"DSK" wrote in message
...
BTW please read the current Jane Bryan Quinn column about the housing
market. She's right on the money.


Send me a link.



I gotta do everything around here (grumble grumble)
Is your Google broken this morning?

http://www.msnbc.msn.com/id/9555157/site/newsweek/

You'll like much of what she says, but will definitely not like other
things. Overall I've found her to be a good source

Good article. She's pretty much on the money.

NOYB wrote:
Good article. She's pretty much on the money.


Did you read the part about how houses are not good investments, and the
risks of 'decline in relative value' is the way she put it, I believe.
Florida is also one of the places identified with over-inflated house
values. I'm a little curious why you so amiably agree with an article
that flat-out contradicts almost everything you were claiming a while back.

** * ** quote ** * **
Most homeowners imagine that their properties will make them rich. But
except in unusual periods, homes aren't terrific investments. Since
1980, the price on the median house has risen only 1.46 percent a year,
adjusted for inflation, compared with 9.2 percent for stocks. Homes are
even less profitable if you deduct the cost of taxes, insurance, upkeep,
remodeling and repair.
** * ** end quote ** * **

I don't know where she got those figures, I've gotten returns in the low
teens from my stock investments, although there were a few flat periods
in there.

** * ** quote ** * **
What will happen to your life if the value of your home flattens or falls?

Nothing, if you stay in the house and keep making mortgage payments. The
only change is that you'll go back to building equity the old-fashioned
way—by paying down your mortgage loan.

It's a bad time to borrow the equity out of your house or to buy a house
with no money down. If you had to resell—because you changed your job,
lost it or divorced—you might find yourself with no money left (or owing
money to the bank). Once prices soften, they tend to stay soft for a
long time, Zandi says.
** * ** end quote ** * **

Another way of putting that is to say 'prices are sticky' and it tends
to hold for both ends of the spectrum. We all know examples of people
trying to sell cars, boats, etc etc, for what they think it's worth, and
holding it for a long long time trying to attract offers.

Here's the advice for your brother:
** * ** quote ** * **
But don't sit in a rental waiting for prices to drop so you can buy
something cheap. Prices might not drop. What's more, you'd be losing
your chance to stabilize your long-term homeowning costs, Sinai says. If
you expect to keep the home for at least four or five years, there's
more risk to staying out of the market than getting in.

Get in with a plain-vanilla fixed-rate or adjustable-rate loan.
Mortgages that let you pay only the interest (or less) each month are
bull-market dreams. A few years from now, payments on those loans will
jump—a problem you may be expecting to solve by refinancing or selling
out. But if prices flatten, you'll get trapped. I'm not saying they
will—only that it's a good time to shore up your finances, just in case.
** * ** end quote ** * **

Notice that she talks about prices flattening, not crashing.

You might want to take a look at what the projected median income in
your town will be in ten years, and think about whether or not it's a
good time to take your gains and go find something you can really
afford. Just a little friendly advice.

DSK

"DSK" wrote in message
...
NOYB wrote:
Good article. She's pretty much on the money.


Did you read the part about how houses are not good investments, and the
risks of 'decline in relative value' is the way she put it, I believe.
Florida is also one of the places identified with over-inflated house
values. I'm a little curious why you so amiably agree with an article that
flat-out contradicts almost everything you were claiming a while back.

"But except in unusual periods, homes aren't terrific investments. "

(We're in an unusual period, and Naples is a unique place.)

" In Zandi's forecast, a handful of markets face declines of 10 percent or
more (southeast Florida, San Diego, Phoenix, Las Vegas and coastal New
Jersey), with another two dozen falling by 5 percent. "

(I'm in Southwest Florida, not southeast Florida. But right now my house
appraises for 65.7% more than when I bought it 18 months ago. If prices
drop 10%, my house is still up 50% from where I bought it. In 18 months!)


"What will happen to your life if the value of your home flattens or falls?

Nothing, if you stay in the house and keep making mortgage payments."

(This is exactly why I was arguing that your home is very safe investment.)



** * ** quote ** * **
Most homeowners imagine that their properties will make them rich. But
except in unusual periods, homes aren't terrific investments. Since 1980,
the price on the median house has risen only 1.46 percent a year, adjusted
for inflation, compared with 9.2 percent for stocks. Homes are even less
profitable if you deduct the cost of taxes, insurance, upkeep, remodeling
and repair.
** * ** end quote ** * **

I don't know where she got those figures, I've gotten returns in the low
teens from my stock investments, although there were a few flat periods in
there.

