How much debt do you have?

[Gookstorm]

You paid over 300 grand for a condo? Isn't that kind of lollable in itself?

I didn't think it was reasonable being the bargain-conscious guy I am, but I partially felt that Seattle was going to wind up like San Francisco where even now a 300 sqft condo can go for $350k, and the rent for comparable units was in the ballpark. I didn't want to wind up having to buy some shitty 500 sqft condo down the road instead of the 1000 2bedroom sqft I got. I made good money but I was falling behind the Microsoft and Google guys too much.

$1 million for a "starter" Manhattan condo is ridiculous, but it's held fairly steady as a median "home" inflation-adjusted for several decades. You could have bought one for $100k back in the 70s and it'd be like $1.2 million now.

[monsterod]

Most home loans shouldn't count here. Even if you owe way more than it's worth, who knows where things will be in 10 years. At some point, you can reasonably ditch it.

I'm, I dunno, 20k deep in student loans? Probably be in 80k when I'm done.

[zzzzzzzz]

[Ghost Dad]

9k in student loans and counting...That PELL GRANT I'm getting this year should help ease the burden though

[Ogre of Disgust]

1,100 to the IRS suddenly...

[pleasuretokill]

You paid over 300 grand for a condo? Isn't that kind of lollable in itself?

I didn't think it was reasonable being the bargain-conscious guy I am, but I partially felt that Seattle was going to wind up like San Francisco where even now a 300 sqft condo can go for $350k, and the rent for comparable units was in the ballpark. I didn't want to wind up having to buy some shitty 500 sqft condo down the road instead of the 1000 2bedroom sqft I got. I made good money but I was falling behind the Microsoft and Google guys too much.

$1 million for a "starter" Manhattan condo is ridiculous, but it's held fairly steady as a median "home" inflation-adjusted for several decades. You could have bought one for $100k back in the 70s and it'd be like $1.2 million now.

I'm so glad I didn't buy 3 years ago when I was considering it, and it looks like things are going to get worse. When the Fed stops buying all of these "tainted" mortgages ($909 BILLION worth!0 from Fannie May and Freddie Mac that really aren't worth shit at the end of March, I think the market is going to collapse even worse.

I know people here in AZ who have lived in their houses for over a year and a half without paying one dime on their house note because they are so upside down that they know the market will never recover enough to make their purchase "worth it" and the powers that be are reluctant to evict because if they did that to everyone here that is not paying, the forclosure rate would be through the roof and it would make buying a house a lot less appealing to those who are thinking about it. Also, house values would drop a lot further than they are now...

Manhattan and the richest areas of California are pretty much never going to change as far as cost and inflation go, those people are just too fucking rich.... The rest of the country is screwed once this happens though. The housing market is nowhere near stable enough at this point to support and sustain itself without heavy government influence. It will be interesting to see what happens....

SPOILERSPOILER_SHOW

Fed Plan to Stop Buying Mortgages Feeds Recovery Worries
by Liz Rappaport and Jon Hilsenrath
Friday, January 8, 2010


The Federal Reserve's pledge to stop buying mortgages by the end of March is sparking fears among home builders, mortgage investors and even some Fed officials that mortgage rates could rise and knock the fragile housing recovery off course.

Rates on 30-year fixed-rate mortgage have risen by a quarter of a percentage point in the past month to around 5.2%, according to HSH Associates, near their highest levels since September as the bond market has pushed up long-term interest rates amid signs of an improving economy.

The recent rise in mortgage rates could be a prelude to even bigger increases in coming months as the Fed steps away from support for the market. That prospect has some in the markets counting on the Fed to change course and keep buying past March, which many officials are reluctant to do.

When such a big investor stops buying, "that could lead to material increases in [interest] rates across the board," said Ronald Temple, portfolio manager at Lazard Asset Management. He sees mortgage rates rising by a percentage point when the Fed stops buying. A withdrawal of government support, combined with high unemployment and rising mortgage foreclosures, could push home prices down 20%, he said.

