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(former)FormerSanDiegan
Participant[quote=asianautica][quote=carlsbadworker]
However, I don’t think “it is extremely foolish to want a no cost or no fee loan, gambling that rates will go lower.” It really depends on individual situation (e.g. how much cash you have on hand, what job security youhave, what is your overall financial plan, etc).
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I think I’ll side w/ HLS on this one. If you don’t have a few grand to buy down rates, then you’re probably extending a little too much to buy the house. If you are not sure of your job security, then you shouldn’t be buying a house. Point is, If you can’t afford to pay a few grand up front to get you a better rate, you should rethink the house you’re buying. It might be too much for you. Pay a few thousands up front will save you tens of thousands over the life of the loan.[/quote]Just because someone has a few thousand or a few tens of thousands does not mean they should spend it to lower the rate. It depends on how long they plan to stay in the property and the amount of time it takes to recoup those costs.
One might be willing to pay a higher rate and save their cash if it takes more than 3 or 4 years to break even on the costs one is paying.
The informed consumer should be offered a range of rates and costs and find the best rate/cost balance for their particular situation. This rarely happens.
ParticipantIs there any way to actually measure “pent up demand”? Are we left with just anecdote?
I don’t believe that there is any way to quantitatively measure pent-up demand. One can only observe the effects of pent-up demand when it turns into actual demand. It’s magnitude can only be known in retrospect.
ParticipantIs there any way to actually measure “pent up demand”? Are we left with just anecdote?
I don’t believe that there is any way to quantitatively measure pent-up demand. One can only observe the effects of pent-up demand when it turns into actual demand. It’s magnitude can only be known in retrospect.
ParticipantIs there any way to actually measure “pent up demand”? Are we left with just anecdote?
I don’t believe that there is any way to quantitatively measure pent-up demand. One can only observe the effects of pent-up demand when it turns into actual demand. It’s magnitude can only be known in retrospect.
ParticipantIs there any way to actually measure “pent up demand”? Are we left with just anecdote?
I don’t believe that there is any way to quantitatively measure pent-up demand. One can only observe the effects of pent-up demand when it turns into actual demand. It’s magnitude can only be known in retrospect.
ParticipantIs there any way to actually measure “pent up demand”? Are we left with just anecdote?
I don’t believe that there is any way to quantitatively measure pent-up demand. One can only observe the effects of pent-up demand when it turns into actual demand. It’s magnitude can only be known in retrospect.
Participant[quote=BGinRB][quote=FormerSanDiegan]
I am having a hard time figuring out why the prudent saver who is looking for a house for his/her family to live in is not being rewarded. [/quote]Here, I’ll help you figure it out – plot price-to-income in 2000 vs 2008 for 92126-92131.
[/quote]
I would prefer that you bring the data to support your argument. I cannot find income broken down by zip code
However, here’s my stab at finding data related to your argument. I’ll take median prices averaged over 3 months(to reduce month-to-month noise) for 92126.92126 Median prices:
Aug-Oct 2008 : Three month average of median price is 377K.Aug-Oct 2000 : Three month average of median price is 236K.
About a 60% increase in prices.
I only have Census bureau income from 2000 and 2006. From 2000-2006 San Diego median family income rose by 34% .
So, since 2000 Prices in the first zip code you mentioned have risen about 60% compared to incomes at ~34%.
However, interest rates in 2000 were at 7.25% for 30-year fixed. Currently at 5.5%, a decline of about 25%
Guess what this means ?
We’re fairly close to the same percentage of income required to buy as was the case in 2000.
If we assume a 2% percent income growth that we didn’t account for in 2007-2008 and another 5% decline in prices since October, guess what ? We are at that point.
If you compare to 2005, you will find that owning in that zip code as a percentage of income is about half today (compared to 2005 peak).
We are very likely to see more downside in prices. However, I would not characterize the current situation as being unfavorable to the prudent savers who have been out of the RE market.
Participant[quote=BGinRB][quote=FormerSanDiegan]
I am having a hard time figuring out why the prudent saver who is looking for a house for his/her family to live in is not being rewarded. [/quote]Here, I’ll help you figure it out – plot price-to-income in 2000 vs 2008 for 92126-92131.
