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joec
ParticipantSorta like car loans…
http://www.usatoday.com/story/money/cars/2014/09/07/car-loans-long-term/15237795/
ParticipantOne thing I don’t understand is if your own kids are vaccinated, how does other people not getting the vaccination affect your kid or you?
Being vaccinated, aren’t you protected already and if people get the measles, it shouldn’t affect you right?
I’m for kids getting vaccinated for all the measles, polio, whatever kids get, but as someone who never bothers getting the flu shot going 40+ years (strong immune system maybe, I rarely get sick), if I don’t get the flu shot, aren’t I just screwing over myself and it shouldn’t affect other people right? At least all the people who did get the flu shot?
Participant[quote=spdrun]New York Times said the opposite last week:
http://www.nytimes.com/2015/01/24/business/home-sales-increase-but-first-time-buyers-remain-few.html%5B/quote%5DYeah, it’s just starting to thaw now from what the article said…Maybe we hit the bottom for 1st time buyers last week and it’s up and up now!
Participant[quote=spdrun]Even 5-6% would do it, since affordability in San Diego sucks at present. A little bit is enough to gently nudge people into not qualifying, unlike in other markets where median income and price are more in line. As well as reduce the spread between income from holding property and income from interest, making property less attractive.
And if you don’t think the Fed is a political animal, you’e kidding yourself. How do members of the board get appointed and confirmed? :)[/quote]
The problem is that it probably won’t even hit 1% fed funds until past 2020+. There are a few people who believe this on Bloomberg, but with the world at negative, the fed is in no rush to raise it anytime soon.
The only rate hike I can see is if they decide to just get off 0%. Maybe park it at .5 or 1 tops, but that’s it.
ParticipantIn the UT Business section today, they are saying 1st time buyers are coming back in large percentages from before due to easier lending terms from fha/fannie/freddie…
Also, as these mid to late 20 somethings hit 30s-40s, there is huge pressure to settle down, get married, have kids. From the article, these is also talk of worst neighbors, constantly raised rents, roommates, etc…
Bottom line I took and my own view is that for a married couple, family…renting an apartment generally sucks and as we get older, having to deal with renting just sucks (for me). I “get” the single guys here loving renting and all that and can defend it all day, but I feel for most families with or without kids, renting is just ghetto.
I’d known “Asian” people (again) who looks down on renters or feel it’s pathetic that you can get knocked up with a kid, but can’t even afford to buy a house…(it’s viewed shamefully).
Just how it is…
ParticipantAs most Asians know, the Japanese CA buyer is a very different buyer than Chinese IMO. If you look at CA immigrants of Chinese or Japanese, there are very few Japanese and most Japanese don’t want to leave Japan. I don’t look at any place other than CA honestly since it doesn’t affect me.
In places like Cupertino, UC Irvine, many foreigners from China, Taiwan, Hong Kong, Asians from Canada buy and have no plans to leave. Those places I think are now > 50% asian already and they aren’t going anywhere. Asians also don’t trust “stocks” as much as real estate so those hands aren’t as weak as people make it out to be. It’s really hard to explain this to non-asians since the white man lives a totally different life/upbringing.
This makes their purchases MUCH more sticky than what happened in the 80s with Japan.
As flu mentioned as well, rent vs buy is also the ultimate calculation since interest rates will be stuck low for a very long time and people who are well off have more cash and very little options on their money. As has been reported, if people can move up, many are trying to keep their old homes to rent since they cash flow well.
Rent in 4S is 3700+/month already for 3k sqft homes already:
http://sandiego.craigslist.org/search/apa?bedrooms=3&housing_type=6&query=4s%20ranchParticipantI think instead of “tight”, the better term maybe “must follow guidelines”.
If you don’t fit in the box that they can sell your loan off to, you will have a tough time. Even if you are a multimillionaire, using the computer program conventional underwriting terms, you may not qualify (think Ben Bernanke…) unless you get a custom terms loan and some lenders won’t even bother with you.
If you are self employed, good luck…
When we bought in 2009, I pretty much told the lender guy how much did you need me to put down to get the loan? Some didn’t or won’t even work with us or spend the time of day at all. This is even if we came in with > 50% down.
It’s all pretty silly.
Seems like a good deal for anyone if you loan them 50%, they default, you just got the house for 50% off.
Participant[quote=livinincali]
The biggest unknown right now is will rates move higher, how much will they move higher, and what potential effect does that have on the price of homes. In the worst case scenario I could see home prices significantly lower than they are now.[/quote]I sorta see the opposite actually. Remember, we live in a global economy now. Watching Bloomberg, they are saying that people are buying blocks of homes in favored big town areas (like NY, LA, SF) from China with cash. This makes it hard to see prices selling for significantly less since unlike a stock, selling a house is less easy (move, less willing to take a loss, etc…). The recent buyers in the past 5 years were also very well financially qualified so those hands aren’t weak hands. They all have equity.
Also, every single developed nation has negative interest rates. Unlike 40-50 years ago, people nowadays buy international assets much more, especially in the US and there are insane levels of wealth out there.
