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just for a reference, parents bought their split for ~255k in 1986 and today it's about 550k judging by the house that just sold next door. Mortgage rates were much higher back then though - think 18%.
Using $100k borrowed at 18% and paying 30 years, it's about $270k principle & interest + $155k they paid up front = $425k. That's $100k+ more for the house if they sell now.
That's a logical fallacy... Someone today is hyping the very fact that values actually did go up that much in that time span - so there's a precedent today that did not exist 30 years ago. You might even call it an expectation. 30 years is kind of a bad number anyway because the vast majority of the spike happened from the late 90s to 2007ish. It's actually down since then, so if you bought in the early 2000s you're actually still playing catch-up.
It's more likely LI is lost to the oceans than the median price in Nassau going from 450k today to 1.8MM in 20 years.
How is it a logical fallacy? Everything had gone up exponentially (not just housing) in the last 30 years MikeyKid, and unless there is a major change in how inflation works cost for everything will continue to rise. I'm not saying they will be as high as 1.8 million for a regular split in 20 years (not sure how you came up with that crazy number) but I wouldn't be surprised if they are In the 750+ range, barring another major economic downturn (which is surely possible), and if that's the case housing prices in Charlotte and elsewhere will come crashing down as well probably worse.
How is it a logical fallacy? Everything had gone up exponentially (not just housing) in the last 30 years MikeyKid, and unless there is a major change in how inflation works cost for everything will continue to rise. I'm not saying they will be as high as 1.8 million for a regular split in 20 years (not sure how you came up with that crazy number) but I wouldn't be surprised if they are In the 750+ range, barring another major economic downturn (which is surely possible), and if that's the case housing prices in Charlotte and elsewhere will come crashing down as well probably worse.
because the logic you're attempting to apply in order to arrive at a conclusion is invalid... Nobody could possibly think a house they bought 30 years ago would appreciate to 500k because it had never happened before. Now, today - people having been cashing out left and right. So it's reasonable to believe people expect a huge appreciation over the same time frame. Granted 1.8MM is extreme, but that number is 4 times 450k - the appreciation amount ILLIB stated her friend cashed out in 20 years times the current median home price you stated for Nassau.
My whole point is that a ILLIB's 400% increase ain't happening... even your example of a 66% appreciation ain't happening. We're currently starting down the road of some serious deflation and it will only be a matter of time until housing goes down - significantly. You might think "Charlotte and elsewhere" will be "probably worse", but you should realize that "Charlotte and elsewhere" didn't have as big a spike to start with so they won't come down as much as a percentage.
I mean you do realize that home values on LI aren't back to the peak of 2007, right? ... and factoring in how many property tax increases have occurred over those 8 years? ouch
barring another major economic downturn (which is surely possible), and if that's the case housing prices in Charlotte and elsewhere will come crashing down as well probably worse.
That depends on several factors with one obvious one being how "hot" a location's market is. For example the home I live in now has decreased in value by 11% from it's high to now, but our ancestral homes on Long Island have decreased by 20% & 35% from their highs to now (all highs happened somewhere in 2006). Please note that the information is just anecdotal.
Last edited by ClarkStreetKid; 01-23-2015 at 08:20 AM..
because the logic you're attempting to apply in order to arrive at a conclusion is invalid... Nobody could possibly think a house they bought 30 years ago would appreciate to 500k because it had never happened before. Now, today - people having been cashing out left and right. So it's reasonable to believe people expect a huge appreciation over the same time frame. Granted 1.8MM is extreme, but that number is 4 times 450k - the appreciation amount ILLIB stated her friend cashed out in 20 years times the current median home price you stated for Nassau.
My whole point is that a ILLIB's 400% increase ain't happening... even your example of a 66% appreciation ain't happening. We're currently starting down the road of some serious deflation and it will only be a matter of time until housing goes down - significantly. You might think "Charlotte and elsewhere" will be "probably worse", but you should realize that "Charlotte and elsewhere" didn't have as big a spike to start with so they won't come down as much as a percentage.
I mean you do realize that home values on LI aren't back to the peak of 2007, right? ... and factoring in how many property tax increases have occurred over those 8 years? ouch
Really 66% ain't happening huh? I guess you are special and can see the future. There will never be another housing spike EVER again, especially on LI because MikeyKid says so! Quick everybody, sell your house now while the getting's good! Once again, as I said several times before anything is possible. Hell the entire world economy could come crashing down tomorrow and your Charlotte McMansion could be worthless along with everyone elses home. No one knows what the future holds, they didn't know 30 years ago, and you certainly don't know now.
I'm aware they aren't back to the peak of 2007 during the bubble, but they have been steadily climbing since then, i'm actually amazed at what houses have been selling for in my area recently. Glad I bought when prices here bottomed out.
That depends on several factors with one obvious one being how "hot" a location's market is. For example the home I live in now has decreased in value by 11% from it's high to now, but our ancestral homes on Long Island have decreased by 20% & 35% from their highs to now (all highs happened somewhere in 2006). Please note that the information is just anecdotal.
