saku39
Member
- Joined
- Sep 6, 2007
- Messages
- 339
Most homeless people prefer being homeless. Of course, there is a small percentage that are actually people just down on their luck-- But most just don't care about being productive. Like I said, I wouldn't know anything about rural poor. But rent is not the issue. Repeating what I've said previously, you are looking at the symptom not the problem.
It's going in circles because you're not looking at the math I gave you. If you have a person living on a few dollars a day, they will care that their money's value is being stolen by inflation. You are trying to say that 3% is some miniscule amount and I have shown that you are wrong.
I gave you an example. I showed how, over a year, $560 worth of value would be taken from a poor person getting $9.50 an hour due to inflation. If you are at the margin, living check to check, not having that extra $560 of value a year hurts you.
No. Variable or fixed are just tools to ensure that the lenders can make their money by lending. The lender will use whatever is the best tool for the job. If a fixed rate works best for the money they are lending to somebody, that's what they'll use. If variable is better, then that's what takes place. It's whatever the situation calls for.
Middle class jobs are secure? What are you talking about? Are you trying to tell me there aren't companies that downsize or go bankrupt? Please understand that there are no guarantees in life. Business does not operate in a vacuum with companies that last forever-- Some grow larger, some grow smaller, some win, some lose but it's never static and it's always moving.
Companies go out of business and people lose jobs. XYZ Company gets bought out by ABC Corporation, the XYZ Company workforce is laid off. Or jobs get outsourced to other countries. These things happen. This affects the blue collar machinist and the white collar accountant who both worked at that company. So yes, my example made perfect sense because all you need to do is open the local paper and read the business section to see.
The gold standard or a commodity backed currency would stabilize and then lower prices in the long run. Booms and busts as we know them would cease to exist. Poor people and middle class would have the value of their money increase over time. Rich people wouldn't mal-invest in stupid ventures because there is no Fed to bail them out, pretty much ending the business cycle booms/busts of fiat currency.
Maybe they decide to stay and maybe they decide move, I can't say, it depends on their situation. In some cases you can move roll a 401k elsewhere. Maybe there are insurance benefits that are a consideration to stay? They person has to make a decision if it's better to take a loss short term in order to recieve a gain long term. If the loss is too great, then they won't move. But there's no way to know for certain what one person will do in comparision to another.
And a teacher is just one example. There are accountants, machinists, graphic designers, personnel managers, IT consultants, mechanics, engineers, architects, ironworkers, hotel managers, supply clerks, etc, etc-- They go out of state because they get transferred, get a better job offer, or the cost of living is cheaper where they're going. Maybe they live in downtown Detroit and just want a nicer place to live? Life is always moving and always changing and that's what's important to remember.
This is true, but what I'm saying is that people don't stand still, life doesn't stand still and business doesn't stand still. And actually for the past 2 years, the average price for homes has gone down. Month by month prices have been dropping like they haven't seen in decades. http://money.cnn.com/2007/09/25/real_estate/low_existing_home_sales/index.htm
If you want to be sure to make money on a house, hold it for over 10 years. Prices go up or down due to market forces, but historically, if you hold a house over 10 years, you'll make money. But the problem is that life isn't some perfect straight line for everybody. Some people are forced to sell due to the circumstances life throws at us. Like I said in a previous post, people move every 3-4 years for one reason or another.
Another thing to consider, is that in some areas, if you factor in inflation you're not getting a whole lot of money back from the house if you sell.
Yes, but what I am saying is that because of the costs involved, the poor person is already excluded from owning a house. There is a cost of ownership that the poor person can't handle financially.
A doubled foreclosure rate and price decreases of as much as 20% are NOT adjustments. That is what happens when you have booms and busts that occur due to interest rate manipulation and fiat currency.
Most people didn't have the money to buy California homes-- But they were given loans due to stupid lending practices which would only be possible with fiat currency. Now there's foreclosures. Mortgage companies are hurting and/or out of business, prices are down, inventories are up, peoples' credit is ruined and on and on.
People invest in California because of the huge population and because of the rate of appreciation due to the population growth is much much larger compared to pretty much anywhere else in the country.
I could point out how you're completely wrong but LVT is a whole other discussion. That would be just as long as the one we're having now. But like I said before, it is not some magic bullet. At the end of the day, LVT is just a tax-- And all taxes are either re-distribution of wealth or destruction of wealth.
The lot itself, house included is a .15 acre. It was a backyard that was about .05 acre. To get sod, a concrete patio and a sprinkler system was $7500. And that was the cheap guy. Others wanted $9000. This was all necessary. The cost of the house did not include backyard landscaping, but the HOA CCR's were very strict in that the backyard had to be landscaped in a certain way.
And actually, that area has gone down in price due to the current housing problems. What were once $515-540k homes are now $420-$465k homes.
