patrick.net

I'm 34, married, two boys. My wife stays home with the kids. We live in the San Gabriel Valley just outside of Los Angeles (hi Charles!).

I was born into the lower class; my dad drove a cab. I grew up in a lower middle class suburb of Chicago and had a typical Midwestern childhood, which was wonderful. Later went to college at University of Illinois at Urbana Champaign and put myself through (I worked 3 jobs, 50-70 hours per week, during the academic year) (yes, really.) Next went to law school at NYU; am still paying for this at a rate of $1,200/month. Today I am an entertainment lawyer in Beverly Hills, California.

I earn about 0.9 HARM/per year. For some reason, I seem to have a knack for finding low-paying legal jobs; I used to be the lowest paid antitrust lawyer in the nation, and now I'm a fairly low paid entertainment lawyer. I've always worked at first rate law firms, and do very good work, but for some reason I've never made the big bucks. I am not happy about this, but am not about to whine about it becuase I know that there are probably 4 billion people living in Third World squalor who would give their right arm to trade places with me. Anyway, the reason I am telling you this is to let you know that although I have an impressive-sounding job, I really am priced out of the market and do personally experience the same pressures that everyone else here is facing; we rent becuase we cannot afford a decent place, not becuase we are unwilling to overpay.

I am something of an oddball on the polticial front because I am socially as well as fiscally conservative. In fact, I am one of President Bush's most fervent acolytes. I don't blame him for the housing bubble, just as I didn't blame Bill Clinton for the dot-com bubble.

As I see it, the business cycle is just a fact of life, beyond the power of government to control, and it is silly to politicize it. Could the Fed have tightened lending standards or raised rates sooner? Sure, and this undoubtedly would have helped, but I tend to think that: (a) Federal Reserve does not have godlike vision or powers, there are ups and downs in the economy, the Fed cannot engineer the business cycle away; and (b) the lowering of rates was an honest, good-faith attempt to fend off a crash after 9/11 that unfortunately inflated the housing bubble. Although I know very little about economics and therefore cannot justify my belief, I have always instinctively thought that the "cult of Greenspan" and the conspiracy theories associated with the Fed governors were ridiculous.

Finally, I think the housing bubble is just a symptom of the profound changes that are taking place in our larger society. For example, as a member of Gen X, I have long felt trapped in perpetual childhood. I want nothing more than to become a stable, contributing member of society, the stereotypical middle class burgher with a mortgage, a small businesses of his own who runs for the City Council and goes to breakfast with the Rotary Club. But at present, these things are impossible.

On the housing front, these changes are obvious. I'm 34 and cannot hope to buy the sort of house that my Boomer coworkers purchased when they were my age. But you can also see it on the employment front. For example, there are no more junior partners at big law firms. The partnership track used to be 6-7 years. It was a lot of work, and there were no guarantees, but if you really dedicated yourself you had a decent chance of making partner. I've been out of school for almost 10 years and only know one person who has made it. There are a few exceptions, of course, but the odds are overwhelmingly against it these days. So for my generation, there is NO upward mobility. Entrepeneurship is a lot harder, too. I would need a bare minimum of $400,000 in capital to start my own practice, and I simply don't have that much. And that's assuming no mortgage, student loans, or other expenses, all of which I have (well, no mortgage). In the past, people were able to go out on their own; today, it's much harder. Salaried jobs are far more volatile these days, too. I've had four different jobs since graduating from school, just like everyone else my age; people 10 years older than me have generally only had one or two. The Boomers never temped, or worked as "contract" employees, today lots of people do it; for kids coming out of college, it seems like this is almost the norm.

My guess is that there will be lots of opportunity in the future once the Boomers retire/drop dead. The current strategy is to amass as much capital as possible in order to buy a house/start my own business/etc. when things finally open up. In addition, I am trying to become more self-promoting entrepeneurial; the idea is to find something that people want, and give it to them. Most of the successful people I have met have done these things, so it seems like a good idea to do it too. I am guessing that others here are following a similar strategy. It's interesting that the same phenomenon we are expereincing with the housing bubble mioght also be occurring in other areas of life.

Out-of-SF,

I find the intelligence and humor of the folks on this blog very refreshing, although I think the wailing against boomers is infantile and self-defeating.