Yep no arguments there, I had a front row seat to see the "hot" the Florida housing market going into the stratosphere, massively overbuilding, and then completely crash, it was crazy how bad it was. Virtually no area was immune to the Great Recession, although LI seemed to have weathered the storm better than many other areas.
Really 66% ain't happening huh? I guess you are special and can see the future. There will never be another housing spike EVER again, especially on LI because MikeyKid says so! Quick everybody, sell your house now while the getting's good! Once again, as I said several times before anything is possible. Hell the entire world economy could come crashing down tomorrow and your Charlotte McMansion could be worthless along with everyone elses home. No one knows what the future holds, they didn't know 30 years ago, and you certainly don't know now.
I'm aware they aren't back to the peak of 2007 during the bubble, but they have been steadily climbing since then, i'm actually amazed at what houses have been selling for in my area recently. Glad I bought when prices here bottomed out.
Ease up on the meds or something... we're having a fun debate here so of course I'm going to proclaim my opinion. Don't get all over dramatic on me - it wasn't even as bad as my usual wise arse remarks. lol
The housing spike was unprecedented and no it won't ever happen again until housing corrects to proper natural levels that reflect income. Housing cannot outpace what people are earning to pay for it forever... and it has for too long now. Interest rates can't go any lower, which is exactly what is giving you the "steady climb" since you bought at "the bottom". Way to time it perfectly champ. I'd still take the bet you won't see significant appreciation over 20 years, if any at all... how long until your property tax payment exceeds your P&I portion of the payment? If you don't think the eventual increase of interest rates (it has to happen), the continued pressure of rising taxes (it has to happen), and stagnant wages will hurt home values in the future I don't know what to say. Either way you seem to like the idea that "no one knows what the future holds" and "anything could happen".
You of course are free to disagree with any of this - I just don't see where you think the money would come from to get your higher home prices... they've already printed so much of it they've backed themselves into having to make another war. Look at oil prices. Look at commodities. Look at history. ah screw it, I bet this time it will all be different!
Ease up on the meds or something... we're having a fun debate here so of course I'm going to proclaim my opinion. Don't get all over dramatic on me - it wasn't even as bad as my usual wise arse remarks. lol
The housing spike was unprecedented and no it won't ever happen again until housing corrects to proper natural levels that reflect income. Housing cannot outpace what people are earning to pay for it forever... and it has for too long now. Interest rates can't go any lower, which is exactly what is giving you the "steady climb" since you bought at "the bottom". Way to time it perfectly champ. I'd still take the bet you won't see significant appreciation over 20 years, if any at all... how long until your property tax payment exceeds your P&I portion of the payment? If you don't think the eventual increase of interest rates (it has to happen), the continued pressure of rising taxes (it has to happen), and stagnant wages will hurt home values in the future I don't know what to say. Either way you seem to like the idea that "no one knows what the future holds" and "anything could happen".
You of course are free to disagree with any of this - I just don't see where you think the money would come from to get your higher home prices... they've already printed so much of it they've backed themselves into having to make another war. Look at oil prices. Look at commodities. Look at history. ah screw it, I bet this time it will all be different!
You're saying two different things: "starting down the road of serious deflation" & "eventual higher interest rates"
Which is it? It won't be both (at the same time anyway).
Ease up on the meds or something... we're having a fun debate here so of course I'm going to proclaim my opinion. Don't get all over dramatic on me - it wasn't even as bad as my usual wise arse remarks. lol
The housing spike was unprecedented and no it won't ever happen again until housing corrects to proper natural levels that reflect income. Housing cannot outpace what people are earning to pay for it forever... and it has for too long now. Interest rates can't go any lower, which is exactly what is giving you the "steady climb" since you bought at "the bottom". Way to time it perfectly champ. I'd still take the bet you won't see significant appreciation over 20 years, if any at all... how long until your property tax payment exceeds your P&I portion of the payment? If you don't think the eventual increase of interest rates (it has to happen), the continued pressure of rising taxes (it has to happen), and stagnant wages will hurt home values in the future I don't know what to say. Either way you seem to like the idea that "no one knows what the future holds" and "anything could happen".
You of course are free to disagree with any of this - I just don't see where you think the money would come from to get your higher home prices... they've already printed so much of it they've backed themselves into having to make another war. Look at oil prices. Look at commodities. Look at history. ah screw it, I bet this time it will all be different!
Hey now MikeyKid who said we aren't having a fun debate? I'm just being a wise arse right back
We are going to have to agree to disagree on this, my house has already appreciated in value over the 6 years I've owned it, could that change? Sure. Of course. But my bet is in the long term 20 years barring another big economic downturn, It will still be worth quite a bit more.
Don't get too exited about oil. It went up 2% yesterday just because the Saudi King died. Doubt it will stay like this for long. Stocks and commodities go up as well as go down nothing will change there. As you said yourself just look at history! I say again you have no clue what the future holds. You yourself said no one foresaw prices increasing as they did over the last several decades.
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