patrick.net

Owning and Renting,

Sorry to hear about your dad. However welcome back to the NW! (Having a Vancouver residence may be more valuable than you know). Recent changes would allow you to deduct your sales tax against your Fed return.

I recently had a conversation with a friend based on one of Peter P's comments. Peter said (in effect) "ideally you should NEVER sell a home! (Emphasis mine). My friend and I really had a chuckle about some of the starters and fixers we'd owned over the years and found ourselves wondering if hanging on to them wouldn't have been such a bad idea? In a sense it's a form of "dollar cost averaging" b/c they would've been bought in very different years! Where the analogy of course falls apart is when you can't "buy less house" when prices are high!

CB,

Well isn't that interesting! Here in the U.S it doesn't even raise an eyebrow. How can any sane person obligating to a HUGE mortgage in their 40's (let alone their 50's) yet consider themselves on a path to retirement?

How can any sane person obligating to a HUGE mortgage in their 40’s (let alone their 50’s) yet consider themselves on a path to retirement?

Dear Hater,

The path to retirement is paved with 35% y.o.y returns. It only goes up.

Sincerely,

The Center of All Glowing Love

Surfer X,

Pffft! What was I thinking? Of COURSE you're right! Your home IS your retirement! It just keeps giving and giving.

Yes George it is Westchester were 600k won't buy squat. LA's not the place to buy a CA home these days, and southern Florida seems more compelling. So does Atlanta, but that involves facing a significant climatic change. If I am destined to be hot and sticky I might find even better pickings in Thailand or India where state of the art health care is quite accessible to those with USD.

I love the way the WSJ article was so fair and balanced (not).

--Bubble critics are "Renters" (there couldn't be any housing bubble critics out there who own, now could there?).
--Renters "gloat" (pure schadenfreude vs. being right early on and feeling vindicated for it).
--"hard-core renters" Ummm.... I knew I was currently a renter, but I wasn't aware I was of the "hard core" variety. What is that anyhow?
--Portrays home"ownership" as inherently superior to renting: "Of course, as even many hard-core renters acknowledge, homeownership has some big advantages, including tax deductions on mortgage interest, the possibility of gaining value over the long term and the security of knowing you won't be evicted by a capricious landlord." Right, home"owners" can never be evicted for non-payment of mortgage, property taxes, etc.
--Portrays bubble awareness advocates as extremists: "Since last year, Mr. Jackson has maintained a blog (davidlereahwatch.blogspot.com) devoted entirely to vilifying Mr. Lereah." Hmmm... is pointing out that someone is a villain really "vilifying" him, or is it just stating the facts?

But, what can one expect from the WSJ? They are, after all, the flagship of industry cheerleaders and pimps of all stripes.

Interesting foreclosure videos on:

http://www.forsakencraft.com/mainframe.html

Regardless of the circumstances, you gotta feel bad for the kids who have to endure the process.

Among the worst performing markets were Detroit, Boston, Cleveland, San Diego and San Francisco. Seattle and Portland, meanwhile, posted strong annual returns.

For the curious, SF Bay Area is -.4% from Sept./Oct. 2006 (-.1% year to year) according to Case-Shiller index. Bear in mind that that the San Francisco index includes Contra Costa County.

Would the admin kindly delete the troll, it would be happier back over on Craigslist with all its other friend.

As stated over and over again, I will enter into a formal legally binding contract with any troll. Here are the terms, I take out the loan, the troll covers the monthly nut, if after 2 years the "property" goes up, troll gets the cash, if "property" cannot be sold for a profit, troll buys out note and I come out even. Pick your prime SF property asshole.

What say troll? Yeah, as I thought, back to craigslist for you asshole.

George,

Though I'd hate to see one of our blog's most valuable "insiders" leave the biz, it might be in your best interest. Whichever way you decide, I wish you the best of luck and success.

SFWoman Says:

> WSJ always does that or misquotes (my husband
> avoids being interviewed by it and so do a few
> others I know- all have been misquoted and some
> point).

The WSJ is better than most, but it seems like every paper misquotes people (I try and avoid quotes on the record for anyone).

My sister had some friends over for Christmas dinner that grew up in TX. They both moved to Foster City in the late 90’s after grad school and bought crappy condos for about $250K each.

When they got married a few years ago they sold one of the condos and bought a house in Foster City for about $1mm.

Last year they sold the other condo for over $1mm and bought two “investment homes” on the Peninsula for well over a million each.

I just nodded when they said they have noting to worry about since they put 25% down on both homes and Bay Area real estate can’t drop more than 10%...

P.S. None of my posts in the last thread (other than a test) made it through…

Oh, whoops, and troll pays me the current CD yield.

I just nodded when they said they have noting to worry about since they put 25% down on both homes and Bay Area real estate can’t drop more than 10%…

SFWoman, sorry, I am not a finance guy, but isn't that a 10% loss?

I just noticed something. They are building large condo complexes and mid rises all over Orange County. We will have more rental choices in no time! Good luck Donald Trump, king of the condos. The writing is on the wall. When you read about it in the WSJ -- well, you know what they say about that! It's official -- the housing boom is over.

