Wealth Effect & Porsche GT Prices
03-02-2017, 12:19 PM
#46
Originally Posted by Manifold
I'm with you, I'm cautious with money as well.
My thinking is that it's not a bad time to upgrade the home at this time, since a big real estate bubble has already burst and prices aren't yet much above the lows from 2011. I could pay cash for the house if necessary, but a mortgage at low interest rate with tax savings on mortgage interest would mean that I'm borrowing the money effectively at close to zero interest, and if there's inflation my monthly payments effectively go down while the value of the home (hopefully) holds or goes up to roughly match inflation even if there's a recession. At least that's my analysis, but I'm no financial whiz.
My thinking is that it's not a bad time to upgrade the home at this time, since a big real estate bubble has already burst and prices aren't yet much above the lows from 2011. I could pay cash for the house if necessary, but a mortgage at low interest rate with tax savings on mortgage interest would mean that I'm borrowing the money effectively at close to zero interest, and if there's inflation my monthly payments effectively go down while the value of the home (hopefully) holds or goes up to roughly match inflation even if there's a recession. At least that's my analysis, but I'm no financial whiz.
Way to many people live in a house they can't afford and drive a car they can't afford. They actually don't own anything. Just borrowing it.
03-02-2017, 12:52 PM
#47
At least not in areas where real estate prices make a difference: Socal, Sanfran, Chi, NYC, CT, parts of Boston, parts of AZ
03-02-2017, 12:59 PM
#48
Nordschleife Master
Prices here in Canada have literally gone through the roof. Feel real sorry for the younger generation just starting out. Cheap money will end soon. I'll just sit back on the side lines and watch.
03-02-2017, 01:15 PM
#49
Um, where do you live? In every major city in the U.S., housing prices are way above the post financial crisis lows. My house is worth double what it was then.
03-02-2017, 01:28 PM
#50
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It's retarded here. I've been flipping since 2006 and prices have gone up at least 500% in most areas. Too much competition from China and some European countries.. They literally have cash to burn.. $200k - $400k over ask is the new norm.
03-02-2017, 01:42 PM
#51
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The house I'm looking at buying is 10 minutes farther out from the city, in an area that's more rural and has a lot of land, and it seems that real estate values haven't risen much in that area since 2011. I'm assuming that prices will continue to rise fairly slowly in that area. The current owner of the house is the CEO of a real estate investment firm, and I'm guessing that he bought the house largely as an investment, given that he listed it in 2014 for 40% more than he paid. It didn't sell, and he incrementally dropped the price, listing the house for the past 10 months at what originally paid. Our offer will of course be below the listing price, and I'm assuming that negotiations will be tough ...
03-02-2017, 02:02 PM
#52
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Found this good real estate interactive chart:
http://www.economist.com/blogs/graph...daily-chart-20
http://www.economist.com/blogs/graph...daily-chart-20
03-02-2017, 02:06 PM
#54
Florida is way up since 2011. I just can't see any upside. Low interest rates and low energy prices + an all time high stock market.
This bubble will burst. Just a matter of time. Probably a good idea to keep mortgage low and have toys paid off.
This bubble will burst. Just a matter of time. Probably a good idea to keep mortgage low and have toys paid off.
03-02-2017, 02:17 PM
#55
Interesting thread - I run a pretty low US market correlation in my investment portfolio (about 0.45). I give up some return to get it there, but the standard deviation is much much lower.
It'll be an interesting crash this time, I suspect passive market weight index funds will drive it down faster and further than in the past. The churn/volumes will be huge as they try to re-balance.
It'll be an interesting crash this time, I suspect passive market weight index funds will drive it down faster and further than in the past. The churn/volumes will be huge as they try to re-balance.
03-02-2017, 02:47 PM
#56
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Found this good real estate interactive chart:
http://www.economist.com/blogs/graph...daily-chart-20
http://www.economist.com/blogs/graph...daily-chart-20
I'm in the Baltimore area, and the chart confirms that real estate hasn't increased that much here since 2011. I'm not sure why, given that the local economy seems fine, and Maryland is among the more affluent states in the US (on average). I guess the upside is that I haven't missed the boat as far as upgrading the house, and meanwhile the appreciation of my current house has been better than average for this area.
03-02-2017, 02:58 PM
#57
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The chart confirms what you guys are saying about real estate being up a lot in most US cities since 2011. I had no idea. What happened to the "sluggish recovery" from the recession? Are incomes up that much in those cities? Are people's debt levels that much higher?
I'm in the Baltimore area, and the chart confirms that real estate hasn't increased that much here since 2011. I'm not sure why, given that the local economy seems fine, and Maryland is among the more affluent states in the US (on average). I guess the upside is that I haven't missed the boat as far as upgrading the house, and meanwhile the appreciation of my current house has been better than average for this area.
I'm in the Baltimore area, and the chart confirms that real estate hasn't increased that much here since 2011. I'm not sure why, given that the local economy seems fine, and Maryland is among the more affluent states in the US (on average). I guess the upside is that I haven't missed the boat as far as upgrading the house, and meanwhile the appreciation of my current house has been better than average for this area.
03-02-2017, 03:40 PM
#59
Agreed. My house goes on the market in about 45 days. Who knows what the future holds for the housing market, but I see more downside risk than upside opportunity over the next 5-10 years.
03-02-2017, 03:41 PM
#60