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Permalink Like Dislike Although the economic recovery remains sluggish and some fear rising interest rates, there are growing signs that this a good time to buy a house, according to a new study.
http://www.thefiscaltimes.com/Articles/2012/04/11/Why-Now-is-a-Good-Time-to-Buy-a-House.aspx
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San Jose, CA
rootvg says
Mortgage rates are based on LIBOR, which provides various bond index rates (but mainly the Bond Buyer's 20-bond index). The Fed wants the discount rate to be non-zero just so that they can claim that we're not in the ZIRP Liquidity trap. We're already paying $480B annually to service our debt. Something like a 6% increase, and we're in default.
Skyrocketing rates just can't happen. Except if we default first, then rates will skyrocket.
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24 threads
557 comments
-Rates will not drastically rise till 2014, if at all. Japan went to 2%, so it's not like the banks are dying at 4%.
-Housing inventory is laughably low, yet driving around through neighborhoods there are plenty of foreclosed homes the banks are hiding. Keep on waiting.
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StoutFiles says
I saw an advertisement for a 0.6% 1-year home loan today. It had been 0.8% until just recently.
Five-year fixed 1.18%; 10-year fixed 1.58%. (For comparison, bank CDs for such periods pay between 0.01% and 0.05%.)
I wouldn't mind seeing the US go this path if it also meant the complete eradication of inflation, which is something the Japanese have enjoyed over the last 10-15 years. Japan Railways hasn't changed their fares since 1988. Can that be said about any semi-public entity in the entire USA?
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249 threads
4,739 comments
Even at 2% interest rates may as well be 6% there is at least *4% in FHA fees, MIP and other various mortgage taxes, that have been added to the process since the fall of 2010.
That is why refinancing my mortgage that I bought at 4.75% would not be feasible for me to refi at even 3%. I would end up actually paying $100 more than I am now with that lower rate.
Though half of those fees could be avoided by paying a 20% down payment up front or paying ltv down to 20%, the other half is fees that are intended for the lifetime of the loan that all FHA loans will have to pay.
* on a 150K mortgage.
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25 threads
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Laguna Beach, CA
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I'm glad the fees for FHA loans are going up, hopefully it prevents them from becoming the subprime lender of choice, like they are now.
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49 threads
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Roslyn, NY
Michinaga says
Low rates never cause deflation. Japan was going to go under deflation anyway regardless of the rates.
The low rates simply caused slow gradual deflation. Without the low artificial rates, Japan would have deflation immediately within 1-3 years instead of a whole 1 & a half decade.
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488 comments
Los Angeles, CA
Common fallacy that higher rates have a causal relationship toward inflation; it's actually the other way around 99% of the time: inflation causes higher interest rates.
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28 threads
747 comments
Tarzana, CA
Smell of desperation?
I don't want this particular property, no open view. But, the bank just dropped the price 59K. Just like that. :-)
http://www.redfin.com/CA/Sherman-Oaks/5021-Tilden-Ave-91423/unit-6/home/4730036
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San Jose, CA
Japan had a trade surplus for most of the past 2 decades:
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49 threads
482 comments
Roslyn, NY
Philistine says
No. The low rates cause the inflation and then the resolution is to increase the rates.
Low rates will always encourage more people to borrow and to borrow more. Savings are neither encouraged. Spending is however encouraged. This is a perfect recipe for inflation.
During the RE bubble we also had low rates, why then didn't the homes prices deflate? And don't say that it's because of easy lending standards. That's nonsense. We STILL have very bad lending standards. Yet the RE market is being trashed. Why? Because it is unsustainable and any gimmicks will not be able to save it in the long run. It will prevail to go where it deserves to go.
Your logic and theory has a big fallacy.
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1,070 comments
Santa Cruz, CA
What is unintentionally funny is that unbelievably annoying ad by the Realtors that begins with the little brat screaming "Granpaw!!!" I have heard it on "hate radio" and also seen it on hate news stations.
So, the ad is telling us what? That Realtors hope this little kid grows up to buy a house someday.
Lame, pathetic, annoying, pointless.
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171 threads
4,213 comments
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Seriously, the USA's economy has been trashed by a crisis in underwriting quality going back to the 1980s. It's the 80000 ton gorilla in the room that no one wants to address because given the criminalized culture of Wall Street and RE, it's a hard and generations-long problem to resolve.
So.