[/quote]
I would prefer that you bring the data to support your argument. I cannot find income broken down by zip code
However, here’s my stab at finding data related to your argument. I’ll take median prices averaged over 3 months(to reduce month-to-month noise) for 92126.92126 Median prices:
Aug-Oct 2008 : Three month average of median price is 377K.Aug-Oct 2000 : Three month average of median price is 236K.
About a 60% increase in prices.
I only have Census bureau income from 2000 and 2006. From 2000-2006 San Diego median family income rose by 34% .
So, since 2000 Prices in the first zip code you mentioned have risen about 60% compared to incomes at ~34%.
However, interest rates in 2000 were at 7.25% for 30-year fixed. Currently at 5.5%, a decline of about 25%
Guess what this means ?
We’re fairly close to the same percentage of income required to buy as was the case in 2000.
If we assume a 2% percent income growth that we didn’t account for in 2007-2008 and another 5% decline in prices since October, guess what ? We are at that point.
If you compare to 2005, you will find that owning in that zip code as a percentage of income is about half today (compared to 2005 peak).
We are very likely to see more downside in prices. However, I would not characterize the current situation as being unfavorable to the prudent savers who have been out of the RE market.
Participant[quote=BGinRB][quote=FormerSanDiegan]
I am having a hard time figuring out why the prudent saver who is looking for a house for his/her family to live in is not being rewarded. [/quote]Here, I’ll help you figure it out – plot price-to-income in 2000 vs 2008 for 92126-92131.
[/quote]
I would prefer that you bring the data to support your argument. I cannot find income broken down by zip code
However, here’s my stab at finding data related to your argument. I’ll take median prices averaged over 3 months(to reduce month-to-month noise) for 92126.92126 Median prices:
Aug-Oct 2008 : Three month average of median price is 377K.Aug-Oct 2000 : Three month average of median price is 236K.
About a 60% increase in prices.
I only have Census bureau income from 2000 and 2006. From 2000-2006 San Diego median family income rose by 34% .
So, since 2000 Prices in the first zip code you mentioned have risen about 60% compared to incomes at ~34%.
However, interest rates in 2000 were at 7.25% for 30-year fixed. Currently at 5.5%, a decline of about 25%
Guess what this means ?
We’re fairly close to the same percentage of income required to buy as was the case in 2000.
If we assume a 2% percent income growth that we didn’t account for in 2007-2008 and another 5% decline in prices since October, guess what ? We are at that point.
If you compare to 2005, you will find that owning in that zip code as a percentage of income is about half today (compared to 2005 peak).
We are very likely to see more downside in prices. However, I would not characterize the current situation as being unfavorable to the prudent savers who have been out of the RE market.
Participant[quote=BGinRB][quote=FormerSanDiegan]
I am having a hard time figuring out why the prudent saver who is looking for a house for his/her family to live in is not being rewarded. [/quote]Here, I’ll help you figure it out – plot price-to-income in 2000 vs 2008 for 92126-92131.
[/quote]
I would prefer that you bring the data to support your argument. I cannot find income broken down by zip code
However, here’s my stab at finding data related to your argument. I’ll take median prices averaged over 3 months(to reduce month-to-month noise) for 92126.92126 Median prices:
Aug-Oct 2008 : Three month average of median price is 377K.Aug-Oct 2000 : Three month average of median price is 236K.
About a 60% increase in prices.
I only have Census bureau income from 2000 and 2006. From 2000-2006 San Diego median family income rose by 34% .
So, since 2000 Prices in the first zip code you mentioned have risen about 60% compared to incomes at ~34%.
However, interest rates in 2000 were at 7.25% for 30-year fixed. Currently at 5.5%, a decline of about 25%
Guess what this means ?
We’re fairly close to the same percentage of income required to buy as was the case in 2000.
If we assume a 2% percent income growth that we didn’t account for in 2007-2008 and another 5% decline in prices since October, guess what ? We are at that point.
If you compare to 2005, you will find that owning in that zip code as a percentage of income is about half today (compared to 2005 peak).
