Stock Market: The Thread

[Warfarin]

Just now, Brandon said:

it's actually not bad. the p&i payment on 1.5m will be ~7.8k and 300k annually is 25k a month. the front end dti (housing cost) is 32%. maybe with escrows, since property taxes on that amount will be nuts, it jumps up to ~40%......not too out of the realm of the ratios most people have.

Well, while I agree that it's "affordable," I would say that's a strong way to become house poor.  Paying 32% of your gross income just to pay PITI seems like a poor idea.  Now that said, if you expect your income to explode in the upcoming years, then it's a decent gamble.  But if you are in a job where you just expect normal wage growth, then it's probably a bad idea.  I'd say 3x gross income is a better target, with 4x probably being the cap.

[Catwhoshatinthehat]

3x or even 4x gross income is a pipe dream for a lot of buyers in some of the more desirable areas in CA.  We've been looking to get into a house but needing to sell our place and being a contingent buyer right now we can't compete with buyers who are looking to buy without a contingency.  There was a place that came on the market about a month ago that was really nice as far as what we're looking for and they had multiple offers at asking or above less than an hour into the open house.  Unless we see more come on the market and feel that as contingent buyers a seller will consider our offer we will stand pat.  To be blunt we feel like the market is overpriced but if/when a correction happens is anyone's guess.   

[Angel Oracle]

NASDAQ is now only a little over 1% off of the all time high, and the DOW is only about 3.8% off all time high.

[Warfarin]

15 minutes ago, Catwhoshatinthehat said:

3x or even 4x gross income is a pipe dream for a lot of buyers in some of the more desirable areas in CA.  We've been looking to get into a house but needing to sell our place and being a contingent buyer right now we can't compete with buyers who are looking to buy without a contingency.  There was a place that came on the market about a month ago that was really nice as far as what we're looking for and they had multiple offers at asking or above less than an hour into the open house.  Unless we see more come on the market and feel that as contingent buyers a seller will consider our offer we will stand pat.  To be blunt we feel like the market is overpriced but if/when a correction happens is anyone's guess.   

I hear ya, I'm living in one of those expensive places.  There are trade-offs to make, such as maybe buying a smaller home in that desireable area, or finding another area to buy the home of your dreams instead.  I opted for the former.

I don't think the market will crater like it did last decade.  Values could dip a little, but there's too much equity in the market for any kind of panic selling / significant price drops.

[Catwhoshatinthehat]

I live in one of those areas too.  We have no problem going for a place a bit smaller but in the area we're looking at some of those places need about 50K or more in work done.  We saw one in the low 7's a few months back that was off market in a few days and it was mostly original inside, circa 1960's.  I don't think the market will crater either but on a national and local level we've seen median home prices outpacing inflation/wage growth which sometimes leads to a correction.  That said the local markets are anything but predictable.  A lot of people we grew up with in our city have been priced out and if more comes on the market it will be interesting to see if properties sit longer, especially as rates go up.  

[Brandon]

3 hours ago, Warfarin said:

Well, while I agree that it's "affordable," I would say that's a strong way to become house poor.  Paying 32% of your gross income just to pay PITI seems like a poor idea.  Now that said, if you expect your income to explode in the upcoming years, then it's a decent gamble.  But if you are in a job where you just expect normal wage growth, then it's probably a bad idea.  I'd say 3x gross income is a better target, with 4x probably being the cap.

i find it always depends on the persons spending habits and debt. if they have no debt, while it's not my cup of tea, it's not off base. if someone has a 32% dti but no debt and a 740+ fico who am i or anyone to tell them how to handle their finances. i see what you are saying though, but 18 years of taking loan apps it's within the norm and why fannie and freddie go up to ~43% on the front end.

[ten ocho recon scout]

4 hours ago, Angel Oracle said:

NASDAQ is now only a little over 1% off of the all time high, and the DOW is only about 3.8% off all time high.

