07-04-2021, 07:23 AM
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#61
07-04-2021, 07:25 AM
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#62
Ughhhh I want to sell mine soooo bad but I really don't want to buy another house in NJ. I'm ready to move to a new state. Well I'm not really ready yet, which is why I am not selling yet. Couple more years. Womp womp
07-04-2021, 07:56 AM
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#63
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would have sold and just rented for a year probably couldve bought double the house for the same price once the market starts to come down but more power to you congrats
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07-04-2021, 07:59 AM
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#64
- mellowfellow01
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Originally Posted By Redfish225⏩
Smart move bro very happy to hear .Been living here 11 years, bought the house as a bank foreclosure as is, only had to replace hot water heater in 2011. Paid 50% of asking price. Appraised for $285,000 two weeks ago, accepted offer of 300k 6 days ago. (House is 90% paid for) Made offer on new place putting down 200k on 420k house. I think I did a good thing/10. All my miscer friends are invited over for a pool party. Let’s do this!!! Pics incoming.
07-04-2021, 08:01 AM
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#65
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I like the brick in those pics.
Where are you going to live now? Presumably, a similar home in a similar neighborhood will have appreciated a similar amount - you're not really financially ahead unless something is changing (smaller house, lower cost area etc.)?
Where are you going to live now? Presumably, a similar home in a similar neighborhood will have appreciated a similar amount - you're not really financially ahead unless something is changing (smaller house, lower cost area etc.)?
07-04-2021, 08:22 AM
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#66
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Is the new house a significant upgrade?
You were almost paid off and free of the banks.
You were almost paid off and free of the banks.
U
07-04-2021, 08:32 AM
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#67
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Originally Posted By leoslayer1⏩
Exactly. While not optimal from a mathematical/compounding perspective, there is a lot to be said for the security of a paid off primary residence.Is the new house a significant upgrade?
You were almost paid off and free of the banks.
You were almost paid off and free of the banks.
07-04-2021, 08:49 AM
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#68
07-04-2021, 08:55 AM
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#69
Nice house OP. Looks like lots of counter space and at least a little personality. Super neutral everything, but you can change that if you want to.
The Fed is saying they are going to raise rates. It seems that they must to fight inflation. But then if they do raise rates it could set off a cascade of other problems. Which is why...
Originally Posted By ContrarianIndi⏩
This is a high quality post and perfectly reasonable, but...It often is like that in major cities.But when homes in bumfuk nowhere are going for 5-6x median household income also, that's indicative of a problem.
Australia, Canada and much of the western world have their own bubbles as well. The bubbles pop when inflation starts running rampant and interest rates are forced to rise to combat it.
I'm not sure what a typical down payment is in Australia, but in the US the avg down payments is absolutely paltry 6%. That's essentially maxing out leverage on a home purchase, and given that the avg buyer has such a low down payment, they are much more sensitive to interest rates because they require larger loans.
If I remember correctly, mortgage rates rising to the historic norm of 7.5% would mean that mortgage costs would rise 50%. So the the avg 6% down on a median $350k home goes from $2,000 a month to $3,000 a month if rates rise back to their historic norms.
Given that the avg idiot only cares about their payment, a median home would have to drop from $350k to entice new buyers if rates returned to normal.Median income of $68k would mean median home price needs to fall to around $210k.(It would actually have to go lower than that because higher interest rates mean mass bankruptcies of over-levered businesses and subsequent mass layoffs. Particularly for high salary tech industry jobs where unprofitable zombie companies are almost more common than profitable tech companies, and they will no longer be able to kick the can with endless borrowing... but that's another story.)
There aren't many ARM's this go around, so that's good. But if you want to sell your home in a higher interest rate environment, you're going to have to lower the price. And also you're going to have lots of inventory hitting the market when over-levered REIT's start going bust and have to unload all the homes they've been buying at 20% over asking price.
Then the avg person with a paltry down payment is going to wonder why they're still paying their expensive mortgage when their home value has collapsed, thus accelerating the decline.
This is a bubble.
Australia, Canada and much of the western world have their own bubbles as well. The bubbles pop when inflation starts running rampant and interest rates are forced to rise to combat it.
I'm not sure what a typical down payment is in Australia, but in the US the avg down payments is absolutely paltry 6%. That's essentially maxing out leverage on a home purchase, and given that the avg buyer has such a low down payment, they are much more sensitive to interest rates because they require larger loans.
If I remember correctly, mortgage rates rising to the historic norm of 7.5% would mean that mortgage costs would rise 50%. So the the avg 6% down on a median $350k home goes from $2,000 a month to $3,000 a month if rates rise back to their historic norms.
