Cost of housing.

[PLATO]

Oerdin, Here is the deal. many places in Ca. are experiencing a 5-7% appreciation rate PER MONTH! With your income you should look for an "interest only" loan to get the kind of house you desire. With this type of loan, you only pay the interest and have no principle reduction, but with those kinds of appreciation rates you should still build plenty of equity. If you want to maximize the kind of house you can have in 5 years, then bite the bullet and buy smaller in a high appreciation area. Hold the property until the market starts to peak and then sell and buy in a neighborhood that has had a more reasonable appreciation. There are many different tactics and many different loans available to you. If you are serious about buying then PM me. Most of the mortgage lending I do is in California. I can definately help!

[JohnT]

However, if CA is experiencing a housing bubble, Oerdin could lose his ass on an "interest only" loan - especially if his $300,000 loan has, as collateral, a newly-revalued $150,000 house. Ouch!

[PLATO]

Originally posted by JohnT
However, if CA is experiencing a housing bubble, Oerdin could lose his ass on an "interest only" loan - especially if his $300,000 loan has, as collateral, a newly-revalued $150,000 house. Ouch!

Trust me...it's no where near the peak yet. Our corporate gurus say 5 years. Plus, you know I'm not going to screw somebody who's gotten shot at on my behalf!

[Ben Kenobi]

High here as well.

I've seen some relatively modest houses (modest from where I'm from) go for 750,000. Back home they'd go for maybe 200,000 CDN

Everyone of my friends are looking at moving back out to the Valley when they get married, and want to have kids. None of us will be able to afford a house, and all of us are professionals of one sort or another, (doctors, nurses, etc.) so we are not that hard up.

[DanS]

House prices are going to take a hit as interest rates rise over the next year or so. Remember that interest rates act like gravity in our economy. As interest rates rise, most assets, including houses, immediately become less valuable.

It's tough to know how much of a hit the prices will take. Maybe it will be just a reduced growth in house prices. Maybe it will be a substantial reduction, or something in between. House prices in California have been known to hit rough spots in the past.

[Shi Huangdi]

Real Estate is on a huge boom right now, and prices are very high. It might be worth delaying the purchase of a house until prices have dipped some.

[loinburger]

Originally posted by Shi Huangdi
Real Estate is on a huge boom right now, and prices are very high. It might be worth delaying the purchase of a house until prices have dipped some.

That's why I'm renting instead of buying. Well, that, plus the fact that I'm broke.

[PLATO]

Originally posted by DanS
House prices are going to take a hit as interest rates rise over the next year or so. Remember that interest rates act like gravity in our economy. As interest rates rise, most assets, including houses, immediately become less valuable.

It's tough to know how much of a hit the prices will take. Maybe it will be just a reduced growth in house prices. Maybe it will be a substantial reduction, or something in between. House prices in California have been known to hit rough spots in the past.

This is not necessarily the case. Interest rates don't affect housing prices nearly as much as local economic conditions. Interest rates, in economically growing areas, tend to affect marketing time. In the California market a situation currently exists where multiple offers are being made on properties and these offers are, in many cases, above the asking price. The net-net of this is: There is an imbalance with buyers and sellers. As long as this is the case, then the market will remain very strong. The only effect that rising interest rates will have is in marketing time and loan type. For example, fixed rates on Conforming mortgages have risen approximately 100 basis points in the last 6 weeks. This has caused many buyers to purchase using 5/1 ARMs or 7/1 ARMs as opposed to fixed rate loans. It has not caused any reduction in the number of purchase applications. The main effect of rising interest rates is primarily to dampen the refinance market and the first time buyer...which it has done. The market in California is predominately made up of people who have owned before. Analysis of the California economy shows that this trend should continue.

The "rough spots" in the past have been related to two specific events: 1.) The S&L failures, and 2.) contraction of the defense industry. Suprisingly, the dot-com bubble bursting, barely caused a ripple.

[PLATO]

Originally posted by loinburger

That's why I'm renting instead of buying. Well, that, plus the fact that I'm broke.

Broke is no excuse! You can buy with $0 out of pocket.

[loinburger]

Sure you can, it just costs twice as much to do it.

Better to wait a coupla years, when I can put down the 20% down payment.

[Ted Striker]

.

[Ted Striker]

PLATO check your PM box

[PLATO]

Originally posted by Ted Striker
PLATO check your PM box

Back at ya!

[Dis]

Las Vegas is well on it's way into turning out like that.

People from California are impressed at how cheap our houses are.

But it's getting more and more difficult to find anything under $200,000 anymore

[Lonestar]

Originally posted by DanS
San Diego has always been pretty expensive housing-wise, hasn't it?

It didn't help that the Navy shut down the Bases in the SF Bay area, and moving most of the pacific Fleet to SD.

Granted, the actual number of ships in SD are now less than 5 years ago, but number of personnell is higher than ever. And since the Navy has been buying up land for housing, and doles out BAH based on the average cost of rent within a hundred mile radius of the base, it does a pretty good job of keeping the housing market up.