Again, remember im an idiot at this stuff (among other things). Is that good news?

[Warfarin]

21 minutes ago, Brandon said:

i find it always depends on the persons spending habits and debt. if they have no debt, while it's not my cup of tea, it's not off base. if someone has a 32% dti but no debt and a 740+ fico who am i or anyone to tell them how to handle their finances. i see what you are saying though, but 18 years of taking loan apps it's within the norm and why fannie and freddie go up to ~43% on the front end.

Right.  I can't presume to tell anyone what is best for their personal situation, but I do think the "average" person, so to speak, should be avoiding that kind of situation.  But that said, I agree, there are definitely people who are uniquely positioned to absorb that kind of situation.

[Brandon]

unfortunately, i've also seen that with the average american, if you give them 20k cash from a refinance, they will find a way to spend 25k. agreed, most people are not very savvy financially....and why everyone refi's every 3-5 years on average.

[Warfarin]

47 minutes ago, ten ocho recon scout said:

Again, remember im an idiot at this stuff (among other things). Is that good news?

My friend, this means that your 401k is worth more than it was a week or two ago

[cez]

bought another share of amazon stock when it was low on feb 8th to cap my IRA contribution for this year.  pretty happy with my decision. 

[Angel Oracle]

2 hours ago, ten ocho recon scout said:

Again, remember im an idiot at this stuff (among other things). Is that good news?

Both the NASDAQ and DOW were down just 3 weeks ago some 11% from their all time highs reached in mid-January.    They have improved significantly since 3 weeks back.   A 10% decline is generally called a correction.   Fortunately, that correction has pretty much been reversed in just 3 weeks.   It's been a crazy two months.

[ten ocho recon scout]

2 hours ago, Warfarin said:

My friend, this means that your 401k is worth more than it was a week or two ago

Thank you, good sir. Now i dont feel as guilty about my beer tab for this past weekend.

[Make Angels Great Again]

I feel like the guideline of 30ish percent of income for a home payment goes out the window at some level of income. When your making 300k, the other 60 to 70 percent of your income is going to be a lot more money than 60 to 70 percent at 140k.

[Warfarin]

11 hours ago, Make Angels Great Again said:

I feel like the guideline of 30ish percent of income for a home payment goes out the window at some level of income. When your making 300k, the other 60 to 70 percent of your income is going to be a lot more money than 60 to 70 percent at 140k.

While true, one could argue you'd be better served (in terms of wealth accumulation) of taking that income surplus and putting it into a stock market, vs. buying a more expensive primary residence.

[Make Angels Great Again]

I mean, it depends on what your goals are I guess. If you just want a nice house, it works and you'll still have plenty of surplus income.

[mrwicked]

Right, depends on your goals. 

All about diversification. RE should be part of portfolio, equities should be as well, some cash etc.

POGs should be your primary holdings though, those only go up up up.

[the dude abides]

5 hours ago, mrwicked said:

POGs should be your primary holdings though, those only go up up up.

I recommend GPK futures as well.

[Angel Oracle]

And then there were the tariff promises promoting a trade war, that ought to play with investors' minds. 

[ten ocho recon scout]

19 hours ago, the dude abides said:

I recommend GPK futures as well.

What about beanie babies? Should i sell off or hold?

[Tank]

57 minutes ago, ten ocho recon scout said:

What about beanie babies? Should i sell off or hold?

 

[ten ocho recon scout]

3 hours ago, Tank said:

 

Speaking of something that was worth a ton and then the stock fell off completely...

 

Mel gibson

[mrwicked]

I love that movie.

f*cking primae noctis man. 

[Angel Oracle]

On ‎3‎/‎1‎/‎2018 at 4:39 PM, the dude abides said:

I recommend GPK futures as well.

WWE ripoff

[mrwicked]

Come one up and get some RE up here...

https://sf.curbed.com/2018/3/2/17073100/silicon-valley-house-home-sunnyvale-record-price-crisis