Given that the avg idiot only cares about their payment, a median home would have to drop from $350k to entice new buyers if rates returned to normal.Median income of $68k would mean median home price needs to fall to around $210k.(It would actually have to go lower than that because higher interest rates mean mass bankruptcies of over-levered businesses and subsequent mass layoffs. Particularly for high salary tech industry jobs where unprofitable zombie companies are almost more common than profitable tech companies, and they will no longer be able to kick the can with endless borrowing... but that's another story.)
There aren't many ARM's this go around, so that's good. But if you want to sell your home in a higher interest rate environment, you're going to have to lower the price. And also you're going to have lots of inventory hitting the market when over-levered REIT's start going bust and have to unload all the homes they've been buying at 20% over asking price.
Then the avg person with a paltry down payment is going to wonder why they're still paying their expensive mortgage when their home value has collapsed, thus accelerating the decline.
This is a bubble.
Originally Posted By WoofieNugget⏩
the economic situation isn't reasonable right now.If you can get in, buying a house is never a bad investment. They've been talking about the bubble bursting for like fifteen years and it hasn't happened yet. It's inevitable that interest rates will go up, but I don't think we will ever see them up to where they were in the 90s when you were paying 8% again. I remember being able to get a government savings bond for 13% when I was a kid.
Even going from 2% to 5% now would cripple most homeowners and while I'd love to see it happen, it would create a massive glut of foreclosures. The industry would never let that happen. Money printer would go brrrr and debt goes up that nobody is ever going to pay back.
Even going from 2% to 5% now would cripple most homeowners and while I'd love to see it happen, it would create a massive glut of foreclosures. The industry would never let that happen. Money printer would go brrrr and debt goes up that nobody is ever going to pay back.
The Fed is saying they are going to raise rates. It seems that they must to fight inflation. But then if they do raise rates it could set off a cascade of other problems. Which is why...
Originally Posted By Redundanteater⏩
This feels like the safest move right now. No clue if it is the best choice, just less scary re: primary residence for anyone that doesn't have a big nest egg to fall back on and time to rebuild said savings.Exactly. While not optimal from a mathematical/compounding perspective, there is a lot to be said for the security of a paid off primary residence.
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07-04-2021, 10:23 AM
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#70
- Redfish225
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Originally Posted By Legz422⏩
Thx mamiCongrats on the new house and Holy wow! Jelly AF at that kitchen and a pool!
Saw the other pics on this page. Looks beautiful OP!
Saw the other pics on this page. Looks beautiful OP!
I loe e.
07-04-2021, 10:29 AM
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#71
- Redfish225
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Originally Posted By leoslayer1⏩
I’ll probably have it paid off in 8-9 yearsIs the new house a significant upgrade?
You were almost paid off and free of the banks.
You were almost paid off and free of the banks.
1100 more square feet and a pool, fairly exclusive area of my city, no idiots, bigger lot, two car garage to work on the camaro.
I loe e.
07-04-2021, 10:49 AM
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#72
- elterrible987
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new house looks nice, i would love a 2 car garage too
do you think its a wash though? i mean if your old house shot up in value hasnt the cost of the new house also shot up and its basically a wash? Are you just trying to get in while the interest rate is low?
do you think its a wash though? i mean if your old house shot up in value hasnt the cost of the new house also shot up and its basically a wash? Are you just trying to get in while the interest rate is low?
07-04-2021, 10:51 AM
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#73
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Originally Posted By SouthDakotaBrah⏩
This.That sounds awesome OP, congrats
If I were in your situation, I'd take advantage of the current interest rate environment and leverage yourself more... no need to put down half the value of a house vs. taking out a larger mortgage and investing the money instead. You'd be better off pulling $120k in equity out of the house you're buying next and putting it into the S&P 500 instead of simply using it to offset debt on a 2.5% mortgage
If I were in your situation, I'd take advantage of the current interest rate environment and leverage yourself more... no need to put down half the value of a house vs. taking out a larger mortgage and investing the money instead. You'd be better off pulling $120k in equity out of the house you're buying next and putting it into the S&P 500 instead of simply using it to offset debt on a 2.5% mortgage
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07-04-2021, 10:51 AM
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#74
- elterrible987
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Originally Posted By Redfish225⏩
i guess if you can pay it off that quick and lock in the interest rate even if the market tanks you can just wait it out anyways if you staying there long term.I’ll probably have it paid off in 8-9 years
1100 more square feet and a pool, fairly exclusive area of my city, no idiots, bigger lot, two car garage to work on the camaro.
1100 more square feet and a pool, fairly exclusive area of my city, no idiots, bigger lot, two car garage to work on the camaro.
400k buys a fuking studio condo here, sounds like you lucky in a low cost of living area with good income.
07-04-2021, 10:59 AM
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#75
07-04-2021, 11:27 AM
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#76
- mr.left hook
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Originally Posted By Cass40⏩
Lol... you can't Not even in Compton or WattsI don't even know if you could get anything for 400K here in Los Angeles area.
