‘Brutal,’ ‘crazy’ housing market has Seattle-area homes selling half-million over asking price

[UpAndComing]

If we being honest, it Occupy Wall Street was literally a bunch of people who didn't have jobs to begin with... just squatting in public parks on some internet meet up shyt.

Exactly. It's getting to the point where people are addicted to demonstrations and protests. They are romanticized by it

 

[UpAndComing]

Bro no cap you sound a future Seriel killer. You gonna walk around shooting up landlords now? lol.

I get what you saying but it’s the government job to provide more affordable housing.

@Wild Self is the only real Socialist on the Coli. #Respect

 

[Jekyll]

This is Socialism through and through. Alot of people don't understand Central Planning, Manipulated supply chain pricing, and Inflation

It can’t be socialism if it’s the people or even private corps are buying and owning the property and selling them at the price that they want to sell them at. People just throw buzz words around.

Inflation is a direct result of capitalism, in which you must always sell things at a higher price than you bought them. China is probably the most socialist leaning country around(they are not fully socialist) and their inflation is far below America.


Inflation Rate - Countries - List

 

[UpAndComing]

It can’t be socialism if it’s the people or even private corps are buying and owning the property and selling them at the price that they want to sell them at. People just throw buzz words around.

Inflation is a direct result of capitalism, in which you must always sell things at a higher price than you bought them. China is probably the most socialist leaning country around(they are not fully socialist) and their inflation is far below America.


Inflation Rate - Countries - List

Did you just say Inflation is because people sell things higher than what they bought them? Are you kidding me?

 

[Jekyll]

Did you just say Inflation is because people sell things higher than what they bought them? Are you kidding me?

No. I just pointed out, in the same place that you quoted, that even “socialist” countries like China have inflation.

The difference between the US and China is that the US’ inflation is both cost push inflation and demand driven inflation. Capitalism contributes to cost push inflation because cost always need to rise.

Cost-Push Inflation

 

[Conan]

If you rent a 3 bedroom home for 3500 today, what's the price going to be in 10 years? Probably more than double that. How much equity will you have? Zero. Or you can buy a home for 600k, maybe put 40k down, pay around 3500 with property taxes, homeowner's insurance, and PMI included, and build equity. Your monthly payments will be the same 10 years from now,. There are maintenance costs, but those are tax deductible, as well as the mortgage interest and insurance. Like I said, I did the math.

Renting has it's benefits as far as flexibility goes, but it is more expensive in the long run.

I'm glad you provided numbers. Let's look at the numbers.

First of all, I'm going to challenge your claim of rent increasing 8.8% per year. Going back 30 years (looking at a standard mortgage length), based on the Consumer Price Index for all urban customers, rents increased by 3.3% per annum. In that same period of time, homes have appreciated at an average of 4.4% per annum. The stock market has historically delivered returns of 9.9% per annum on average.

Alright. Now let's run the numbers for a house purchase of 600k. You put down 40k. So you get approved for a mortgage of 540k at 3.8% (going off Google's average rates). You only put down 6.6% so you got to pay PMI (1% on loan value) until you hit 20% Equity to Value ratio right? The average property tax rate rate nationwide is 1.1%, let's use that. The rule of thumb is to budget 1.5% for home maintenance, and 0.7% for home insurance. Oh right, can't forget average closing cost of 4% on buying, and 6% on selling.

We are going to take a sample breh and place him in two scenarios. Scenario A: he buys the house using the numbers on hand. Scenario B: he rents for 30 years. Key point: we assume that if breh in Scenario B is paying less on a monthly basis than breh in Scenario A, the delta is automatically invested in the market, and allowed to mature until the end of 30 years. If at any point breh A is paying less than breh B, then breh A invests the delta in the market.

So for example, breh A has to come up with 40k for the down payment and 24k for the closing costs, cash. Breh B does not have to come up with that amount. So he can place that 64k in an index fund tracking the market, and forget about it for 30 years, and at the end it is worth $1.09M. In the beginning, Breh A's monthly payment is $4720, and breh B has to shell out $3500 for rent. So breh B gets to invest $1220 that month. 20 years down the line, breh A is paying $6478 in monthly expenses, and breh B's rent is $6682. So breh A gets to place $204 in the stock market that month.

At the end of the 30 years, breh A sells the house. He pays selling costs, and pays long term capital gains on the profit (minus a $500k deduction granted to married couples). In addition, he liquidates his stock portfolio and pays long term capital gains on what he was able to invest once his monthly house payments were less than the rental apartments of breh B.

For breh B, at the end of 30 years, he liquidates his stock portfolio, and pays long term capital gains tax.

Who came out better? I created a spreadsheet to evaluate both scenarios and figure this out.

Breh A made a post tax profit of $1.31M.
Breh B made a post tax profit of $1.67M.

Both did very well, but at the end, breh B (rent breh) outperformed breh A (house breh) by 360K.

Now you may be saying I fudged the numbers. I'll upload the spreadsheet to a common link if desired so anyone can check my math.

