All Equitied Up With No Place to Go
The mathematics behind today’s “Trapped in a Bubble” story makes perfect sense. Say you decided to buy a $200,000 studio three years ago with 50% down and were selling it now for $300,000 so you could trade up to a one-bedroom. Your $100,000 in equity would now be $200,000. Great, but that one bedroom that…
The mathematics behind today’s “Trapped in a Bubble” story makes perfect sense. Say you decided to buy a $200,000 studio three years ago with 50% down and were selling it now for $300,000 so you could trade up to a one-bedroom. Your $100,000 in equity would now be $200,000. Great, but that one bedroom that was $400,000 when you bought your studio is now $600,000, so despite your increased equity, the mortgage you’ll need a mortgage that’s $100,000 higher than you would have three years ago to carry that one-bedroom ($400,000 instead of $300,000). Oh, and your income has not kept pace with the rise in housing prices. Doh!
Trapped in the Bubble [NY Times]
Because they still don’t get it! They think moving to Brooklyn is tantamount to moving to Siberia. Poor, deluded souls….
8:28 am anon is right. That is the first thing I thought of by the end of this article. Why didn’t some of these families move to where they could get more for their money?
Oh, and don’t hang me for the typo, please. It’s early, and I haven’t had any coffee yet…
Bottom line – if you’re coop is suddenly worth 3x what you paid, it’s time you headed out of your comfort zone to a less trendy zip and find an undiscovered architectural gem. Take your windfall, put down a healthy chunk on the house (so you don’t need tenants, or at least don’t have to rely on them to swing your house), keep some back for the reno… then watch your lovely home appreciate, even if more modestly than we’ve seen these past three years or so… Oh, and most importantly, enjoy it! Isn’t this the brownstoner ethos?
It’s amazing that those people from Manhattan didn’t consider coming to Brooklyn. Go figure! $4400 a month in rent for a box would get you a house in Bed Stuy.
Lucy, the point is that typos are made all the time and, as long as the context is understood, it really does not matter on a forum like this. However, the reason I called you out on it was that your method of commenting and then quoting Linus made it very confusing to see what you had written yourself. I had to read your quote of Linus to see if there was a correction within that text also.
Typos happen – simple as that.
I own a condo – what you are talking about really does get to the point, as has already been mentioned. The couple in the article were trying to time the market. There is no other conclusion that can be made given the numbers being quoted in the piece. As such, what you are saying is correct, but there is also something else going on and that it NY Times reporters fudging facts (and BigBubba and Linus also mentioned this on the craigslist housing forum) to present the story that they want to whether the facts support it or not.
Re: the comment about the foreclosure rate going up in England.
I don’t know why this hasn’t gotten much press, but it’s up in the US as well:
“RISMEDIA, July 27 – The number of properties entering foreclosure nationwide increased to 67,024 in June compared to 62,432 in May, RealtyTrac reports.
That was the highest number of new foreclosures reported in any one month in 2005, and caused a 7.4-percent increase in the nation’s foreclosure rate, with one new foreclosure for every 1,726 households.”
http://rismedia.com/index.php/article/articleview/11084/1/1/
We live in a city where people pay $100 for a piece of raw fish arranged nicely over a bed of white rice. If you have F. U. money who cares what people think, just buy it. If you see a brownstone in Bed Sty that brings out the color in your eyes, just buy it.
Hey VDH: It’s not spelling I’m talking about, it’s the use of the wrong word in the context of the comment. I don’t comment on spelling, a good thing given your response to me, but only about the misuse of words by people otherwise making cogent comments.