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Automotive News & Views Are gas prices fueling your pain? 
10042 messages, Last post on Jul 12, 2008 at 3:07 PM
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Replying to: chuckhoy (Jan 16, 2008 6:09 am) Well that depends on how much you owe on your house. If home values dropped enough you may not have much equity to put into a new home. You also have to consider the cost to sell your home too, that will take a sizable chunk out of any equity you have in your home.
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Replying to: nippononly (Jan 16, 2008 11:02 am) I think he described me too. My daily drive takes me several miles along a street with one lane in each direction and no passing lanes. I have talked about this road several times in the inconsiderate drivers forum. Even though its a semi residential road (homes on one side forest preserve on the other) and I do SL+5 I get people racing up behind me a riding my tail. |
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Replying to: snakeweasel (Jan 16, 2008 4:26 pm) It's still a wash. Let's say you bought a home for $500,000 and put $200,000 down. You owe $300,000. Now let's say you sell to move into an identical home, who's value went up or down identically. You will still owe $300,000 regardless of what home values did. As far as the costs to buy/sell a home since they are typically based on sales price then falling home prices actually benefit you there.
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Looked at my IRA balance and I'm way down since Jan 1. The loop went like this. Gas went up in price partly due to the demand of adding 3 million people a year to our population and partly due to the greed of our big oil industries, our enemies in OPEC, big oil offering money to Univ of Colo hurricane prediction scientists to predict another actice hurricane season, and our wars. So real estate and food went up. So people borrowed on their newfound equity to buy a Toyota. Toyota overtook GM as world sales leader. The teaser rate expired and the full interest became due on the equity loan. The borrower also had a Toyota loan so he couldn't pay the house loan. The house went into foreclosure by the bank. all the foreclosures drove real estate values back down. Now the equity loans were just personal loans without equity backing them up. People just walked away from the houses (drove away in their Toyota) and left the bank holding the bag. The bank declared a huge loss and it's stock tumbled. My IRA got sacked. China and the rest of the world bought up the US bank stocks and anything else that got dragged down with it for pennies on the dollar. Kuwait, UAE, etc. also bought some banks for pennies on the dollar too. Now we owe our mortgages and car loans, and gas card balances to a Chinese, Japanese or Middle Eastern owned banks. Japan bought banks with the Toyota sales profits. China bought them with sales of everything else we bought with the home equity loan money, which was all made in China if it wasn't a Japanese made vehicle. The Middle East bought them with all the gas money. Our goverment was happy to do nothing because they were raping us on property taxes due to the inflated valuations of our houses and vehicle excise taxes and sales taxes on the equity loan spending we were doing. Import duties were up as well due to Toyota's overtake of GM, and the federal gov't was taxing Exxon's $75k per second profits and a % of the gas price. Now, we're wondering how soon a fed rate cut will have banks offering 2% CD rates that will decimate the elderly on fixed incomes who already can't afford the inflated property taxes, rising gas prices, and higher energy and insurance costs on their homes. I just saw yesterday that having a foreclosure home within 150 feet of your homes drops your value by $7000. nice. At least we can enjoy driving our toyota, unless we work for a living for a company about to get hit with a recession or for a sinking bank and lose our job. So now we have no money to spend, foreign countries own a newly acquired big chunk of our country, Our auto industry is dying, our home values are falling, and we are being laughed at by everyone in our gov't from the local to federal level as they feel almost none of it. Other good news. Huckabee who wants 30% sales tax on everything instead of our current income tax system was a distant 3rd place in Michigan yesterday. That means that there is no real threat to the tax free drug trade and illegal immigration and their underground economies of ever paying into the system that they use, as they add 2 million people a year to our population and to the load on our system that they do everything they can to not support. Next summer, with the help of a growing population, we will be told that demand for gas is ever rising and the above mentioned big oil and Middle east will demand $4.50 a gallon. What can we do about all this?
