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Old 07-14-2012, 11:11 AM
 
Location: under the beautiful Carolina blue
22,648 posts, read 36,624,565 times
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Yeah, true Pequa, my sister's first house, in 1985 - her interest rate was 11%!!!

I remember when I bought my first car, the interest rate was 11%...and that rate was WAY better than any of my friends were getting back then!

When we bought our house in '97 our rate was a bit over 7%....we had a 5 year ARM, so it worked in our favor all those years as when they recalculated our payment every year, it was on the amount we currently owed, not the original loan. It was like refinancing every year for free.
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Old 07-14-2012, 11:13 AM
 
Location: under the beautiful Carolina blue
22,648 posts, read 36,624,565 times
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Quote:
Originally Posted by kdlugozi View Post
So I guess the question is....is a town middle class when most people living in the town are middle class? Or is a town middle class when middle class people can afford to buy into the neighborhood today at current home prices? Because many neighborhoods with middle class people living there do not have any available housing stock at middle class prices.
And does the definition change over time? If a town of $300K homes is considered middle class, did I buy into a middle class town (Garden City) in 1997?
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Old 07-14-2012, 01:20 PM
 
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Quote:
Originally Posted by Pequaman View Post
The big difference is, mortgage rates fluctuated around 7%-10% in the 90's. From 2001 to 2012, they've fluctuated from 3.75%-7%, which they are currently at record lows around 3.75.

$200,000 borrowed @9% 30-yr FRM = $1609/month P+I
$337,000 borrowed @4% 30-yr FRM = $1609/month P+I

See what happened? Also, median household incomes have risen at about the rate of inflation since the 90's.
Mortgage rates in Japan are close to 1%. I think that's a real possibility here in the future.
Youre right taxes barely went up since the gogo 9% days.

C'mon Peqs...dont be a big dumb dummy ; ).
Admit theres some folks on the Riv who couldnt afford to be there had they not bought years ago and refinanced.

Bottom line is that the cost of ones home is a liability...not an asset when looking at ones monthly nut.
It will have great bearing on the amount of disposable income.A fortunate birth has little to do with wealth or middleclassyness lol.

Crooks
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Old 07-14-2012, 01:28 PM
 
7,658 posts, read 19,127,312 times
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Quote:
Originally Posted by twingles View Post
And does the definition change over time? If a town of $300K homes is considered middle class, did I buy into a middle class town (Garden City) in 1997?
FWIW you wouldve struggled to find something nice in Brookhaven for 300 in 2007.

Crooks
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Old 07-14-2012, 01:59 PM
 
Location: under the beautiful Carolina blue
22,648 posts, read 36,624,565 times
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Quote:
Originally Posted by Crookhaven View Post
FWIW you wouldve struggled to find something nice in Brookhaven for 300 in 2007.

Crooks
Hempstead too
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Old 07-14-2012, 06:15 PM
 
Location: Massapequa Park
3,172 posts, read 6,728,830 times
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Quote:
Originally Posted by Crookhaven View Post
Youre right taxes barely went up since the gogo 9% days.

C'mon Peqs...dont be a big dumb dummy ; ).
Admit theres some folks on the Riv who couldnt afford to be there had they not bought years ago and refinanced.

Bottom line is that the cost of ones home is a liability...not an asset when looking at ones monthly nut.
It will have great bearing on the amount of disposable income.A fortunate birth has little to do with wealth or middleclassyness lol.

Crooks
There are folks everywhere who couldn't afford to be where they are hadn't they refinanced. Taxes went up a lot, no doubt, but the cost of a mortgage went down by A LOT more. Earning $50k in the 90's is now the equivalent of earning $85k today. A 2-br garden apt that used to cost $1100 in rent now costs $1800.

Looking at it from that POV and the fact that our $ is going the way of the Yen, LI housing really hasn't changed much in "cost" since the 90s. I won't argue taxes haven't, but that's why people are trying to change that, or at least stop them dead in their tracks for the next 10 years. IDK what a "fortunate birth" means, but living in a home and paying principal is still creating some kind of equity for most people vs what it would cost (the same) to rent that home. 1990 was a terrible time to buy if you went to sell in 1995. But I'm sure they still made out OK in the long run. You don't believe in the American Dream anymore, lol?
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Old 07-14-2012, 06:43 PM
 
7,658 posts, read 19,127,312 times
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Quote:
Originally Posted by Pequaman View Post
There are folks everywhere who couldn't afford to be where they are hadn't they refinanced. Taxes went up a lot, no doubt, but the cost of a mortgage went down by A LOT more. Earning $50k in the 90's is now the equivalent of earning $85k today. A 2-br garden apt that used to cost $1100 in rent now costs $1800.

Looking at it from that POV and the fact that our $ is going the way of the Yen, LI housing really hasn't changed much in "cost" since the 90s. I won't argue taxes haven't, but that's why people are trying to change that, or at least stop them dead in their tracks for the next 10 years. IDK what a "fortunate birth" means, but living in a home and paying principal is still creating some kind of equity for most people vs what it would cost (the same) to rent that home. 1990 was a terrible time to buy if you went to sell in 1995. But I'm sure they still made out OK in the long run. You don't believe in the American Dream anymore, lol?
I like your wide eyed optimism.

Fortunate birth: See Baby Boom where any one pushing a broom could buy a Levitt slice of Moses' Americana. All they had to do was pay a modest mortgage and they'd have a retirement.

RIP


Crooks

Last edited by Crookhaven; 07-14-2012 at 07:08 PM..
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Old 07-14-2012, 06:59 PM
 
377 posts, read 642,836 times
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Unless you work as a rehab professional where your hourly rate is defined by Medicare reimbursement rates. In that case, the hourly rate from the 90s is what it still is today. So earning 50K in the 90s is still earning 50K today. And those working through the county's early intervention (because of the cuts to healthcare funding) have actually seen their pay go down incrementally over the years. So much for cost of living increase, sigh. But I digress...
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Old 07-15-2012, 08:30 AM
 
5,047 posts, read 5,772,412 times
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But then if you refinance, you are adding more years onto the mortgage usually. Unless you go from a 30 to a 15 year which would be the smart thing to do. Also there are refinance fees (of course).
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Old 07-15-2012, 02:05 PM
 
325 posts, read 735,274 times
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Quote:
Originally Posted by kdlugozi View Post
And yes, I am happy for him. The whole point was that most people are in homes valued at prices far exceeding what they could pay for a home, and therefore many household incomes do not match with current home values. That is all.
I'm confused how you're coming to this conclusion. They're not renters living in rent controlled apartments and it's not just about their income. They own houses (or at least equity in houses) valued at that amount. It's not like they are starting fresh. Even if you're living on a fixed retirement income, if you own a house outright (as many older residents do) you can sell it and pay cash for a comparable house (minus broker fees, closing costs, etc.). So, I would say unless you're refinanced up the wazoo, most people that purchased their homes 12+ years ago can "afford" to live in their communities. Your cousin has spent 20 years investing in a home. Obviously he can sell and buy another home worth "millions."

This also isn't a new phenomenon. Trust me, in the 70s and 80s there were still blue collar fisherman-types living in places like CSH. They couldn't "afford" to buy their own homes either at the rate us yuppies were paying. It's not like we had them evicted and turned them out of their homes with nothing but their income to find new housing. We paid them premium prices and dramatically increasing their net worth.
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