** * ** quote ** * **
What will happen to your life if the value of your home flattens or falls?

Nothing, if you stay in the house and keep making mortgage payments. The
only change is that you'll go back to building equity the old-fashioned
way—by paying down your mortgage loan.

It's a bad time to borrow the equity out of your house or to buy a house
with no money down. If you had to resell—because you changed your job,
lost it or divorced—you might find yourself with no money left (or owing
money to the bank). Once prices soften, they tend to stay soft for a long
time, Zandi says.
** * ** end quote ** * **

Another way of putting that is to say 'prices are sticky' and it tends to
hold for both ends of the spectrum. We all know examples of people trying
to sell cars, boats, etc etc, for what they think it's worth, and holding
it for a long long time trying to attract offers.

Here's the advice for your brother:
** * ** quote ** * **
But don't sit in a rental waiting for prices to drop so you can buy
something cheap. Prices might not drop. What's more, you'd be losing your
chance to stabilize your long-term homeowning costs, Sinai says. If you
expect to keep the home for at least four or five years, there's more risk
to staying out of the market than getting in.

Get in with a plain-vanilla fixed-rate or adjustable-rate loan. Mortgages
that let you pay only the interest (or less) each month are bull-market
dreams. A few years from now, payments on those loans will jump—a problem
you may be expecting to solve by refinancing or selling out. But if prices
flatten, you'll get trapped. I'm not saying they will—only that it's a
good time to shore up your finances, just in case.
** * ** end quote ** * **

My brother is getting a 7-year fixed interest only mortgage. In 7 years, he
should be earning quite a bit more than he currently earns. If not, he will
sell the place and look for a new job before then. Even if prices correct,
they should rebound to present levels by then.





Notice that she talks about prices flattening, not crashing.

That's the biggest part of her article that I agree with.



You might want to take a look at what the projected median income in your
town will be in ten years, and think about whether or not it's a good time
to take your gains and go find something you can really afford. Just a
little friendly advice.

I can afford this house just fine. I have an additional $1100/mo. in
disposable income right now if I pay interest only. I could apply that
money towards the principle...or sock it away to save for the day 5 years
from now when my rate increases.

Of course, in less than 4 years my business loan is paid off and I should
have an additional $50k/year in disposable income at that point.


You worry too much.

NOYB wrote:
"But except in unusual periods, homes aren't terrific investments. "

(We're in an unusual period, and Naples is a unique place.)

Yeah yeah, *every* time & place is unique & exceptional.


" In Zandi's forecast, a handful of markets face declines of 10 percent or
more (southeast Florida, San Diego, Phoenix, Las Vegas and coastal New
Jersey), with another two dozen falling by 5 percent. "

(I'm in Southwest Florida, not southeast Florida. But right now my house
appraises for 65.7% more than when I bought it 18 months ago. If prices
drop 10%, my house is still up 50% from where I bought it. In 18 months!)


You missed the "or more" part, didn't you? What could you rent your
house for? What is the median income for families in your county? What
are the local schools like?

Fundamentals never change, that's why they're fundamentals. It could be
that your house is not a fiscal trap. But you're playing right into the
trap if it is.





"What will happen to your life if the value of your home flattens or falls?

Nothing, if you stay in the house and keep making mortgage payments."

(This is exactly why I was arguing that your home is very safe investment.)


And if your income doesn't go up as planned? Or if (as I suspect will be
the case) we're headed into a time frame where inflation outstrips
income growth?


My brother is getting a 7-year fixed interest only mortgage.

You mean, like JBQ said not to?

... In 7 years, he
should be earning quite a bit more than he currently earns.

Yeah, so should we all.

... If not, he will
sell the place and look for a new job before then. Even if prices correct,
they should rebound to present levels by then.

tsk tsk tsk... you don't believe the trap is real, even when you see the
video and listen to the survivor's screams.

I can afford this house just fine. I have an additional $1100/mo. in
disposable income right now if I pay interest only.

And *if* you invest all of it in something that pays higher returns than
you're mortgage interest... like say a high yield bond fund... although
remember to factor in taxes coming & going... then you can come out ahead.




Of course, in less than 4 years my business loan is paid off and I should
have an additional $50k/year in disposable income at that point.


Or you could be shopping around to refinance it.