Since international rates are negative, foreign people are more likely to BUY more US bonds. This pushes the yield even lower since the same equivalent bond in their country is like 2-3% lower…
Inflation is not a worry, everyone is concerned with deflation in Europe. I really think Feds won’t raise rates materially (to 75 basis points+) till 2020 or later…
You can quote me on the above.
ParticipantOne thing that may throw a monkey wrench in your planning is when you and your significant other decide to get married/have kids, then there will be a massive nesting instinct and you will be “forced” to buy no matter what.
There were reports from plenty of people who knew it would keep going down earlier from 2005-2008, but bought anyways since it was only money and less painful than to fight with the wife.
The good thing with buying is it’s a load off your mind and all the time you spend researching can be spent doing other things. Also, if you buy in places, as mentioned close to what it cost to rent, you aren’t paying anymore than the renter and in a high income bracket like you, you get the government helping out too…
Having a fixed known housing cost is great too…I’ve also noticed renters in the area tend to not be as “friendly” ,etc.. since they don’t feel as much is in the game, etc…
ParticipantNo surprise this was dropped. Honestly, I know for a fact (as fact as it can be at least), that there will be no major tax reform in the next 2 years with a divided Congress. Be safe knowing in any discussion that nothing major will be done so please, there is no need at all to worry. Really.
If they can’t stop and tax Yahoo for their AliBaba profits (saving 14 billion), good luck trying to pass anything major anytime soon.
I actually support 0% corporate tax rates for this reason. Companies already can find ways to pay 0 so to balance it out, maybe just get rid of capital gains, dividends rates and everything else rates and make a sliding scale. It was like this many many years ago, but when tax rates were 75% or some insane value, no one paid that neither…
As mentioned, taxing people with 0 or very low income/assets isn’t going to do/help much.
Too bad the government is controlled by the 0.1% so nothing will be done or changed…ever in my lifetime at least.
ParticipantProductivity probably has gone to sh*t with all this speculation whether you will have a job in a few months…
Participant[quote=AN]Fyi, I’m not worried, since I’m diversified in all tax benefit accounts. I was just opening up a discussion about it. If talking about what if isn’t your cup of tea, feel free to ignore the thread.[/quote]
You just came off to me as all irate and freaked out about it…People kept posting this won’t past anyways with a republican congress so what’s the worry?
Discussion is fine, just the endless what IF, this That, ETC…on and on, etc…sounded like more freaked and worried to me.
Good you’re diversified, you don’t need to worry really…honestly…of any of this crap.
Participant[quote=AN]That in itself is an if. Since I started this thread talking about the future. Of course it’s all about ifs. What do you expect it to be when we’re talking about the future? My crystal ball is broken, so I have to use if. Is your crystal ball working?
[/quote]Yes, it’s all an unknown what will happen. I suppose I’ve noticed with what I do now, I tend to glaze over news articles that “propose” things rather than things that are already law. My point is it’s pointless to worry about things which will never pass or may/if/who knows (remember all the talk of canning mortgage tax deduction? what about deduction for MR fees?…)
if they will pass. I tend to just look at the tax landscape yearly and base my actions on that. If you’re like scaredy and work non-stop in 1 or a few professions and have millions saved and will get taxed a lot, I suppose just be glad that you will HAVE enough in retirement, even though you will tapped a lot when you withdraw. At that point, consult a tax pro and see what you can do at that point, but at the end of the day, you’re probably in the boat of people who will be ok regardless, no matter what the tax rates are. Just minimize at that point forward.
As mentioned, I’m sadly not in that boat with taking time off, career changes, being laid off, starting businesses, no pension, etc…
This is why my view is biased to this point. If you’re high tech and get laid off at 50+, maybe use that time to start a business, convert money, etc…I know when I was in tech, I certainly had hundreds of k in cash/stock so for most people here who saved diligently, you should have money to live off of if needed and maybe time your withdrawals based on how the tax landscape is that year.
tl;dr: be prepared for any situation. I don’t need a crystal ball if I’m diversified with all my accounts/cash/assets/real estate, etc…all this talk of 529s being taxed, raising capital gains, etc…is just a lot of hot air really and a waste of time/discussion currently.
Participant[quote=scaredyclassic]But it’s not worth deferring taxes if taxes get much higher later right?[/quote]
Depending how much you have done prior to retiring, the actual tax rate may not matter if you derive the bulk of your income from other means. Also, if you have other funds to live off of.
That being the case, it’s probably always better to defer since when you are working, you are always at your marginal (highest) tax bracket so you defer as much as you can during the working years.
If you’re a young worker without a pension (most people now), then you will have a situation where if you do decide to retire early, you can start withdrawing retirement assets tax free or very low rates if you have enough tax deductions to balance your tax due on the withdrawal (deductions aren’t credits so you need to have some form of income to use them).
You may also have periods in your life where you take time off, are laid off, change careers and start a business where you aren’t making much at all.
I’ve been in nearly all those situations and I’ve mentioned before I pay very low taxes now since my income is sadly, very low. That being the case and also when I took time off, I did IRA conversions as well and know of a friend who is “retired” with no earned income so he can do withdrawals at low tax rates or even free…even though he’s a millionaire.
This is why I tend to not favor Roth 401(k)s since you can control your income in the future if you aren’t super wealthy or have a pension.
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