tag:blogger.com,1999:blog-13164186.post115668145867089012..comments2024-01-27T19:26:32.604-05:00Comments on Bubble Meter: BubbleSphere RoundupDavidhttp://www.blogger.com/profile/11169148764438565562noreply@blogger.comBlogger79125tag:blogger.com,1999:blog-13164186.post-1156949591559757942006-08-30T10:53:00.000-04:002006-08-30T10:53:00.000-04:00sorry, "equalling".p.s. apologies to all offended ...sorry, "equalling".<BR/><BR/>p.s. apologies to all offended by my "bitter and depressed" remark. I hate to see people make life-long decisions based on a one-time event. I was attempting to show that that was what the commenter had done - to his great detriment.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-1156949269518567402006-08-30T10:47:00.000-04:002006-08-30T10:47:00.000-04:00I don't know why what started out as a benign comm...I don't know why what started out as a benign comment about relative affordability of housing now vs. the early 80's has mushroomed into an unfriendly argument, but let's put it to rest.<BR/><BR/>I agree with h that there is a difference in that the 80's saw a gradual decrease of rates which continued for 20 years. This hardly seems likely today.<BR/><BR/>Does anyone expect rates to drop appreciably from today's levels? I don't. So rates will not likely be a "bailout".<BR/><BR/>I do agree with Lance that increasing rates can offset monthly savings brought about by lower prices. For people like me (investors-loooonnngg term) monthly cost vs. rent is really all I care about.<BR/><BR/>As I have stated before, I do expect a correction similar to the 90's. I do not see rents equally mortgage costs ever.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-1156901839036032752006-08-29T21:37:00.000-04:002006-08-29T21:37:00.000-04:00Lot's of bits and pieces.H, I agree, two months at...Lot's of bits and pieces.<BR/><BR/>H, I agree, two months at 18% is not representative, but those two months did make a big impression on the home buying public. At least I have certainly heard it mentioned enough by people of a certain age. However, 2 years should be representative of the early years of a decade and for 2 years, 1981 and 1982, interest rates averaged over 16%. <BR/><BR/>Mytwocents, 16% is 266% of 6% so I think you have resolved the question as to whether housing is more affordable now than in the early 80's.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-1156893075948562122006-08-29T19:11:00.000-04:002006-08-29T19:11:00.000-04:00dc_too,We were making about that median income the...dc_too,<BR/><BR/>We were making about that median income then. I think house prices were higher here. I don't know exactly when ARMS came on the scene, but I had a one-year arm in 1983 and in 1984. In 1981 I was "lucky" enough to assume a 12.5% fixed rate.<BR/><BR/>We had 95% loans with PMI and got "decorating allowances" to cover the 5% down. In other words, no money down loans were available.<BR/><BR/>We also had a full=blown recession to deal with. I remember savings rates and 14% CD's as well.<BR/><BR/>I am just attempting to point out that housing was very expensive. I am not a math expert, so I defer to h and data miner for the exact numbers.<BR/><BR/>What I have claimed earlier is hardly "fraud". Today's costs as a percent of income are not that much different.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-1156890590074904482006-08-29T18:29:00.000-04:002006-08-29T18:29:00.000-04:00H said...doesn't = don't. Before the grammar polic...H said...<BR/><I>doesn't = don't. Before the grammar police call me out.</I><BR/><BR/>Too late. Once a crime is committed, you can't undo it. You're going to Grammar County Jail, Mister!Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-1156887613487804212006-08-29T17:40:00.000-04:002006-08-29T17:40:00.000-04:00H,Some more back of the napkin for you. I took NVA...H,<BR/><BR/>Some more back of the napkin for you. I took NVAR's price for a median home in 1981: $100,050, and used BLS' inflation calculator to determine what it would be worth today: $214,960.<BR/><BR/>The actual price is $538,144. This is 250% of the inflation adjusted value.<BR/><BR/>I then went to the Census Bureau's statistics for mean household income: http://www.census.gov/hhes/www/income/histinc/h03ar.html<BR/><BR/>The 1981 mean income for the middle 20th percentile was $18,981. Adjusted for inflation to 2005 dollars this would be $40,820. <BR/><BR/>The actual mean income for 2005 is $46,301. This is 113% of the inflation adjusted value.<BR/><BR/>I haven't run the numbers for interest rate difference, but I doubt that a 10% swing on the interest rate (16% vs 6%) will account for the huge percentage gain housing has made over income.<BR/><BR/>Therefore, I would tend to doubt that as a percent of income, housing debt is the same now as it was in the early 1980s.<BR/><BR/>My $0.02.MyTwoCentshttps://www.blogger.com/profile/10642606797401998999noreply@blogger.comtag:blogger.com,1999:blog-13164186.post-1156885026185279012006-08-29T16:57:00.000-04:002006-08-29T16:57:00.000-04:00The general point about relative affordability is ...The general point about relative affordability is getting lost in arguments about small differences in interest rates.<BR/><BR/>I would appreciate hearing from dc_too regarding affordability.<BR/><BR/>h, my point is that my generation did not have any cake-walk buying our first homes either.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-1156883262947719712006-08-29T16:27:00.000-04:002006-08-29T16:27:00.000-04:00h,I don't agree with the interest rate you are usi...h,<BR/><BR/>I don't agree with the interest rate you are using. But let's go back to where the affordability issue first came up above.<BR/><BR/>I am referring to dc_too calling me a fraud. data miner clearly refures that nonsense.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-1156882356254174512006-08-29T16:12:00.000-04:002006-08-29T16:12:00.000-04:00Yeh, take my remarks in context please. See data ...Yeh, take my remarks in context please. See data miner's analysis for ownership costs in the early 80's.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-1156881399843373812006-08-29T15:56:00.000-04:002006-08-29T15:56:00.000-04:00It is, however, no more expensive than in prior ti...