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sdduuuude
ParticipantOnce again, powayseller, you have missed the point for which you have been criticized.
You have also missed the point of the 50% salary increase comment. It isn’t a blanket statement about the state of salaries in San Diego. It was an example meant to show that different people are in different circumstances and it isn’t wise (or even possible) to judging individual cases without understanding the complete individual financial picture.
Furthermore, it is also not wise to use your judgement of individual cases (the entire background of which you don’t know) to prove a point.
Going on and on in your Hybrid Time Bomb posts only shows you didn’t understand this. We understand the ARM, I/O, HELOC time bomb. We don’t disagree. We just think you have misused the example of the health care technician.
Participant“… they’ve lost control and the market is in control.”
Cool.
ParticipantQ: “What would it take to shift the psychology back, to get people excited about housing?”
A: Lower prices.
ParticipantR&F,
“Not everyone who drives while intoxicated will get into a car accident. Whould you still advise them to drink and drive? I’m just using your own logic.”
This is a foolish comment. It isn’t the same and you know it. I expect better of you.
ParticipantIf I’m not mistaken – the problem is that his payment is going to grow from interest only to interest and principal.
He may be barely able to afford the payment now.
Yes – he has equity and won’t be upside down, but he may still be forced to sell.
ParticipantSounds like a good theory – but I think this is a necessary path, not necessarily a bad thing. Painful, but not bad.
ParticipantYou should have him write that reporter Rich mentioned – the one at the LA times looking for people with suicide loans.
ParticipantWell, PS, my understanding of macro economics isn’t as good as yours. The thing is housing will deflate and most everything else will inflate – thus the conundrum. I guess Bugs is right, housing will drop but inflation could appear to mitigate the drop in price, though not value.
I think the Fed should ignore the housing market and keep inflation to a mild level, but I don’t know what they’ll do.
As someone listed in another post somewhere, the housing correction is a necessary, “bad medicine” that must be swallowed to balance out many problems in the economy.
ParticipantRLA
But, you aren’t stuck with the decision to rent for 40 years. You could be stuck with the decision to buy, however.
If you rent and prices come down in 5 years, then you buy, using your long-term analysis argument. You have flexibility. If life forces you out of the area, you can simply go.
If you buy and prices come down in 5 years, you have spent the last 5 years paying extra to lose money, and you are stuck with the house, possibly upside down. If life forces you out of the area, you have to sell, incurring the 5% transaction cost of doing so, or rent the place out, taking a monthly loss.
ParticipantWow.
Participantpowayseller –
My idea stems from the fact that they sometimes ask the right question of the wrong person. i.e. they talk to agents about their opinion of the future of the market, when in fact agents aren’t necessarily qualified to talk about that. They are qualified to talk about how to sell a house in today’s market.
Asking an expert what they have considered in their analysis of the market shows the extent to which they have analyzed the market.
My questions are intended to find the right expert to ask.
If someone says “The trend in the median price is up, so I predict it’ll go higher, they are a moron.” They have considered only the variable in question and don’t understand the cause and effect in the market.
If they say “I have considered the number of ARMS due to reset, Japanese monitary policy and its effects on interest rates, etc, etc.” then they understand the cause and effect of different issues and how they apply to the question at hand.
In my opinion, this is what makes Rich an expert.
He understands cause and effect in the market, not just graphs.ParticipantAre you an expert at selling houses or an expert at anlyzing the future of the market?
Can you name 6 indicators that you look at to determine the future direction of the housing market – other than median price, sales and inventory?
ParticipantThis thread should be titled “How to make $120,000 disappear.”
Enough with the splitting hairs over monthly calculations.
20% loss on $600,000 is bad.It doesn’t matter if you can “ride it out.” Why buy high, then ride it out when you can ride it out in a rental, then buy low.
It’s like saying “I want to buy this stock I know is overvalued just because I want to be an investor.”
ParticipantBonus nachos.
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