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(former)FormerSanDiegan
ParticipantSince you already bought at the last bottom I would hold the house. Living there is cheaper than renting. If you need to move up to a new neighborhood, rent there first (and rent out your property)
The ideal situation (if you have the downpayment outside your current home equity) would be to buy in the move up neighborhood (I guess that’s CV for you) sometime in the next 2-3 years, while keeping the old property. This is a buy low, never sell strategy, and although not as potentially lucrative as a buy low/sell high it is much easier to get it right (your timing has to be correct fewer times in your life).
ParticipantSince you already bought at the last bottom I would hold the house. Living there is cheaper than renting. If you need to move up to a new neighborhood, rent there first (and rent out your property)
The ideal situation (if you have the downpayment outside your current home equity) would be to buy in the move up neighborhood (I guess that’s CV for you) sometime in the next 2-3 years, while keeping the old property. This is a buy low, never sell strategy, and although not as potentially lucrative as a buy low/sell high it is much easier to get it right (your timing has to be correct fewer times in your life).
ParticipantSince you already bought at the last bottom I would hold the house. Living there is cheaper than renting. If you need to move up to a new neighborhood, rent there first (and rent out your property)
The ideal situation (if you have the downpayment outside your current home equity) would be to buy in the move up neighborhood (I guess that’s CV for you) sometime in the next 2-3 years, while keeping the old property. This is a buy low, never sell strategy, and although not as potentially lucrative as a buy low/sell high it is much easier to get it right (your timing has to be correct fewer times in your life).
ParticipantEx-SD –
Your points are well-taken. I agree that home prices are still significantly overvalued (probably by 35% or so in San Diego). I’m just saying that if one believes that dollar devaluation and inflation are on the uptake, then a significant chunk of the housing price correction going forward could be eaten by inflation. It will be a factor.
A lot can happen in 10 years to the value of a dollar due to inflation.
Lets take a stroll through a brief history of home prices in this country during inflationary times:
1970 : Price of a new home = 26,600 *
Median household income = 8734
inflaiton at 6.5%1975 : Price of a new home = 42,600
Median household income = 11,800
inflation = 14.1%1980 : Price of a new home = 76,400
median household income = 17,710
inflaiton = 13.5 %SO, there you have it. During a period that included significant chunks of double-digit annual inflation home prices tripled and income more than doubled.
1990 : Price of a new home = 149,800
Median Household Income = 29,943
inflation = 5.4%1999: Price of a new home = 195,800
Median household income = 39,973
inflation = 2.1%Higher inflation does not equal downward pressure on home prices.
ParticipantEx-SD –
Your points are well-taken. I agree that home prices are still significantly overvalued (probably by 35% or so in San Diego). I’m just saying that if one believes that dollar devaluation and inflation are on the uptake, then a significant chunk of the housing price correction going forward could be eaten by inflation. It will be a factor.
A lot can happen in 10 years to the value of a dollar due to inflation.
Lets take a stroll through a brief history of home prices in this country during inflationary times:
1970 : Price of a new home = 26,600 *
Median household income = 8734
inflaiton at 6.5%1975 : Price of a new home = 42,600
Median household income = 11,800
inflation = 14.1%1980 : Price of a new home = 76,400
median household income = 17,710
inflaiton = 13.5 %SO, there you have it. During a period that included significant chunks of double-digit annual inflation home prices tripled and income more than doubled.
1990 : Price of a new home = 149,800
Median Household Income = 29,943
inflation = 5.4%1999: Price of a new home = 195,800
Median household income = 39,973
inflation = 2.1%Higher inflation does not equal downward pressure on home prices.
ParticipantEx-SD –
Your points are well-taken. I agree that home prices are still significantly overvalued (probably by 35% or so in San Diego). I’m just saying that if one believes that dollar devaluation and inflation are on the uptake, then a significant chunk of the housing price correction going forward could be eaten by inflation. It will be a factor.
A lot can happen in 10 years to the value of a dollar due to inflation.
