property value, per year. college kids are
rough on a project, so, it’s a good number there.

i just don’t like the idea of running a rental anywhere you can’t
get to in 25 minutes.

[/quote]
Absolutely those maintenance and overhead costs could be overstated. However, the original post article seems to miss the point, often repeated in these forums and among savvier investors, that real estate had better do a lot more than just cover the costs to offset the risk that a bad tenant gets in there and that the value of the property goes down. The real estate boom years mentality, which will take a long time to unwind, is that you can tolerate even negative cash flow because the value of the property goes up. Realistic is something more like that you demand 10-20% better than cash outflow to compensate for the risk.

What else do you expect from Business Week, let alone its Lifestyle section.

[Fearful]

[quote=patb][quote=scott-at-alumni]Maintenance number seems high – I’ve got 3 older (pre-1980) SFHs rented and I haven’t had major problems yet, except for 1 furnace replacement, in 10 years of renting them out. And how did the 1% for maintenance become $200/month? I must have missed something. 1% would be less than $200/year.

[/quote]

I usually figure Proeprty/casualty and Liability as running the same as
local taxes, if it’s a bit lower, cool, as for 1% of the maintenance, what i was
thinking was 1% of the property value, per year. college kids are
rough on a project, so, it’s a good number there.

i just don’t like the idea of running a rental anywhere you can’t
get to in 25 minutes.

[/quote]
Absolutely those maintenance and overhead costs could be overstated. However, the original post article seems to miss the point, often repeated in these forums and among savvier investors, that real estate had better do a lot more than just cover the costs to offset the risk that a bad tenant gets in there and that the value of the property goes down. The real estate boom years mentality, which will take a long time to unwind, is that you can tolerate even negative cash flow because the value of the property goes up. Realistic is something more like that you demand 10-20% better than cash outflow to compensate for the risk.

What else do you expect from Business Week, let alone its Lifestyle section.

[Fearful]

Quote from the OCRegister blog piece on the U-Haul moves: “It’s perhaps a modest sign that cascading home prices have lured in some new residents or that those same low housing values have forced many Californians to stay put because they can’t afford to sell.”

Reduced worker mobility is one known effect of falling house prices. Excess state unemployment is thus partly a result of unemployed workers being unable to move to better opportunities. I doubt the claim that excess unemployment is due to unemployed workers moving here, but it could be true to some degree – people attracted here by the welfare state aspects.

I do not know how to reconcile this with the anecdotal reports (e.g. city-city) of price differences.

[Fearful]

Quote from the OCRegister blog piece on the U-Haul moves: “It’s perhaps a modest sign that cascading home prices have lured in some new residents or that those same low housing values have forced many Californians to stay put because they can’t afford to sell.”

Reduced worker mobility is one known effect of falling house prices. Excess state unemployment is thus partly a result of unemployed workers being unable to move to better opportunities. I doubt the claim that excess unemployment is due to unemployed workers moving here, but it could be true to some degree – people attracted here by the welfare state aspects.

I do not know how to reconcile this with the anecdotal reports (e.g. city-city) of price differences.

[Author]

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