patrick.net

I still think with this economy prices will not go up...if they start to, they will fall back down again eventually.

I live in Vegas, prices went WAY down...and who thought they would? CA state is doing too bad to raise prices.

You forgot prostitute.

ChrisLA says

Whats your point exactly?

i dont see the 30 year mortgage as an evil life sentence that should be avoided. Actually it locks in hour housing expense for 30 years. Once you have income coming in to cover that payment you're pretty much set.

ch_tah says

Great…another Klarek or Joshuatrio where a 30 year mortgage is a life sentence.

Some of us are just allergic to debt. Not our fault you drank the kool-aid.

toothfairy says

i dont see the 30 year mortgage as an evil life sentence that should be avoided. Actually it locks in hour housing expense for 30 years. Once you have income coming in to cover that payment you’re pretty much set.

If what you are saying is true, than why did so many people just end up losing their houses when they didn't want to walk away?

Did their 30 year plan somehow not account for raising interest rates, the fact that they may be unemployed for a really long time, the fact that they may not afford healthcare one day, or economy around them would collapse turning their McMansion into a deserted ghost town with high property taxes and maintenance costs.

Do you personally know where you will be in 15 years? Do you know you will not get very very ill, or fall on difficult times? Most people foreclosed in this country (at least before the crisis) due to medical bills. Do you know if your city turn into a ghost town like in "Roger & Me" when GM closes it's factory (just an example)?

30 year loan for most people is a life sentence which takes on more risk than one should take on reasonably. For others it simply raises a cost of housing because many choose to stretch liability over 30 years raising costs. And all it does is make lots of money for Bankers and Realtors. Someone got to pay for all those extravagant bonuses they give out in the lending industry after all.

joshuatrio says

ch_tah says

Great…another Klarek or Joshuatrio where a 30 year mortgage is a life sentence.

Some of us are just allergic to debt. Not our fault you drank the kool-aid.

If you want to live a debt free life, that's perfectly fine. But as we discussed before, a 30 year mortgage is not indentured servitude or a life sentence. Rather, it can be a very helpful tool.

Another reason Prop 13 was popular was because it made property taxes predictable. No surprises.

So to get a land value tax, we would need to make increases very predictable.

What about Jizz Mopper at the local nudie booth?

ch_tah says

If you want to live a debt free life, that’s perfectly fine. But as we discussed before, a 30 year mortgage is not indentured servitude or a life sentence. Rather, it can be a very helpful tool.

Whatever makes you feel better.

ch_tah says

Great…another Klarek or Joshuatrio where a 30 year mortgage is a life sentence. Do the concepts of selling, shortselling or foreclosing completely escape you guys? Obviously, the latter 2 aren’t optimal, but there are risks involved with everything. You realize there is a risk in waiting to buy until you have enough cash to purchase a house, right? It may be a very small risk, but there is a chance the government/fed will succeed in creating high inflation in housing. And if rents rise like many articles are predicting now, you’re going to be stuck paying more for your bricks and sticks.

Anybody who views home ownership as a gambling operation does not understand home ownership. It was bad during the housing bubble. Today it is inexcusable.

ch_tah says

If you want to live a debt free life, that’s perfectly fine. But as we discussed before, a 30 year mortgage is not indentured servitude or a life sentence. Rather, it can be a very helpful tool.

I have a 30 year since, since 1992. We are not in pre-bubble years when such mortgages made sense, and the economy was doing better. Many are still in denial over the mess that has been caused.

But others are correct, it made no sense to take on an inflated home prices and and equally inflated home loans, which many did during the bubble and could never pay off thus going into foreclosure.

I like many other tax payers WE ALL now on the hook to pay these loans on behalf of people who should have never idioticaly purchased a home using 30yr fixed, ARM, or any other mortgage. WE the taxpayer are now "indentured servitude" for their mistakes.

It is bad for everyone concerned. Like it or not, renter or long term homeonwer you will be the one to pay these loans off.

APOCALYPSEFUCK says

If you can’t pay cash for a house, you are begging to be fucked by banks, brokers, all the grim, psychopathic engrossers that flock to real estate to exploit people who need to live indoors.
Otherwise, get a tent and tell the engrossers to fuck themselves and die.

I'll take the tent option to get ready for the cannibal anarchy that is going to follow. :)

joshuatrio says

ch_tah says

If you want to live a debt free life, that’s perfectly fine. But as we discussed before, a 30 year mortgage is not indentured servitude or a life sentence. Rather, it can be a very helpful tool.

Whatever makes you feel better.

So if you could buy a house and have a 30 yr. mortgage with a lower monthly payment than what you would pay to rent the same house, you wouldn't do it?

tatupu70 says

So if you could buy a house and have a 30 yr. mortgage with a lower monthly payment than what you would pay to rent the same house, you wouldn’t do it?

