Jim Kunstler whipped out another gem in which
he wrote:
For decades we measured the health of our economy (and therefore of our society) by the number of "housing starts" recorded month-to-month. For decades, this translated into the number of suburban tract houses being built in the asteroid belts of our towns and cities. When housing starts
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If you're a pod-person, his Kunstler Cast is pretty amusing, too.
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Perhaps the first question should be "why." This housing bubble started in '98. Bubbles take as long to deflate as they take to grow. (See Chapter 15 of The Crash Course for supporting reference.)
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What I'm getting at is, there is an interesting optimization between buying now to start paying down the mortgage, and buying later to have a smaller starting mortgage because the market value has "adjusted". I should do some math around this, and work out some scenarios.
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There is a disconnect, though, with what people are getting in rent versus what a mortgage would cost. I'm shocked at what some crap-tastic apartment buildings charge. Better bargains (around here, at least) can be found renting whole houses, especially if you have decent roomies to cover the rent.
The Wife and I got lucky, buying in 2001. I see our house maintaining its value (relative to our mortgage left to be paid) simply because of; a) the houses in the neighborhood sell price recently, compared to b) the sell price of 'burb houses. It helps that we plan to die here, making liquidation kind of academic.
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I was on our home owner's association board (not the kind that can enforce anything, I would never live in one of those) and someone once said that banks making construction loans on spec houses forced the builders to put up the maximum size house that was allowed.
We now owe less on our house than we paid for our Oregon house in '77.
Of course our current payment is now 2.5 times the property tax payment so paying it off isn't going to reduce our monthly payments that much.
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You're in California, I assume? That state is so screwed. Prop 13 has proven a disaster in just about every way.
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Prop 13 screwed? You ain't seen nothing yet. This giant over budget fiasco in California is going to dwarf the prop 13 problems. But I don't think Washington is going escape unscathed.
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Just. Wow. Good luck.
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Unfortunately I cannot drive there on one tank of gas. It takes about 2.
I am not sure what is going to happen but I don't think the life we have in the US is going to stay this way much longer. California is more crowded and doesn't have enough water but every state has vulnerabilities.
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