Forum Replies Created
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PerryChase
ParticipantNo surprise there.
What continually surprises me is that people take on mortgages of $500,000 – $1,000,000 without the ability to pay. The amount of gambling on appreciation was just astounding.
If buyers were truly buying homes they could afford, to live in, then prices may come down, but default rates would not change.
To me, default rates is a sign of speculation running rampant, not just on the part of non-resident investors but on the part of full-time residents.
It takes about 2 years to personalize a house the way you want it and to fully settle in. The resale activity that we see clearly obviate arguments that people buy because they want they can afford their own personal castles. In a normal market of inflation appreciation, selling within 5 years would cause a loss (due to transaction and home improvement costs).
In reviewing sales data, I saw plenty of houses that sold in 1996 for below their purchase price in 1989. We can expect the same, or worse this time around.
ParticipantNo surprise there.
What continually surprises me is that people take on mortgages of $500,000 – $1,000,000 without the ability to pay. The amount of gambling on appreciation was just astounding.
If buyers were truly buying homes they could afford, to live in, then prices may come down, but default rates would not change.
To me, default rates is a sign of speculation running rampant, not just on the part of non-resident investors but on the part of full-time residents.
It takes about 2 years to personalize a house the way you want it and to fully settle in. The resale activity that we see clearly obviate arguments that people buy because they want they can afford their own personal castles. In a normal market of inflation appreciation, selling within 5 years would cause a loss (due to transaction and home improvement costs).
In reviewing sales data, I saw plenty of houses that sold in 1996 for below their purchase price in 1989. We can expect the same, or worse this time around.
ParticipantAlex_angel, were you one of the people who said that “if you buy for the long-term, you’ll be OK”?
ParticipantAlex_angel, were you one of the people who said that “if you buy for the long-term, you’ll be OK”?
ParticipantGovernment taxes when when we buy. But why are we still buying like there’s no tomorrow? You’d think we’d save more.
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On ideals alone, I agree that prop 13 is unfair (I was just arguing the pay-for-use point). But since I benefit from prop 13, I won’t protest too much. 🙂 It’s the pocket book issue, you know.
ParticipantGovernment taxes when when we buy. But why are we still buying like there’s no tomorrow? You’d think we’d save more.
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On ideals alone, I agree that prop 13 is unfair (I was just arguing the pay-for-use point). But since I benefit from prop 13, I won’t protest too much. 🙂 It’s the pocket book issue, you know.
ParticipantOur standard of living has increased compared to generations past. All thanks to credit, we live in bigger houses with better amenities. We drive fancy cars with all the gadgets. On the other hand, our quality of life and happiness is a whole other topic.
Well, Rustico, is this sustainable? It depends for how long. 50 years?
Did you read about the development of credit industry? There was also a Frontline show on that topic. By lowering monthly payments, they grew the industry, made more profits and provided credit to about the entire population. They don’t loose anything until debtors en-masse stop servicing their debts (hasn’t happened yet). If defaults increase, they increase rates and fees to make up for the loses. Consumers benefit in that they can get the goods right now. The trade off is indebtedness which the consumers willingly take on.
People these days don’t think about purchase prices (the Realtors will tell you that). They think in terms of monthly minimum payment costs of housing, transportation, clothing, etc… It is a form of servitude. However, unless you’re independently well-to-do, you have no choice but to participate in order to fit in your social group. It’s part of our society now, and the richer a person is, the higher that person’s debt is.
Perpetual credit first started with TVs and washing machines, then cars and now houses. Leasing cars was considered crazy in the 1980s but the majority of cars are now leased. Drivers are used to trading cars and as long as the monthly payment is within their budgets, they are OK with it. Buyers live about 5 years in their houses and continually trade from one house to another; racking up fees, points and transactions costs and never paying off their homes.
I think that this credit regime has staying power and will last as least until the boomers are 5 years into retirement (sorta like society’s ARM reset), despite the coming housing recession.
ParticipantOur standard of living has increased compared to generations past. All thanks to credit, we live in bigger houses with better amenities. We drive fancy cars with all the gadgets. On the other hand, our quality of life and happiness is a whole other topic.