In the BA, it only made sense between early to mid 90s. For many other parts of the nation after 2001, it didnt make any sense. Prices and their mortgages were all a bubble which were going to bite you back and hurt you financially.

thomas.wong1986 says

tatupu70 says

So if you could buy a house and have a 30 yr. mortgage with a lower monthly payment than what you would pay to rent the same house, you wouldn’t do it?

In the BA, it only made sense between early to mid 90s. For many other parts of the nation after 2001, it didnt make any sense. Prices and their mortgages were all a bubble which were going to bite you back and hurt you financially.

So you are changing the conversation from: all 30 year mortgages are bad to 30 year mortgages on "overpriced" houses are bad. Aren't any purchases of an overpriced house bad? Paying cash for a $1M house that eventually is worth $500k is bad too, no? Therefore, if you remove the overpriced part of the equation, it seems like you agree that 30 year mortgages are fine (which is obviously why you used one in the 90's).

tatupu70 says

So if you could buy a house and have a 30 yr. mortgage with a lower monthly payment than what you would pay to rent the same house, you wouldn’t do it?

Not a chance. 30 years is to long. Hell, I'm still in my twenties : - )

Because I've rented for 3 years, I've been able to relocate twice, and more than double my annual income. Moving from the east coast, to the mid west, and again out to the west coast. Opportunities that would have never materialized had I'd been strapped to a house payment.

thomas.wong1986 says

In the BA, it only made sense between early to mid 90s. For many other parts of the nation after 2001, it didnt make any sense. Prices and their mortgages were all a bubble which were going to bite you back and hurt you financially.

Sure--they were during the bubble years. Many places are back down to reasonable levels now.

joshuatrio says

Because I’ve rented for 3 years, I’ve been able to relocate twice, and more than double my annual income. Moving from the east coast, to the mid west, and again out to the west coast. Opportunities that would have never materialized had I’d been strapped to a house payment.

That's fair enough. Renting does offer more flexibility--although you may owe 2 mos. break lease fee. I know everyone thought I was crazy last time I mentioned it, but every time I've moved cross-country there has always been a relocation package. I've done the same-moved from east coast to midwest to CA. as an owner each time. Being an owner didn't stop me...

tatupu70 says

That’s fair enough. Renting does offer more flexibility–although you may owe 2 mos. break lease fee. I know everyone thought I was crazy last time I mentioned it, but every time I’ve moved cross-country there has always been a relocation package. I’ve done the same-moved from east coast to midwest to CA. as an owner each time. Being an owner didn’t stop me…

Never had to pay a break lease fee. I usually sign a 6-12 mo lease and go month to month after the fact. Most circumstances, relocation has always been covered up to a certain amount depending on the company.

Owning a home just makes it more painful, and it's really not worth the headache to me. Plus, when I'm ready to buy a house, I plan on buying it outright, so I don't have to deal with those pesky bankers and their loan docs. Yes, I'm missing the "tax advantage", but when/if I decide to buy, it'll be where I plan on settling down for a while.

joshua, out of curiosity, care to show the math and time frame for your purchase? For example, you have $200k in the bank right now, you save $5k/month, you plan on buying a $500k house, so in 60 months, you'll be able to buy in cash. Other variables can be taken into account, I think you said you have precious metals, so if the trend continues, that would obviously shorten the time frame.

ch_tah says

joshua, out of curiosity, care to show the math and time frame for your purchase? For example, you have $200k in the bank right now, you save $5k/month, you plan on buying a $500k house, so in 60 months, you’ll be able to buy in cash. Other variables can be taken into account, I think you said you have precious metals, so if the trend continues, that would obviously shorten the time frame.

I don't plan on spending near $500k on a home and have no specific time frame in mind for when/if I plan on purchasing. I'd probably relocate to another state before dropping that kind of $$ on a place. I can purchase just outside of Monterey for about $250-300k, but even that seems high for a 1960's 3 bed that needs a full remodel.

Have around $175k in cash - save $3-5k month (depending on what bills hit - or if the wife does any part time work). Stash of PM's putting me over $200k liquid. No debt/loans etc... I'm not a big wig, but not doing to bad either for being in my twenties.

That's really my limit - $200k. I don't think housing should cost much more than that for a decent place in a decent location. No plans on moving to the bay area, and in most other parts of the country, I can buy a nice, new home for $150k + or minus a few grand. So relocation isn't out of the question. Prices still seem to high in CA, and if don't come down any more than they already have - so be it, I'm flexible and can move anywhere I'd like.

shrekgrinch says

kc6zlv says

All property taxes in California stay within the county they are collected in. As far as I know it has always been that way.

No, half goes to the state and half goes to the school district — except when the state decides to raid more.