The Fed now holds $909 billion of mortgage-backed securities. In the past year it has purchased 73% of the mortgages that government-backed Fannie Mae, Freddie Mac and Ginnie Mae have turned into securities. Purchases by the Treasury pushed total government purchases above $1 trillion. The Fed says it plans to top off its purchases at $1.25 trillion by the end of March, but must decide in the months ahead whether the economy is strong enough to stick with that plan.

The urgency of sustaining the housing market has sparked a debate inside the Fed. Many Fed officials don't think ending the purchases will have a large effect.

If mortgage rates shoot up or the economy weakens, some Fed officials argue, the central bank might need to keep buying. But with the economy improving and the mortgage market already heavily dependent on government, other Fed officials are eager to get on with an exit.

"I think the economy is starting its recovery, and there's reason to be optimistic," Thomas Hoenig, president of the Federal Reserve Bank of Kansas City, said Thursday.

Minutes from the Fed's December meeting, released this week, pointed to the Fed's internal debates.

Some Fed officials fretted that "mortgage markets could come under pressure as the Federal Reserve's agency MBS [mortgage-backed securities] purchases wind down." The bottom line, officials say privately, is that it would take a surprisingly sharp upturn in mortgage rates, or a worsening economic outlook, to prompt them to change their plans.

The government has already taken steps to reassure investors. In late December the Treasury Department said it would provide unlimited support to Fannie Mae and Freddie Mac, and wouldn't force them to sell securities they hold. That should soften the sting of the Fed's removal from the market.

"Now that the question of [Fannie and Freddie] selling is off the table, the market is less worried about the Fed's exit," said Mahesh Swaminathan, a mortgage strategist at Credit Suisse.

Nevertheless, home builders and others are hoping the Fed will flinch. Some market participants haven't reacted to the Fed's promises to exit, believing the central bank won't have the will to wind down its purchase program.

If the Fed stops buying, "it would be the beginning of a crisis again, and we haven't emerged from the last one," said Larry Sorsby, chief financial officer at home builder Hovnanian Enterprises Inc., which had a $250.8 million loss in its last quarter on a 39% drop in revenue.

Mr. Sorsby figures the Fed's withdrawal will prompt at least a one-percentage-point rise in mortgage rates, which he fears could squash recent glimmers of more demand for homes. He expects the Fed will, in fact, keep buying. "I doubt they'll just pull out," he said.

On a $250,000 conventional 30-year mortgage, a mortgage-rate increase from 5% to 6% would raise monthly payments by about $150 per month to $1,499.

"The Fed wants to keep mortgage rates low," said Mitch Flack, co-head of the mortgage group at TCW Group Inc., a money manager that hasn't been a big seller of mortgage securities. "It's very possible that they'll slow purchases now, but should mortgage rates rise significantly after the end of the program in March, they may decide to extend that purchase program further."

Many Fed insiders expect the end to their mortgage buying to have a mild effect on rates, a half-percentage-point increase or possibly much less. Mortgage rates didn't move up much when the Fed initially signaled in September that it intended to end the $1.25 trillion mortgage program by March.

One theory inside the Fed is that what matters for mortgage rates isn't the central bank's day-to-day purchases, but the magnitude of mortgages that it has taken from the private sector. According to this view, the impact of removing more than a trillion dollars of supply should help to keep rates low even after the Fed stops buying.

Fed officials take comfort that yields on Treasury bonds remained little changed during a stretch between August and November when the Fed was completing its $300 billion of Treasury purchases, meaning the Fed's exit from that program didn't severely disrupt that market.

The Fed's heavy buying last year drove yields on mortgage bonds to within 0.65 percentage point of comparable Treasury bonds, much lower than the traditional spread of 1.15 percentage points. Lower mortgage rates helped sustain the housing market, and housing prices recently appear to have stabilized. But a looming wave of foreclosures, still-high unemployment and other factors are clouding the housing outlook for this year

[Zerohero]

-45K
Car and house and minimal balance on the cc.

