Recession?

[mudpuppy]

Great discussions everybody.

Just wanted to chime in on the gas tax. I'm with IFR & udpolo & kevo on this one. Price controls don't work--look at the 70's energy crisis. When price controls were implemented, there wasn't enough gas to go around, because demand was still high and gas was artifically cheap. The problem is the politicians feel obliged to do something which often ends up being the wrong thing.

 

[Road Guy]

We got a first and second mortgage to avoid the PMI - which turned out to be a bad choice when the second variable rate started climbing. And I still don't know how I avoided PMI when I refinanced into just one loan with a 90% LTV.

we did that also and then refinanced into a 15 year loan which also negates PMI.

I dont know how anyone in Southern Cal and other extremely high house priced markets get into one, I am assuming thats why Cal traffic is pretty bad, lots of people commuting from a hellofalongway to get into a decent house.

I watch those home improvement shows and laugh when folks up north get so excited about a deal on a 2 BR 2 BA starter home for $400,000....

but again I dont advocate a mandatory 20%, I just think it would have been better if people put at least somethig down, nice to at least actually own the door to your house!

 

[squishles10]

we did that also and then refinanced into a 15 year loan which also negates PMI.
I dont know how anyone in Southern Cal and other extremely high house priced markets get into one, I am assuming thats why Cal traffic is pretty bad, lots of people commuting from a hellofalongway to get into a decent house.

I watch those home improvement shows and laugh when folks up north get so excited about a deal on a 2 BR 2 BA starter home for $400,000....

but again I dont advocate a mandatory 20%, I just think it would have been better if people put at least somethig down, nice to at least actually own the door to your house!

Zero down, interest only loans. Or even better, 105% loans, no interest. It's the only way most of the time. Wasn't a problem when the bubble was expanding. You could sell after 5 years and pay off the whole thing no problem. Now you're in the hole stuck with the thing. Not at ALL claiming to be an expert, but it's all happening right now because after X years the mortgage resets? And everyone bought when the bubble was going crazy so it's all resetting at once. Not sure if "resetting" means switching from interest-only to a real payment, or the interest rates reset, or perhaps both.

 

[C-Dog]

Great discussions everybody.
Just wanted to chime in on the gas tax. I'm with IFR & udpolo & kevo on this one. Price controls don't work--look at the 70's energy crisis. When price controls were implemented, there wasn't enough gas to go around, because demand was still high and gas was artifically cheap. The problem is the politicians feel obliged to do something which often ends up being the wrong thing.

What mud said!

 

[IlPadrino]

I dont know how anyone in Southern Cal and other extremely high house priced markets get into one, I am assuming thats why Cal traffic is pretty bad, lots of people commuting from a hellofalongway to get into a decent house.

I know a Master Chief stationed near LA... he wanted to buy a house and had a certain amount to spend. He started looking in LA and then expanded out in ever larger circles. He finally found what he was looking for... THREE HOURS AWAY from work. He knew he'd be retiring in a few years so he figured it was worth the commute. Crazy, I tell you.

 

[wilheldp_PE]

near LA...THREE HOURS AWAY from work.

So it's, what, about 5, maybe 10 miles from work? You couldn't pay me enough to live or work in LA. I hate that place.

 

[IlPadrino]

The problem in my mind is how can house prices continue to rise if median wages are relatively stagnant? I would be thrilled to hear any insights from an informed source.

Same question here... I don't get it, especially if interest rates increase.