Why don't we just start over by throwing all the fucking bankers out of helicopters over the North Atlantic?
Robber Baron Elite Scum says
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37 threads
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Mountain View, CA
bmwman91's website
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APOCALYPSEFUCK is Tony Manero says
Why do you hate the environment? We should be thinking more about our future. Combustion of fecal matter could provide lots of fuel, and given the amount of bullshit that those types spew, we just need to harness it.
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28 threads
351 comments
David9 says
You could rent this place out for a minimum of $1700 a month. I work in this area and it's a great neighborhood to live. The little league ballpark nearby is really cool and well maintained.
On the surface this looks dirt cheap and a steal... No problem making a profit renting this place out. BUT, the big question mark is the HOA fees and how high they go.. They are at $300 a month already...and I would look into how many people bought in 2004-2007 in this complex.
The more people that default the higher your HOA will go or the more likely you won't be able to sell the place for anything but cash.
That's probably why this is listed for less than the 1988 sales prices of $123K if you factor in inflation.
I bet this condo would require an ALL CASH BUYER due to the bad situation the HOAs are in. I think the banks could just start renting these out for a profit though. I guess they'd rather take a loss and get it off their books, rather than go into property management.
THe elementary / middle schools are very solid in the area too.. the high school is pretty terrible though. So you can get at least 15 years out of the place if you don't have kids yet, before you have to move.
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28 threads
747 comments
Tarzana, CA
BoomAndBustCycle says
You hit the nail on the head. That is probably why the bank wants to get rid of it. Property Shark changed where I can only look up 5 histories a day, but the last sales are: #1 405,000, #2 500,005, #3 295,000, #4, 236,000, #5 371,003
Yes, the numbers work out to be about $500 a month profit when it is rented for $1,700. However, if the buyer ends up paying $300 for each of the 6 units or $1,800 a month in HOA fees, that would put it in the red.
Real Estate, what a game.
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7 threads
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clambo says
Anyone, yes anyone can save up 200k in non retirement accounts. Some additional areas that are crucial to achieving a significant savings: Car purchasing decisions, how much you choose to drive, where you choose to live, how often you go out to eat/to the bar, every vice (smoking, drinking, gambling), where and how often you shop for clothing, where and what you buy for food, your hobbies/entertainment (are they cheap like hiking or exercising or are they expensive like golf or skiing?) never purchasing something that doesn't have an immediate use and a regular use in the future, Stop hoarding things and sell your items of value before they lose all their value and then live in a smaller place because you sold all your stuff. Of course you have to be comfortable with people thinking you are poor because you won't have the BMW, designer clothes or live in the McMansion. That's the hardest part for most.
Purchasing and owning things is not a path to happiness, Freedom and time is a path to happiness and it can only be gained through $$. Doesn't matter how much you make, only how much you have.
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7 threads
530 comments
Belmont, CA
Great, now buy and be a debt slave, you 99% wage slave debt slaves!
This country is starting to suck more and more.
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28 threads
351 comments
David9 says
David,
Do you rent in Tarzana currently? I've seen condos selling at what seem like liquidation prices in that area.. vegas style price drops of 60%-70% off 2006 prices? What's the vibe of the condo communities in the area? Does it feel like things are turning the corner and bottoming out?
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25 threads
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Laguna Beach, CA
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Saving $100k or $200k for a down payment isn't hard if you have a somewhat decent career and you don't blow it all on BMW leases, or $500 tabs every two weeks.
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1,070 comments
Santa Cruz, CA
rent4ever has got it.
My problem is I grew up around prosperity but having worked a couple of years in Mexico changed my outlook. Particularly, how valuable capital is. A few thousand bucks sounds like spare change in San Francisco, but in many countries it is enough capital to start a business, start building your own house, etc. A fine used car is a fantastic thing to a guy who has none and makes just enough to feed a couple of people.
There are people who just hate saving. My friend has a successful and fairly unique business. He just keeps buying more things we can call "inventory" instead of just having enough for his use. I estimate his inventory now is going to take him 1.5 years to liquidate. He simply can't resist buying more.
My needs are not that great but luckily I have friends I can also visit who have the summer houses and whatnot.
My recollection of the most fun times I ever had never involved having money to do it. I remember swimming, snorkeling, sailing, scuba diving, and digging up clams and spearing fish. It was fun to be out and about. I relived this down in Baja years ago and this is still fun. To be able to surf you can spend under a grand for a board and a suit.