[Zerohero]

$91k left on my house. Will have that paid off in 3 years. Otherwise, no debt at all. I made the CC mistake when I was younger and will never do it again.

If you cant pay cash for your shit, you dont need it. This includes cars.

this is true. I'm learning this lesson the hard way.

Want to know how you can pay off 91K in 3 years...thats $2527 even with 0 interest. What's the secret? Or are ya just investing in NYDM? That's a big chunk a change unless UR knocking down bigtime dollar$bux.

SPOILERSPOILER_SHOW

supplemental dollarsbux from selling drugga right?

[spacehamster]

Nothing, and about 15K in the bank. I'll have to either take up a student loan or somehow convince my boss to allow a semi-sabbatical soon, though.

[soiled depends]

Only the mortgage from the house we live, but it is setup in a way that the payments are lower than renting the house.

mortgages can be set up any other way?

Well I guess they can be set up however you'd like...

But I like paying less than rent and so does everyone I know who purchased a place...

[wheatgurm]

Oh if I was to fork out around 15k, my phone would propbably stop ringing as much.

[Grendel]

Just the wife's student loan About (17,000) and the mortgage, although we put down 20 percent down payment and are making extra payments so hopefully it won't take the full 30 years to pay off.

[Toxicarius]

I have negative debt. People owe me to the tune of around 500 bux... but it was money lent to friends and I knew going in that there was little chance of ever seeing that money again.

[Zerohero]

I wonder how the Dr. Doom economy scenerio of hyper inflation would play out on home prices.

a home, like gold will always have A value. a dollarbuck in the bank only is worth what it's worth today.. economists, scholars, and battletwits thoughts?

[Krieg]

Only the mortgage from the house we live, but it is setup in a way that the payments are lower than renting the house.

mortgages can be set up any other way?

Well I guess they can be set up however you'd like...

But I like paying less than rent and so does everyone I know who purchased a place...

You can get (or at least could a couple of years ago) no down payment loans around here, then the montly payments would be higher than renting, otherwise everyone would buy instead of renting. You could even get 120% loans, meaning you would use the other 20% for renovations.

[Bored, Esq.]

Only the mortgage from the house we live, but it is setup in a way that the payments are lower than renting the house.

mortgages can be set up any other way?

Well I guess they can be set up however you'd like...

But I like paying less than rent and so does everyone I know who purchased a place...

You can get (or at least could a couple of years ago) no down payment loans around here, then the montly payments would be higher than renting, otherwise everyone would buy instead of renting. You could even get 120% loans, meaning you would use the other 20% for renovations.

How much (percentage) are your taxes, Krieg?

[Krieg]

How much (percentage) are your taxes, Krieg?

I don't actually know. I can tell you how much is approximately the difference between nett and brutt income from our salaries. It should be around 46% including taxes, health insurance, pension, unemployment insurance, etc. From other sources of income is around 19% and some income is taxed in dfferent countries.

[Bored, Esq.]

How much (percentage) are your taxes, Krieg?

I don't actually know. I can tell you how much is approximately the difference between nett and brutt income from our salaries. It should be around 46% including taxes, health insurance, pension, unemployment insurance, etc. From other sources of income is around 19% and some income is taxed in dfferent countries.

You see...that's the thing. People in America cry all day long about socialism but our taxes aren't THAT much lower than socialist countries. I mean, people pay around 30% here...WTF?

[Krieg]

How much (percentage) are your taxes, Krieg?

I don't actually know. I can tell you how much is approximately the difference between nett and brutt income from our salaries. It should be around 46% including taxes, health insurance, pension, unemployment insurance, etc. From other sources of income is around 19% and some income is taxed in dfferent countries.

You see...that's the thing. People in America cry all day long about socialism but our taxes aren't THAT much lower than socialist countries. I mean, people pay around 30% here...WTF?

It depends which country you want to compare to. Finland, Sweden and Norway can be "expensive".

