[Running Bear]

We aren’t at the bottom. We are far from it time wise. I can’t put a percentage on how much further we will drop but I would say taking on a large amount of debt and locking yourself into a community probably isn’t the safest bet right now.

Think of all the things that are unknowns that are starting to surface right now:

Energy, food, job market, interest rates, gas, etc. By getting into the housing market and buying a home you are locking yourself into an area and home. Not to mention a large amount of debt. I think it is safe to assume that even if you got a good deal your ability to sell your new home in the next few years will be very tough.

I think most people get excited about the price drop and their ability to buy a home they have coveted for several years and forget that other variables are changing around them.

My2Cents

[Running Bear]

We aren’t at the bottom. We are far from it time wise. I can’t put a percentage on how much further we will drop but I would say taking on a large amount of debt and locking yourself into a community probably isn’t the safest bet right now.

Think of all the things that are unknowns that are starting to surface right now:

Energy, food, job market, interest rates, gas, etc. By getting into the housing market and buying a home you are locking yourself into an area and home. Not to mention a large amount of debt. I think it is safe to assume that even if you got a good deal your ability to sell your new home in the next few years will be very tough.

I think most people get excited about the price drop and their ability to buy a home they have coveted for several years and forget that other variables are changing around them.

My2Cents

[Running Bear]

We aren’t at the bottom. We are far from it time wise. I can’t put a percentage on how much further we will drop but I would say taking on a large amount of debt and locking yourself into a community probably isn’t the safest bet right now.

Think of all the things that are unknowns that are starting to surface right now:

Energy, food, job market, interest rates, gas, etc. By getting into the housing market and buying a home you are locking yourself into an area and home. Not to mention a large amount of debt. I think it is safe to assume that even if you got a good deal your ability to sell your new home in the next few years will be very tough.

I think most people get excited about the price drop and their ability to buy a home they have coveted for several years and forget that other variables are changing around them.

My2Cents

[Running Bear]

We aren’t at the bottom. We are far from it time wise. I can’t put a percentage on how much further we will drop but I would say taking on a large amount of debt and locking yourself into a community probably isn’t the safest bet right now.

Think of all the things that are unknowns that are starting to surface right now:

Energy, food, job market, interest rates, gas, etc. By getting into the housing market and buying a home you are locking yourself into an area and home. Not to mention a large amount of debt. I think it is safe to assume that even if you got a good deal your ability to sell your new home in the next few years will be very tough.

I think most people get excited about the price drop and their ability to buy a home they have coveted for several years and forget that other variables are changing around them.

My2Cents

[Running Bear]

We aren’t at the bottom. We are far from it time wise. I can’t put a percentage on how much further we will drop but I would say taking on a large amount of debt and locking yourself into a community probably isn’t the safest bet right now.

Think of all the things that are unknowns that are starting to surface right now:

Energy, food, job market, interest rates, gas, etc. By getting into the housing market and buying a home you are locking yourself into an area and home. Not to mention a large amount of debt. I think it is safe to assume that even if you got a good deal your ability to sell your new home in the next few years will be very tough.

I think most people get excited about the price drop and their ability to buy a home they have coveted for several years and forget that other variables are changing around them.

My2Cents

[Running Bear]

davelj,

You are leaving out a few other inputs that I would include.
Taking CA as an example we all know that the state and cities are having some serious issues with funding. Are you sure that the state/city won’t raise property taxes to help make up the shortfall in the next few years? How would that effect your rent vs buy calculation.

Or what if they decide to raise income tax. If I am a renter I have the flexibility to downsize very easily to reduce my costs to weather the storm. What if the buyer has a job loss in the next couple of years? As a renter I have the flexibility to relocate to find another job.

I know most people out there believe this will be short and shallow, but if this turns out to be worse then that, holding off and not buying in the next couple years will insure you don’t set yourself up for pain. This housing correction will not be a V shaped bottom. We will bounce on the bottom for many months. It isn’t going to be hard to wait and buy within a few percent of the bottom. Be patient and protect your wealth from being put at risk.

