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sdcellar
ParticipantAlso, I neglected to mention that being the conservative guy that I am, I would certainly keep some of the cash liquid if I didn’t already have reserves (as some others have pointed out).
Alex– Did your workmate leave himself such reserves? (understanding there’s a limit to what people will divulge…)
ParticipantAlso, I don’t *think* that FSD’s chart factors in inflation (and that’s intentional). That means that true appreciation is less (than 6.2%).
Of course, as Perry points out, guys like Schiller think appreciation and inflation should roughly be equal over the long haul. Even so, appreciation does deviate from that for significant periods of time historically, so there are good reasons to consider this.
ParticipantAlso, I don’t *think* that FSD’s chart factors in inflation (and that’s intentional). That means that true appreciation is less (than 6.2%).
Of course, as Perry points out, guys like Schiller think appreciation and inflation should roughly be equal over the long haul. Even so, appreciation does deviate from that for significant periods of time historically, so there are good reasons to consider this.
Participantasianautica– I’d check your math. Doing that he’s losing roughly $400 month. I also like how you were conservative low on the loan rate and agressive high on the savings interest rate. And if you can find me a guaranteed liquid 10% return, let me know.
Participantasianautica– I’d check your math. Doing that he’s losing roughly $400 month. I also like how you were conservative low on the loan rate and agressive high on the savings interest rate. And if you can find me a guaranteed liquid 10% return, let me know.
ParticipantThere’s an even better one, but I couldn’t find it. This (link retracted) should give you an idea though.
…never mind. FSD found it while I was wasting my time. I didn’t really want to send anybody to her site anyway.
ParticipantThere’s an even better one, but I couldn’t find it. This (link retracted) should give you an idea though.
…never mind. FSD found it while I was wasting my time. I didn’t really want to send anybody to her site anyway.
ParticipantHe would certainly pay a higher interest rate on the extra borrowed $400K. That is, he’s not going to get the non-jumbo 6 and whatever percent that’s the going rate today. Rather, something like 7 or 8 percent. In the long run, he’d pay more and end up chewing up the principal anyway (or at least most people would).
Also, doubt he had $400k down. Considering transaction costs, it was probably more like $350-$360. I’ll bet his monthly payments (even with the big down) aren’t as low as he’s telling you either.
ParticipantHe would certainly pay a higher interest rate on the extra borrowed $400K. That is, he’s not going to get the non-jumbo 6 and whatever percent that’s the going rate today. Rather, something like 7 or 8 percent. In the long run, he’d pay more and end up chewing up the principal anyway (or at least most people would).
Also, doubt he had $400k down. Considering transaction costs, it was probably more like $350-$360. I’ll bet his monthly payments (even with the big down) aren’t as low as he’s telling you either.
ParticipantFSD– One thing your graph lacks compared to powayseller’s hand drawn one is that it doesn’t actually curve back in time. Nice try though…
ParticipantFSD– One thing your graph lacks compared to powayseller’s hand drawn one is that it doesn’t actually curve back in time. Nice try though…
ParticipantYeah, I kind of got that (as a possible explanation) as well. I’m just not sure how that relates to seattle-relo’s situation. I never saw where they needed appreciation just to keep the house. They might be stuck there, but we don’t know they’re at risk of losing it.
Maybe he was trying to say that since the boom was so big this time that the crash will be harder. Hence, they stand to lose more money and/or it will take longer to recover.
Only drunkle knows…
ParticipantYeah, I kind of got that (as a possible explanation) as well. I’m just not sure how that relates to seattle-relo’s situation. I never saw where they needed appreciation just to keep the house. They might be stuck there, but we don’t know they’re at risk of losing it.
Maybe he was trying to say that since the boom was so big this time that the crash will be harder. Hence, they stand to lose more money and/or it will take longer to recover.
Only drunkle knows…
ParticipantNew house prices in 4S have come down significantly and that’s why they sell.
What’s surprising is how many people don’t realize that there’s no reason they shouldn’t continue to drop further.
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