Comments on: The Bourgeoisie Crisis: Three Fascinating Stories from the Recession Front: Nationalization for the Oligarchs. When a Master Planned Community Meets the Crashing Housing Market. Where will the Proletariat Play? http://www.doctorhousingbubble.com/the-bourgeoisie-crisis-three-fascinating-stories-from-the-recession-front-nationalization-for-the-oligarchs-when-a-master-planned-community-meets-the-crashing-housing-market-where-will-the-prol/ How I Learned to Love Southern California and Forget the Housing Bubble Thu, 09 Feb 2012 15:03:51 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Homes Alexandria VA http://www.doctorhousingbubble.com/the-bourgeoisie-crisis-three-fascinating-stories-from-the-recession-front-nationalization-for-the-oligarchs-when-a-master-planned-community-meets-the-crashing-housing-market-where-will-the-prol/#comment-42606 Homes Alexandria VA Thu, 26 Nov 2009 23:23:23 +0000 http://www.doctorhousingbubble.com/?p=1480#comment-42606 This is a great post, and looking at it in retrospect...there still are no real answers. What we have witnessed is a government intervention and stimulus that has saled the free fall. What remains to be seen now...is rising unemployment, commercial failures, and bank failures. This is a great post, and looking at it in retrospect…there still are no real answers. What we have witnessed is a government intervention and stimulus that has saled the free fall. What remains to be seen now…is rising unemployment, commercial failures, and bank failures.

]]> By: Prince William Homes http://www.doctorhousingbubble.com/the-bourgeoisie-crisis-three-fascinating-stories-from-the-recession-front-nationalization-for-the-oligarchs-when-a-master-planned-community-meets-the-crashing-housing-market-where-will-the-prol/#comment-34205 Prince William Homes Wed, 04 Mar 2009 05:42:37 +0000 http://www.doctorhousingbubble.com/?p=1480#comment-34205 Scary stuff...but you are right on the money. No one seems to have a solution either. Scary stuff…but you are right on the money. No one seems to have a solution either.

]]> By: Joey Logano http://www.doctorhousingbubble.com/the-bourgeoisie-crisis-three-fascinating-stories-from-the-recession-front-nationalization-for-the-oligarchs-when-a-master-planned-community-meets-the-crashing-housing-market-where-will-the-prol/#comment-34196 Joey Logano Wed, 04 Mar 2009 02:45:13 +0000 http://www.doctorhousingbubble.com/?p=1480#comment-34196 Quite Honestly, I still can't believe that CitiGroup is doing as bad as it is doing, About a year ago, I had thought that Citi was doing quite well compared to some of the other banks, but I guess not. Quite Honestly, I still can’t believe that CitiGroup is doing as bad as it is doing, About a year ago, I had thought that Citi was doing quite well compared to some of the other banks, but I guess not.

]]> By: AnnS http://www.doctorhousingbubble.com/the-bourgeoisie-crisis-three-fascinating-stories-from-the-recession-front-nationalization-for-the-oligarchs-when-a-master-planned-community-meets-the-crashing-housing-market-where-will-the-prol/#comment-34188 AnnS Tue, 03 Mar 2009 20:34:13 +0000 http://www.doctorhousingbubble.com/?p=1480#comment-34188 madguru writes "One thing I would like to see you touch on is interest rates. Where do you see them headed? How long can they stay as low as they are? What will be the effect on the housing market when they inevitably start moving up?" >>>> Yes the realtor chant of "record low interest rates" makes no sense. Sooner or later - and it could be 2, 5 or 8 years from now, interest rates will rise. Now that is important if you buy something and have to sell in the future. What people can afford to buy depends upon their income and that monthly payment. The payment is made up of interest and principal. >>. If you buy a $250,000 house with 10% down you will br carrying a $225,000 mortgage. Say it is a 30 year fixed at 5.26% (the rate Bankrate gives today.) The pricipal & interest payment will be $1243 and the income needed for the entire PITI including taxes and insurance would be around $60,000 so the PITI is not more than 31% of gross (and that is STILL ver high for most people.) >>> Now say you go to sell 5 years from now and the interest rates are now up to 6.75%. If the house is priced at $250,000, that principal and interest with 10% down will now be $1460 and the income needed for the entire PITI will be around $69,000 or 15% more than you make. That means FEWER potential buyers with the higher price. >>> For someone else to buy that house with a 6.75% interest rate, 10% down and not have the principal and interets payment be more than $1243, you would have to DROP the price to $213,300 so their mortgage was not more than $192,000. >>> You can ALWAYS refinance and interest rate - you can NOT reduce the price you paid (unless you are willing to lose money.) >> High interest rates and a lower price are far far far better than low interest and a higher price. And if you think sellers are not keeping their prices higher because interest rates are lower, think again as the bottom line is always how much buyers can afford to pay each month. When interest rates rsie - and they will - unless incomes go up a commensurate amount, the price of houses will have to drop. madguru writes “One thing I would like to see you touch on is interest rates. Where do you see them headed? How long can they stay as low as they are? What will be the effect on the housing market when they inevitably start moving up?”

