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Old 09-12-2016, 12:45 PM
 
727 posts, read 399,195 times
Reputation: 1081

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Quote:
Originally Posted by Perma Bear View Post
I secretly hope your deflationary doom and gloom happens. I'd love cheap Bay Area
Houses.
Real Estate gained 2% - 3% annually for 100 years. This is only since 2001 that we experienced speculations in housing on a grand scale. This is also because we have no real economy and manufacturing has been shipped oversees. Housing prices going up 10% + annually is crazy and NOT normal. Inviting Wall Street Hedge Funds to be our Landlords is CRiMINAL. Houses should be build for Americans to live in them and raise their families. House is first and foremost a shelter and not an INVESTMENT. It's more a liability then investment. But the BANKS, low rates and Fed policies turned our housing market into a Las Vegas Casino.

When interest rates are up, no speculations in housing is taking place, houses are purchased by end users, homeowners who buy a house as a shelter and not some kind of a investment. Why would anyone speculate in housing, play a Slumlord when you can get safe returns in your savings account and CD. This crazy speculation is only possible with low rates.

Real Estate is grossly overpriced all over America today thanks to ZIRP. Those prices of today and abnormal, false or inflated prices thanks to ZIRP!!!!
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Old 09-12-2016, 12:57 PM
 
9,086 posts, read 3,701,709 times
Reputation: 13383
Not sure you understand that to the buyer, nothing has changed much since the 1970-80s...

Amortization Schedule for a $1,000,000 mortgage for 30 years with a 4.25 Percent Interest Rate

Amortization Schedule for a $500,000 mortgage for 30 years with a 10.25 Percent Interest Rate

A $500k house with 10% interest rate from the 70s would have a $4500/month bill. A $1 million house today at 4% is $4900/month.

There isn't much difference in payment. IE if they couldn't afford $4500-5000/month payment, they couldn't buy a house back in the 70s, and if they could, they could buy a million dollar house today.
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Old 09-12-2016, 01:02 PM
 
5,600 posts, read 4,206,197 times
Reputation: 10562
Quote:
Originally Posted by C2BP View Post
OMG, you are living on a fantasy island.
I think you are right. Those of us with a positive attitude see life as a wonderful thing... a fantasy island if you wish. We fit in, enjoy the world, find ways to succeed and make accomplishments and prosper.


Those who live in a dark world are rarely happy, seem to lose rather than win. Then they blame the dark world.
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Old 09-12-2016, 01:38 PM
 
Location: Liminal Space
1,018 posts, read 1,162,155 times
Reputation: 1294
Quote:
Originally Posted by MLSFan View Post
Not sure you understand that to the buyer, nothing has changed much since the 1970-80s...

Amortization Schedule for a $1,000,000 mortgage for 30 years with a 4.25 Percent Interest Rate

Amortization Schedule for a $500,000 mortgage for 30 years with a 10.25 Percent Interest Rate

A $500k house with 10% interest rate from the 70s would have a $4500/month bill. A $1 million house today at 4% is $4900/month.

There isn't much difference in payment. IE if they couldn't afford $4500-5000/month payment, they couldn't buy a house back in the 70s, and if they could, they could buy a million dollar house today.
The difference is that 20% down on the $1million house is twice as high.

Today's housing market may not cost much more on a monthly-payment basis, but it has a higher barrier to entry. Therefore it's becoming an insider's game. People who already got into the housing market 15, 20, 30 years ago can stay in by using their equity as the next down payment, and the truly rich buy with cash. Normal working people who are starting out and trying to build savings, are the ones who get screwed. Not only do they have to save up twice as much, but saving money is twice as hard because of the inflated rental market.
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Old 09-12-2016, 01:43 PM
 
Location: not normal, IL
776 posts, read 350,092 times
Reputation: 917
Quote:
Originally Posted by jrkliny View Post
Of course savers are not doing well. The whole idea of low rates is to stimulate investment and buying and borrowing. Borrowing is a great deal. You can borrow at very low rates, enjoy the money or put it to work for you, and then pay it back years or decades later with dollars that are worth much less.
Not hardly, when have you taken out a loan and had it "work for you" in your favor? Like someone else said they will raise interest rates, not to mention, you have fees, etc. It is a good way to build credit and a great way to loose money. I only know of one person to make this work in her favor and it cost her about $100 a month without interest.

