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FidgetyRat posted:PMI is actually quite simple.. Its calculated in brackets based on the total mortgage. Note, I'm not financial expert, but this is how it was explained to me and taken from PMI tables elsewhere. That's really good to know, thanks. They must have been calculating on a 10% down instead then.
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May 8, 2009 19:58
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TheAngryDrunk posted:Don't feel bad. All mortgage tax interest deductibility does is artificially raise prices on homes. If you could deduct the interest, your home would just cost more.  You just blew my mind on something that is completely obvious.
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May 8, 2009 20:10
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necrobobsledder posted:HOAs Is there any easy way to research this information? I'm considering a condo since it is more appealing than a house for various reasons. Or is that rookie mistake #1?
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May 10, 2009 18:40
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Todd Flanders posted:Is there any easy way to research this information? Every HOA is different.. You need to look into the place you are considering living and get the HOA contract to really nail it down.. Im building a house in a new development and we have an HOA, but the one in our development is extremely lax and the HOA is only there to maintain the water retention basins and community property like the entranceways and signs. For me, it will be <$8/m.. The contract for the HOA was like 70 legal pages long to pretty much just say they will cut grass.. Other HOAs (like the one where my parents live) are horribly intrusive.. They control what type of mailbox you can have, whether you can build a porch, shed, etc.. Major changes to house, and cost a ton more.. Again, it varies per house/development/condo what kind of HOA you get.. Avoid any that control your property because gently caress it if someone besides the township has any control over what you can/can't do with your property. Moral of the story, make drat sure you understand the ins and outs of any HOA where you plan to live.
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May 10, 2009 19:15
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Todd Flanders posted:Is there any easy way to research this information? Todd Flanders posted:I'm considering a condo since it is more appealing than a house for various reasons. Or is that rookie mistake #1? Personally, I would advise against anyone buying a condo unless they already have a SFH or townhome. Even a 2000+ sq ft condo can be restrictive if you want things like a workshop garage, atrium, sun room, and other stuff requiring lots of actual land. However, one roof covers a lot of units, so if you plan to stick around a long time, it's a big relief to share costs of new roofing with others. A condo in a great location is fantastic to rent out over a couple decades due to the improvement to land value ratio and due to rental market demographics favoring occupancy rates of rental condos over rental SFHs. The bottom line is that things you care about in a place to live are unique to you, and your HOA and your community's residents should align with you and your requirements just as much as your property itself. It makes buying real estate doubly hard, and because of that, I would discourage first time buyers from buying a condo unless they're in one of those places where you just aren't going to get a house anywhere near your job in the next 20+ years.
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May 10, 2009 22:14
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Well I did what I always call people idiots for doing: went out and made an offer on a house without even having secured financing. We applied last week and won't hear if we are approved until Wed this week. But we found our perfect house on Friday. So on Saturday we made an offer and they have till 2 today to let us know. Our lender assures us he feels "pretty confident" we'll be approved, but the waiting is killing me. I should know better.
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May 11, 2009 14:40
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jhoc posted:Mortgage: $197,000 Out of curiosity, who is your mortgage with? I'm Canadian too, and I haven't seen a rate this low on any of the bank websites I've looked at (though I haven't actually gone through a pre-approval process yet).
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May 11, 2009 17:35
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anitsirK posted:Out of curiosity, who is your mortgage with? I'm Canadian too, and I haven't seen a rate this low on any of the bank websites I've looked at (though I haven't actually gone through a pre-approval process yet). It's through http://home.hlcmortgages.com/ I think most of the 5-year fixed rates are now down to 3.75 now, at least BMO's special rate was last time I checked. The actual mortgage is through Firstline, HLC was the broker.
