Forum Replies Created
-
AuthorPosts
-
October 5, 2008 at 9:35 PM in reply to: Bailout – What does it mean for real estate for us waiting? #281988October 5, 2008 at 9:35 PM in reply to: Bailout – What does it mean for real estate for us waiting? #282029
stockstradr
ParticipantBuying a house>
OK, go ahead read my opinion below and LAUGH as you’re all probably thinking about year 2012-2014 for your next home purchase.
Here is why my wife and I plan to buy a home within nine months.
1a) In Silicon Valley home prices are dropping so fast and rents rising so fast that MANY properties are now cash flow positive for renting (based on say 20% down with 30-year fixed)
If your renter is paying off your mortgage, what difference does it make if the value of the home drops a bit more in the few years following your purchase?
1b) We are currently sending our landlord $31,000/year in rent, which I prefer to be using to pay off a mortgage. I also prefer to be getting those tax benefits of paying mortgage interest.
2) This recession and its deflationary forces will push the CPI down near zero, or into negative territory within 9-12 months. With recession going deeper the Fed will again and again lower rates. CONCLUSION: the coming year will offer great opportunity to get much lower mortgage rates.
3) Housing lobby will be successful in passing bill loaded with bonuses for anyone who buys home. We’re talking $15,000 tax credits…etc.
4) As we move out of this recession/depression, inflation and mortgage rates will skyrocket above 10% (yes, actually getting to 10% could take a few years). So buy your home with a fixed rate and then pay the banker back in ever more worthless dollars. We are not buying cash-only so we gotta think about housing bottoms more in terms of actual mortgage payment.
5) Within nine months, housing price declines will be reaching the point of diminishing declines. My theory is that the next nine months will show home prices declining another big step down as unemployment soars (Roubini predicts unemployment rates MIN 8% countrywide and at least 10% in CA). Yet, beyond nine months the additional home price decline will be moderate (5%?)
However, for those able to make their next home purchase as cash-only, then I agree you should wait until the bottom which I expect in 2012-2014
October 5, 2008 at 9:35 PM in reply to: Bailout – What does it mean for real estate for us waiting? #282042ParticipantBuying a house>
OK, go ahead read my opinion below and LAUGH as you’re all probably thinking about year 2012-2014 for your next home purchase.
Here is why my wife and I plan to buy a home within nine months.
1a) In Silicon Valley home prices are dropping so fast and rents rising so fast that MANY properties are now cash flow positive for renting (based on say 20% down with 30-year fixed)
If your renter is paying off your mortgage, what difference does it make if the value of the home drops a bit more in the few years following your purchase?
1b) We are currently sending our landlord $31,000/year in rent, which I prefer to be using to pay off a mortgage. I also prefer to be getting those tax benefits of paying mortgage interest.
2) This recession and its deflationary forces will push the CPI down near zero, or into negative territory within 9-12 months. With recession going deeper the Fed will again and again lower rates. CONCLUSION: the coming year will offer great opportunity to get much lower mortgage rates.
3) Housing lobby will be successful in passing bill loaded with bonuses for anyone who buys home. We’re talking $15,000 tax credits…etc.
4) As we move out of this recession/depression, inflation and mortgage rates will skyrocket above 10% (yes, actually getting to 10% could take a few years). So buy your home with a fixed rate and then pay the banker back in ever more worthless dollars. We are not buying cash-only so we gotta think about housing bottoms more in terms of actual mortgage payment.
5) Within nine months, housing price declines will be reaching the point of diminishing declines. My theory is that the next nine months will show home prices declining another big step down as unemployment soars (Roubini predicts unemployment rates MIN 8% countrywide and at least 10% in CA). Yet, beyond nine months the additional home price decline will be moderate (5%?)
However, for those able to make their next home purchase as cash-only, then I agree you should wait until the bottom which I expect in 2012-2014
ParticipantI’m just a whacko nutjob so take what I say with a grain of salt …
Maybe, maybe not.
I think about our economic predicament in terms of consumer spending, upon which about 70% of our GDP rests.
So I ask myself hypothetical common sense question: “How much will typical American reduce their spending? 5%? 10%? 20%? 30%?”
I think it is very possible Americans will reduce their spending on average by over 15%, maybe even over 20%. So clearly we are looking at some quarters ahead with GDP declining.
Sales of cars and light trucks fell 27% last month, reached a 15-year low, according to Autodata Corp. Even Toyota was down 32%.
If that data is at all representative of how consumers are cutting back spending, we’ve got a severe recession or depression coming our way.
ParticipantI’m just a whacko nutjob so take what I say with a grain of salt …
Maybe, maybe not.
I think about our economic predicament in terms of consumer spending, upon which about 70% of our GDP rests.
So I ask myself hypothetical common sense question: “How much will typical American reduce their spending? 5%? 10%? 20%? 30%?”
I think it is very possible Americans will reduce their spending on average by over 15%, maybe even over 20%. So clearly we are looking at some quarters ahead with GDP declining.
Sales of cars and light trucks fell 27% last month, reached a 15-year low, according to Autodata Corp. Even Toyota was down 32%.
If that data is at all representative of how consumers are cutting back spending, we’ve got a severe recession or depression coming our way.
ParticipantI’m just a whacko nutjob so take what I say with a grain of salt …
Maybe, maybe not.
I think about our economic predicament in terms of consumer spending, upon which about 70% of our GDP rests.