Quote:
Originally Posted by redguard57 View Post
When your economy is 70% dependent on domestic consumer spending, obviously saving does it little good.
100% correct, but it also doesn't help when 30% is growing, after a while that 30% really takes its toll.
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Old 09-12-2016, 02:01 PM
 
5,600 posts, read 4,206,197 times
Reputation: 10562
Quote:
Originally Posted by Nothere1 View Post
Not hardly, when have you taken out a loan and had it "work for you" in your favor? ........

I have a mortgage that costs me less than 4%. The money I would have spent on the house has earned much more
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Old 09-12-2016, 02:02 PM
 
8,281 posts, read 3,454,476 times
Reputation: 1584
Quote:
Originally Posted by Nothere1 View Post
Not hardly, when have you taken out a loan and had it "work for you" in your favor? Like someone else said they will raise interest rates, not to mention, you have fees, etc. It is a good way to build credit and a great way to loose money. I only know of one person to make this work in her favor and it cost her about $100 a month without interest.


100% correct, but it also doesn't help when 30% is growing, after a while that 30% really takes its toll.
I bought a car with a zero percent loan. I have that money to do whatever I want.

Many people buy stocks or commodities on margin and make money from that loan.

I borrowed at 3% for an investment that pays better than 15%. I have paid off the loan with gains made in that investment.

So now you know 2.
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Old 09-12-2016, 09:27 PM
 
8,508 posts, read 2,389,571 times
Reputation: 8123
Quote:
Originally Posted by C2BP View Post
Yes, you all have been wrong all this time and I'm the only one who got it right. It's sad, isn't it,. You all thought that we are in recovery since 2008, that low rates will bring us roaring economy. You all have been fooled by the FED. So after ZIRP, QE1, QE2, QE3 you guys still belive in fairy tales? Amazing!!!

But, don't you worry, you guys are not the only ones who got fooled. People from Japan got fooled too decades ago. We are following in their footsteps now not because we chose it but because no one can rein in the Federal Reserve who clearly doesn't embrace capitalism, believe in America, and thinks saving is a sin.

It's time to wake up, America is NOT recovering. The so called recovery is a lie and illusion. In the meantime, enjoy the dead economy.
Right - so all these 1/2 million dollar houses that people are buying CASH near me - and the uptick in boat and yacht sales - and the upticks in virtually every part of consumer goods - and the upticks in travel - and the lowering of unemployment rates....and the increasing profits of corporations....

They are all part of the "fake" recovery that the Kenyan and Hillary planned out.

Hardy Har Har.

Ask yourself why the Japanese, Chinese, Europeans and everyone else wants to invest in the USA and in USA dollars, real estate, etc.

We may be bad - but we are the BEST of the worst.

It's hard for me not to believe in the recovery when I check my net worth and look at my houses and other stuff. But if you say so...you must be right!

Maybe these fine steaks in my freezer were part of the Kenyans plot?
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Old 09-12-2016, 09:30 PM
 
8,508 posts, read 2,389,571 times
Reputation: 8123
Quote:
Originally Posted by jrkliny View Post
I have a mortgage that costs me less than 4%. The money I would have spent on the house has earned much more
Ah, free money.
This is akin to a Perpetual Motion Machine.

No longer do we (mankind) need to produce goods and services! Rather we can create a "spread" between bank loans and other stuff and sit back and make money.

Why would anyone work? Oh, that's right - very few do.

This is funny stuff. You can see how the Great Recession came about...and get ready for the next one. People really think they can borrow money and then invest it to make more!

That's what they all did...until they didn't.

Musical Chairs is a fun game but it never caught a fish.
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Old 09-12-2016, 09:35 PM
 
4,310 posts, read 2,448,126 times
Reputation: 2424
Quote:
Originally Posted by craigiri View Post
Right - so all these 1/2 million dollar houses that people are buying CASH near me - and the uptick in boat and yacht sales - and the upticks in virtually every part of consumer goods - and the upticks in travel - and the lowering of unemployment rates....and the increasing profits of corporations....

They are all part of the "fake" recovery that the Kenyan and Hillary planned out.

Hardy Har Har.

Ask yourself why the Japanese, Chinese, Europeans and everyone else wants to invest in the USA and in USA dollars, real estate, etc.

We may be bad - but we are the BEST of the worst.

It's hard for me not to believe in the recovery when I check my net worth and look at my houses and other stuff. But if you say so...you must be right!

Maybe these fine steaks in my freezer were part of the Kenyans plot?
Housing prices increases only help those who were born in 1946 and could buy a house on a hill in 1968 in the Bay Area for 35k. For those of us who happened to be born later we get screwed. Something is wrong when even the top 10% can't afford to buy a home.
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