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May 11, 2009 18:46
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quote:In most major markets, the answer is still 'no.' Every market is different, so you're still going to your own research, but you should consider a couple different factors. First, check out the historical home prices. The Case-Shiller Index is a good place to start. They compile housing data for most major markets and the numbers account for inflation. The February data shows that prices are only down to Sept 2003 levels, and probably will fall another 20%+ in most major markets to be in line with post-WWII historical levels. Past prices of housing does not dictate future prices of housing based on some curve. Population growth, social trends versus housing, and population movement are all major factors that are completely different than 20 years ago. Trying to estimate where house prices will be next year or 5 years from now based upon a graph of the past prices is just going to be nothing more than a complete guess, especially with this administration and this market.
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May 11, 2009 20:32
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Cheesemaster200 posted:I absolutely hate this argument. It's even simpler than that. House prices are based on affordability, period.
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May 11, 2009 20:34
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Cheesemaster200 posted:I absolutely hate this argument.
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May 11, 2009 21:58
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Don Wrigley posted:It's even simpler than that. House prices are based on affordability, period. Really, the most important thing I've taken away is not to treat a home purchase as an investment because based on historical data, it's not a good investment. If you're planning on buying a house, it should be because you can afford it, not because you think home prices will rise. I completely agree with the idea that we can't predict anything that's going to happen with any accuracy, but I do think it's a good idea to buy a house with the idea in mind that prices could continue to decline.
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May 11, 2009 22:04
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moana posted:How can you reconcile this with the past few years, then? Aren't we saying that the housing bubble broke because people really couldn't afford what they were buying? I'm adding these posts to the OP since I'm sure this will generate a lot of discussion and because I'm curious what people think will happen. Based upon historical data from what? The last 10, 15, 20, 100 years? Just because something was a bubble does not mean that it needs to return to its starting point after it burst. If that is the case I guess the entire 20th/21st century is one giant economic bubble, we better watch out. Economies are forward moving entities which may be influenced by the actions of the past, but are by no means bound by previous performance. Another thing to add to your OP too is the pitfall of "waiting for the right market": How long do you plan on living? Let say 80 years if you are lucky? What age can you realistically buy a house: 25-30 if you are luck? That's around 50 years you really have to work with for owning a house. I have heard some people say "I am going to wait another decade to buy a house", which to me sounds absurd. If you want to buy a house, do NOT try and "time" the market into getting the absolute, 100% best price you will ever get. If you are trying to invest in real estate for some sort of profit, this is the wrong thread. If you are trying to invest in real estate for your life and well being, take a step back and evaluate what you are really loosing by nitpicking your entry into the market. Even if you get an extra $20k by timing the market on your house purchase by waiting, you are still loosing out on the commodity that matters most, time. Living in an apartment when you do not desire such so you can "get the best deal" is pointless. Buy in when you want to and can afford it. A house in an investment both financially, and personally. You get a lot more out of living in a house for five years than the equity you earn from it. Cheesemaster200 fucked around with this message at 22:53 on May 11, 2009 |
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May 11, 2009 22:33
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Cheesemaster200 posted:lots of things
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May 11, 2009 23:03
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moana posted:How can you reconcile this with the past few years, then? Aren't we saying that the housing bubble broke because people really couldn't afford what they were buying? I'm adding these posts to the OP since I'm sure this will generate a lot of discussion and because I'm curious what people think will happen. This is speculation now, but I think that when the history books are written a couple decades from now, economists will link the internet bubble and housing bubble. Historically, home prices have risen at a inflation-adjusted rate of 0.5-1.0% depending on which study you read.
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May 11, 2009 23:39
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moana posted:How can you reconcile this with the past few years, then? Aren't we saying that the housing bubble broke because people really couldn't afford what they were buying? I'm adding these posts to the OP since I'm sure this will generate a lot of discussion and because I'm curious what people think will happen. That's the whole point. The past few years, there were exotic mortgages that made houses affordable (in the short term), but this is long term unsustainable because in actuality the homes were not affordable. Historical data is useless except that for the most part, home prices have stayed at roughly the same price--relative to wage inflation--since...I guess WW2. Ask yourself this. What makes a home price appreciate, if noone can afford to pay more for it?