So I ask myself hypothetical common sense question: “How much will typical American reduce their spending? 5%? 10%? 20%? 30%?”
I think it is very possible Americans will reduce their spending on average by over 15%, maybe even over 20%. So clearly we are looking at some quarters ahead with GDP declining.
Sales of cars and light trucks fell 27% last month, reached a 15-year low, according to Autodata Corp. Even Toyota was down 32%.
If that data is at all representative of how consumers are cutting back spending, we’ve got a severe recession or depression coming our way.
ParticipantI’m just a whacko nutjob so take what I say with a grain of salt …
Maybe, maybe not.
I think about our economic predicament in terms of consumer spending, upon which about 70% of our GDP rests.
So I ask myself hypothetical common sense question: “How much will typical American reduce their spending? 5%? 10%? 20%? 30%?”
I think it is very possible Americans will reduce their spending on average by over 15%, maybe even over 20%. So clearly we are looking at some quarters ahead with GDP declining.
Sales of cars and light trucks fell 27% last month, reached a 15-year low, according to Autodata Corp. Even Toyota was down 32%.
If that data is at all representative of how consumers are cutting back spending, we’ve got a severe recession or depression coming our way.
ParticipantI’m just a whacko nutjob so take what I say with a grain of salt …
Maybe, maybe not.
I think about our economic predicament in terms of consumer spending, upon which about 70% of our GDP rests.
So I ask myself hypothetical common sense question: “How much will typical American reduce their spending? 5%? 10%? 20%? 30%?”
I think it is very possible Americans will reduce their spending on average by over 15%, maybe even over 20%. So clearly we are looking at some quarters ahead with GDP declining.
Sales of cars and light trucks fell 27% last month, reached a 15-year low, according to Autodata Corp. Even Toyota was down 32%.
If that data is at all representative of how consumers are cutting back spending, we’ve got a severe recession or depression coming our way.
October 5, 2008 at 4:33 PM in reply to: Still thing moving to Euro’s is good thing? Still think Europe is immuned from this mess??? #281472ParticipantEurope is in Big Trouble.
Lots of USA economists have been warning about this now for over a year, specifically that European central banks not only failed to follow the lead of our FOMC in cutting rates aggressively (as they should have), initially they even turned up their noses and critized the FOMC’s rate cuts. There have been several great articles on this topic in the WSJ.
So European central banks were VERY LATE (relative to USA) in implementing fiscal stimulus in response to the global recession, and the financial meltdown.
October 5, 2008 at 4:33 PM in reply to: Still thing moving to Euro’s is good thing? Still think Europe is immuned from this mess??? #281749ParticipantEurope is in Big Trouble.
Lots of USA economists have been warning about this now for over a year, specifically that European central banks not only failed to follow the lead of our FOMC in cutting rates aggressively (as they should have), initially they even turned up their noses and critized the FOMC’s rate cuts. There have been several great articles on this topic in the WSJ.
So European central banks were VERY LATE (relative to USA) in implementing fiscal stimulus in response to the global recession, and the financial meltdown.
October 5, 2008 at 4:33 PM in reply to: Still thing moving to Euro’s is good thing? Still think Europe is immuned from this mess??? #281753ParticipantEurope is in Big Trouble.
Lots of USA economists have been warning about this now for over a year, specifically that European central banks not only failed to follow the lead of our FOMC in cutting rates aggressively (as they should have), initially they even turned up their noses and critized the FOMC’s rate cuts. There have been several great articles on this topic in the WSJ.
So European central banks were VERY LATE (relative to USA) in implementing fiscal stimulus in response to the global recession, and the financial meltdown.
October 5, 2008 at 4:33 PM in reply to: Still thing moving to Euro’s is good thing? Still think Europe is immuned from this mess??? #281795ParticipantEurope is in Big Trouble.
Lots of USA economists have been warning about this now for over a year, specifically that European central banks not only failed to follow the lead of our FOMC in cutting rates aggressively (as they should have), initially they even turned up their noses and critized the FOMC’s rate cuts. There have been several great articles on this topic in the WSJ.
So European central banks were VERY LATE (relative to USA) in implementing fiscal stimulus in response to the global recession, and the financial meltdown.
October 5, 2008 at 4:33 PM in reply to: Still thing moving to Euro’s is good thing? Still think Europe is immuned from this mess??? #281807ParticipantEurope is in Big Trouble.
Lots of USA economists have been warning about this now for over a year, specifically that European central banks not only failed to follow the lead of our FOMC in cutting rates aggressively (as they should have), initially they even turned up their noses and critized the FOMC’s rate cuts. There have been several great articles on this topic in the WSJ.
So European central banks were VERY LATE (relative to USA) in implementing fiscal stimulus in response to the global recession, and the financial meltdown.
ParticipantFuck the GOP. Borrow-n-spend fiscal crackpots, flag-pin patriots, religious nutjobs, airport bathroom queers. Republicans are ridiculous. Palin is a prop. McCain has cancer.
That post gets my vote for the funniest, most brilliant post-of-the-week!
ParticipantFuck the GOP. Borrow-n-spend fiscal crackpots, flag-pin patriots, religious nutjobs, airport bathroom queers. Republicans are ridiculous. Palin is a prop. McCain has cancer.
That post gets my vote for the funniest, most brilliant post-of-the-week!
-
AuthorPosts
