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Last week I asked you how much more than an investor’s cold “pencil-out” scenario you are willing to pay to own a home.

The idea behind the question was simple: investors will hardly ever buy something unless they can achieve positive cash flow, or pull in more money from rent than they pay in mortgage payments.

Obviously, part of the difference for an individual homebuyer is what mortgage broker Brian Brady referred to in that post as the ability to “paint my walls lime green” — a physical reminder that you own the place.

But I want to know how much that’s worth. Brady estimated the individual homebuyers are willing to pay about $40,000 to $50,000 more than the investors.

And you’ve been chiming in with some interesting stuff. Here’s one response that raises a bunch of different points from reader MM:

I work in an interesting office setting. Our office employees are almost all 50+ and ready to retire or where recently hired to backfill those retirees and are 32 and under. There is a real gap in the middle. Most of the people under 32 are now on permanent hold from buying a house. They are happy to rent, it is cool! They want and expect to buy next to the beach on their 80k incomes. If my sample size of 500 people means anything, prices have to come down MUCH further. I don’t think these first time home buyers are going to be looking in Temecula or the Southbay just because they can afford it. When starters/town homes/condos near the beach come down to about 2k in mortgage/HOAs per year I think we’ll see a support level. The other option is hyper inflation so that incomes catch up to home values. It will be some of both.

What’s your reaction to MM’s perspective? Send me an e-mail with your thoughts.

KELLY BENNETT

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