You worry too much.


Nope, I just try to keep from getting caught in the obvious traps. And
in this case, try to warn you. I can't believe you actually read any of
that article and then go back to stubbornly saying the things you do.

"Try to learn from the mistakes of others, life isn't long enough for
you to have time to make them all yourself." - author unknown, but a
very good quote.

DSK

On Fri, 07 Oct 2005 15:29:49 -0400, DSK wrote:

NOYB wrote:
"But except in unusual periods, homes aren't terrific investments. "

(We're in an unusual period, and Naples is a unique place.)

Yeah yeah, *every* time & place is unique & exceptional.


" In Zandi's forecast, a handful of markets face declines of 10 percent or
more (southeast Florida, San Diego, Phoenix, Las Vegas and coastal New
Jersey), with another two dozen falling by 5 percent. "

(I'm in Southwest Florida, not southeast Florida. But right now my house
appraises for 65.7% more than when I bought it 18 months ago. If prices
drop 10%, my house is still up 50% from where I bought it. In 18 months!)


You missed the "or more" part, didn't you? What could you rent your
house for? What is the median income for families in your county? What
are the local schools like?

Fundamentals never change, that's why they're fundamentals. It could be
that your house is not a fiscal trap. But you're playing right into the
trap if it is.





"What will happen to your life if the value of your home flattens or falls?

Nothing, if you stay in the house and keep making mortgage payments."

(This is exactly why I was arguing that your home is very safe investment.)


And if your income doesn't go up as planned? Or if (as I suspect will be
the case) we're headed into a time frame where inflation outstrips
income growth?


My brother is getting a 7-year fixed interest only mortgage.

You mean, like JBQ said not to?

... In 7 years, he
should be earning quite a bit more than he currently earns.

Yeah, so should we all.

... If not, he will
sell the place and look for a new job before then. Even if prices correct,
they should rebound to present levels by then.

tsk tsk tsk... you don't believe the trap is real, even when you see the
video and listen to the survivor's screams.

I can afford this house just fine. I have an additional $1100/mo. in
disposable income right now if I pay interest only.

And *if* you invest all of it in something that pays higher returns than
you're mortgage interest... like say a high yield bond fund... although
remember to factor in taxes coming & going... then you can come out ahead.




Of course, in less than 4 years my business loan is paid off and I should
have an additional $50k/year in disposable income at that point.


Or you could be shopping around to refinance it.


You worry too much.


Nope, I just try to keep from getting caught in the obvious traps. And
in this case, try to warn you. I can't believe you actually read any of
that article and then go back to stubbornly saying the things you do.

"Try to learn from the mistakes of others, life isn't long enough for
you to have time to make them all yourself." - author unknown, but a
very good quote.

DSK


You continue to prove how much you wish you'd bought a house in Naples and
watched it double, triple, or quadruple in value.

--
John H

"The trouble with our liberal friends is not that they're ignorant: It's just that they know so much that isn't so."

Ronald Reagan

"PocoLoco" wrote in message
news
On Fri, 07 Oct 2005 15:29:49 -0400, DSK wrote:

NOYB wrote:
"But except in unusual periods, homes aren't terrific investments. "

(We're in an unusual period, and Naples is a unique place.)

Yeah yeah, *every* time & place is unique & exceptional.


" In Zandi's forecast, a handful of markets face declines of 10 percent
or
more (southeast Florida, San Diego, Phoenix, Las Vegas and coastal New
Jersey), with another two dozen falling by 5 percent. "

(I'm in Southwest Florida, not southeast Florida. But right now my
house
appraises for 65.7% more than when I bought it 18 months ago. If
prices
drop 10%, my house is still up 50% from where I bought it. In 18
months!)


You missed the "or more" part, didn't you? What could you rent your
house for? What is the median income for families in your county? What
are the local schools like?

Fundamentals never change, that's why they're fundamentals. It could be
that your house is not a fiscal trap. But you're playing right into the
trap if it is.





"What will happen to your life if the value of your home flattens or
falls?

Nothing, if you stay in the house and keep making mortgage payments."

(This is exactly why I was arguing that your home is very safe
investment.)


And if your income doesn't go up as planned? Or if (as I suspect will be
the case) we're headed into a time frame where inflation outstrips
income growth?


My brother is getting a 7-year fixed interest only mortgage.

You mean, like JBQ said not to?

... In 7 years, he
should be earning quite a bit more than he currently earns.

