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Something will make it different this time.

In 1994, you could stomach losing $20,000 and get out. You fore go the next car and pay it off over five years.

With homes in OC having a median of $625,000, that “average” loss likley will climb to $70K or so and could easily push six figures. People won’t be able to stomach and walk away with a $100,000 loss.

That’s a bankruptcy level loss which changes the game.

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According to Duke University research, over the long term, the S&P 500 has a total return of 1%/month. With a CAGR of 12.7%.

Basically what is different now, from a historical perspective, is the incredibly low dividend rate. Before the 1990s, the Dow had a dividend rate that ranged from 3-18% a year.

The Duke Article

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That’s three million dollars short.

And Couple C, being renting regulars, decides to ride it out. They bank the $18,000 a year to start knowing rent goes up 5% a year or less over the long term.

In year ten, they buy the same house, still for $650,000 because inflation and incomes are starting to get back in line.

They take a 30 year loan at 6.5%, put down $150,000 from their savings, still having over $400,000 left. Kick back with their $3160 monthly payment knowing they’ve got it in the bank. Bank the extra $600 a month like Couple B.

Twenty years later, they get tired of hearing their friends couple A and couple B brag about almost being paid off, so they take $362,000 out of their investments now at $3,364,000 and pay off their house and realize they have three million left to retire and play with.

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Powayseller, I suggest you due a minimum of due diligence and type 877youkeep in google and see he is all over.

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PS, it’s a foreclosure rescue SPAMMER and potentially scammer.

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Actually, I chalk it up to the desperation of the sellers and the RE industry. They’ve gone from look at the appreciation you’re missing to the threat of how bad your rent is going to be as the motivator for buying.

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Wow, everybody skipped over:

Donald Rumsfield, sacrificial offering.

My question is… why didn’t he do it before. He probably wouldn’t have lost the senate. But, maybe it’s part of the master plan for victory in 2008 after they let the economy go bunk.

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Rents aren’t skyrocketing. They’re barely outpacing inflation.

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Actually, they should roll back the child tax credit.

Children put a huge tax burden on the Government and here were are giving a credit per kid.

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Hmmm $500,000 for 5 years of a foreclosure on your record.

Sounds like a deal to me.

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Me too, unfortunately, our government seems to work best when it is divided against itself.

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Multiple club houses.
Multiple pools.
Multiple jacuzzis.
Multiple tennis courts.
In community trails.
In community landscaping.
In community facilites.
Community intranet access.
potentially your high speed cable.
security people.
etc.

The new communities aren’t really SFRs, they a SFR in the equivalent of a resort complex. You pay the HOA for all the features. In my friends place, that happens to include the salary of the person that stands out in the gatehouses 24×7 to verify whom is driving into the complex and make sure your on the list for entry.

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Well Jay, Mamani is right about the supply. The supply curve is dictated by the marginal cost of production.

Prop 87 is bad.

Props 1B, 1C, 1D & 1E are also bad. They are bonds. What are bonds? Taxes for the stupid. For every dollar you spend in a State bond, you will get to pay two dollars worth of taxes over the next ten years.

If these props are good, then let’s be a state and raise the taxes to pay for the stuff.

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Not sure where you got $100,000?

I was being capriciously generous with the salary to show how much money was unaccounted for in spending when parents stop to figure out the math for how many students are in their kids class.

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No on 87.

It won’t help the State Budget at all. None of the funding goes to the State budget, it all goes to a special board to fund “research”.

I would vote for 87 if the money did go to the general fund. It doesn’t. It goes to unnamed future research groups.

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