<I>It is, however, no more expensive than in prior times. So that excuse should be put to rest. </I><BR/><BR/>Va-Investor = Credibility shotAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-1156879384291742102006-08-29T15:23:00.000-04:002006-08-29T15:23:00.000-04:00It is expensive to own a home in the D.C. area. A...It is expensive to own a home in the D.C. area. Always has been, always will be. For some it will never be an option.<BR/><BR/>It is, however, no more expensive than in prior times. So that excuse should be put to rest.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-1156874265240872482006-08-29T13:57:00.000-04:002006-08-29T13:57:00.000-04:00I don't think this is about age. Affordability pr...I don't think this is about age. Affordability problems exist..whether you claim the cost of homeownership was the same in the 80's or not. I'm sure there are plenty of people who are out of their twenties who fall into the parameters of the affordable housing programs discussed in the Washington Post over the weekend like the one in Fairfax. And for the record I'd venture to believe that most people paid down a lot ore money wen purchasing in the past than they do now. However, I don't know that as fact because I don't have the statistics in front of me.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-1156871543738894232006-08-29T13:12:00.000-04:002006-08-29T13:12:00.000-04:00Not necesarily buy, but quit whining. Buy if you ...Not necesarily buy, but quit whining. Buy if you are long term: there are unique benefits to having a low-rate loan when rates increase. Like selling via assumption or wrap=around financing if you are forced to relocate.<BR/><BR/>You probably have to be over 40 to know these concepts.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-1156870706369371162006-08-29T12:58:00.000-04:002006-08-29T12:58:00.000-04:00So 20somethings should run out and purchase right ...So 20somethings should run out and purchase right now..because it was just as expensive in the '80s.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-1156870256095169472006-08-29T12:50:00.000-04:002006-08-29T12:50:00.000-04:00H,One more thing, why 6.5%? Bankrate.com lists the...H,<BR/><BR/>One more thing, why 6.5%? Bankrate.com lists the mortgage average today at 5.97%.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-1156869155711952952006-08-29T12:32:00.000-04:002006-08-29T12:32:00.000-04:00H,What about wage growth? When I have a little mor...H,<BR/><BR/>What about wage growth? When I have a little more time I'll look it up, but my first guess is that it has been significant. I also know that several people here have made claims about wage stagnation, but those claims should be examined carefully.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-1156866427134514462006-08-29T11:47:00.000-04:002006-08-29T11:47:00.000-04:00btw, the silence is deafening from today's 20 some...btw, the silence is deafening from today's 20 somethings as to the "cost" of owning. It is no more discouraging today than it was when I was "starting out".Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-1156865555000764342006-08-29T11:32:00.000-04:002006-08-29T11:32:00.000-04:00h,The market in the 80's flattened due to economic...h,<BR/><BR/>The market in the 80's flattened due to economic reasons - recession.<BR/><BR/>I graduated into a recession in 1980. Interest rates continued to spiral up.<BR/><BR/>My question relates to the basic "cost of housing" as a percent of income. If it turned out "ok" to have bought then, then why is it not ok to buy now (provided you are not a "flipper"). This being in terms of buying a house as a home, with plans to stay awhile.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-1156859264180236222006-08-29T09:47:00.000-04:002006-08-29T09:47:00.000-04:00"Bogus condo's at seven corners (falls church) wer..."Bogus condo's at seven corners (falls church) were going for around 50 to 60K. Too depressing to consider living there, for me at least."<BR/><BR/>Amen to that.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-1156858838363902512006-08-29T09:40:00.000-04:002006-08-29T09:40:00.000-04:00I remember in '82 or '83 looking at unrenovated ho...I remember in '82 or '83 looking at unrenovated houses in Pimmit Hills (Tyson's-Falls Church) for around 80K. The area was "sketchy" and the houses depressing.<BR/><BR/>Also looked at brick colonials in Silver Spring (sligo - four corners) for 100-120K. Nicer homes/area - but no major upgrades.<BR/><BR/>Bogus condo's at seven corners (falls church) were going for around 50 to 60K. Too depressing to consider living there, for me at least.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-1156857404635530802006-08-29T09:16:00.000-04:002006-08-29T09:16:00.000-04:00What was the average cost of a home in the '80s?What was the average cost of a home in the '80s?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-1156832957205056172006-08-29T02:29:00.000-04:002006-08-29T02:29:00.000-04:00“The ones that worry me are the middle-aged indivi...“The ones that worry me are the middle-aged individuals who have sold their homes with the expectation of making a killing by buying back similar homes for half the price after Armagedon occurs. These are the "rapture people". Gambling just like the flippers but without the realization that easy earnings can just as easily turn out to be easy losses.”<BR/><BR/><BR/><BR/><BR/>Exactly! There are a lot of people selling their $500,000 home who plan to buy back into the area a few years later paying around $400,000-425,000. <BR/><BR/>All I can say is good luck.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-1156832918475996982006-08-29T02:28:00.000-04:002006-08-29T02:28:00.000-04:00Exactly! There are a lot of people selling their $...Exactly! There are a lot of people selling their $500,000 home who plan to buy back into the area a few years later paying around $400,000-425,000. <BR/><BR/>All I can say is good luck.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-1156818284068249732006-08-28T22:24:00.000-04:002006-08-28T22:24:00.000-04:00Data miner; thank you for posting such useful info...Data miner; thank you for posting such useful information.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-1156818181859857322006-08-28T22:23:00.000-04:002006-08-28T22:23:00.000-04:00Thank you data miner.dc_too are you out there? Yo...Thank you data miner.<BR/><BR/>dc_too are you out there? You practically called me a liar.Anonymousnoreply@blogger.com