We are very likely to see more downside in prices. However, I would not characterize the current situation as being unfavorable to the prudent savers who have been out of the RE market.
Participant[quote=BGinRB][quote=FormerSanDiegan]
I am having a hard time figuring out why the prudent saver who is looking for a house for his/her family to live in is not being rewarded. [/quote]Here, I’ll help you figure it out – plot price-to-income in 2000 vs 2008 for 92126-92131.
[/quote]
I would prefer that you bring the data to support your argument. I cannot find income broken down by zip code
However, here’s my stab at finding data related to your argument. I’ll take median prices averaged over 3 months(to reduce month-to-month noise) for 92126.92126 Median prices:
Aug-Oct 2008 : Three month average of median price is 377K.Aug-Oct 2000 : Three month average of median price is 236K.
About a 60% increase in prices.
I only have Census bureau income from 2000 and 2006. From 2000-2006 San Diego median family income rose by 34% .
So, since 2000 Prices in the first zip code you mentioned have risen about 60% compared to incomes at ~34%.
However, interest rates in 2000 were at 7.25% for 30-year fixed. Currently at 5.5%, a decline of about 25%
Guess what this means ?
We’re fairly close to the same percentage of income required to buy as was the case in 2000.
If we assume a 2% percent income growth that we didn’t account for in 2007-2008 and another 5% decline in prices since October, guess what ? We are at that point.
If you compare to 2005, you will find that owning in that zip code as a percentage of income is about half today (compared to 2005 peak).
We are very likely to see more downside in prices. However, I would not characterize the current situation as being unfavorable to the prudent savers who have been out of the RE market.
Participant[quote=DWCAP]
I guess the real issue is that most of us were hoping for “our” time, a time when people who saved would be rewarded. But when is life ever fair? [/quote]I am having a hard time figuring out why the prudent saver who is looking for a house for his/her family to live in is not being rewarded. If you have been waiting out the bubble and have been saving, your time is arriving. Recognize it.
Consider this, if you have been sitting out the bubble :
1. Prices down 25-40% in San Diego since 2005, currently at inflation-adjusted levels last seen in ~2001.
2. Interest rates are down to the 5% or lower levels.
Assuming prices have dropped by 35% or so, and mortgage costs have dropped by at least 20% for fixed rate mortgages. That is nearly a 50% drop in monthly costs for a comparable home.
If you have been sitting out the bubble, looking for an opportunity to prudently deploy your savings and are whining now about these circumstances, you cannot be helped.
Participant[quote=DWCAP]
I guess the real issue is that most of us were hoping for “our” time, a time when people who saved would be rewarded. But when is life ever fair? [/quote]I am having a hard time figuring out why the prudent saver who is looking for a house for his/her family to live in is not being rewarded. If you have been waiting out the bubble and have been saving, your time is arriving. Recognize it.
Consider this, if you have been sitting out the bubble :
1. Prices down 25-40% in San Diego since 2005, currently at inflation-adjusted levels last seen in ~2001.
2. Interest rates are down to the 5% or lower levels.
Assuming prices have dropped by 35% or so, and mortgage costs have dropped by at least 20% for fixed rate mortgages. That is nearly a 50% drop in monthly costs for a comparable home.
If you have been sitting out the bubble, looking for an opportunity to prudently deploy your savings and are whining now about these circumstances, you cannot be helped.
Participant[quote=DWCAP]
I guess the real issue is that most of us were hoping for “our” time, a time when people who saved would be rewarded. But when is life ever fair? [/quote]I am having a hard time figuring out why the prudent saver who is looking for a house for his/her family to live in is not being rewarded. If you have been waiting out the bubble and have been saving, your time is arriving. Recognize it.
Consider this, if you have been sitting out the bubble :
1. Prices down 25-40% in San Diego since 2005, currently at inflation-adjusted levels last seen in ~2001.
2. Interest rates are down to the 5% or lower levels.
Assuming prices have dropped by 35% or so, and mortgage costs have dropped by at least 20% for fixed rate mortgages. That is nearly a 50% drop in monthly costs for a comparable home.
If you have been sitting out the bubble, looking for an opportunity to prudently deploy your savings and are whining now about these circumstances, you cannot be helped.
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