>>>>

Yes the realtor chant of “record low interest rates” makes no sense. Sooner or later – and it could be 2, 5 or 8 years from now, interest rates will rise. Now that is important if you buy something and have to sell in the future. What people can afford to buy depends upon their income and that monthly payment. The payment is made up of interest and principal.
>>.
If you buy a $250,000 house with 10% down you will br carrying a $225,000 mortgage. Say it is a 30 year fixed at 5.26% (the rate Bankrate gives today.) The pricipal & interest payment will be $1243 and the income needed for the entire PITI including taxes and insurance would be around $60,000 so the PITI is not more than 31% of gross (and that is STILL ver high for most people.)
>>>
Now say you go to sell 5 years from now and the interest rates are now up to 6.75%. If the house is priced at $250,000, that principal and interest with 10% down will now be $1460 and the income needed for the entire PITI will be around $69,000 or 15% more than you make. That means FEWER potential buyers with the higher price.
>>>
For someone else to buy that house with a 6.75% interest rate, 10% down and not have the principal and interets payment be more than $1243, you would have to DROP the price to $213,300 so their mortgage was not more than $192,000.
>>>
You can ALWAYS refinance and interest rate – you can NOT reduce the price you paid (unless you are willing to lose money.)
>>

High interest rates and a lower price are far far far better than low interest and a higher price. And if you think sellers are not keeping their prices higher because interest rates are lower, think again as the bottom line is always how much buyers can afford to pay each month. When interest rates rsie – and they will – unless incomes go up a commensurate amount, the price of houses will have to drop.

]]> By: compass rose http://www.doctorhousingbubble.com/the-bourgeoisie-crisis-three-fascinating-stories-from-the-recession-front-nationalization-for-the-oligarchs-when-a-master-planned-community-meets-the-crashing-housing-market-where-will-the-prol/#comment-34177 compass rose Tue, 03 Mar 2009 17:59:50 +0000 http://www.doctorhousingbubble.com/?p=1480#comment-34177 DHB is truly the best tonic. I've been seeing on various lists and forums the assertion that you have nothing to worry about if you consider yourself part of the "cultural creatives," the "new class," the bohos, bobos, and bonobos...in short, the spendy, trendy, educated consumer classes of the past 20-30 years. ~ For two decades my work took me to enclaves of people whose notion of work involved showing up, or not, to stroke other people of similar inclinations into a general agreement that they all were smarter, better, nicer, and prettier than the working stiffs. In San Francisco in 1999 there was a huge flap because a handful of Muni (transit) drivers had earned in the six figures! Horrors! All my dot-com acquaintances agreed this was wrong. ~ These few workers had worked the equivalent of two full-time positions, because the city wasn't allowed to hire more drivers for budgetary reasons if I recall correctly. In other words, these working women and men were out there driving routes that I didn't even like to ride on (like the 22-Fillmore bus line, which the drivers all called the "22 Fellini"), 60 to 80 or more hours per week. DHB is truly the best tonic. I’ve been seeing on various lists and forums the assertion that you have nothing to worry about if you consider yourself part of the “cultural creatives,” the “new class,” the bohos, bobos, and bonobos…in short, the spendy, trendy, educated consumer classes of the past 20-30 years.
~
For two decades my work took me to enclaves of people whose notion of work involved showing up, or not, to stroke other people of similar inclinations into a general agreement that they all were smarter, better, nicer, and prettier than the working stiffs. In San Francisco in 1999 there was a huge flap because a handful of Muni (transit) drivers had earned in the six figures! Horrors! All my dot-com acquaintances agreed this was wrong.
~
These few workers had worked the equivalent of two full-time positions, because the city wasn’t allowed to hire more drivers for budgetary reasons if I recall correctly. In other words, these working women and men were out there driving routes that I didn’t even like to ride on (like the 22-Fillmore bus line, which the drivers all called the “22 Fellini”), 60 to 80 or more hours per week.

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