Comments on: Housing Slump slows national spending http://queercents.com/2007/04/08/housing-slump-slows-national-spending/ We're here, We're queer, and We're not going Shopping without Coupons Wed, 10 Mar 2010 04:23:21 -0700 http://wordpress.org/?v=2.9.1 hourly 1 By: rhbee http://queercents.com/2007/04/08/housing-slump-slows-national-spending/comment-page-1/#comment-31184 rhbee Tue, 10 Apr 2007 13:19:26 +0000 http://www.queercents.com/2007/04/08/housing-slump-slows-national-spending/#comment-31184 We live in San Diego where everyone apparently wants to live and the housing prices are beyond what most people can afford. This has led to the tremendous increase in the foreclosure rates over the last three months. Yes, people used sub-prime lending strategies to buy into the market and now they are paying the price. One interesting side effect to the situation is that condo conversions have decreased the rental supply so that that has in turn forced the rents for what is left to begin to escalate. Meanwhile, the builders who couldn't or wouldn't read the writing on the wall are now starting to realize they are facing a glutted and over-valued market place with few buyers. Everyone now appears to be waiting or wanting to cash in on a foreclosure. Unfortunately, this doesn't mean that any of us have learned the lesson in all of this.<p class="top-comments">Current score: <span class="top-comments-karma" id="karma-31184">0</span> <small>(to vote for this comment, please visit the site)</small></p> We live in San Diego where everyone apparently wants to live and the housing prices are beyond what most people can afford. This has led to the tremendous increase in the foreclosure rates over the last three months. Yes, people used sub-prime lending strategies to buy into the market and now they are paying the price. One interesting side effect to the situation is that condo conversions have decreased the rental supply so that that has in turn forced the rents for what is left to begin to escalate. Meanwhile, the builders who couldn’t or wouldn’t read the writing on the wall are now starting to realize they are facing a glutted and over-valued market place with few buyers. Everyone now appears to be waiting or wanting to cash in on a foreclosure. Unfortunately, this doesn’t mean that any of us have learned the lesson in all of this.

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]]> By: corey http://queercents.com/2007/04/08/housing-slump-slows-national-spending/comment-page-1/#comment-31059 corey Tue, 10 Apr 2007 01:56:06 +0000 http://www.queercents.com/2007/04/08/housing-slump-slows-national-spending/#comment-31059 This is eerily similar to the 70s era "Butter and Guns" economy. Hyper spending by individuals and the government shot interest rates, unemployment rates, and dramatically decreased housing values. Maybe as forclosure rates rise I'll be able to afford my first house in the Pacific Northwest. Still saving, and holding out a little while longer though.<p class="top-comments">Current score: <span class="top-comments-karma" id="karma-31059">0</span> <small>(to vote for this comment, please visit the site)</small></p> This is eerily similar to the 70s era “Butter and Guns” economy. Hyper spending by individuals and the government shot interest rates, unemployment rates, and dramatically decreased housing values. Maybe as forclosure rates rise I’ll be able to afford my first house in the Pacific Northwest. Still saving, and holding out a little while longer though.

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]]> By: Ian http://queercents.com/2007/04/08/housing-slump-slows-national-spending/comment-page-1/#comment-30992 Ian Mon, 09 Apr 2007 18:13:38 +0000 http://www.queercents.com/2007/04/08/housing-slump-slows-national-spending/#comment-30992 It's misleading to compare the interest paid on a 5-year loan to a 10-year one without considering the extra money it requires to pay off the loan in 5 years. The payment on that 10 year loan would only be $360/mo, a difference of $245 per month. If you have the extra money, there's no reason you couldn't pay off the HELOC just as fast as the car. If you don't, it doesn't really matter what the benefits of a shorter loan are if you can't make the payments. An actual apples to apples comparison would show paying off the two loans at the same rate. In which case, the tax gains are going to amount to 20-30% of the total interest paid. Surprise, surprise: it's better to take out a HELOC.<p class="top-comments">Current score: <span class="top-comments-karma" id="karma-30992">0</span> <small>(to vote for this comment, please visit the site)</small></p> It’s misleading to compare the interest paid on a 5-year loan to a 10-year one without considering the extra money it requires to pay off the loan in 5 years. The payment on that 10 year loan would only be $360/mo, a difference of $245 per month. If you have the extra money, there’s no reason you couldn’t pay off the HELOC just as fast as the car. If you don’t, it doesn’t really matter what the benefits of a shorter loan are if you can’t make the payments.

An actual apples to apples comparison would show paying off the two loans at the same rate. In which case, the tax gains are going to amount to 20-30% of the total interest paid. Surprise, surprise: it’s better to take out a HELOC.

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