Except for the tiny house for homeless folk maybe haha.
Except for the tiny house for homeless folk maybe haha.
Congratz Red! that house is huge bud mirin...
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07-04-2021, 11:53 AM
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#77
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Originally Posted By mr.left
I could never live in Cali, too many guns, I’d be on the FBI watch listLol... you can't Not even in Compton or Watts
Congratz Red! that house is huge bud mirin...
Congratz Red! that house is huge bud mirin...
I loe e.
07-04-2021, 11:56 AM
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#78
Originally Posted By Redfish225⏩
Do you cook good Cajun/Creole food?Been living here 11 years, bought the house as a bank foreclosure as is, only had to replace hot water heater in 2011. Paid 50% of asking price. Appraised for $285,000 two weeks ago, accepted offer of 300k 6 days ago. (House is 90% paid for) Made offer on new place putting down 200k on 420k house. I think I did a good thing/10. All my miscer friends are invited over for a pool party. Let’s do this!!! Pics incoming.
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07-04-2021, 11:58 AM
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#79
- rectifryer
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Back out of the new house otherwise there was no point in selling the old.
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07-04-2021, 12:06 PM
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#80
- Redfish225
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07-04-2021, 12:38 PM
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#81
- ContrarianIndi
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Originally Posted By WoofieNugget⏩
In the 80s the consensus was that interest rates would never fall again. Then we had 40 years of falling rates. Now the assumption is that rates will never rise again even though we've reached rock bottom. Somehow I doubt that rates are going to remain low forever, and if they don't, the bubble bursts.If you can get in, buying a house is never a bad investment. They've been talking about the bubble bursting for like fifteen years and it hasn't happened yet. It's inevitable that interest rates will go up, but I don't think we will ever see them up to where they were in the 90s when you were paying 8% again. I remember being able to get a government savings bond for 13% when I was a kid.
Even going from 2% to 5% now would cripple most homeowners and while I'd love to see it happen, it would create a massive glut of foreclosures. The industry would never let that happen. Money printer would go brrrr and debt goes up that nobody is ever going to pay back.
Even going from 2% to 5% now would cripple most homeowners and while I'd love to see it happen, it would create a massive glut of foreclosures. The industry would never let that happen. Money printer would go brrrr and debt goes up that nobody is ever going to pay back.
It's unquestionable that this is a bubble, hence why the Fed feels the need to buy $40 billion in MBS every single month during probably the hottest real estate market ever.
If interest rates ever rise to any meaningful degree, the bubble bursts. So they will try to keep rates low for as long as possible. But the problem is if we do get unignorable inflation that prompts public outrage, the only solution will be to hike rates and end the stimulus.
Plenty of industries didn't want higher rates in the late 70's. The whole climate of opinion was against rate hikes, but rates still rose up to 20% in spite of all that because fighting inflation took priority. History repeats itself.
And even if the Fed continues to refuse to fight inflation and lets it run rampant, home prices could still fall in real terms as rising food costs, utilities, healthcare, gas, insurance premiums, property taxes, etc... start eroding the average person's ability to make their payments.
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07-04-2021, 01:01 PM
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#82
- friesbruh
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real talk though, if you net $200k + from the sale, arent you tempted to put just 20% down (90k) and just bank / invest the other $110k?
this is just me but from a real estate perspective, at least where i grew up, 2 and 4 unit complexes are still going for under 200k and id be tempted to buy up two of those on commercial loans, put down a full 20%, ($180K X2 X.2 = 72K down + fees so say 80k in all), save the other 30k for unexpected expenses which the bank would ant to see anyways and then have 8 units netting $200-$300 a month pure cashflow + appreciation, meanwhile that $110k less paid towards a mortgage only costs 4-500 a month.
id either do that or take the money, go to a low COL area and buy, rehab, rent, refinance, repeat with remaining cash.
youre winning either way. this is just my input.
this is just me but from a real estate perspective, at least where i grew up, 2 and 4 unit complexes are still going for under 200k and id be tempted to buy up two of those on commercial loans, put down a full 20%, ($180K X2 X.2 = 72K down + fees so say 80k in all), save the other 30k for unexpected expenses which the bank would ant to see anyways and then have 8 units netting $200-$300 a month pure cashflow + appreciation, meanwhile that $110k less paid towards a mortgage only costs 4-500 a month.
id either do that or take the money, go to a low COL area and buy, rehab, rent, refinance, repeat with remaining cash.
youre winning either way. this is just my input.
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07-04-2021, 01:19 PM
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#83
- WellHungOver
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Nice OP. That's a lot of house for the money. It would probably be closer to $600k where I'm at. I want to sell and move to Idaho, but the market is way stupid there.
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