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Replying to: tpe (Jan 16, 2008 4:59 pm) Sorry I will have to disagree with you there. Lets look at your example. You will most likely owe more or buy a cheaper home. Remember if you buy an identical house for the same price their is still 1.) sales costs (i.e. commissions) and 2.) costs to get the new loan on the new house. So lets say the home value does not change you are only going to get $470K for your new house which means if you owe $300K you only get $170K to put down on the new house. Now since lenders charge fees to get a loan the $300K you are going to borrow will only have say $296K going to the purchase of the house. This means that you will either have to borrow more money, find more money to put down or go for a cheaper home ($466K using these figures). Needless to say that no matter what moving from one house to another is going to cost you.
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Replying to: dave8697 (Jan 16, 2008 5:21 pm) The people that will be hit hardest by a recession are those that fully bought into the smoke and mirrors prosperity of the past 6 years. The people smart enough to realize this was artificial and kept their debt and lifestyle at a sustainable level will be relatively unscathed. It's a cycle that has repeated itself numerous times in our society. What it comes down to is that common sense and discipline are valuable traits. If we do get hit with a significant recession/depression I'm sure the feds will step in. Their intervention might amount to penalizing the people with common sense in order to take care of those without. If that happens what's the message that people will leave with? The message I get is it's best to gamble, if you lose you'll be bailed out by those that didn't gamble.
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Replying to: snakeweasel (Jan 16, 2008 5:35 pm) I live in an area with fairly stable employment so home prices haven't been hit that hard, ... yet. I know people that bought a home for $200,000 in 1999 that was worth $425,000 at the end of 2005. These homes are now selling for around $385,000 and these people are whining about how they've lost $40k in the last 18 months. It's hard to take them seriously. This was all somewhat artificial wealth. However people do seem to spend based upon what they perceive their wealth to be. So I can see how this would impact an economy that is based upon consumption. But I don't see how you can create a situation where people perceive their wealth to be increasing by 10% a year. Sooner or later something's got to give. That's what's happening now, a needed correction.
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Replying to: tpe (Jan 16, 2008 5:50 pm) As a fiscally conservative wuss, I hope you are right and the recession doesn't hit me as hard (not that I want it to hit anyone else either). A house payment + 2 car payments is a situation I will avoid in the future, even though the it is within the budget. As my commute just went from 20 minutes to 40 minutes and 18 miles to 32 miles each way, I am now faced with moving, getting a more fuel efficient vehicle (which is relatively hard to do giving the Accord has been getting mid-30s), or making some other compromise, and that is with fuel at its current pricing. I don't think I am upside-down in my house, but there is very little equity in there either, so that might not be a good opportunity for me now. That and I like my house. I will probably look for something with 2 wheels and a motor in the spring, maybe another Ninja 500. Okay, so thats because its fun with fuel efficiency as a justification, but still, 40-50 mpg vs 35, and keeping the miles off the newer vehicle...
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Replying to: snakeweasel (Jan 16, 2008 4:21 pm) Unless you make every road a toll road you will still need to fund roads by a fuel tax or other broadly based tax. When I say every road I mean even the one in front of your house. If you are going to have a fuel tax anyway you may as well raise it a little and eliminate all tolls. There is a slight unfairness in making me pay for a road that I don't use, but I'll be doing that anyway unless I drive every last road in my state.
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Replying to: anotherguy (Jan 16, 2008 7:14 pm) Well the question was if a majority of people are using them. There will always be are significant percentage of people who don't have a transponder that is valid for a particular tollway because they are not local or are only an occasional user. FWIW transponders for most systems can be used on most systems. But remember since there are so many users of the transponders that the time non users spend at a toll booth is reduced, Unless you make every road a toll road you will still need to fund roads by a fuel tax or other broadly based tax. No one is arguing that point. There is a slight unfairness in making me pay for a road that I don't use, Just because you don't drive the road doesn't mean that you don't benefit from that road being there,
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