Because that's a house. A garage door is a cost involved with owning a house. With an apartment, that's a cost you won't have. Just like you wouldn't have to pay for: landscaping costs, homeowner's insurance, larger electric/heating/water bills, possible repair for damages to the house, maintenance fees, HOA dues, trash pickup fees, etc, etc.
In an apartment you pay rent and utilities and that's all. And it should be noted that the utilities on an 800 sqft apartment with no yard are a fraction of the utlities reauired on a 1400 sqft house with a front and back yard.
As I've said before, there is a cost of ownership in owning a house that doesn't exist with an apartment, which is why your assertion that houses are cheaper is completely wrong.
It's not bull at all. You are not seeing the big picture.
First off, apartments don't always go up. Just like houses don't always go up. Sometimes they go down. Look at the 1980's in Texas-- there was an oversupply, tax laws changed, rents dropped, and many real estate holding companies went out of business.
Like I said before, you aren't taking into account the ownership costs involved in owning a house at all. There are other things to consider other than just the house payment: insurance, larger utility bills, maintenance costs, HOA fees, landscaping costs, etc, etc. And that doesn't even include the regular cost of living outside of keeping the house.
On top of what I said, there are barriers to why more poor people don't have housing. Ok, let's take a house in the middle of $200k-500k-- $350000. Here's an example: 3 bedroom, 2 bathroom in El Cajon
Under normal conditions, you would need a down payment of 20% down payment as well as $1000 to deposit an offer, so that comes to $71,000. You would need that up front to even be taken seriously for the house.
Let's say you have perfect credit, so you get a fixed interest rate of 6% for a loan amount of $280000 (350000 price - 70000 down payment) When you add the monthy payment, finance charges, loan origination fees and home insurance costs you have a monthly payment of around $1600-1700. (It's important to note that most people DO NOT have perfect credit, so their payment could possibly be $200-500 more a month.)
Before you can get the house, you also have closing costs. There's ecrow and title search, recording fee, appraisal fee, which is an extra $1500 or so, not to mention the realtor commission might have to be paid by the buyer. (At $350000 and 6%, that would be $21000. Traditionally, the seller pays, but it doens't always happen that way.) I'll leave off the commission.
$1000 Deposit + $70000 Down payment + $1500 Closing costs = $72500 Total
You would need $72500 to just get started. That's a huge barrier for most poor people. Some finance their down payment, which usually just ends up causing trouble for them.
But there's more. There's property taxes which add up to about $4500 annually. There's also an monthy HOA due that is anywhere from $30-100. Your trash, water, electric and gas bill are now doubled from what they were when you were in an apartment due to the extra space and rooms. You also have to mow the lawn, you've got to buy a a lawn mower and get gas for the lawn mower, that's at least $150 and an additional $10-15 every few months, maybe more if gas prices go up. Consider also that you might have to make repairs on the house.
This is why poor people stay in apartments. And this is why when poor people get houses, a family will pack as many people as possible in. A single family home like the link I posted was designed to house a family of 5-6 people. But many poor people double that. They bring in extended families just to be able to pay. Every able family member works and pays. That's why there will be cousins, uncle's, aunts, grandma and grandpa all living in the same house. It's the only way they can pay.
Ok, so we have the low house payment of $1600. Say HOA of $50, phone bill $30, electric bill of $150, a water bill of $50, a trash fee of $20, gas bill of $30, say another $20 a month for cleaning products for the house. All of that adds up to $1950. But you're forgetting that people need furniture (kitchen table, beds and dressers) they need to eat, need to be clothed, need to make the car payment, pay car insurance, gas, etc-- All of that added together would be an extreme strain on people working hourly wages living on the margin.
So like I said, because of these extra expenses it's hard for the poor to afford houses because they ARE more expensive than apartments.
Your incorrect re: foreclosures. They have open auctions and then they go on market. When they go on market, 99% of the time, they are open to anybody that wants to see them and buy them.
Foreclosures are not desired but they are not sickening, they are a natural occurence. They happen every day. Some people can't keep up and they lose the house. But what's happening now isn't natural, it's like they're happenening at every minute. In some parts of Southern California, the foreclsures are up over 200% from the year previous.
These happened because of no down payment, interest only ARMs. These types of mortgages are only possible when you lower rates below what they should be and you dump cash into the system. The Fed did both of these things for years. Now the crash is happening. Housing is the current problem, but the effect of all the cash and interest rate tampering is spreading elsewhere.
This current burst housing bubble wouldn't have happened without fiat currency.
What does this have to do with anything?
You said a few posts ago, that the Japanese enjoyed a boom due to fiat currency. I said in response that they collapsed and their economy was flatlined for about 20 years-- Something that always happens to fiat currencies.
Look at history, fiat always ends up collapsing. It might take years, it might take decades, or it might take a century, but it always happens.
)