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May 12, 2009 00:28
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Don Wrigley posted:That's the whole point. The past few years, there were exotic mortgages that made houses affordable (in the short term), but this is long term unsustainable because in actuality the homes were not affordable. But my point is what is keeping the same thing from happening again for the next 15 years? Interest rates are at record lows right now, and I think the major thing keeping back the housing market is spending reduction do to the recession rather than the housing market still imploding. People generally save during recessions, and once the economy publicly turns around, there will be a lot of large down-payments ready to dispersion into the housing markets. Houses which were previously overpriced will get a haircut sure, but locations which were close to realistic value will see a big increase in price in my opinion. Either way, we don't know what will happen specifically, and saying "we still got a long way to go!" based entirely on historic data is not very founded.
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May 12, 2009 02:40
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Cheesemaster200 posted:But my point is what is keeping the same thing from happening again for the next 15 years? Interest rates are at record lows right now, and I think the major thing keeping back the housing market is spending reduction do to the recession rather than the housing market still imploding. With low interest rates, higher prices are more affordable, so it'll keep housing prices up until interest rates are at normal levels, when you'll need more money to afford the same price (since the interest payment is higher). Prices will have to go down, rates will not stay this low forever. Where is the price increase coming from where values are "realistic?" Can people afford more expensive houses? If they can, then yes, prices will go up. If they can't, where is this extra money coming from that is going to push up the price of houses? Now, lets say you buy a house in a rural/suburban area, that over time develops. As it develops, more jobs come to the area, causing the median wages in the area to increase at a faster pace than inflation. In this scenario, yes, your house will be more valuable. But this doesn't have anything to do with interest rates, historical trends, or anything other than affordability. The people in the area are able to afford houses that are more expensive, and as such, the house prices increase.
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May 12, 2009 02:45
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Cheesemaster200 posted:But my point is what is keeping the same thing from happening again for the next 15 years? Interest rates are at record lows right now, and I think the major thing keeping back the housing market is spending reduction do to the recession rather than the housing market still imploding. I'd argue that home prices will fall significantly below historical levels for a couple reasons. First, access to loans will remain tight, especially for large segments of the population who were foreclosed on or had credit card problems. This will suppress demand and lower prices. Secondly, when the $8k incentive disappears, and there is no longer a motivation to buy immediately, more people will be likely to wait to buy a house, further reducing demand. Finally, the massive increases to government spending without increasing government revenue will lead to a period of accelerated inflation. This inflation will cause banks to charge a higher percentage rate on mortgages driving down the purchasing power of most home-buyers. If I was a betting man, I'd wager that home prices will over-correct relative to the historical average and remain depressed for ten years or more. Note: This doesn't mean I don't think you should buy a house. I'm planning on buying one next year. Just don't bet on home prices going up any time soon.
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May 12, 2009 03:09
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swenblack posted:Each generation generally doesn't make the same mistake twice http://en.wikipedia.org/wiki/Savings_and_Loan_crisis quote:so it'll probably be at least 20 years before we see a large run-up in price again. Even then, it probably won't be as dramatic as we saw, and it'd have to be coupled with a large increase in future perceived earnings or real income. Neither is likely to happen any time soon. quote:It is likely that most areas will never see real (adjusted for inflation) home prices as high as they were in 2006 again in our life times. quote:With low interest rates, higher prices are more affordable, so it'll keep housing prices up until interest rates are at normal levels, when you'll need more money to afford the same price (since the interest payment is higher). Prices will have to go down, rates will not stay this low forever. Cheesemaster200 fucked around with this message at 03:57 on May 12, 2009 |
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May 12, 2009 03:46
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Cheesemaster200 posted:How long did it take tech stocks to rebound after that bubble popped a decade ago? Like I said, just because something took a hit, doesn't mean that said industry is doomed for the next quarter century. We pick ourselves up and get on with it. People still want to own houses, banks still want to make oodles of money with bad mortgages. But a lot of tech stocks never did rebound. The NASDAQ in particular has never come close to its previous peak. E: Words. Kobayashi fucked around with this message at 04:07 on May 12, 2009 |
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May 12, 2009 04:04
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Cheesemaster200 posted:http://en.wikipedia.org/wiki/Savings_and_Loan_crisis You are absolutely dead wrong on every single statement in your post.
