Economy

[teachercd]

35 minutes ago, Guy Chamberlin said:

Inflation-driven interest rates post COVID have played a huge part. The other big trend since 2020 are corporations, investors and consortiums getting into the housing market like never before.

 

https://www.cnbc.com/2023/02/21/how-wall-street-bought-single-family-homes-and-put-them-up-for-rent.html

 

It's been years since median income folks could afford a house here in California. It's not right but it is supply and demand. Government is trying to intervene but no developer is truly interested in affordable housing. 

When you got your home in Cali, was it expensive or did it seem okay for the time?

 

 

[Guy Chamberlin]

7 minutes ago, teachercd said:

When you got your home in Cali, was it expensive or did it seem okay for the time?

 

 

 

Even having lived in CA for 15 years, I was convinced we were buying at the height of the market but had no choice as we prepared to raise kids. 

 

Interestingly enough, our numbers in 1999 were really close to the new numbers Devo cited. We bought a $490,000 house at 7.5% interest on a 30 year mortgage in 1999. We put more than the average down, so our monthly mortgage payment was $2,500. Seemed like a lot, but we were dual incomes at the time and happy to have a house in a nice place. By paying down the principle and refinancing about five times, we now pay $1,150 a month on a house now worth at least $1.6 million. That's California math. But you can't cash out unless you move far away, and honestly a lot of affordable cities have gotten pricey fast. 

 

In 1999, the mortgage brokers kept telling us we could afford MORE house by getting a 5 or 7 year ARM. All we needed to qualify was four months worth of house payments in the bank. I considered that a really small margin of error and went with the more modest house and the 30 year fixed. My wife wondered what would happen if everyone went with those 7 year ARMS and houses they couldn't otherwise afford. And sure enough, that was the recipe for that Big Short meltdown.

[Archy1221]

5 hours ago, DevoHusker said:

 

I'm not proposing anything. It was more fyi.

Sorry, as I was not aware it was this bad. I will refrain from sharing more regarding the housing crisis.

Keep sharing please.   It’s interesting info and nice to hard numbers with some of these economic issues.  

[Archy1221]

1 hour ago, Guy Chamberlin said:

 

Inflation-driven interest rates post COVID have played a huge part. The other big trend since 2020 are corporations, investors and consortiums getting into the housing market like never before

 

I see this as a problem also, but I don’t know how it can be fixed legislatively. 

[teachercd]

1 hour ago, Guy Chamberlin said:

 

Even having lived in CA for 15 years, I was convinced we were buying at the height of the market but had no choice as we prepared to raise kids. 

 

Interestingly enough, our numbers in 1999 were really close to the new numbers Devo cited. We bought a $490,000 house at 7.5% interest on a 30 year mortgage in 1999. We put more than the average down, so our monthly mortgage payment was $2,500. Seemed like a lot, but we were dual incomes at the time and happy to have a house in a nice place. By paying down the principle and refinancing about five times, we now pay $1,150 a month on a house now worth at least $1.6 million. That's California math. But you can't cash out unless you move far away, and honestly a lot of affordable cities have gotten pricey fast. 

 

In 1999, the mortgage brokers kept telling us we could afford MORE house by getting a 5 or 7 year ARM. All we needed to qualify was four months worth of house payments in the bank. I considered that a really small margin of error and went with the more modest house and the 30 year fixed. My wife wondered what would happen if everyone went with those 7 year ARMS and houses they couldn't otherwise afford. And sure enough, that was the recipe for that Big Short meltdown.

Dude, those ARMS...for awhile you could make a KILLING.  Until it went nuts!  

 

What do you think, if you had to take a guess, that your 1.6 million dollar home would go for in Omaha?

 

 

[Guy Chamberlin]

45 minutes ago, teachercd said:

Dude, those ARMS...for awhile you could make a KILLING.  Until it went nuts!  

 

What do you think, if you had to take a guess, that your 1.6 million dollar home would go for in Omaha?

 

 

 

Lotta variables, mostly location, but I'd guess something in the $400k - $600k range.

 

At the end of the day, we're still a 3 bedroom, 2 bath, 1,600 sf house. The view adds a bit.

 

[teachercd]

1 minute ago, Guy Chamberlin said:

 

Lotta variables, mostly location, but I'd guess something in the $400k - $600k range.

 

At the end of the day, we're still a 3 bedroom, 2 bath, 1,600 sf house. The view adds a bit.

 

Soooo...you live in Dublin?  I thought you were in Cali??

 

Nice view!

[Guy Chamberlin]

That's about 15 miles north of San Francisco. My dog is waiting for the coyotes to emerge. They've gotta grudge match going. 

[DevoHusker]

45 minutes ago, Guy Chamberlin said:

 

Lotta variables, mostly location, but I'd guess something in the $400k - $600k range.

 

At the end of the day, we're still a 3 bedroom, 2 bath, 1,600 sf house. The view adds a bit.

 

Wow! What a view 

[Archy1221]

1 hour ago, Guy Chamberlin said:

 

Lotta variables, mostly location, but I'd guess something in the $400k - $600k range.

 

At the end of the day, we're still a 3 bedroom, 2 bath, 1,600 sf house. The view adds a bit.

 

Nice view.  Must be great in the morning with a cup of coffee

[ZRod]

2 hours ago, Guy Chamberlin said:

 

Lotta variables, mostly location, but I'd guess something in the $400k - $600k range.

 

At the end of the day, we're still a 3 bedroom, 2 bath, 1,600 sf house. The view adds a bit.

 

I'd say you did damn good!

[Lorewarn]

6 hours ago, Archy1221 said:

I see this as a problem also, but I don’t know how it can be fixed legislatively. 

 

 

I'm out of my depths in this conversation but one legislative aid that would presumably help somewhat would be some sensible limits or guidelines surrounding wall street and companies like AirBnB buying up huge swaths of homes everywhere.

[Archy1221]

6 hours ago, Lorewarn said:

 

 

I'm out of my depths in this conversation but one legislative aid that would presumably help somewhat would be some sensible limits or guidelines surrounding wall street and companies like AirBnB buying up huge swaths of homes everywhere.

The question then becomes what is sensible?   Being able to own 5 rentals, 15, 50?  And some renters have each unit set up as it’s own company.

 

I think you are on to something and agree, but it’s probably a challenge to figure out how to make a law that’s constitutional.   

[Guy Chamberlin]

5 hours ago, Archy1221 said:

The question then becomes what is sensible?   Being able to own 5 rentals, 15, 50?  And some renters have each unit set up as it’s own company.

 

I think you are on to something and agree, but it’s probably a challenge to figure out how to make a law that’s constitutional.   

 

I know certain municipalities have been able to severely limit the number of AirBnB and VRBO units in the marketplace, as they have made rents both high and predatory. Not sure how the laws actually work, but I think they're working. Might be applicable to any single entity buying houses and developing rentals. 

[teachercd]

4 hours ago, Guy Chamberlin said:

 

I know certain municipalities have been able to severely limit the number of AirBnB and VRBO units in the marketplace, as they have made rents both high and predatory. Not sure how the laws actually work, but I think they're working. Might be applicable to any single entity buying houses and developing rentals. 

Is AirBnB big in your area?