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Old 11-18-2018, 10:07 PM
 
427 posts, read 348,058 times
Reputation: 963

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Quote:
Originally Posted by JJonesIII View Post
Yet another fallacy when you look at the historic low interest rates people have been able to purchase property at. I'm sure many would have loved to purchase homes at some of these 3-3 1/2% rates as opposed to some of the double digit rates many in his generation were exposed to (apparently you're too young to remember that). Not to mention, plenty had an opportunity to purchase homes at 40%+ below of what they are today some 8 years ago. Let's not expect other to cry tears for those that didn't take advantage of that. Buying homes have always been hard in the large metropolitan areas of California. Please don't foolishly try and discount the hardships others had to go through to purchase their homes.
In the long run, you would much rather purchase a 500,000 property with 100,000 down @ 3.5% interest than the same exact house for 1,000,000 house with 100,000 down at 12% interest even though they both would have about the same payment per month and same capital outlay. This is double true in CA due to Prop 13.
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Old 11-18-2018, 10:30 PM
 
28,107 posts, read 63,374,410 times
Reputation: 23222
Quote:
Originally Posted by CA4Now View Post
If the OP really is in his early 40s, he never paid a double digit interest rate for his first home(s), unless he was dabbling in residential real estate as a child. Believe me, those of us who paid those high interest rates remember exactly when they started to decline.



It's doubtful that this poster is expecting anyone to cry tears for anyone. He's just being honest: there actually was a time when the average homeowner could buy a decent starter home here for 3 X his or her income. And those days are long gone, and probably will not return.
The time was 2009-12 and there were a lot of them... every city block in Oakland had at least one...

Single family starter home... 60k... homes in the hills with 4 bedrooms 2.5 bath and bay views 280k...

These are real numbers from 6 years ago...

Thing is that 60k home is now 300k+... that 280K home is now 850k

The problem is when prices are down the group think is run... instead of a buy opportunity of a generation.

My hospital friends all had good jobs... only one single mom RN took the leap... she bought a little home in Castro Valley... even her friends told her why buy when you can rent?

That single purchase in 2011 has provided 400k equity and the rent she was paying is now the same as her mortgage...

People thing Real Estate always goes up until it doesn't...

Thing to remember is Real Estate is cyclical...

My first home was the home no one wanted... it was the least expensive single family home on the Oakland MLS when I bought it... and it was all I could afford!
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Old 11-19-2018, 02:31 AM
 
1,203 posts, read 827,159 times
Reputation: 1391
amokk and UR,

Just the fact that there are posters like you guys that understand this is good enough for me. I know myself and CaliRestoration would use a basic math equation to explain this to a myriad of posters here. Some simply didn't want to accept the reality of it, and others were mathematically challenged and would still try to argue it. When I would point out that math isn't subjective (not an insult, just a statement of fact), they'd report me to a mod and say I personally insulted them. So I don't waste my time with it any more. Some will get it and some won't.

P.S. amokk, I think you reversed the figures in your example but I knew what you meant

P.S.S. UR, I used to laugh at people that would claim you could just refinance out of your high interest loan. Most don't realize that even if you had an A+ credit rating, we went through about a 12 to 13 year period into the 90's where the best interest rate you could get was 9% (anyone with a blemish on their record were still in double digits). And you had to pay points to get that rate (typically at least 2 points)! Yeah, the good ol' days, lol.

Last edited by JJonesIII; 11-19-2018 at 02:46 AM..
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Old 11-19-2018, 06:40 AM
 
1,203 posts, read 827,159 times
Reputation: 1391
I should also mention that if CR is a self-made millionaire (as the previous poster claimed), he achieved it by taking a risk with his money and making a sound business decision. He could have gone belly up on his investment and there would be no one there to bail him out. No different than what Ultrarunner went through (which I would say is a remarkable story). A state doesn't make you rich. It's called taking personal responsibility for your actions. This move is just another business decision he is making (getting out of an area with what he deems to be a hostile business environment). I personally think it is a smart one and know of many that have achieved much greater financial success doing the same. They valued their financial freedom more than scenery, beaches, and what some claim is perfect weather (I beg to differ on that one). To each their own. I wish him the best. He's been a great contributor and a voice of reason to this forum.

Last edited by JJonesIII; 11-19-2018 at 06:54 AM..
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Old 11-19-2018, 07:22 AM
 
Location: So Ca
26,573 posts, read 26,433,288 times
Reputation: 24510
Quote:
Originally Posted by Ultrarunner View Post
The time was 2009-12 and there were a lot of them... every city block in Oakland had at least one...
Yes, as did many in the greater L.A. area.
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Old 11-19-2018, 07:55 AM
 
1,203 posts, read 827,159 times
Reputation: 1391
Quote:
Originally Posted by amokk View Post
In the long run, you would much rather purchase a 500,000 property with 100,000 down @ 3.5% interest than the same exact house for 1,000,000 house with 100,000 down at 12% interest even though they both would have about the same payment per month and same capital outlay. This is double true in CA due to Prop 13.
In regards to my previous post, I'm assuming you meant....

In the long run, you would much rather purchase a 500,000 property with 100,000 down @ 12% interest than the same exact house for 1,000,000 house with 100,000 down at 3.5% interest even though they both would have about the same payment per month and same capital outlay. This is double true in CA due to Prop 13.

Correct?

You're simply saying that the property tax aspect would be one to take into account. Although admittedly, in that example, the former would be $500 less per month, but I understand your point (and I'm guessing you were just throwing out those numbers, so I'm not going to bust your **** over it). However, it's clear that the initial effort to purchase both those homes is not going to be much different for the parties involved. So the point about it being some increased hardship for those purchasing now is unfounded (in fact in that example, it would be easier for the party purchasing now). Which was the original point I was making on CR having to deal with the same factors as anyone dealing with it now. It's disingenuous and grossly unfair to claim otherwise.