My friend in Mexico is very highly paid by the local standard. He was telling me that he wants to buy a new car because his 2001 XTerra was leaking oil somewhere and gasoline is expensive. I told him to fix the leak and not buy anything, that as I wrote my friend is fixing a 65 Volvo for his daughter. I said that the average American car is 12 years old. I think I convinced him.
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28 threads
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Rent4Ever says
I guess.. maybe it's because i actually enjoy my job and coworkers... but after a week of vacation I'm bored and ready to get back to work.
Maybe that will change with kids...
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28 threads
747 comments
Tarzana, CA
BoomAndBustCycle says
Yes, I do rent in Tarzana. In my opinion, from my research, Long Beach and San Diego are more at a bottom than the San Fernando Valley, from number of listings, properties sold, quality of the units available, and of course price.
Take Tarzana for example, there are 26 properties under 300K. The banks released a property 4, 16, 17, 19, and 20 days ago for the 5 most recent. This controlled drip has gone one for 3 years.
Since I don't live in a condo complex, I can't really comment on the vibe. I can say I know of one complex I like with 317 units and not a single 3rd floor unit has been available since November 2009.
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38 threads
2,016 comments
Pleasanton, CA
Premium
Now is most likely the worst time to buy in my lifetime. I think it'll turn out to be worse than 2006 even. Rent and gain leverage.
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10 threads
2,329 comments
To the debt takers - good luck on being bailed out by future generations.
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28 threads
351 comments
RentingForHalfTheCost says
That makes NO sense.
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David9 says
I checked out home rentals in Tarzana on www.hotpads.com... Doesn't look like any decent homes rent for under $2000 a month.. and most rent for FAR more south of ventura blvd. I keep hearing people who are renting homes at amazing prices on this site, but I've never had any luck finding these amazing deals in the real world...
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clambo says
Yep. Living frugally doesn't mean living a joyless life. It just means prioritizing what actually gives you joy. Things do not, experiences and people do. I would never buy a vacation home/timeshare. Instead I would rent one and prioritize vacations with people I care about.
It is possible to live both frugally and with luxuries.
BoomAndBustCycle says
A small percentage of people, if given the choice to quit their job and do "whatever they want" with money being no object, would not quit their job. These are the Mark Zuckerbergs, the leading physicians, businessmen, lawyers, etc in the country. More power to you if you actually like what you do and the hours you work.
When I say freedom, I don't mean stop working. I mean work in something that might be less stressful, less time consuming, more rewarding or with people you actually like/care about (like your wife), or volunteering for causes that mean something to you personally. Freedom doesn't mean sit on a beach for the rest of your life. It means not having to rely on the paycheck. But if your job is exactly how you want to spend your time, then you have already achieved complete happiness.
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171 threads
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No, it means waking up to a tongue bath from the harem, being carried to the dining salon by your adoring wives and fed fresh fruit from your fields, before retiring for the first orgy of the morning and later, over coffee brewed from beans from your fields, planning the afternoon's concert with the castle's music director and conductor of the resident symphony. Lunch figures in there once in a while if you can move your jaw after the orgy. . .
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49 threads
482 comments
Roslyn, NY
Rent4Ever says
Mark Zuckerberg is an idiot that stole someone else's idea, stole the programming code and now is conning the idiots called the "shareholders" who are investing in computer bytes...
He actually is trying to trademark the word "Book"...
The company he named is nothing unique or creative. It is just generic wording put together.
Mark will lose a lot of money. And Facebook will finally stop being compared to Google, Microsoft, Apple and Amazon.
Facebook should never ever be compared to those big four. It is a gimmick and fad that doesn't produce all that much value compared to the value Google, Microsoft, Apple and Amazon produce.
Facebook will die just like Myspace and AOL.
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49 threads
482 comments
Roslyn, NY
Mark really should have named it "Sheepbook"...
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28 threads
747 comments
Tarzana, CA
BoomAndBustCycle says
www.westsiderentals.com Worth every penny of the $60 for two months if you are looking for an apartment. (Which I am considering just for a change of scenery)
I have found a great apartment on this site every time I looked since I sold my condo in late 2004.
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11 threads
218 comments
San Jose, CA
bubblesitter says
We'll default either honestly or dishonestly. The baby boomers retiring pretty much guarantee that shit will hit the fan within a decade or so.
