Recession truly hitting Austin hard now.... (San Diego, West: low income, apartment complexes, 2nd mortgage)

[atxcio]

Originally Posted by ArkLaTexana

Some people are still making $200,000 a year while others make $20,000 a year. The people making $200,000 are saying, "What's the big hoo-haw about?" and the other folks are saying, "What are you blind?"

It's just a matter of trickle up I guess. They'll figure it out evenutally that the economy is in the toilet.

The people making $200K probably have way more invested in the market than those making $20K... and they've likely lost several times the yearly income of some lower-paid people in just the last 6 months. So I think they are aware that the economy is bad...

[mimimomx3]

Originally Posted by llkltk

But mimimomx3, interest rates are down, you get an 8000 tax credit if you are new homebuyer and sales are up 5.1% according to a Fox News report. I don't see prices going down or appraisals for that matter. Again with the negativity. Where is the optimism in this world?

I'm not being negative, I'm being realistic. I think that we have way too many overpriced houses in the suburbs, and the only houses that will hold their value or increase in value are in the close in neighborhoods.

February Austin home sales drop 28% - Austin Business Journal: show an increase in home value but a drop in sales for February, which I didn't know. I had heard that :" single-family home sales and median home prices both fell compared with January 2008, decreasing 36 percent and 6 percent respectively."

What's wrong with fighting your property tax appraisal? Do you LIKE giving the City of Austin/Travis County more money to squander? Do you LIKE big government? You can send in a donation, then, I prefer small government, and you BET I will contest my appraisal (like I have every year).

[mimimomx3]

Originally Posted by Austin97

That is simply not true. Government debt is not the same as debt that you and I have. The US government can always print more money. The impact is inflation and that foreigners will no longer buy our debt. But the existing debt will get inflated away.

The impact to you and I is that if you hold your wealth in cash, gonds or have a fixed rate annuity, you will be "taxed" heavily. If you have fixed rate debt, hard assets or stocks you will be fine.

What about our interest payment? Will that get 'inflated away' with the tooth fairy too?

[Austin97]

Originally Posted by mimimomx3

What about our interest payment? Will that get 'inflated away' with the tooth fairy too?

If it is fixed rate debt, yes it will. Todays dollars are worth much less than 15-20 years ago because of inflation. If you used to have mortgage payments of $500 20 years ago, that is equivalent to 868 dollars today.

If your mortgage is 1700 today, that will probably drop by half compared to purchasing power in 10-15 years.

If you have variable rate debt then you will have a problem.

[ArkLaTexana]

Originally Posted by atxcio

The people making $200K probably have way more invested in the market than those making $20K... and they've likely lost several times the yearly income of some lower-paid people in just the last 6 months. So I think they are aware that the economy is bad...

What I'm saying is that they haven't moved from eating meat to eating beans. I don't feel terrible for people that lost $20,000 in the stock market, the stock market is as much of an investment as the roulette wheel is. I feel bad for people that were saving up for a car and because prices have increased and wages have stagnated and they can't find a better job are now using that car money on rent.

[ArkLaTexana]

I guess I could say this in simpler terms. People that are having a hard time making ends meet having a harder time making ends meet concerns me. People that are having a hard time buying a pretty boat having a harder time buying a pretty boat doesn't concern me.

Anytime the middle class or the rich are feeling the pinch of a down economy, they're not the ones truly suffering. It's the working poor that I am keeping an eye on to see what they do.

[mimimomx3]

Originally Posted by Austin97

If it is fixed rate debt, yes it will. Todays dollars are worth much less than 15-20 years ago because of inflation. If you used to have mortgage payments of $500 20 years ago, that is equivalent to 868 dollars today.

If your mortgage is 1700 today, that will probably drop by half compared to purchasing power in 10-15 years.

If you have variable rate debt then you will have a problem.

You might want to read up on why defiicits matter: Presentations | The Concord Coalition

[mimimomx3]

Originally Posted by ArkLaTexana

I guess I could say this in simpler terms. People that are having a hard time making ends meet having a harder time making ends meet concerns me. People that are having a hard time buying a pretty boat having a harder time buying a pretty boat doesn't concern me.
.

You should be concerned. When people can't buy a new boat the boat makers tend to get unemployed....

[ArkLaTexana]

Are there really a lot of boat makers in Austin?

[ArkLaTexana]

Anyway, I think our industry needs to be focused more on making a bunch of small boats that everyone can afford rather than a few large boats that only a few people can afford.