Inflation expectations through Treasury breakevens – a concept we just visited – are a decent take on the market’s opinion on the ‘cost of holding money’. Mortgages are, of course, the standard means by which people acquire houses – usually borrowing money for 30 years to pay off the cost of a home (see some […]
A couple of weeks back, we here at DQYDJ tried to get some Bay Area street cred with our screed on how Bay Area house prices make more sense than one might think (please read that article if you are genuinely interested in our model). After being informed by the readers on the Bay Area home site Burbed that our definition of the Inner Bay Area (the ‘Real Bay Area’) was too large, we’re back for another pass. Thanks to Burbed’s super-intelligent head editor Madhaus and a huge amount of comments we’re back with two calculators we’re titling “The Burbed and DQYDJ Real Bay Area Calculators!”. Since all Bay Areans hope for 7.2% annual home value returns (check it – doubling every ten years!), we hope everyone will enjoy this little demonstration of the absurd amounts of wealth that the place we call home generates.
Here at DQYDJ we’ve rambled on recently about the affordability of homes, and even tried to convince you that when mortgage interest rates are low it’s not necessarily a good time to purchase a house. We’ve tried to make the point that affordability in Real Estate seems conditioned on affording payments instead of the actual purchase price of a home. That said, we left our readers hanging by not graphing that affordability with changing interest rates.
For a deeper background, please visit “Rooting for Price Increases and Low Interest Rates” for a description of the DQYDJ Median Home Affordability Index, and “Home Price Affordability Calculator” to play with the affordability numbers yourself.