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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).
I reply to these things quickly so maybe that's why you missed I was saying exactly that... both can't exist at the same time. ZIRP and QE as policy are the weapons used to induce inflation - which worked to some extent, but it become less and less effective over time - as we're seeing. You can't kick the can forever, interest rates need to come up... and when that happens, it will hammer a very weak housing market.
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.
I think the key is your continued caveat with "another big economic downturn"... maybe you could explain what you mean by that because I'm saying that is exactly what is happening globally and will prevent the appreciation from continuing.
I reply to these things quickly so maybe that's why you missed I was saying exactly that... both can't exist at the same time. ZIRP and QE as policy are the weapons used to induce inflation - which worked to some extent, but it become less and less effective over time - as we're seeing. You can't kick the can forever, interest rates need to come up... and when that happens, it will hammer a very weak housing market.
It's very unlikely to have rates rise in a deflationary-contractionary environment. I can't think of any time in history where that's happened.
What I would say is more likely is deflation/contraction this year is almost a certainty in most major economies. This will keep a floor on housing prices as rates have more room to the down-side. People have been saying rates are going to rise for the last 5 years. We're near record lows. They are negative in some European countries.
Wow, what a thread. Such bickering, so indicative of the LI lifestyle. Imagine if this energy was focused on some constructive pursuits instead of this ridiculous bickering where, as far as I can tell, no one wins.
Truth be told, I want to leave LI, my home for most of my life, where I have friends (actually most of whom have left for other locales) and family. The quality of life here is arguably just too low and costs too high. Much more detail that that has already exhaustively been debated on this thread, so I won't repeat it. What I realize as I get older, I can always make more money but I can't make more time. Time is something that we bleed here in NY/LI, when it takes 30 mins to drive a couple of miles or 90 mins on the ridiculously inefficient LIRR.
When I do relo, I'm sure I'll enjoy hugely lower taxes (both property and income), utility rates, insurance premiums, gas and maybe even some savings on groceries. But on other things, such as culinary, cable and internet, movies, etc., they'll be the same or maybe even more. Net-net, it will be a huge financial favor to my retirement and kids' college funds and hopefully I can get back some free time to spend where and how I want, instead of the commute-work-commute-dinner-bed cycle here in lovely, well-educated, expensive, crowded LI.
Everyone here on LI (forum), have a great day today in the slush!
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
Let me just add my friend's house is in a VERY popular area with one of the top school districts. He is not in one of the middle of the price range areas. There are already homes selling there in the $1.8M range.
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
Well, I don't know about that. During the real estate boom the prices went up wildly in lots of areas. Then when it CRASHED the houses went down to almost nothing. I remember the real estate agents in California filling buses of potential investment buyers and taking them on tours of foreclosed house after house to see. You'd think that couldn't happen in CA, since it is so popular, but I guess they overbuilt. In contrast, LI is an island and there's not much opportunity for overbuilding
I also have a friend in Florida who bought several condos to flip. They were doing fantastic until the bubble popped and suddenly things were worth half. They made a lot of money, but even so, they are still stuck with 2 condos that they would have a big loss on and nobody wants to buy anyway. They have been renting these condos for years for less that it takes to carry them, so they will have a loss for years on that. This is another state were during the boom they overbuilt houses and condos. I have hear some terrible things about Venice, FL. Block after block of very nice homes empty.
In contrast, LI did not experience such massive ups and downs in value as some other places in the country.
Last edited by I_Love_LI_but; 01-24-2015 at 10:32 AM..
When I do relo, I'm sure I'll enjoy hugely lower taxes (both property and income), utility rates, insurance premiums, gas and maybe even some savings on groceries. But on other things, such as culinary, cable and internet, movies, etc., they'll be the same or maybe even more.
You can see which factors will go up or down and by approx how much %. It's mostly in the housing. Groceries, utilities and such aren't huge deals in the grand scheme, especially when your salary is adjusted.
Also, what a lot of people fail to see is that even Queens or Brooklyn is comparatively more expensive than LI. Nevermind Manhattan. Have you seen what passes for $1mil "homes" in Brooklyn? I'd never...
Another factor about moving away from my hometown is how much of a mundane life I'd live week to week without family and friends and basically just your own kids and what you have going on with them. Sure you can make new friends, but honestly how many people do that much and often with them? I'm reminded of this every time we sit down with college friends or go on our annual family vacations with them. Or even going to each others' kids birthday parties. We have a large group and a long history that cannot be replaced. Relocating mostly comes down to value or affordability and people just have to weigh what's more important to them. Unless it's killing us, we're not likely to move because of so many factors in favor.
As for traffic, it took us 36 mins to get out to Bayside last night, Friday night which is notorious for traffic. It wasn't bad despite the congestion. You'll get traffic in any city worth a damn. It took us 29 mins to get back WITHOUT traffic.
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.
Yeah that's what my friend went through with flipping condos in FL. Made great money for a time, then still owned 2 of them when the crash happened and still owns and rents them at a loss.
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!
If we're still on here together after 20 years, we will revisit this discussion!
hows the train ride from long island to NYC thinking about taking a trip to long island when i move to nyc
The trains are very comfortable if it's not rush hour, then they are very crowded, so don't travel during rush hour if you can help it. For more info, here's a link to the railroad that serves LI:
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