Yeah, so should we all.

... If not, he will
sell the place and look for a new job before then. Even if prices
correct,
they should rebound to present levels by then.

tsk tsk tsk... you don't believe the trap is real, even when you see the
video and listen to the survivor's screams.

I can afford this house just fine. I have an additional $1100/mo. in
disposable income right now if I pay interest only.

And *if* you invest all of it in something that pays higher returns than
you're mortgage interest... like say a high yield bond fund... although
remember to factor in taxes coming & going... then you can come out
ahead.




Of course, in less than 4 years my business loan is paid off and I
should
have an additional $50k/year in disposable income at that point.


Or you could be shopping around to refinance it.


You worry too much.


Nope, I just try to keep from getting caught in the obvious traps. And
in this case, try to warn you. I can't believe you actually read any of
that article and then go back to stubbornly saying the things you do.

"Try to learn from the mistakes of others, life isn't long enough for
you to have time to make them all yourself." - author unknown, but a
very good quote.

DSK


You continue to prove how much you wish you'd bought a house in Naples and
watched it double, triple, or quadruple in value.

Liebrals are all alike.....they all think they now better than everyone
else.......that and they are so willing to spent other peoples money.

--
John H

"The trouble with our liberal friends is not that they're ignorant: It's
just that they know so much that isn't so."

Ronald Reagan

"DSK" wrote in message
...
NOYB wrote:
"But except in unusual periods, homes aren't terrific investments. "

(We're in an unusual period, and Naples is a unique place.)

Yeah yeah, *every* time & place is unique & exceptional.


" In Zandi's forecast, a handful of markets face declines of 10 percent
or more (southeast Florida, San Diego, Phoenix, Las Vegas and coastal New
Jersey), with another two dozen falling by 5 percent. "

(I'm in Southwest Florida, not southeast Florida. But right now my house
appraises for 65.7% more than when I bought it 18 months ago. If prices
drop 10%, my house is still up 50% from where I bought it. In 18
months!)


You missed the "or more" part, didn't you? What could you rent your house
for?

The cap rate doesn't matter for primary residences.


What is the median income for families in your county?

Median income families aren't buying homes on the water in Naples.

1400 properties sold for more than $1 million in the last 12 months.


What are the local schools like?

Local schools are average to above average. Like anywhere, they vary
depending upon what part of town you're in. As for private schools, Naples
has 4 or 5 of the top-rated private schools in the state.




Fundamentals never change, that's why they're fundamentals. It could be
that your house is not a fiscal trap. But you're playing right into the
trap if it is.





"What will happen to your life if the value of your home flattens or
falls?

Nothing, if you stay in the house and keep making mortgage payments."

(This is exactly why I was arguing that your home is very safe
investment.)


And if your income doesn't go up as planned?

It's not a matter of my income increasing. It just has to stay somewhat
level over the next 4 years. Even if it decreases, it certainly won't
increase $6000/mo (the amount available to me when that business loan is
repaid).

Or if (as I suspect will be the case) we're headed into a time frame where
inflation outstrips income growth?

Inflation is wonderful for people who are already heavily in debt at fixed
rate. I'll let you think about *why*.




My brother is getting a 7-year fixed interest only mortgage.

You mean, like JBQ said not to?

It's *fixed* for 7 years. No different than an ARM...except that he won't
pay any principle over that time period. So what.



... In 7 years, he should be earning quite a bit more than he currently
earns.

Yeah, so should we all.

... If not, he will sell the place and look for a new job before then.
Even if prices correct, they should rebound to present levels by then.

tsk tsk tsk... you don't believe the trap is real, even when you see the
video and listen to the survivor's screams.

I can afford this house just fine. I have an additional $1100/mo. in
disposable income right now if I pay interest only.

And *if* you invest all of it in something that pays higher returns than
you're mortgage interest... like say a high yield bond fund... although
remember to factor in taxes coming & going... then you can come out ahead.




Of course, in less than 4 years my business loan is paid off and I should
have an additional $50k/year in disposable income at that point.


Or you could be shopping around to refinance it.


You worry too much.


Nope, I just try to keep from getting caught in the obvious traps. And in
this case, try to warn you. I can't believe you actually read any of that
article and then go back to stubbornly saying the things you do.

"Try to learn from the mistakes of others, life isn't long enough for you
to have time to make them all yourself." - author unknown, but a very good
quote.

DSK