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Apologies for not shrugging it off.....guess this was just one comment
after too many that imply we get to "line our pockets' with rent monies.
That's not a good enough excuse so the apology is sincere.
Oceanside isn't very nice and historically has been a pretty cheap place to live. What has changed over the last 6-7 years to justify the increased prices? Nothing really. The prices are still higher than historic norms. Given that and the fact that there is a lot of foreclosure activity I'm pretty amazed you think there is no way prices can decline more.
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My estimated mortgage payment-to-be puts my taxable income at a whopping $10k, because of the 30 year term and other deductions. My current tax liability is $10k
How can your mortgage payment put your taxable income at $10k? That would mean your mortgage payment is something like 80% of your income. Also, you aren't at the highest tax bracket if you don't make more than 100k. You'd have to make over 357k to be in the highest tax bracket. You are either in the 25% or the 28% bracket.
prices are coming down disproportionately, in some areas you may get good buys but in others like here in South OC it's still a very bad decision to buy. I could rent a 3bd house here around Mission Viejo for $2k - $2.2k or so. Buying something similar is going to cost me $5k, that's a HUGE gap. To make a 30yr commitment I expect my PITI+HOA to be a bit less than rent (trading cost for commitment..just like you sign a lease for lower stable payments, that is how it's always been), so perhaps $1900 - $2k or so. For that prices still have to come down by about 50%.
Oceanside isn't very nice and historically has been a pretty cheap place to live. What has changed over the last 6-7 years to justify the increased prices? Nothing really. The prices are still higher than historic norms. Given that and the fact that there is a lot of foreclosure activity I'm pretty amazed you think there is no way prices can decline more.
I repeat...Prices are NOT going back down to their "historic" levels. There's no way. Buildout has made land a premium, and the value of the land is nearly 70% of the total purchase price. $170k or thereabout is the lowest it's going to get. We're not going to see house prices around $90k like my parents got back in the 80's. Not happening.
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Originally Posted by Humanoid
How can your mortgage payment put your taxable income at $10k? That would mean your mortgage payment is something like 80% of your income. Also, you aren't at the highest tax bracket if you don't make more than 100k. You'd have to make over 357k to be in the highest tax bracket. You are either in the 25% or the 28% bracket.
As I said, until I make over $100k, my tax liability isn't going higher.
And, you're thinking in reverse. When I do my taxes, my taxable income decreases to around $40k. Assuming interest and (at least for now) capital gains, I can deduct nearly $24k. 401k cuts it even more. Overpayment of taxes every year cuts it even more. And student loan interest cuts it yet more. By the time it's done, my taxable will be so low that I will have no tax liability, resulting in a full refund...again, until I make over $100k. Then I'll break even and eventually start owing again. That's when itemization is critical.
Rent is not throwing money away, it's buying shelter. One might as well say that buying food and clothing is throwing money away.
The demand for rentals is increasing in many areas, sometimes more so than the supply of places to rent. This will push rents higher and begin to bridge the gap between renting versus owning, assuming a reasonable down payment. The balance is another component to recovery.
I repeat...Prices are NOT going back down to their "historic" levels. There's no way.
Why not? Something is worth only what people will or CAN pay for it. It's pretty simple. Besides the old wives tale that there is no buildable land has been refuted many times, just search the net for an analysis. Infact, the converse is true, Southern California has been severely overbuilt in the last few years.
And given what is happening with our economy including the downward pressures on income due to Global Wage arbitrage I think demand for homes will wane and take prices to new lows.
Know what chafes my hinney as far as real estate?
If you have to sell your primary resodence- house at a loss for a reason like job transfer, etc. (not just wanting to move 5 miles down the road) you get no tax relief for the loss whatsoever. Isn't buying real esate a gamble to begin with? Ya...so why can't you take it as a gambling loss???
That 's what I wanta know!
Unless prices continue to decline, in which case you don't get your money back and may even end up owing money to move out of your own house. In that case it's a lot like renting - you pay to use the house for a while and end up with "nothing" to show for it when you move.
First, so you dont buy a home, because of "in case properties decline"?
Second, I've never seen a period of time when property values decline for 30+ years consecutively. Ohh, there hasnt been yet, thats why...
Third, you could pay your mortgage off in 15-30 years, so regardless as to what the property values have gone to, in after 15-30 years you sell and pocket whatever you can. What do you end up with after 15-30 years of rent? (or 5 years as in the last mortgage I had).
Finally, you dont lose money on properties until you sell. So you could buy a home for $100,000, have it drop to $50,000 but as long as you continue to live there, you dont lose money on it. The chance of properties not climbing again over 30 years is slim to none. Whats the value of the rent you paid over 30 years?
Last edited by pghquest; 07-30-2008 at 07:46 PM..
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