Lets take a stroll through a brief history of home prices in this country during inflationary times:
1970 : Price of a new home = 26,600 *
Median household income = 8734
inflaiton at 6.5%1975 : Price of a new home = 42,600
Median household income = 11,800
inflation = 14.1%1980 : Price of a new home = 76,400
median household income = 17,710
inflaiton = 13.5 %SO, there you have it. During a period that included significant chunks of double-digit annual inflation home prices tripled and income more than doubled.
1990 : Price of a new home = 149,800
Median Household Income = 29,943
inflation = 5.4%1999: Price of a new home = 195,800
Median household income = 39,973
inflation = 2.1%Higher inflation does not equal downward pressure on home prices.
ParticipantEx-SD –
Your points are well-taken. I agree that home prices are still significantly overvalued (probably by 35% or so in San Diego). I’m just saying that if one believes that dollar devaluation and inflation are on the uptake, then a significant chunk of the housing price correction going forward could be eaten by inflation. It will be a factor.
A lot can happen in 10 years to the value of a dollar due to inflation.
Lets take a stroll through a brief history of home prices in this country during inflationary times:
1970 : Price of a new home = 26,600 *
Median household income = 8734
inflaiton at 6.5%1975 : Price of a new home = 42,600
Median household income = 11,800
inflation = 14.1%1980 : Price of a new home = 76,400
median household income = 17,710
inflaiton = 13.5 %SO, there you have it. During a period that included significant chunks of double-digit annual inflation home prices tripled and income more than doubled.
1990 : Price of a new home = 149,800
Median Household Income = 29,943
inflation = 5.4%1999: Price of a new home = 195,800
Median household income = 39,973
inflation = 2.1%Higher inflation does not equal downward pressure on home prices.
ParticipantIn my current situation, marriage and the combined income would definitely push me into AMT. My better half is already subject to AMT
Being subject to AMT is not the worst problem to have. I’d rather be subject to AMT than subject to refundable credits.ParticipantIn my current situation, marriage and the combined income would definitely push me into AMT. My better half is already subject to AMT
Being subject to AMT is not the worst problem to have. I’d rather be subject to AMT than subject to refundable credits.ParticipantIn my current situation, marriage and the combined income would definitely push me into AMT. My better half is already subject to AMT
Being subject to AMT is not the worst problem to have. I’d rather be subject to AMT than subject to refundable credits.ParticipantIn my current situation, marriage and the combined income would definitely push me into AMT. My better half is already subject to AMT
Being subject to AMT is not the worst problem to have. I’d rather be subject to AMT than subject to refundable credits.ParticipantWhen measured in gold, the only real money, the Dow is worth about half of what is was worth in 2000
What happens if you use the same logic for house prices ?
Does that mean that home prices are really not in a bubble, since they are now relatively cheap compared to gold ?…. ANd don;t give me the same stale argument that houses don;t follow the same rules because they can’t be transacted across international borders or easily transferred. I can buy or sell a house with cash and use that cash to buy/sell gold. Although the market is not as liquid, it is still possible to transfer assets to/from gold, real estate, stocks and cash fairly easily.
ParticipantWhen measured in gold, the only real money, the Dow is worth about half of what is was worth in 2000
What happens if you use the same logic for house prices ?
Does that mean that home prices are really not in a bubble, since they are now relatively cheap compared to gold ?…. ANd don;t give me the same stale argument that houses don;t follow the same rules because they can’t be transacted across international borders or easily transferred. I can buy or sell a house with cash and use that cash to buy/sell gold. Although the market is not as liquid, it is still possible to transfer assets to/from gold, real estate, stocks and cash fairly easily.
ParticipantWhen measured in gold, the only real money, the Dow is worth about half of what is was worth in 2000
What happens if you use the same logic for house prices ?
Does that mean that home prices are really not in a bubble, since they are now relatively cheap compared to gold ?…. ANd don;t give me the same stale argument that houses don;t follow the same rules because they can’t be transacted across international borders or easily transferred. I can buy or sell a house with cash and use that cash to buy/sell gold. Although the market is not as liquid, it is still possible to transfer assets to/from gold, real estate, stocks and cash fairly easily.
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