[Kevin_nlv]

It requires such simple thinking to understand that housing prices have to be aligned with incomes.
Most of you refuse to see that if house prices rise and rise, the income of consumers must increase exponentially to avoid hardship and dysfunctional allocation of money in everyday households.
In the last 3 years Las Vegas median income has declined by almost 19% it's not rising.

At this point, without the fed pump and rate manipulation there will be another downward correction in housing. In other words this was a giant waste of time. If you don't believe me, just watch your home's value on Zillow tick down as the fed removes QE. It should never have been done in the first place!

[lvoc]

Originally Posted by Kevin_nlv

It requires such simple thinking to understand that housing prices have to be aligned with incomes.
Most of you refuse to see that if house prices rise and rise, the income of consumers must increase exponentially to avoid hardship and dysfunctional allocation of money in everyday households.
In the last 3 years Las Vegas median income has declined by almost 19% it's not rising.

At this point, without the fed pump and rate manipulation there will be another downward correction in housing. In other words this was a giant waste of time. If you don't believe me, just watch your home's value on Zillow tick down as the fed removes QE. It should never have been done in the first place!

It is the old problem of differential equations. It is the initial conditions that govern the action.

YOu seem to presume that wages and housing values were in balance at the trough in roughly February of 2012. At that point I believe they were hopelessly catiwampus with house values less than half of what wages would support.

So I would claim we can live with a good bit more rise before things are balanced.

Let us try it this way. Given a median household income of $48,000 how much house can they afford?

[Kevin_nlv]

Use the formula;monthly salary x 0.33

[lvoc]

Originally Posted by Kevin_nlv

Use the formula;monthly salary x 0.33

There are very few $1,320 homes. I don't think you meant that.

[Kevin_nlv]

That is how much mortgage payment they could afford.
Use back end ratio and add car payment, credit card debt, student loan debt and homeowner association fees and you get the picture that your pool of qualified buyers is minimal. Add increasing
mortgage rates on top of that and picture gets really ugly.

[bledsoe3]

Originally Posted by lvoc

There are very few $1,320 homes. I don't think you meant that.

Originally Posted by Kevin_nlv

That is how much mortgage payment they could afford.
Use back end ratio and add car payment, credit card debt, student loan debt and homeowner association fees and you get the picture that your pool of qualified buyers is minimal. Add increasing
mortgage rates on top of that and picture gets really ugly.

That will get you a pretty good home in Las Vegas.
$200,000 house
$ 20,000 down (10%)
$180,000 loan
1.25% property tax
.5% PMI
4.5% rate 30 fixed
Total payment $1,120.37 or mothly salary .28

Even at these so called inflated prices and interest rates, it very affordable.

[ddrhazy]

Originally Posted by bledsoe3

That will get you a pretty good home in Las Vegas.
$200,000 house
$ 20,000 down (10%)
$180,000 loan
1.25% property tax
.5% PMI
4.5% rate 30 fixed
Total payment $1,120.37 or mothly salary .28

Even at these so called inflated prices and interest rates, it very affordable.

Or you could rent the same house for 1200/month and at the end of 30 years have nothing.

[Kevin_nlv]

Originally Posted by bledsoe3

That will get you a pretty good home in Las Vegas.
$200,000 house
$ 20,000 down (10%)
$180,000 loan
1.25% property tax
.5% PMI
4.5% rate 30 fixed
Total payment $1,120.37 or mothly salary .28

Even at these so called inflated prices and interest rates, it very affordable.

Add car payment, credit card debt, student loans, and etc. and your pool of qualified buyers is very minimal

[lvoc]

Originally Posted by Kevin_nlv

Add car payment, credit card debt, student loans, and etc. and your pool of qualified buyers is very minimal

Now you are being nonsensical. Any first time buyer with 20K in the bank will have those other items well under control. In actual fact our b oy could likely get to 210K or a little more.

[von949]

Originally Posted by Kevin_nlv

Add car payment, credit card debt, student loans, and etc. and your pool of qualified buyers is very minimal

You keep throwing that in the equation. If student loans, cc debt and luxury car payments are out of control then that person isn't really in a position to be a home owner. With strict underwriting guidelines today, the person probably wouldn't qualify anyway.

My wife and I paid off all the CCs and student loans before purchasing two year ago. It put us in a better position overall.

Honestly, if you think about it, a person can afford "more house" if they got rid of all or most of their debt.


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