You may also be saying I'm not taking into account mortgage interest deductions. That is fair, but it doesn't come close to eliminating the impact of compound interest on money saved from renting early on in this scenario.

You may also say the answer is dependent on interest rates, estimates for home maintenance and tax and so on. That is correct, but I never argued there was a definite financial answer to the rent or buy question. It depends on the numbers.

But to correct an erroneous point you made, you absolutely can rent and build equity. And you build equity using the money you would have pissed away on interest, home maintenance, property tax, closing costs, the down payment... early on in the life of the mortgage. It's called opportunity cost in economics, and it's only when you ignore this significant factor, does rent seem like throwing money away.

 

[UpAndComing]

No. I just pointed out, in the same place that you quoted, that even “socialist” countries like China have inflation.

The difference between the US and China is that the US’ inflation is both cost push inflation and demand driven inflation. Capitalism contributes to cost push inflation because cost always need to rise.

Cost-Push Inflation

In the article you referenced

Cost-push inflation occurs when overall prices increase (inflation) due to increases in the cost of wages and raw materials. Higher costs of production can decrease the aggregate supply (the amount of total production) in the economy. Since the demand for goods hasn't changed, the price increases from production are passed onto consumers creating cost-push inflation.


This is exactly what I mentioned in the first thing I mentioned to you in this thread. Price Manipulation and Central planning messes up the prices of Commodities and the Supply chain, and the companies end up passing on the prices to the consumer. That is the work of the Federal Reserve, which is a government agency

High taxes also works the same. High taxes on the Supplier side causes the prices to be transferred to the consumer side. Which is also the Government's doing


If you think the Federal Reserve is Capitalism, then you have no idea what Capitalism is

 

[Jekyll]

In the article you referenced

Cost-push inflation occurs when overall prices increase (inflation) due to increases in the cost of wages and raw materials. Higher costs of production can decrease the aggregate supply (the amount of total production) in the economy. Since the demand for goods hasn't changed, the price increases from production are passed onto consumers creating cost-push inflation.


This is exactly what I mentioned in the first thing I mentioned to you in this thread. Price Manipulation and Central planning messes up the prices of Commodities and the Supply chain, and the companies end up passing on the prices to the consumer. That is the work of the Federal Reserve, which is a government agency

High taxes also works the same. High taxes on the Supplier side causes the prices to be transferred to the consumer side. Which is also the Government's doing


If you think the Federal Reserve is Capitalism, then you have no idea what Capitalism is

Well no one ever said that the US economy was 100% capitalist. No major system today is 100% on any side of the spectrum which is why I said that about China. The US tried untethered capitalism and it failed and LBJ had to save the US economy with socialism. Hell every time this country is on the brink of failing economically it gets bailed out by Socialism. There really can’t be capitalism the way it is in the US without a social safety net.

The US is still mostly full blooded capitalism. It is not a planned economy. The Fed is there to watch and prevent huge depressions. At no point have they ever said that they’re gonna buy everything and run the economy themselves.

 

[Easy-E]

These home prices have surged across the country. Black people really should've come up with a plan decades ago to secure ownership. Now we have to pay way overpriced rent just to live in a place that isn't middle America or the desert. Ownership secures your ability to pay a fair price to live somewhere. Renting is throwing money away, especially today. Every year, people are getting hit with rent hikes and getting moved around. Homeowners' expenses are relatively stable and in line with inflation.

I was rocking with you til this...One of my biggest knocks on Obama was him not doing shyt about the owners of the homes during the 08 Crash.

Atlanta, for example, has seen big drop in home value for black people during those times after 08.

People HAD to sell their homes. And they got bought up and values exploded.

I hate how ya'll talk like 'Black just don't wanna do right.'

The MAJORITY OF BLACK WEALTH is in homeownership.

 

[UpAndComing]

Well no one ever said that the US economy was 100% capitalist. No major system today is 100% on any side of the spectrum which is why I said that about China. The US tried untethered capitalism and it failed and LBJ had to save the US economy with socialism. Hell every time this country is on the brink of failing economically it gets bailed out by Socialism. There really can’t be capitalism the way it is in the US without a social safety net.

The US is still mostly full blooded capitalism.

Well there you go, you answered my point for me, thank you. They are not a full Capitalistic society. When you have competing economic systems that diametrically oppose each other, saying this country is failing because of Capitalism is disingenuous, and you know that


LBJ saved the US Economy? Are you fukking kidding me

This is American History 101 breh. 20 years prior to LBJ... US was literally the top of the food chain from 1945-1963. Until LBJ came in 1963 decided to inject his "Great Society" and failure of his execution of the Vietnam War

I really hope you're joking

 

[UberEatsDriver]

I was rocking with you til this...One of my biggest knocks on Obama was him not doing shyt about the owners of the homes during the 08 Crash.

Atlanta, for example, has seen big drop in home value for black people during those times after 08.

People HAD to sell their homes. And they got bought up and values exploded.

I hate how ya'll talk like 'Black just don't wanna do right.'

The MAJORITY OF BLACK WEALTH is in homeownership.

