General > General Technical Chat
First house for a young man
Towger:
--- Quote from: cdev on July 04, 2017, 08:58:17 pm ---Towger, what about deflation?
--- End quote ---
Hits the money in your account more than property.
rstofer:
--- Quote from: cdev on July 04, 2017, 08:58:17 pm ---Towger, what about deflation?
--- End quote ---
As I pointed out in my story about my old house, don't worry about it. Sooner or later, prices recover. Maybe not to the stupid levels but, at least in California, they have done just that.
It's all too easy to sit back and say assets are overpriced while watching them continue to rise. Then, when they inevitably fall say something like "Told you so!". But the thing is, there is a lot of money to be made riding the trend.
What can you say about and $80k house rising to $360k in 31 years (plus providing shelter and a mortgage deduction). I'm not going to do the math but that seems like a pretty good return. Yes, it will go down again. But it will never go back to $100k and, even if it did, just hang on! As bad as the ride was in the 2006-2010 timeframe, things have recovered nicely.
Many locales are banning most of the new construction in favor of in-fill projects in the inner cities. By law (stupid as it is), new construction around here is essentially stopped while we wait for inner city projects that will never be built because they just don't pencil out. But what happens when supply is limited? Right, prices rise! Cool...
Builders are in the business of building but they aren't stupid enough to get involved in some of the "feel good" projects.
It's a shame the OP can't get a mortgage. I'm not sure I would want all my assets in one place. I would go asking around. He has income, he has enough for a huge down payment, he has enough left over to make the payments for a very long time. I would at least test the waters. And stay away from ARM loans!
nctnico:
I'm wondering what exactly you mean with ARM loans? Are those so they change the interest rate every year? If yes they may not be so bad. Over here you can get mortgages where the rate changes every year. Sure there will be good years and bad years but overall the interest rate is lower than longer term fixed rates. What I did in the past few years is wait for the interest rates to drop before committing to a longer term interest rate (which is pretty sweet if I may say so). I expect the interest rates won't stay as low as they currently are for very long; I expect to see a rise somewhere in 2017/2018.
jpanhalt:
Let's hope the entire US doesn't follow Europe's lead down the economic toilet.
tronde:
--- Quote from: jpanhalt on July 04, 2017, 10:11:57 pm ---Let's hope the entire US doesn't follow Europe's lead down the economic toilet.
--- End quote ---
I would be more than happy if you kept the toilet your side of the fence...
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