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May 12, 2009 04:38
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Don Wrigley posted:Historical data is useless except that for the most part, home prices have stayed at roughly the same price--relative to wage inflation--since...I guess WW2. When you said that house prices were tied to affordability, well, for a period of a few years they didn't. Historically, they have and will continue to do so in the long term. I think we're saying the same thing here, sorry if I caused confusion.
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May 12, 2009 07:58
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Dik Hz posted:You are absolutely dead wrong on every single statement in your post. Well I guess I can't argue with that! quote:But a lot of tech stocks never did rebound. The NASDAQ in particular has never come close to its previous peak. What I am trying to get at here, which I think people are misinterpreting as "housing will skyrocket again" is that trying to predict the future based upon a graph is nothing more than a guess. I mean gently caress, isn't one of the main reasons this whole mess got started because everyone used the false logic of "housing prices have only gone up over the last 10-15 years, how can I lose?!?!" Cheesemaster200 fucked around with this message at 14:54 on May 12, 2009 |
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May 12, 2009 14:36
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Plus, keep in mind not all areas have had many drops at all.. The place where I'm buying in NJ has hardly fallen at all, and in fact our builder just raised prices 10k after he sold out the new section of the development in 2 weeks. Then again, things were never ridiculous down here to begin with, so maybe that has something to do with it. It is funny thought hat half the development that was finished before the recession hit is paying almost 2x the taxes then the rest of us.
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May 12, 2009 15:36
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Cheesemaster200 posted:Well I guess I can't argue with that! You are wrong on so many levels, its quite impossible to even start. Read what other posters have posted in this thread and think critically about your own positions. Then stop posting in this thread.
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May 12, 2009 16:12
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FidgetyRat posted:Plus, keep in mind not all areas have had many drops at all.. The place where I'm buying in NJ has hardly fallen at all, and in fact our builder just raised prices 10k after he sold out the new section of the development in 2 weeks. Then again, things were never ridiculous down here to begin with, so maybe that has something to do with it. It is funny thought hat half the development that was finished before the recession hit is paying almost 2x the taxes then the rest of us. It's the same general situation where I want to buy on the North side of Chicago. While my very relaxed, rudimentary tracking of condo values in the more desirable neighborhoods where I hope to buy at (Lakeview, Lincoln Park, Uptown, Bucktown, Logan Square, etc.) indicates that prices don't really seem to be going up, they sure don't seem to be appreciably going down either. Deals can be found in the more fringe and non-gentrified areas that weren't there previously, but I'm not exactly keen on dodging bullets for 5-10 years while the hood gets shuffled out to either save a few bucks or profit a few bucks down the road. Then again, all you have to do is drive 35 miles west to Plainfield to see vast tracts of empty sub-developments where they can't even give the houses away. Location, location, location.
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May 12, 2009 16:15
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Dik Hz posted:You are wrong on so many levels, its quite impossible to even start. Read what other posters have posted in this thread and think critically about your own positions. Then stop posting in this thread. Wow, what a counter argument!
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May 12, 2009 16:18
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Dik Hz, if you're going to take the time to read this thread and post twice with absolutely no content, you can take the time to actually make an argument, or just let other people argue against Cheesemaster. Cheese, you don't need to respond to anything that isn't an argument. None of this internet posturing is helping people who want to buy a house, which is what this thread is about, thanks.