Last edited by JJonesIII; 11-19-2018 at 08:15 AM..
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Old 11-19-2018, 10:28 AM
 
367 posts, read 416,819 times
Reputation: 425
Regarding self-made RE millionaires (not talking about the OP!)....my greedy landlord family member who made a lot on real estate....they were getting those mortgages without having a job or any income, banks didn't care about papers or proof of anything (unlike now), 0-down, etc, etc. Then, this person went ahead screwing the banks, not paying, playing games, won. Typical CA real estate millionaire.
Government should just limit how much real estate can be owned by "investors": allow one 2nd home max, per household, not per person, that's it (and citizens or residents only should be allowed to own). May be then the place (CA) would become livable again. This housing plague (shortage, insane rents, overvalued homes, homelessness=destruction of "communities") is spreading all over the US now, not just CA, the end of it will not be pretty. A lot of people bash CA, having literally fleeced it earlier, are taking profit and heading to ruin the next state. The price of turning housing in nothing more but highly volatile, tradeable by entire world, for-profit commodity will be the destruction of society as a whole, it's morale and all social ties (very evident almost anywhere in CA now). Housing is a human right - especially since being homeless is illegal everywhere (yep, so much to freedom and free market-lovers,: it's all free and capitalist till there're 5 homeless camps around your nice Airbnb investment)

Last edited by Usrname; 11-19-2018 at 10:47 AM..
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Old 11-19-2018, 11:17 AM
 
1,203 posts, read 827,159 times
Reputation: 1391
Quote:
Originally Posted by Usrname View Post
Regarding self-made RE millionaires (not talking about the OP!)....my greedy landlord family member who made a lot on real estate....they were getting those mortgages without having a job or any income, banks didn't care about papers or proof of anything (unlike now), 0-down, etc, etc. Then, this person went ahead screwing the banks, not paying, playing games, won. Typical CA real estate millionaire.
Government should just limit how much real estate can be owned by "investors": allow one 2nd home max, per household, not per person, that's it (and citizens or residents only should be allowed to own). May be then the place (CA) would become livable again. This housing plague (shortage, insane rents, overvalued homes, homelessness=destruction of "communities") is spreading all over the US now, not just CA, the end of it will not be pretty. A lot of people bash CA, having literally fleeced it earlier, are taking profit and heading to ruin the next state. The price of turning housing in nothing more but highly volatile, tradeable by entire world, for-profit commodity will be the destruction of society as a whole, it's morale and all social ties (very evident almost anywhere in CA now). Housing is a human right - especially since being homeless is illegal everywhere (yep, so much to freedom and free market-lovers,: it's all free and capitalist till there're 5 homeless camps around your nice Airbnb investment)
Then your senseless rant is off topic. Please start your own thread if you want to rant about your fictional "greed".
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Old 11-19-2018, 11:20 AM
 
Location: Formerly Pleasanton Ca, now in Marietta Ga
10,276 posts, read 8,435,178 times
Reputation: 16488
Quote:
Originally Posted by Usrname View Post
Regarding self-made RE millionaires (not talking about the OP!)....my greedy landlord family member who made a lot on real estate....they were getting those mortgages without having a job or any income, banks didn't care about papers or proof of anything (unlike now), 0-down, etc, etc. Then, this person went ahead screwing the banks, not paying, playing games, won. Typical CA real estate millionaire.
Government should just limit how much real estate can be owned by "investors": allow one 2nd home max, per household, not per person, that's it (and citizens or residents only should be allowed to own). May be then the place (CA) would become livable again. This housing plague (shortage, insane rents, overvalued homes, homelessness=destruction of "communities") is spreading all over the US now, not just CA, the end of it will not be pretty. A lot of people bash CA, having literally fleeced it earlier, are taking profit and heading to ruin the next state. The price of turning housing in nothing more but highly volatile, tradeable by entire world, for-profit commodity will be the destruction of society as a whole, it's morale and all social ties (very evident almost anywhere in CA now). Housing is a human right - especially since being homeless is illegal everywhere (yep, so much to freedom and free market-lovers,: it's all free and capitalist till there're 5 homeless camps around your nice Airbnb investment)
This all seems rather knee jerk and short sighted. Just because you have a family member who is greedy and crooked doesn't make all landlords this way.
If there was a limit to home ownership as you suggest, rents could go sky high as there will not be enough rentals to go around forcing people to buy or move out. The people forced to buy will. Increase demand and thus make prices even higher.
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Old 11-19-2018, 11:24 AM
 
Location: SoCal
20,160 posts, read 12,648,206 times
Reputation: 16993
Quote:
Originally Posted by JJonesIII View Post
Yet another fallacy when you look at the historic low interest rates people have been able to purchase property at. I'm sure many would have loved to purchase homes at some of these 3-3 1/2% rates as opposed to some of the double digit rates many in his generation were exposed to (apparently you're too young to remember that). Not to mention, plenty had an opportunity to purchase homes at 40%+ below of what they are today some 8 years ago. Let's not expect other to cry tears for those that didn't take advantage of that. Buying homes have always been hard in the large metropolitan areas of California. Please don't foolishly try and discount the hardships others had to go through to purchase their homes.
No kidding. I hate these online whinnys. I purchased my first home when interest rate was 9.75%. Do you know how scary it was. My home was $250k, after interest and everything is paid, it would have cost me $1 million. I remember I was in shell shocked when I finally realized the amount I was in debt for.
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