[Bored, Esq.]

How much (percentage) are your taxes, Krieg?

I don't actually know. I can tell you how much is approximately the difference between nett and brutt income from our salaries. It should be around 46% including taxes, health insurance, pension, unemployment insurance, etc. From other sources of income is around 19% and some income is taxed in dfferent countries.

You see...that's the thing. People in America cry all day long about socialism but our taxes aren't THAT much lower than socialist countries. I mean, people pay around 30% here...WTF?

It depends which country you want to compare to. Finland, Sweden and Norway can be "expensive".

Yes.

[spacehamster]

How much (percentage) are your taxes, Krieg?

I don't actually know. I can tell you how much is approximately the difference between nett and brutt income from our salaries. It should be around 46% including taxes, health insurance, pension, unemployment insurance, etc. From other sources of income is around 19% and some income is taxed in dfferent countries.

You see...that's the thing. People in America cry all day long about socialism but our taxes aren't THAT much lower than socialist countries. I mean, people pay around 30% here...WTF?

I don't pay anywhere near that much. But the rest of Europe hates us for it.

[rape bear]

Only the mortgage from the house we live, but it is setup in a way that the payments are lower than renting the house.

mortgages can be set up any other way?

Well I guess they can be set up however you'd like...

But I like paying less than rent and so does everyone I know who purchased a place...

You can get (or at least could a couple of years ago) no down payment loans around here, then the montly payments would be higher than renting, otherwise everyone would buy instead of renting. You could even get 120% loans, meaning you would use the other 20% for renovations.

Man, there are no places that are willing to give out more than 100% for a house. I've talked to three places so far that offer no extra money for renovations or anything else.

[The Wages of Ben]

SPOILERSPOILER_SHOW

[Gookstorm]

Manhattan and the richest areas of California are pretty much never going to change as far as cost and inflation go, those people are just too fucking rich.

California's system is beyond bankrupt, and NY is only surviving because the bailouts kept the ludicrous paychecks of the bankers full. When median houses cost $600k in a suburb of San Francisco and the median income is only $100k / yr, it's nowhere near sustainable. The only other possibility I can think of is that the only people that buy houses have been putting down more than 20% when they do, but the prevalence of jumbo loans makes me doubt that's plausible.

I'm not planning on buying any property in urban-ish CA unless I make something Will Rahmer would gawk at. Even then, I'd likely buy a place far away from a city where $400k gets you a bunch of land and a luxury home and rent a decent place close to the office maybe so I could switch companies with little need to move my belongings and have a good home for my family that I could defend with automated drones toting rifles. I'd hope that by the time that happens I don't need to commute anymore and could live wherever the fuck I want and I'd get flown every month or so to a big city maybe. I don't think that's a lot to ask for actually. I'm kind of hoping to snag an older home out in the country for cheap when people start dying off in droves out there.

We have three things to correct for when it comes to houses: overleveraged credit markets, unemployment, and sheer supply due to massive overdevelopment during the boom. This means that in theory we should be below 100 on the Case Schiller index in every major coastal city before we can begin a housing market recovery, which hasn't happened because of government intervention (yes, you're correct). The reason why the government must prop up house prices for a while: the CDSes and mortgage backed securities domino chain along with other derivatives would basically blow a hole in the US economy (the total market for them all is around $6 trillion dollars - which should be worth about nothing). We'll likely end up like Japan with slowly declining house prices for over a decade and shitty GDP growth. Corrected for inflation, the US has literally gone nowhere since about 1999 already, yet we're still headed downward because we let our financial markets become so goddamn retarded.

Therefore, I say don't buy a house unless you have money to completely blow it on the thing - its value to you should be intrinsic primarily. I'm hoping for a decent house in Sonoma or Napa Valley to hit maybe $300k, but the rich motherfuckers around the world (not just Californians buy California houses) keep that from me.

I wonder how the Dr. Doom economy scenerio of hyper inflation would play out on home prices.