My2cents

[Running Bear]

davelj,

You are leaving out a few other inputs that I would include.
Taking CA as an example we all know that the state and cities are having some serious issues with funding. Are you sure that the state/city won’t raise property taxes to help make up the shortfall in the next few years? How would that effect your rent vs buy calculation.

Or what if they decide to raise income tax. If I am a renter I have the flexibility to downsize very easily to reduce my costs to weather the storm. What if the buyer has a job loss in the next couple of years? As a renter I have the flexibility to relocate to find another job.

I know most people out there believe this will be short and shallow, but if this turns out to be worse then that, holding off and not buying in the next couple years will insure you don’t set yourself up for pain. This housing correction will not be a V shaped bottom. We will bounce on the bottom for many months. It isn’t going to be hard to wait and buy within a few percent of the bottom. Be patient and protect your wealth from being put at risk.

My2cents

[Running Bear]

davelj,

You are leaving out a few other inputs that I would include.
Taking CA as an example we all know that the state and cities are having some serious issues with funding. Are you sure that the state/city won’t raise property taxes to help make up the shortfall in the next few years? How would that effect your rent vs buy calculation.

Or what if they decide to raise income tax. If I am a renter I have the flexibility to downsize very easily to reduce my costs to weather the storm. What if the buyer has a job loss in the next couple of years? As a renter I have the flexibility to relocate to find another job.

I know most people out there believe this will be short and shallow, but if this turns out to be worse then that, holding off and not buying in the next couple years will insure you don’t set yourself up for pain. This housing correction will not be a V shaped bottom. We will bounce on the bottom for many months. It isn’t going to be hard to wait and buy within a few percent of the bottom. Be patient and protect your wealth from being put at risk.

My2cents

[Running Bear]

davelj,

You are leaving out a few other inputs that I would include.
Taking CA as an example we all know that the state and cities are having some serious issues with funding. Are you sure that the state/city won’t raise property taxes to help make up the shortfall in the next few years? How would that effect your rent vs buy calculation.

Or what if they decide to raise income tax. If I am a renter I have the flexibility to downsize very easily to reduce my costs to weather the storm. What if the buyer has a job loss in the next couple of years? As a renter I have the flexibility to relocate to find another job.

I know most people out there believe this will be short and shallow, but if this turns out to be worse then that, holding off and not buying in the next couple years will insure you don’t set yourself up for pain. This housing correction will not be a V shaped bottom. We will bounce on the bottom for many months. It isn’t going to be hard to wait and buy within a few percent of the bottom. Be patient and protect your wealth from being put at risk.

My2cents

[Running Bear]

davelj,

You are leaving out a few other inputs that I would include.
Taking CA as an example we all know that the state and cities are having some serious issues with funding. Are you sure that the state/city won’t raise property taxes to help make up the shortfall in the next few years? How would that effect your rent vs buy calculation.

Or what if they decide to raise income tax. If I am a renter I have the flexibility to downsize very easily to reduce my costs to weather the storm. What if the buyer has a job loss in the next couple of years? As a renter I have the flexibility to relocate to find another job.

I know most people out there believe this will be short and shallow, but if this turns out to be worse then that, holding off and not buying in the next couple years will insure you don’t set yourself up for pain. This housing correction will not be a V shaped bottom. We will bounce on the bottom for many months. It isn’t going to be hard to wait and buy within a few percent of the bottom. Be patient and protect your wealth from being put at risk.

My2cents

[Running Bear]

I plan on updating this post with the 10yr rate so people can track it more easily and understand the effects of how much the change in rates will have on payments and home affordability.

When I wrote this post the 10yr was at 3.4%

Today as I write this we are at 3.85%

I plan on updating the monthly mortgage payment and total cost of a 500,000.00 30yr fixed mortgage that started at 6.5% and goes up the same value as the 10yr increase. This is not the case in the real world as the mortgage rates can go up or down more then this rate but I am doing it to only have 1 variable to deal with. This isn’t meant to tell you “this is the rate or amount you will pay” if you tried to go out and get a loan but a rough estimate of how much increase your loan will see with the rise or fall in interest rates.

