Author Topic: Observations of Irvine RE market  (Read 16976 times)

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Offline novaseline

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Observations of Irvine RE market
« Reply #30 on: December 10, 2009, 08:21:00 PM »
Quote from: "reason"
Quote from: "novaseline"

If that is true, your down payment will go DOWN in real dollars while remaining constant as a %.  Think about that for a minute...

Does anyone know how to calculate the devaluation of the Dollar since the last 3 years as it applies to the current housing prices?

In other words, a gallon of unleaded gasoline currently is above $3.00. But 2-3 yrs. ago, the same gallon was around $1.90.  


No it wasn't.

http://www.californiagasprices.com/retail_price_chart.aspx

12/08 - $1.99
12/7 - $3.15
12/06 - $3.43
12/05 - $2.35

I understand the point you're trying to make, but your data points don't work out so good with said point.

Offline reason

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Observations of Irvine RE market
« Reply #31 on: December 10, 2009, 11:27:00 PM »
Quote from: "novaseline"
Quote from: "reason"

Does anyone know how to calculate the devaluation of the Dollar since the last 3 years as it applies to the current housing prices?

In other words, a gallon of unleaded gasoline currently is above $3.00. But 2-3 yrs. ago, the same gallon was around $1.90.  

No it wasn't.

http://www.californiagasprices.com/retail_price_chart.aspx

12/08 - $1.99
12/7 - $3.15
12/06 - $3.43
12/05 - $2.35

I understand the point you're trying to make, but your data points don't work out so good with said point.


I knew the data was not accurate (too lazy to type in approx.) But as long as you know the point that I am getting at   :D

I was going to use the value of an oz. of gold of 2 yrs ago vs. current. It was "roughly" $400/oz. and currently it's "roughly" $1000/oz. Now, it's still an oz. of gold. So why is it costing more now?  But somehow, I get this feeling Awgee would come in to correct the dollar amount.

I hope someone would provide the data of the US Dollar at the beginning of the RE crash vs. its current value. Then compare that to the current prices of homes. I find it interesting that as we saw the housing market crash. The value of the dollar also went down.

Since the buying power of the Dollar is not what it was 2 - 3 yrs prior. What effect does that have on the current housing price. Lets say a house price now is $500k. Is it really $500k? or is it really $400k if you factor in the declining value of the Dollar. Gosh, I hope someone is understanding my jibberish. Nevermind.

Offline nosuchreality

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Observations of Irvine RE market
« Reply #32 on: December 11, 2009, 06:37:00 PM »
Decling price of the dollar is irrelevant.

It's growth in income that matters.

Unless you have enough money that your country of living is a realistic choice.

$500,000 yesterday and $500,000 today, still take $500,000.

Now if the incomes in the area have changed from $83,000 to $106,000.  Then $500,000 is correspondingly cheaper.

But, choose your poison.    If the house is an investment, compare the price then compared to other investments:  Gold, diamonds, spiders, oil, pork belly futures...

If it's a necessity, compare to necessities: a cart of groceries.

If it's a discretion, compare to discretinary items: trips to Europe, price of movie tickets, cost of cable, flights to hawaii and a week a Hulalai etc...

Offline reason

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« Reply #33 on: December 13, 2009, 09:35:00 AM »
Quote from: "nosuchreality"
Decling price of the dollar is irrelevant.

It's growth in income that matters.

Unless you have enough money that your country of living is a realistic choice.

$500,000 yesterday and $500,000 today, still take $500,000.

Now if the incomes in the area have changed from $83,000 to $106,000.  Then $500,000 is correspondingly cheaper.

But, choose your poison.    If the house is an investment, compare the price then compared to other investments:  Gold, diamonds, spiders, oil, pork belly futures...

If it's a necessity, compare to necessities: a cart of groceries.

If it's a discretion, compare to discretinary items: trips to Europe, price of movie tickets, cost of cable, flights to hawaii and a week a Hulalai etc...



Oh, no. I have to disagree. $500k yesterday is not the same as $500k today. Lets say a candy bar cost 10 cents back in the 70's and that same candy bar is now $1.25. It takes $1.25 to buy that candy bar. Not 10 cents of 3 decades ago. So no, the current value of the dollar is not the same as years past.

And although income might increase. It's not the same dollar value. A person can make $40k, 5 years ago. And is now making $50k, the current $50k is not going to buy the same amount of goods as 5 years ago.

Furthermore, I understand the mention of "growth in income" makes the declining dollar irrevelant. But how many average American workers' income increased to outpace the rapid declining value of the dollar?

In the last 3 years, the job market have deteriorated. Where most workers are lucky to have a job. Most are afraid to ask for a raise. Some companies won't give raises due to market competitiveness. Many workers had their hours reduced. This, of course, lower their income.

Hence, to speak of "growth in income" in the current market condition is irrelevant. If we were in a perfect economy, maybe.
« Last Edit: December 13, 2009, 10:08:00 AM by Anonymous »

 

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