No, all property taxes stay within the county they are collected in. Property taxes are local taxes subject to rate limitations by the State under Prop 13. They may be spent on state highway upgrades, community colleges, the local CSU campus, but the expenditures stay within the county.

See page 4, second paragraph for an explanation of how property taxes are allocated.

www.iga.ucdavis.edu/Research/CSLT/Publications/PPICReport.pdf

joshua, thanks. It sounds like you are in a good position to pull off your plan. I think it is much harder to do what you plan in the Bay Area which makes the 30 year mortgage necessary. I'd rather have paid cash and not have a mortgage. But when the total purchase price you mentioned as your limit is about what we paid just as a down payment, the two situations aren't really comparable.

Another reason Prop 13 was popular was because it made property taxes predictable. No surprises.

Yeah. Predictably falling to zero over time.

When prop 13 was passed, the inflation rate was around 8%, but the tax increase was capped at 2%. In other words you're real tax rate would fall 6% over time.

How can anybody look at that and say that's reasonable? Why not cap tax increases on income or sales taxes to 2%, and stick it to the the younger generation that way too?

In the 33 years since 1978, inflation has been 233%.

Yet the tax liability for those that owned since 1978 has only gone up 92%.

Even ignoring the fact housing values outpaced inflation, it makes no sense.

I agree Prop 13 is very unfair and should be repealed.

I'm just saying that one reason it got voter support was that it added predictability.

joshuatrio says

tatupu70 says

So if you could buy a house and have a 30 yr. mortgage with a lower monthly payment than what you would pay to rent the same house, you wouldn’t do it?

Not a chance. 30 years is to long. Hell, I’m still in my twenties : - )

You do know that nobody is forcing you to pay it off in 30 years, you could do it sooner if you have the money. Also, nobody is forcing you to stay in that house for 30 years. If you want to move, just rent it out and move. It's not like you are doomed to live in that house for 30 years. Put a bunch of cash in the house, live there for 5 years...then re-fi, get a lower payment and rent it out. You might actually make money. So, let somebody else pay your mortgage off for you. There are enough people here in the forum that would not mind. They think its smarter to pay of your mortgage than their own. And in some situations it probably is smarter.

omg!

SubOink says

ChrisLA, if you are worried about being trapped than you should never buy a house, never get married, never have kids, never buy a car and definitely don’t even have a 9-5 job because that is the ultimate trap.

100% perfect

Hmmm, why is this for me?

How many teen pregnancies did she prevent?

tatupu70 says

thomas.wong1986 says

In the BA, it only made sense between early to mid 90s. For many other parts of the nation after 2001, it didnt make any sense. Prices and their mortgages were all a bubble which were going to bite you back and hurt you financially.

Sure–they were during the bubble years. Many places are back down to reasonable levels now.

Oh Baby! you havent even seen anything yet...

APOCALYPSEFUCK says

Anyone, like Trump, who can comb over the hair from his back to cover his scalp is an authority on everything and deserves to be president of the USA forever.

How do we know his back isn't one great big clever wig?

a href="/post/657705#comment-729301">Vicente says

How many teen pregnancies did she prevent?

I think that there's a fair amount of teen boys who didn't sleep with her that count in that category.

@thunderlips

>"It’s because they (the commercial banks) were selling them to investment banks who in turn were bundling them into Mortgage Backed Securities and selling them on yet again to Pension Funds and other investors all over the world..."

Excellent-best comment this month in the Housing market Forum -
IMHO.

And what is a "reasonable levels now" and who gets to make that judgment?

No doubt, inquiring minds want to know.

thomas.wong1986 says

tatupu70 says

thomas.wong1986 says

In the BA, it only made sense between early to mid 90s. For many other parts of the nation after 2001, it didnt make any sense. Prices and their mortgages were all a bubble which were going to bite you back and hurt you financially.

Sure–they were during the bubble years. Many places are back down to reasonable levels now.

Oh Baby! you havent even seen anything yet…

The BA may not be one of those places.. That's why I said many and not all.

Thomas.Wong,
Why is the inflation line so linear? At a constant inflation rate, you would expect to see a lot of curvature over that number of years.

YesYNot says

Thomas.Wong,
Why is the inflation line so linear? At a constant inflation rate, you would expect to see a lot of curvature over that number of years.

Because it is what it is?

Why was housing so linear until the mid-late 80's?

OurBroker says

And what is a “reasonable levels now” and who gets to make that judgment?
No doubt, inquiring minds want to know.
Peter at OurBroker.com

I'm pretty sure most on this site would state that "reasonable levels" are prices in line with local incomes.

And apparently anyone with a keyboard, writting ability, or vocal cords gets to make that judgement. Probably others too, but I'm not so sure they could communicate their opinion.

She kept me from getting pregnant... AGAIN!