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(former)FormerSanDiegan
Participant[quote=kev374]yes, I understand the traditional relationships – that the buying power is decreased.
However, I wanted to determine the value of the currency as how much effort it would take to obtain that money…which is how that $1000 is view as in the effort to obtain it.
I am trying to see if the money would have the same perception of value by people… in the context of how hard it is to obtain it.
If it took you 8 hrs of sweat to obtain $10 today and 5 years from now it is the same then how would you value $10? Regardless of how much things cost.
Yes, if we earned more and things cost more then something of a fixed value, that $10 would be less significant. But what if income was constant.[/quote]
Your question is a bit naive, so let’s do a thought experiment ..
In 1975, Mr. Construction boss made 30K per year in the construction business … about $15 per hour. Mom stays home. They live in a large ranch house with 7 children. They were able to feed and clothe a large family, send to private school and send 6 of the 7 went to college, and two to grad school.
Fast forward to 2008. Joe Dropout has a laborer job in the construction business making $15 per hour. He spends 45% of his income to rent a 2-BR apartment for his wife and baby. He relies on food stamps to buy milk and cannot afford insurance.
In both cases the 8 hours of labor is valued the same in dollar terms. The only difference is inflation.
ParticipantOne dude from this show was arrested for stealing art from one of the estates he was handling. Maybe he needed to make a lease payment.
http://www.tmz.com/2008/08/01/bravo-star-ought-not-to-be-in-pictures/
ParticipantOne dude from this show was arrested for stealing art from one of the estates he was handling. Maybe he needed to make a lease payment.
http://www.tmz.com/2008/08/01/bravo-star-ought-not-to-be-in-pictures/
ParticipantOne dude from this show was arrested for stealing art from one of the estates he was handling. Maybe he needed to make a lease payment.
http://www.tmz.com/2008/08/01/bravo-star-ought-not-to-be-in-pictures/
ParticipantOne dude from this show was arrested for stealing art from one of the estates he was handling. Maybe he needed to make a lease payment.
http://www.tmz.com/2008/08/01/bravo-star-ought-not-to-be-in-pictures/
ParticipantOne dude from this show was arrested for stealing art from one of the estates he was handling. Maybe he needed to make a lease payment.
http://www.tmz.com/2008/08/01/bravo-star-ought-not-to-be-in-pictures/
ParticipantYeah, instead of buying lottery tickets this year I jumped in also. Couldn’t resist.
Buy 200 FNM Market 4.8599 12:55:32 08/20/08
Note : bought in my taxable account so that I can at least take the loss if it goes to zero.
ParticipantYeah, instead of buying lottery tickets this year I jumped in also. Couldn’t resist.
Buy 200 FNM Market 4.8599 12:55:32 08/20/08
Note : bought in my taxable account so that I can at least take the loss if it goes to zero.
ParticipantYeah, instead of buying lottery tickets this year I jumped in also. Couldn’t resist.
Buy 200 FNM Market 4.8599 12:55:32 08/20/08
Note : bought in my taxable account so that I can at least take the loss if it goes to zero.
ParticipantYeah, instead of buying lottery tickets this year I jumped in also. Couldn’t resist.
Buy 200 FNM Market 4.8599 12:55:32 08/20/08
Note : bought in my taxable account so that I can at least take the loss if it goes to zero.
ParticipantYeah, instead of buying lottery tickets this year I jumped in also. Couldn’t resist.
Buy 200 FNM Market 4.8599 12:55:32 08/20/08
Note : bought in my taxable account so that I can at least take the loss if it goes to zero.
ParticipantAN – My experience was similar. We purchased a Clairemont house for 160K in spring 1996. Rent for equivalent properties was 1000-1100 per month. Our mortgage rate was 8.25%.
SFH rents were about mortgage rates + 0 to 1% at the bottom of the last cycle.
P.S. – If rates go back up to the 8% range as I expect, I would expect prices in the same area would drop to somewhere in the 320K range. (I’m assuming real rent growth rates of negative 4 %, i.e. flat rents and 4% inflation).
ParticipantAN – My experience was similar. We purchased a Clairemont house for 160K in spring 1996. Rent for equivalent properties was 1000-1100 per month. Our mortgage rate was 8.25%.
SFH rents were about mortgage rates + 0 to 1% at the bottom of the last cycle.
P.S. – If rates go back up to the 8% range as I expect, I would expect prices in the same area would drop to somewhere in the 320K range. (I’m assuming real rent growth rates of negative 4 %, i.e. flat rents and 4% inflation).
ParticipantAN – My experience was similar. We purchased a Clairemont house for 160K in spring 1996. Rent for equivalent properties was 1000-1100 per month. Our mortgage rate was 8.25%.
SFH rents were about mortgage rates + 0 to 1% at the bottom of the last cycle.
P.S. – If rates go back up to the 8% range as I expect, I would expect prices in the same area would drop to somewhere in the 320K range. (I’m assuming real rent growth rates of negative 4 %, i.e. flat rents and 4% inflation).
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