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May 12, 2009 17:13
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Cheesemaster200 posted:Well I guess I can't argue with that! I don't get what you're trying to say here. It's not that the NASDAQ "never really saw" its previous highs, but rather, 10 years later, it's never even come close. Yes, there was a strong uptick over the past 6-7 years, but after the latest crash, it's much, much closer to its 10 year low than its 10 year high. And yeah, the S&P and the Dow did a lot better, but you specifically mentioned tech stocks, so that's why I brought it up. I don't think the major tulip indexes have ever really recovered, either...
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May 12, 2009 18:06
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Kobayashi posted:I don't get what you're trying to say here. It's not that the NASDAQ "never really saw" its previous highs, but rather, 10 years later, it's never even come close. Yes, there was a strong uptick over the past 6-7 years, but after the latest crash, it's much, much closer to its 10 year low than its 10 year high. And yeah, the S&P and the Dow did a lot better, but you specifically mentioned tech stocks, so that's why I brought it up. I don't think the major tulip indexes have ever really recovered, either... What I am trying to get at with all this is that the future of markets is still uncertain. It may go up, it may go down more. Some markets may see highs, others won't. Earlier in the thread people were making accusations that the housing market has to align to a historical curve that adheres closely to inflation adjusted values like it is a law of economics. However, I think that there are so many variables with housing markets, that anything could potentially happen. In the context of this thread, making a decision based upon where the market "should" be on a curve is silly because housing prices could go in any direction at any point in time, especially if you consider the massive differences in regional markets.
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May 12, 2009 18:46
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moana posted:Dik Hz, if you're going to take the time to read this thread and post twice with absolutely no content, you can take the time to actually make an argument, or just let other people argue against Cheesemaster. Cheese, you don't need to respond to anything that isn't an argument. None of this internet posturing is helping people who want to buy a house, which is what this thread is about, thanks. On the contrary, Cheesemaster being ridiculed for being stupid will help people buying houses, lest they think like him and wind up upside down on a spiffy new condo. He's arguing that tech stocks rebounded from their highs at the start of the decade. That kind of delusion could harm naive individuals if they latch onto his beliefs. And he surely doesn't need a cheerleader in this thread. Pretty much everything posted in this thread refutes what he advocates. What good is another person pointing out the fallacies in his arguments going to do?
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May 12, 2009 19:39
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Cheesemaster200 posted:What I am trying to get at with all this is that the future of markets is still uncertain. It may go up, it may go down more. Some markets may see highs, others won't. Earlier in the thread people were making accusations that the housing market has to align to a historical curve that adheres closely to inflation adjusted values like it is a law of economics. Well duh, the bog standard disclaimer for pretty much everything is, "past performance may not be indicative of future results." The point people are trying to make is that there is no real, sustained evidence that homes are good investments. Sure we just had a huge bubble, and I guess it's possible it could re-inflate, somehow, but all the evidence suggests that this was a once in a lifetime orgy of free credit and rampant speculation.
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May 12, 2009 19:49
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Dik Hz posted:On the contrary, Cheesemaster being ridiculed for being stupid will help people buying houses, lest they think like him and wind up upside down on a spiffy new condo. He's arguing that tech stocks rebounded from their highs at the start of the decade. That kind of delusion could harm naive individuals if they latch onto his beliefs. And he surely doesn't need a cheerleader in this thread. Props on the reading comprehension. quote:Well duh, the bog standard disclaimer for pretty much everything is, "past performance may not be indicative of future results." The point people are trying to make is that there is no real, sustained evidence that homes are good investments. Sure we just had a huge bubble, and I guess it's possible it could re-inflate, somehow, but all the evidence suggests that this was a once in a lifetime orgy of free credit and rampant speculation. I am not trying to marginalize the trends of housing, but this isn't a scientific experiment where we can make a conclusion from data points observed previously. The housing market is just too large of a dynamic entity. Yes, in the past it was rather linear, but that was before jumbo loans, ARMs, government subsidy for housing, modern mortgages procurement, and tons of other factors which led to this bubble in the first place, factors which aren't going away Cheesemaster200 fucked around with this message at 20:33 on May 12, 2009 |
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May 12, 2009 20:00
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Cheesemaster200 posted:The evidence does not suggest that, the evidence suggests that the latest bubble was different than what is was for the last 100 or so years before it. It does not inform you of anything about the future housing market. Making any conclusion based only on that graph does not take into effect any other factor other than "what it previously was". What graph are you talking about? Are you seriously arguing that because we can't predict the future with absolute certainty, we cannot make any conclusions at all about the future of the housing market?