Well, Rustico, is this sustainable? It depends for how long. 50 years?
Did you read about the development of credit industry? There was also a Frontline show on that topic. By lowering monthly payments, they grew the industry, made more profits and provided credit to about the entire population. They don’t loose anything until debtors en-masse stop servicing their debts (hasn’t happened yet). If defaults increase, they increase rates and fees to make up for the loses. Consumers benefit in that they can get the goods right now. The trade off is indebtedness which the consumers willingly take on.
People these days don’t think about purchase prices (the Realtors will tell you that). They think in terms of monthly minimum payment costs of housing, transportation, clothing, etc… It is a form of servitude. However, unless you’re independently well-to-do, you have no choice but to participate in order to fit in your social group. It’s part of our society now, and the richer a person is, the higher that person’s debt is.
Perpetual credit first started with TVs and washing machines, then cars and now houses. Leasing cars was considered crazy in the 1980s but the majority of cars are now leased. Drivers are used to trading cars and as long as the monthly payment is within their budgets, they are OK with it. Buyers live about 5 years in their houses and continually trade from one house to another; racking up fees, points and transactions costs and never paying off their homes.
I think that this credit regime has staying power and will last as least until the boomers are 5 years into retirement (sorta like society’s ARM reset), despite the coming housing recession.
Participantliver, I disagree on the Prop 13 comment. Property taxes largely go to schools. Since your argument is based on pay-for-use, long time owners don’t generally have school age children (at least not anymore), therefore it’s fair for them to pay less in taxes under prop 13. They use much less public services because they don’t use the schools.
I’m a progressive thinker and think that we should pay taxes regardless of the services we use as a way of contributing to society. BUT since the general mentality is “why should I pay for something that’s of no benefit to me?” then I think that Prop 13 is fair.
Personally, I think there should be some nominal tuition for schools, like $500 to $1000 per year. People should think long and hard before they have kids, rather than pop them out after a marital fight.
Participantliver, I disagree on the Prop 13 comment. Property taxes largely go to schools. Since your argument is based on pay-for-use, long time owners don’t generally have school age children (at least not anymore), therefore it’s fair for them to pay less in taxes under prop 13. They use much less public services because they don’t use the schools.
I’m a progressive thinker and think that we should pay taxes regardless of the services we use as a way of contributing to society. BUT since the general mentality is “why should I pay for something that’s of no benefit to me?” then I think that Prop 13 is fair.
Personally, I think there should be some nominal tuition for schools, like $500 to $1000 per year. People should think long and hard before they have kids, rather than pop them out after a marital fight.
ParticipantHere’s the sales information.
http://www.sdlookup.com/Property-E3C5F580-10192_Prairie_Fawn_Dr_San_Diego_CA_92127Looks like a relatively small house for the price. I don’t know 4S but there was a related thread on Fieldstone’s Pienza at 3000sf+ for about the same price. But I heard the Fieldstone home have lower ceilings and are not as well designed as other builder’s houses.
There are other posters here who know 4S well and might comment.
ParticipantHere’s the sales information.
http://www.sdlookup.com/Property-E3C5F580-10192_Prairie_Fawn_Dr_San_Diego_CA_92127Looks like a relatively small house for the price. I don’t know 4S but there was a related thread on Fieldstone’s Pienza at 3000sf+ for about the same price. But I heard the Fieldstone home have lower ceilings and are not as well designed as other builder’s houses.
There are other posters here who know 4S well and might comment.
Participantliver, the new paradigm is to “increase standards of living by giving people what they need now.” So long as you can make the monthly payments, you can have what you want, now. Computer models allow the credit industry to “grow the pie.” They just spread the cost around. It’s a form of taxation by the finance industry for those who willingly participate.
Participantliver, the new paradigm is to “increase standards of living by giving people what they need now.” So long as you can make the monthly payments, you can have what you want, now. Computer models allow the credit industry to “grow the pie.” They just spread the cost around. It’s a form of taxation by the finance industry for those who willingly participate.
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