"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