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May 12, 2009 20:55
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Cheesemaster200 posted:I am not trying to marginalize the trends of housing, but this isn't a scientific experiment where we can make a conclusion from data points observed previously. The housing market is just too large of a dynamic entity. Yes, in the past it was rather linear, but that was before jumbo loans, ARMs, government subsidy for housing, modern mortgages procurement, and tons of other factors which led to this bubble in the first place, factors which aren't going away I didn't see your edit earlier, but this is just all wrong. Housing prices have hardly been "linear" over time: http://www.nytimes.com/imagepages/2006/08/26/weekinreview/27leon_graph2.html Jumbo loans and ARMs are most certainly going away. Gaaaah, do you even have any idea what's been happening over the past 10 years?
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May 12, 2009 21:00
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Kobayashi posted:I didn't see your edit earlier, but this is just all wrong. Isn't that where this whole argument started? Someone making a comment about real home prices being rather steady over the past however long due to some home study and that they should theoretically be around 110ish on that graph? My original argument (and what I am still trying to argue) is that might not be the case due to advancements (as formerly noted) in the real estate business, population growth and the culture of owning a home in this country. I am not saying houses are going to go up, down sideways, diagonally or whatever in price. I am not saying they are awesome or horrible financial investments. I am saying there is no magical level derived from past home prices which the market needs to reach. As far as jumbo loans and ARMs are concerned, what makes you think they will go away? Sure, they won't be abused (as much), but they have become part of the system. I mean gently caress, I am refinancing my house right now and the mortgage agent wouldn't shut the gently caress up about it. The same poo poo is going on, there is just a bit more caution on the side of the banks.
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May 12, 2009 21:30
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Cheesemaster200 posted:Yes, in the past it was rather linear, but that was before jumbo loans, ARMs, government subsidy for housing, modern mortgages procurement, and tons of other factors which led to this bubble in the first place, factors which aren't going away All of those things in your list predate the housing bubble. The main driver of the bubble was retarded risk pricing in secondary finance markets. That ain't coming back any time soon.
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May 12, 2009 21:56
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Cheesemaster200 posted:How long did it take tech stocks to rebound after that bubble popped a decade ago? I made the prediction using the assumptions I laid out in the next three paragraphs. You're free to interpret the data however you see fit. I interpreted the bubble to bet just that, a bubble, and that prices would return to what people afford. A drastic rebalancing of affordability could shift the prices either way. If other expenses (taxes, education, health care) go up, home prices will likely go down. If income goes up (technological advances, increases in trade, opening new markets are possibilities), home prices will likely go up. You're also looking at interest rates wrong. Banks are not giving out a discount to get business right now. That would be the credit crisis you've heard so much about. There are a lot of people who would like to get a mortgage either to buy or refinance but aren't able to right now. Can you please cite some sort of source that states that increased home demand leads to higher mortgage rates, because that runs counter to all literature I've seen. Usually home prices follow interest rates (almost like bonds) not vice versa.
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May 12, 2009 22:32
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Cheesemaster200 posted:I am not trying to marginalize the trends of housing, but this isn't a scientific experiment where we can make a conclusion from data points observed previously. The housing market is just too large of a dynamic entity. Yes, in the past it was rather linear, but that was before jumbo loans, ARMs, government subsidy for housing, modern mortgages procurement, and tons of other factors which led to this bubble in the first place, factors which aren't going away
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May 12, 2009 22:41
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