Author Topic: At what point in the rate cycle would you pass on home buying?  (Read 4415 times)

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Offline Burn That Belly

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Re: At what point in the rate cycle would you pass on home buying?
« Reply #15 on: April 21, 2018, 06:46:47 PM »
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« Last Edit: August 03, 2018, 03:42:34 PM by Burn That Belly »
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Offline Soylent Green Is People

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Re: At what point in the rate cycle would you pass on home buying?
« Reply #16 on: April 21, 2018, 07:22:43 PM »
We may see a +3% 10 year sooner than later. Then again a few more -200 stock days should postpone higher rates as investors in stocks get wobbly. People will begin to weigh in the balance if it's wise to buy more FANG stock or a big bundle of 3% government debt.

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Offline i1

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Re: At what point in the rate cycle would you pass on home buying?
« Reply #17 on: April 21, 2018, 08:32:33 PM »
My personal needs dictate when I buy. If rates are much higher, I will still buy but I’ll have to buy a cheaper home than if rates were <4%.
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Offline Burn That Belly

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Re: At what point in the rate cycle would you pass on home buying?
« Reply #18 on: April 21, 2018, 08:44:58 PM »
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« Last Edit: August 03, 2018, 03:42:31 PM by Burn That Belly »
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Offline fortune11

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Re: At what point in the rate cycle would you pass on home buying?
« Reply #19 on: April 21, 2018, 09:12:55 PM »
Multiple story duplexes are actually very common in West LA . But again , those are dense neighborhoods , much more so than great park , so not apples to apples comparison . But there is proof it works under the right circumstances .

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Offline Burn That Belly

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Re: At what point in the rate cycle would you pass on home buying?
« Reply #20 on: April 21, 2018, 09:27:11 PM »
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Offline Compressed-Village

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Re: At what point in the rate cycle would you pass on home buying?
« Reply #21 on: April 21, 2018, 09:38:37 PM »
We may see a +3% 10 year sooner than later. Then again a few more -200 stock days should postpone higher rates as investors in stocks get wobbly. People will begin to weigh in the balance if it's wise to buy more FANG stock or a big bundle of 3% government debt.

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+3% would be crazy if homes continue to appreciate like Delano. Remember that we still have the growing 1.48T national student loan debt. Only a few years ago, we were at $800B. A 3% rate increase plus these student loans will all but wipe out any average Z-gens any chances of buying a (Irvine) home.

Soylent refer to the 10 T-bill rate at which is approaching 3 percent or 2.96 % to be exact on April 20, 2018. The 10 yrs T-Bill is a correlation to mortgage rate increase. This will hit and push rate to 5 % for jumbo loan by summer.

Offline Burn That Belly

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Re: At what point in the rate cycle would you pass on home buying?
« Reply #22 on: April 21, 2018, 11:17:14 PM »
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« Last Edit: August 03, 2018, 03:42:24 PM by Burn That Belly »
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Offline fortune11

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Re: At what point in the rate cycle would you pass on home buying?
« Reply #23 on: April 22, 2018, 06:26:42 AM »
Multiple story duplexes are actually very common in West LA . But again , those are dense neighborhoods , much more so than great park , so not apples to apples comparison . But there is proof it works under the right circumstances .

That’s not apples to apples comparison. We can’t talk about multi-million dollar Manhattan apartments or apartments in Trump towers...

Isn’t that (not apples to apples) what i said :).   But you had to make a point using Manhattan which is NOT what I used as example .

West LA is proximate enough both in terms of geography and underlying dynamics (distance from coastal areas) that it can be a good comp down the road . The thing is I don’t know the future - neither do you .

All we can do is make educated guesses about the future  . And in that realm of probabilities great park multi level homes are not something you can totally dismiss as having no relevance .

Offline lnc

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Re: At what point in the rate cycle would you pass on home buying?
« Reply #24 on: April 22, 2018, 07:49:31 AM »
For me personally, higher interest rate is less of a deterring factor than higher home prices.

I rather buy a home at 10% interest rate but with a 50% lower home prices than other way around.

Yes of course that is the best scenario. But what if you have a continuing higher rate and continually higher price?

Then that’s a double whammy. 

As a potential trade up buyer, higher home price makes me think twice about trading up.  With the home prices continue going up, on one hand my asset goes up but on the other hand, it will cost me a lot more to trade up.  When you trade up, it’s not just simply the price difference between the two products.  The trade up home will have a significant higher property tax, maybe also higher MR, and the new property tax deduction limits plus the higher interest rate doesn’t help either.

Offline Soylent Green Is People

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Re: At what point in the rate cycle would you pass on home buying?
« Reply #25 on: April 22, 2018, 11:20:55 PM »
10 yr Futures for Monday 4/23 indicate a 2.97 open. The 3% handle is closer that many are willing to believe.

Offline fortune11

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Re: At what point in the rate cycle would you pass on home buying?
« Reply #26 on: April 23, 2018, 08:38:09 AM »
Every time in last 5 years that we have approached 3% on 10y  , we have failed and fallen back below (even in Feb after that block buster jobs report).  Lets see if this time is different ...

Offline nosuchreality

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Re: At what point in the rate cycle would you pass on home buying?
« Reply #27 on: April 23, 2018, 09:34:28 AM »
Interest rates and price are irrelevant.  The math is simple, population growth is greater than housing growth.  Until the economy runs a ground, price increases will continue until people self select into greater occupant density.  Moving to Riverside is just a stratification of occupant density.

If you build 1000 housing units with a currennt, (and target density) of 2.3 people but your population increases by 30,000 people you have an issue.  This is what we've been doing for two decades across the entire five county region.

Offline fortune11

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Re: At what point in the rate cycle would you pass on home buying?
« Reply #28 on: April 23, 2018, 10:00:26 AM »
Interest rates and price are irrelevant.  The math is simple, population growth is greater than housing growth.  Until the economy runs a ground, price increases will continue until people self select into greater occupant density.  Moving to Riverside is just a stratification of occupant density.

If you build 1000 housing units with a currennt, (and target density) of 2.3 people but your population increases by 30,000 people you have an issue.  This is what we've been doing for two decades across the entire five county region.

yes, we agree .  check my other post in this thread .  interest rates matter less compared to everything else going on ...

Offline Burn That Belly

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Re: At what point in the rate cycle would you pass on home buying?
« Reply #29 on: April 23, 2018, 10:39:12 AM »
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« Last Edit: August 03, 2018, 03:42:22 PM by Burn That Belly »
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