Which is a choice as of today. Other avenues of wealth to explore

 

[UberEatsDriver]

I'm glad you provided numbers. Let's look at the numbers.

First of all, I'm going to challenge your claim of rent increasing 8.8% per year. Going back 30 years (looking at a standard mortgage length), based on the Consumer Price Index for all urban customers, rents increased by 3.3% per annum. In that same period of time, homes have appreciated at an average of 4.4% per annum. The stock market has historically delivered returns of 9.9% per annum on average.

Alright. Now let's run the numbers for a house purchase of 600k. You put down 40k. So you get approved for a mortgage of 540k at 3.8% (going off Google's average rates). You only put down 6.6% so you got to pay PMI (1% on loan value) until you hit 20% Equity to Value ratio right? The average property tax rate rate nationwide is 1.1%, let's use that. The rule of thumb is to budget 1.5% for home maintenance, and 0.7% for home insurance. Oh right, can't forget average closing cost of 4% on buying, and 6% on selling.

We are going to take a sample breh and place him in two scenarios. Scenario A: he buys the house using the numbers on hand. Scenario B: he rents for 30 years. Key point: we assume that if breh in Scenario B is paying less on a monthly basis than breh in Scenario A, the delta is automatically invested in the market, and allowed to mature until the end of 30 years. If at any point breh A is paying less than breh B, then breh A invests the delta in the market.

So for example, breh A has to come up with 40k for the down payment and 24k for the closing costs, cash. Breh B does not have to come up with that amount. So he can place that 64k in an index fund tracking the market, and forget about it for 30 years, and at the end it is worth $1.09M. In the beginning, Breh A's monthly payment is $4720, and breh B has to shell out $3500 for rent. So breh B gets to invest $1220 that month. 20 years down the line, breh A is paying $6478 in monthly expenses, and breh B's rent is $6682. So breh A gets to place $204 in the stock market that month.

At the end of the 30 years, breh A sells the house. He pays selling costs, and pays long term capital gains on the profit (minus a $500k deduction granted to married couples). In addition, he liquidates his stock portfolio and pays long term capital gains on what he was able to invest once his monthly house payments were less than the rental apartments of breh B.

For breh B, at the end of 30 years, he liquidates his stock portfolio, and pays long term capital gains tax.

Who came out better? I created a spreadsheet to evaluate both scenarios and figure this out.

Breh A made a post tax profit of $1.31M.
Breh B made a post tax profit of $1.67M.

Both did very well, but at the end, breh B (rent breh) outperformed breh A (house breh) by 360K.

Now you may be saying I fudged the numbers. I'll upload the spreadsheet to a common link if desired so anyone can check my math.

You may also be saying I'm not taking into account mortgage interest deductions. That is fair, but it doesn't come close to eliminating the impact of compound interest on money saved from renting early on in this scenario.

You may also say the answer is dependent on interest rates, estimates for home maintenance and tax and so on. That is correct, but I never argued there was a definite financial answer to the rent or buy question. It depends on the numbers.

But to correct an erroneous point you made, you absolutely can rent and build equity. And you build equity using the money you would have pissed away on interest, home maintenance, property tax, closing costs, the down payment... early on in the life of the mortgage. It's called opportunity cost in economics, and it's only when you ignore this significant factor, does rent seem like throwing money away.

Repped it’s amazing how much info people who think outside the box have

 

[Rekkapryde]

Companies are buying homes and not people now, it's fukkin up the game. These corporations buying homes in neighborhoods have ZERO issues paying premiums to secure not just a home, but HOMES to increase their inventory to rent.

Wake up.

Corporations shouldn't be allowed to buy residential.

 

[Jekyll]

Well there you go, you answered my point for me, thank you. They are not a full Capitalistic society. When you have competing economic systems that diametrically oppose each other, saying this country is failing because of Capitalism is disingenuous, and you know that


LBJ saved the US Economy? Are you fukking kidding me

This is American History 101 breh. 20 years prior to LBJ... US was literally the top of the food chain from 1945-1963. Until LBJ came in 1963 decided to inject his "Great Society" and failure of his execution of the Vietnam War

I really hope you're joking

LBJs programs still make up literally the only safety net available in this country. The US doesn’t have competing economic systems. There’s capitalism and there’s just enough socialism to keep the riots down. America’s wealth inequality and this upcoming “permanent underclass” that economists speak on is a direct result of Capitalism.

 

[Raw Lyrics]

If you rent a 3 bedroom home for 3500 today, what's the price going to be in 10 years? Probably more than double that. How much equity will you have? Zero. Or you can buy a home for 600k, maybe put 40k down, pay around 3500 with property taxes, homeowner's insurance, and PMI included, and build equity. Your monthly payments will be the same 10 years from now,. There are maintenance costs, but those are tax deductible, as well as the mortgage interest and insurance. Like I said, I did the math.

Renting has it's benefits as far as flexibility goes, but it is more expensive in the long run.

Facts, I did the same shyt for a 700k house. I put down about 90 though.