Doesn't matter if most of the monetary supply sits in the hands of the rich and none of the consumer class gets it. The dollar could plummet in value and people would still get paid roughly the same or even less (globalization ftl, right?), so that shouldn't really hurt real estate... until those people that live outside the country start to relinquish their US-based assets. Until more money starts flowing into the hands of consumers will hyperinflation become a concern. We started printing money to combat the deflation that occurred in the Great Depression, and considering we actually did hit deflation (nobody would admit it here, of course) that shows the sheer magnitude of the problem.

Hey rich people, your piece of the GDP is already fucking ridiculous, spend some on the people you made your money off of for once instead of hoarding like a fatass. It's like game theory at the macro level and they're fucking everyone over (same could go for China, too, btw). We have more money flowing into Africa than the middle class US by the rich folks, so I dunno wtf to do besides try to become rich as fuck (see: Bill & Melinda Gates' contributions for the past 3 years).

a home, like gold will always have A value.

Sure, but also consider that gold is functionally useless in a true doomsday / anarchy scenario that I'm honestly concerned about, so those buying gold are hopefully not putting their savings in it. I wish I'd put my money in gold when the market started tanking and I'd be up like 70% on it. Now's a good time to sell off gold ETFs I'd say (long term capital gains should have kicked in, making it an easy 55% gain).

Also, people seem to overvalue the dollar value of homes because of the emotional attachment to them. Cars last only so long, and homes typically don't last more than 50 years in the US, yet people spend half their paychecks to pay for their dwelling. The introduction of the mortgage and the subsequent interest deductions also increased prices on homes because people thought they could afford more. Given it'd take basically a revolution to change things around back to something honestly sustainable, I'm banking on things getting shittier and shittier in the US. I've moved all my investments to either fixed income domestic or international growth, you see...

You see...that's the thing. People in America cry all day long about socialism but our taxes aren't THAT much lower than socialist countries. I mean, people pay around 30% here...WTF?

Our "progressive" tax system means that you get taxed differently per tier and that most Americans pay somewhere around 15% of their income in federal taxes, then on top of that there's social security. It's honestly really sad that with the money we've lost via the Bush and Reagan tax cuts we'd have had universal health care and a budget surplus rivaling China's now, but no, we were too focused upon outspending the commies and brainwashed by Ayn Randian schools of economic thought (Alan Greenspan is from the same circle of people that are the basis of Libertarians today). The idea that the most fiscally conservative (rich) people could be enticed to spend more by giving them more is fucking ludicrous from the outset to me. The rich can deduct a shitload by donating to charities of their choosing instead of giving it to The Man, yet they constantly bitch about welfare babies and welfare queens that were a myth created by the Republican party of the early 80s to incite fear among those concerned about the horrible economy left by Jimmy Carter.

Oftentimes, the same people that bitch about how we're socialist also tend to praise and idolize the time period of the 40s, 50s, and maybe early 60s ... when our tax system taxed the rich about 70% (it used to be 90% around 1915). The others just keep pointing at Ronald Reagan and saying how he saved the country without showing the full math of what it took, the "war on drugs" that got pushed into high gear, and how the S&L scandal cost the US so much it affected the economy well into the late 90s. Almost all the economic problems the US has had is based fundamentally around shitty policies letting companies do whatever the fuck they want all at once when they had regulations for a while. It's no different than grounding a 16 year old for 6 months then giving them the car keys all of a sudden - no shit they're going to do dumb shit with the car. The US historically sucks at regulation and worse at deregulation.

[Krieg]

Hey rich people, your piece of the GDP is already fucking ridiculous, spend some on the people you made your money off of for once instead of hoarding like a fatass. It's like game theory at the macro level and they're fucking everyone over (same could go for China, too, btw).

Some months ago they showed on TV a special about how the rich are "surviving" the crisis. Almost every rich person who was born rich (royalty, etc) said that they were spending less in solidarity with the people affected by of the crisis. It was the first time I actually wanted to facepalm in real life.