At 3.4/6.5 monthly 3,160.34 total cost 637,722.44

At 3.85/6.95 monthly 3,309.74 total cost 691,506.23

If there are people that don’t like the way I have constructed this or have a better way I am happy to change it to better explain the point.

RB

[Running Bear]

I plan on updating this post with the 10yr rate so people can track it more easily and understand the effects of how much the change in rates will have on payments and home affordability.

When I wrote this post the 10yr was at 3.4%

Today as I write this we are at 3.85%

I plan on updating the monthly mortgage payment and total cost of a 500,000.00 30yr fixed mortgage that started at 6.5% and goes up the same value as the 10yr increase. This is not the case in the real world as the mortgage rates can go up or down more then this rate but I am doing it to only have 1 variable to deal with. This isn’t meant to tell you “this is the rate or amount you will pay” if you tried to go out and get a loan but a rough estimate of how much increase your loan will see with the rise or fall in interest rates.

At 3.4/6.5 monthly 3,160.34 total cost 637,722.44

At 3.85/6.95 monthly 3,309.74 total cost 691,506.23

If there are people that don’t like the way I have constructed this or have a better way I am happy to change it to better explain the point.

RB

[Running Bear]

I plan on updating this post with the 10yr rate so people can track it more easily and understand the effects of how much the change in rates will have on payments and home affordability.

When I wrote this post the 10yr was at 3.4%

Today as I write this we are at 3.85%

I plan on updating the monthly mortgage payment and total cost of a 500,000.00 30yr fixed mortgage that started at 6.5% and goes up the same value as the 10yr increase. This is not the case in the real world as the mortgage rates can go up or down more then this rate but I am doing it to only have 1 variable to deal with. This isn’t meant to tell you “this is the rate or amount you will pay” if you tried to go out and get a loan but a rough estimate of how much increase your loan will see with the rise or fall in interest rates.

At 3.4/6.5 monthly 3,160.34 total cost 637,722.44

At 3.85/6.95 monthly 3,309.74 total cost 691,506.23

If there are people that don’t like the way I have constructed this or have a better way I am happy to change it to better explain the point.

RB

[Running Bear]

I plan on updating this post with the 10yr rate so people can track it more easily and understand the effects of how much the change in rates will have on payments and home affordability.

When I wrote this post the 10yr was at 3.4%

Today as I write this we are at 3.85%

I plan on updating the monthly mortgage payment and total cost of a 500,000.00 30yr fixed mortgage that started at 6.5% and goes up the same value as the 10yr increase. This is not the case in the real world as the mortgage rates can go up or down more then this rate but I am doing it to only have 1 variable to deal with. This isn’t meant to tell you “this is the rate or amount you will pay” if you tried to go out and get a loan but a rough estimate of how much increase your loan will see with the rise or fall in interest rates.

At 3.4/6.5 monthly 3,160.34 total cost 637,722.44

At 3.85/6.95 monthly 3,309.74 total cost 691,506.23

If there are people that don’t like the way I have constructed this or have a better way I am happy to change it to better explain the point.

RB

[Running Bear]

I plan on updating this post with the 10yr rate so people can track it more easily and understand the effects of how much the change in rates will have on payments and home affordability.

When I wrote this post the 10yr was at 3.4%

Today as I write this we are at 3.85%

I plan on updating the monthly mortgage payment and total cost of a 500,000.00 30yr fixed mortgage that started at 6.5% and goes up the same value as the 10yr increase. This is not the case in the real world as the mortgage rates can go up or down more then this rate but I am doing it to only have 1 variable to deal with. This isn’t meant to tell you “this is the rate or amount you will pay” if you tried to go out and get a loan but a rough estimate of how much increase your loan will see with the rise or fall in interest rates.

At 3.4/6.5 monthly 3,160.34 total cost 637,722.44

At 3.85/6.95 monthly 3,309.74 total cost 691,506.23

If there are people that don’t like the way I have constructed this or have a better way I am happy to change it to better explain the point.

RB

[Author]

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