Followed by 0
Ignored by 0
In United States
Registered Jul 29, 2011
treatmentreport's most recent comments:
- On 6 Jun 2013
Spreadsheet Analysis of House Purchase,
My "waiting is expensive" statement really only applies in the current market where prices AND interest rates are rising, specifically in the SFBA.
You are assuming that prices are still rising. They were rising a couple of months ago, but not right now. In fact if interest rates stay where they are, prices will be seasonally lower at the end of the year.
- On 30 May 2013
Mortgage Rates Vault Catastrophically Higher,
Now, add in that 30% of the purchases are cash, so you are only affecting the other 70% anyways.
The reason why 30% of the purchases are cash is that the rates are so low in other asset classes. If rates rises (I don't think they will), cash purchases will decrease substantially.
Let me do the math for you. If someone can make 5% on a bond fund, $200,000 gives them $10,000 of income without any expenses. The $200,000
house makes ($1200 rent X 12 months)*0.9 (10% management fee) -$1500 property tax = $11450 and that does not include any fixes and depreciation. I would put my money in a bond fund.
- On 22 May 2013
Crashing gold price is about physical demand, NOT paper,
I don't think we make it to $1000. Low $1200 at best. It's not only the expectation of inflation that matters; it's the size of the Fed's balance sheet which at the current price could buy half of all the gold in the world.
I did talk to some dealers that got stuck with inventory at above 1500, so they will have to sell at some point and that might drive prices another 100-150 lower.