Comments on: The absolute best, affordable, house in Mountain View

By: Jojor

Jojor — Mon, 01 Jun 2009 03:07:04 +0000

mtv-renter said: “Banks, unless they’re insane or run by the government, won’t loan you money at below inflation interest rates.”

Banks is in the business to make money on saving/loan interest margin. As long as there is money supply in the savings who can tolerate the below inflation rates return (because they have no place to hide), Banks can still loan you money because they are in business to make margin.

BuyersAreIdiots Says: “And because we are a nation that needs to sell its bonds to fund all our stupid wars and bloated budgets, we will have to at some point raise rates to offset the dollar decline. As that happens, the already overstretched real estate bag holders will hear a nationwide echoing ’snap’ ”

If you buy a house as the bottom of the downturn, you will turn out to be the winner since when interest rates go up, the mortgage cost is going up, which will keep the price from going up but keep pushing up the rent cost, which is closely related to the monthly mortgage cost. So the owners will say highly money rate on their houses even the actual price is not going up. Of cause, this is assuming you do not buy a house which is 20% higher than the bottom price.

By: rick

rick — Sun, 31 May 2009 20:51:40 +0000

You know, they should have just posted a model home and said use your creative imagination.

By: nomadic

nomadic — Sun, 31 May 2009 07:47:03 +0000

Time to go back to college everyone!

http://www.latimes.com/news/nationworld/nation/wire/sns-ap-us-condos-as-dorms,1,2257365.story

Maybe Stanford can do this with Gables End by setting up a shuttle bus!

By: zanon

zanon — Sat, 30 May 2009 22:45:16 +0000

JASON: Rents can quadruple and you’re still (just) better off renting than buying. Stash your cash in TIPS, let rents (and your salary) quadruple, TIPS will quadruple, then buy the house for 25% of what it costs now in real terms.

By: Jason

Jason — Sat, 30 May 2009 20:27:41 +0000

I think RE kicked some ass here. We just saw the housing bubble pop, so affordability has improved. Interest rate has gone up, but it’s still only around 5.5%. With inflation on horizon, your debt will get eaten up anyways. If you’re a renter, your rent will go up with inflation. There’s no letting up.

By: Real Estater

Real Estater — Sat, 30 May 2009 18:20:36 +0000

madhaus,

In the scenario you described above, you would be able to pay off your house with worthless money, and have a place to live. While I don’t expect the same magnitude disaster to happen here, the same concept applies.

By: madhaus

madhaus — Sat, 30 May 2009 17:40:37 +0000

RE, I don’t have to hear about places you haven’t been to in order to understand hyperinflation. My grandmother lived through the hyperinflation in Germany in the early 1920s. Just married in 1922, she and her new husband left for their two-week honeymoon via train. When they arrived at their first destination, their vacation stash wasn’t enough to pay for one night at any hotel. They stayed with a family member and had to go home the next day. No honeymoon.

With people rolling wheelbarrows of money around to buy groceries, the economy came to a screeching halt. Nobody was buying houses, or cars, or horses, or anything more than a day’s supply of food. So who cares if the house you bought then is worth a loaf of bread now? If you need to sell it, you can’t.

Therefore at that time your house literally has no value other than a place to live in. At some point it will again, but who knows where the prices will end up adjusting when the economy stabilizes.

You would teach your grandmother to suck eggs.

By: Real Estater

Real Estater — Sat, 30 May 2009 17:25:52 +0000

You don’t need a visual to understand hyper-inflation. Just consider the following scenario:

- It cost you a million bucks to buy a house today
- When hyper-inflation hits, it will cost you a million bucks to buy a loaf of bread

Sounds sensational? This actually happened in places like Argentina and Brazil.

Buy now and don’t be a bread holder!

By: Real Estater

Real Estater — Sat, 30 May 2009 17:20:31 +0000

and don’t forget those famous last words:

Market downturn is always in the future!

By: madhaus

madhaus — Sat, 30 May 2009 16:32:03 +0000

Gah, I got so caught up in the inflation/deflation discussion I forgot to comment on the house. Is 7000 sf of Mountain View land in the good zip code really worth $750K? We’re talking less than 1/6th an acre. I guess you could put up a mini-Gables End and sell those Towers of Townhouse Troubles to some gullible Google geeks.

Oh wait, it’s close to Huff School. What am I saying? Now is the time to buy! Now is always the time to buy!