Robber Baron Elite Scum says
So did Bill Gates and Steve Jobs. It is very hard to get rich if you're not a crook.
clambo says
Is this just regular stuff/junk/trinkets that people tend to hoard? One of the things I personally went through was downsizing, and this was before the 2008 recession. I moved from renting a house to renting a small apartment. The smaller the apartment, the cheaper the monthly rent. Gave away 1/3 of my wardrobe a couple years in a row. Gave away or recycled stuff/junk I rarely use... stuff that's still good and useful, but I decided to live without.
One thing I realized is that lots of people have a hard time doing what I did. It's so easy to accumulate "inventory", but it is so hard to downsize. You don't need and can easily live without all these junk. Having so much junk requires one to rent/buy a bigger place. You don't own these stuff... they own you!
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3 threads
552 comments
Madison, WI
Yeah, lol, it's always going to be a good time to buy. Getting interest on the house I'm living in, could be back into an apartment again soon. I'm not buying, I don't need the room, taxes, upkeep, neighborhood, job security is gone, and my real wages are still falling. I've been through the buying, owning, and selling process already, and would only do it again if it was the last time. But, it's fun listening to home shows, and see all the disasters people are getting into with all the homes they are buying into.
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49 threads
482 comments
Roslyn, NY
tdeloco says
Not as outright as Mark and not as to be 100% blatant infringement.
Mark stole the name, the whole entire site running on stolen code and every last detail of the idea.
Steve and Bill at least did some original work while using other people's concept and expanding on it.
In addition, Mark is not someone to compare at all to Bill and Steve. It's an insult to try to compare Mark on the same level as Bill and Steve.
Mark created nothing special. His company is nowhere near the level of Microsoft, Apple, Google and Amazon. It is worth very little compared to these companies. It has very little further potential and it is extremely over-valued.
Facebook's asset is hype other than taking it's users private information to sell for marketing purposes which many object too.
It's advertising network can never ever compete with Google Adwords. The conversions seen on Facebook for advertisers are horrible.
I predict Facebook will start charging monthly for membership when it starts losing serious revenue and becomes desperate to stop negative cash flow. It's app store is a pathetic little gimmick. iTune's app store is far superior which can be accessed by the iPhone and iPad. They are many other app stores as well.
There is very very little chance that Facebook will ever amount to anything more than a social media site.
They could collaborate with all public schools, private schools, colleges and universities in the world to create year books for them that are available offline and online with the ability to add commentary online. That's one possible revenue source idea.
Google offered Facebook a very generous offer. They will regret not accepting. Facebook will become bankrupt and it's assets will be liquidated in a bidding war between Google.
It has value but nowhere near billions of dollars. This current false valuation will cause Facebook to run the company like it's a multi-billion dollar company.
That will cause it to become bankrupt and it's stocks will become nearly worthless. Their assets will then be bought off.
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49 threads
482 comments
Roslyn, NY
tdeloco says
It is also very hard to get rich if you are so stupid that you can't even add in some of your own work.
Mark was sued successfully for a reason. He is an idiot.
His company is going to fail epically. Just watch...
If you are smart, invest in Google, Microsoft or Apple. Defiantly not Facebook. It has extremely poor business foundation and fundamentals. It's over-hyped and completely over-optimistic.
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34 threads
2,552 comments
San Jose, CA
Premium
Can you convince us now is a good time to sell? One man's misfortune is another man's blessing.
All-in baby. :)
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124 comments
Good time to buy is not the good time to sell.
Good time to sell is not the good time to buy.
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103 threads
3,764 comments
If you think prices are normal now, just think what they will do once interest rates go up to what they must in order for economy not to collapse...
Banks will always get bailed out, you won't.
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38 threads
2,016 comments
Pleasanton, CA
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RentingForHalfTheCost says
Time will tell. Sense is not what was used as we went into this bubble, and sense is not what we are using to get out. Sense will prevail, it always comes full circle. You can only escape from the hungry lion for so long. We have left the comfort of the Safari van and wandered into the jungle. Currently the 30% drop is synonymous which us just being hungry. The real threat is that we are going to become the food ourselves. These foreclosure-to-rent, principle reduction, loan modification programs, are all just minor solutions to a huge problem. Kinda like throwing a rock at a tidal wave. Time will show our foolishness.
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38 threads
2,016 comments
Pleasanton, CA
Premium
E-man says
If you have more than 40% of your wealth in your house, then you should sell. You are in fact gambling for your wealth, rather than creating it.