BTW, Patrick, I owned from 99-04, and basically I stashed my payments, so when I sold, got almost the exact amount back. (Not the tax, insurance, repairs, improvements etc.) It was a nice house, but I was constantly broke (house poor) and owed credit cards. I think I would have been better off with money in the bank the whole time. Houses are a money pit. Mine is a sucess story.

George Says:

> I am still looking to buy at the end of the year once
> we are done renting (assuming that the time is right),
> so MLS access and my license would probably be
> worth all the money I would have to shell out until then.
> I may have to take my license to another broker.
> The receptionist tells me the most common call she
> got last week weren’t floor calls about our listings,
> but rather bill collectors wanting to know how why
> the company is past due on several invoices.

I don’t know the laws in FL, but in CA any real estate “agent” (with some experience or a bachelors degree) can take a few (easy) correspondence courses to qualify to sit for the (easy) brokers exam to become a real estate “broker” and do deals on their own (I’ve kept my CA brokers license current since I “retired” from full time brokerage years ago).

HARM wrote:

–Bubble critics are “Renters” (there couldn’t be any housing bubble critics out there who own, now could there?).

Of course I am a bubble critic who owns. We used the "gimmicks" that were available at the peak of the last bubble (1989) and were under water for a long time, with no other options but to ride it out. Only able ride it out because we had to be very frugal for a very long time and also had to be very lucky (like, no income disruptions, no major illnesses, etc.) I didn't know there was a housing bubble when I bought in 1989, didn't know anything about economics then. It was very stupid, and I congratulate you in educating people out of repeating my mistake.

Thanks to the evidence you've made available in your links, I was able to provide ample documentation to a relative who was considering "investing" in real estate in 2005 (for flipping). After he did a lot of reading on his own, starting with your website, he concluded that maybe it wasn't such a good idea. Now, like an ex-smoker or twice born Christian, he's "sharing" what he learned with anyone who will listen.

@CapitalistPig

Yeah, we’re all a bunch of losers for not buying at or near the peak or selling before the peak. Many others were so f*king clever for profiting off of subsidized loans. However, nothing you said changes the fact that the tide is just beginning to reverse and anyone who buys now stands a tremendous chance of being done in. Laugh all you want asshole, but we all know you are here out of fear of losing your money. So thanks for the advice, but no thanks.

@CapitalistPig

Yeah, we’re all a bunch of losers for not buying at or near the peak or selling before the peak. Many others were so f*king clever for profiting off of subsidized loans. However, nothing you said changes the fact that the tide is just beginning to reverse and anyone who buys now stands a tremendous chance of being done in. Laugh all you want asshole, but we all know you are here out of fear of losing your money. So thanks for the advice, but no thanks.

@CapitalistPig

Yeah, we’re all a bunch of losers for not buying at or near the peak or selling before the peak. Many others were so f*king clever for profiting off of subsidized loans. However, nothing you said changes the fact that the tide is just beginning to reverse and anyone who buys now stands a tremendous chance of being done in. Laugh all you want asshole, but we all know you are here out of fear of losing your money. So thanks for the advice, but no thanks.

duh, I meant buying at or near the bottom. Note to self - "never post while angry."

frank,

That aside (for the moment) CP manages to gloss over huge chunks of reality. In re-reading the article I couldn't find much of anything for bulls to celebrate? Rich Toscano moved back to SD in early 2003, welcome to the bottom of the 8th. inning. His buddy, escaped with his life (and some tax free money). If RE is all good, all the time he should have been able to sell at any time of his choosing. That's simply not the case in Sand Dog right now!

What Mr. Smarmy further misinterprets is that for a guy that operates from a small pine table, Patrick sure has built ONE HELL of an audience! Especially when compared to the marketing juggernaut NAR operates. What a doofus.

Again CP (like so many other RE perma-bulls) fails to recognize is that for many years in this country a sharp businessman that stayed at the top of his game longer than even his staunchest supporters thought possible 'might' be lucky to sell the business for 500K when he retires after 30+ years!

(Yet they fail to see any thing out of the ordinary with someone that is late to work twice a week and doesn't own a ladder, walking away w/500K after 2 years?)

Dude, you're not an "investor". You're somebody that could fog a mirror so you got the loan. You're a "homeowner" (for now) and you damn sure ain't no businessman.

SQT,

Always good to hear from you! Sorry to hear about the folks. Especially considering that in order to continue to feed this "boom" we've pretty much rendered our currency worthless. In reviewing my P.I fall back position the scenario has changed quite a bit. The dollar has gone from 55 pesos to the dollar to 48? I'm starting to wonder if there'll be any real currency arb. to take advatage of by the time I'm ready to retire?

Ha Ha Says:

I make 160K per year … my net worth (401K) is 300K …

Jesus H. Christ, here we go again... :roll:
Oh, and speaking of, Merry Christmas everyone!

Ha Ha Says:

I make 160K per year … my net worth (401K) is 300K …
_____

Yawn...

Just go "all in" for godsakes! You can afford it!

;-)

C Pig,

I don't even know what to say. You're a total idiot. Obviously you're new to the game and perhaps reality for that matter. The 20% you claim to have put down in your 1,400 "unit" cookie cutter development is.......gone. You're wiped out. It's over for you. Start liking it.

No dipshit. It's been widely known among those that bother to do their own research that 2006 would only be the start of the re-set. A mere .5 trillion. 2007 with it's 1.5 trillion in ARM/Neg. Am. toxic loans hasn't even started yet. You've just now figured out that there are those among us that aren't mindlessly buying into the hype so this is a recent discovery for you.

In the stock market, we have bulls, and we have bears. In RE (up until now) there have ONLY been bulls! Now w/ Schiller's CME housing futures we'll have a more level playing field. Oh, and you're an idiot.

Oh btw, over at Ben's C Pig claims to have been invested in tech stocks during the tech bubble (but managed to sell out before he sustained any real damage!)

Yet he fails to see ANY similarities here? What C Pig also fails to grasp is that we get clowns just like him from time to time and they ALWAYS deny being a realtwhore. Only once they've been totally demoralized do they own up to it. Start count down in 5 4 3 2 1.......

DinOR,

Stop bothering with our friend CPig. His last post literally sounds like the rantings of a paranoid schizophrenic. There's no arguing with that $hit!

Happy Holidays.

I just came back from a holiday down under, man, it is hard to get back to the cold rainy weather from the sunshine and beaches.

Congrats Patrick for your work, hopefully you are not going to catch a falling knife in the next 3 years. We are just at the beginning of this tide, it will get more and more interesting towards 2009.

PS. the WSJ article is quite biased, perhaps the reporter himself just bought a few investment properties? The reporter could have easily dug out less extreme examples about people who DID manage to sell at the top (2005/2006), and Patrick is not portrayed in a very positive light, if I didn't come to this site regularly and I didn't hold a very negative view of the US economy and the housing market initially, I would have thought of Patrick as a semi-lunatic who is just out for his personal vindication.

Btw, I don't read WSJ any more because I find it offering less insight and less integrity. I consider the Economist a more trustworthy source of information.

Ha Ha,

was there any update of the latest Ha Ha unit while I was gone? $170K or $180K perhaps? Is the Ha Ha unit adjusted for inflation?

I propose that we refer to the Ha Ha unit as $160K 2006 money, because in about 5 years, perhaps every American will start to make that much then our unit will entirely lose its meaning.

Patrick, if for no reason other than readers who will find your blog in consequence, congratulations on the WSJ article.

It hardly matters how poorly prepared the piece was - and it was a shoddy affair - you've just scored a coup.

I've just been informed via an email from a friend that Saturn enters Cancer in mid January '07 and remains there until mid July '07. I personally am not much of a believer in astrology, but theoretically this could place quite a damper on already weak home sales. It could instill even more caution in buyers.

C@pitalistPig Says:

> BLAME THE INACCURATE DATA GENERATED
> BY MISLEADING REPORTERS WHO CONSIPIRE
> TO KEEP FOLKS STUPID.

The reporters are not “trying to keep people stupid” they are (like they always have) just trying to “keep their advertisers happy so they can keep their jobs”…

In the past I can recall a few times (just a few) where a newspaper or magazine said something to offend an advertiser, but with the print media dying I may never see it again…

Did someone change a BLOG settings?

Yesterday I quoted the Boston area Realtor and my comment was killed and today when I quoted CP (and spelled his name with an "a" rather than an "@") my post was killed...

I didn't change any blog settings. Sorry about comments that get killed. You can always mail them to me personally (p@patrick.net) and I'll figure out what the problem is.

Patrick

skibum,

No worries. What made for such interesting sport was it was almost as if CPig finally got some time off from his squirrel cage during the holidays and just now realized there are "a few" folks that *did not* drink the kool-aid! It was funny that with so many FB's already having made the transition from denial to "bargaining" there was ONE clueless wonder STILL in the "anger" phase?

Learning from a WSJ article (during the holidays of all times) that educated and informed people are LAUGHING at you HAS to be a rude awakening! He was sooooo angry he charged into the belly of the beast (Ben's & Patrick's) half cocked and totally unprepared for a sound and well deserved thrashing. It wasn't until much later we found he'd "invested" in "Bear-i-zona" (TM) where they aren't making any more land.

Refi fever is a coming....

Refinancings were up in mid-December by 60 percent over the same period last year, and they accounted for more than half of all new home mortgage applications -- the highest since the spring of 2004....

For example, Douglas Duncan, chief economist for the Mortgage Bankers Association of America, estimates that $1.1 trillion to $1.7 trillion of adjustable-rate mortgages are scheduled for payment resets in the coming 12 months, and that $600 billion to $700 billion is likely to be refinanced by homeowners eager to avoid higher monthly outlays.
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2006/12/24/REG0MN41EL1.DTL