Please know that the occasional (OK, daily) anti-boomer-ranting that goes on here is largely a product of generational demographics more than it is (or should be taken as) a specific personal attack. I know some of us tend to become animated and colorful -- myself included at times -- when we go off on "Boomer mentality", but we are more voicing collective frustration with the younger generations' less-than-optimal claim on the future. Also, there just happen to be more X'ers (and increasingly Millenials) who are of the age to be using blogs to research housing prices.

I think most X'ers and Millennials would agree that it's not Boomers' faults that they were born in the boom anymore than it's your faults that many of you won the societal cycle lottery. But it is up to each individual to take responsibility for their own outcomes. It just happens that Boomers generally had a bit less headwind than X'ers. Not that these guys are the gospel authorities on generational demographics, but at least a couple of demographer authors (who happen to be Boomers themselves), support the general malaise that us X'ers feel: http://www.fourthturning.com/

I'm a 28 year old graphic designer. I grew up in a small town in rural TN with a population of approximately 134 people. I went to college in Boston, and moved to the Bay Area in late 2000 when the Dot-Com madness was at it's absolute peak. Our school had invited a few businessmen to speak to us about the wonders of the internet. They were from Mondo Media,and wanted cartoon animators( which was what my degree was in) and said that the need for highly proficient Flash animators was severe in the SF. So me and a few friends moved out here in Jan, 2000. Renting was insane. We couldn't afford to live in SF, so we rented a tiny, miserable condo in Berkeley for $2500. I was sharing a tiny room with another guy. Our stuff was out in the living room, and we were practically tripping on each other. Then the dot-com burst, we never found work, except doing menial jobs like working at video rental places and movie theaters making 6 bucks an hour. We almost starved. 3 guys that moved out with me left for NYC. I stayed and rented an even smaller room in Alameda.
I worked selling expensive decorative hardware to rich people for almost 3 years, then the job market began to improve. I got a job as a graphic designer. I met a girl soon after. She worked as a school teacher, but the pay was awful. So she quit and also found work as a designer. We decided to get married. That was a year ago, and since then, the idea of finding a home for us became a pressing issue. I had never considered a house because frankly I thought the prices were a joke and it wasn't a big deal to me since rent was so cheap in comparison. Besides, I liked having all the extra savings and spending money, not to mention security if the job market did a repeat of 2001. I had been through that before, so naturally, NOT having to suffer that same thing was paramount in my mind.
Thinking about housing changed my whole outlook about my perceptions of family, home, values, and the state of California. The disparity, insane prices, and the fact that there were plenty of people desperately trying to buy houses regardless of the cost was appalling to me. It also changed my priorities. Prior to all of this, my big goal was to be as creative as possible. Nothing else. Once housing entered my mind, making LOTS MORE money became my new obsession. So I bounced from job to job in pursuit of more money. After 2 years of this, I can see that wages for my kind of work are stalled at a level that's about 1/3rd of what I would have to make just to buy a crappy condo. We both make a combined total of 85k. It seems that we know way too many people who make twice this amount, yet still cannot afford. So I'm struck with a depressing realization that even if the housing prices crash and burn to 50% or more reductions, we STILL have to compete with all the people who make way more than us.
The housing bubble made me stop and realize just how good me and my family have it in comparison back in TN, where a house is a simple given no matter what your income. Everyone sends their kids to public schools, and people work 9-5 and come home. Easy. Simple. It made me realize that a large chunk of the country still lives a fairly comfortable life on middle-income salaries. Even though I originally thought California was perhaps one of the best states to live in, that has all changed.
I wait and wait for a miracle to occur, like a recession, a burst, earthquakes, or whatever. But nothing happens. I realize that sooner or later I will have to make a drastic decision, which is to vacate the state for another and hope that plenty of other younger people do the same, thus creating entirely new communities in which to work and live and attain the same level of comfort as that of my parents.
The longer I live here, the more I hate rich people, homeowners, baby-boomers, and the countless people I run into who are obsessed with real estate. This last weekend I went to several small towns I visited 2 years ago. Literally half of the businesses in the areas were Real estate. Big portraits of smiling people on billboards, and just about every third home for sale. These small towns were ruined. They were taken over by Bimmer driving yuppies who were moving in, decimating the town's charm, and buying up businesses to sell candles, smelly hippy shit, and real estate.This, among all else is what bothers me more than all the rest.As far as I can see, California has already lost more than it will ever gain back, and once the ball drops, I don't want to be living here.They have lost their heritage, their future children, and their future neighborhoods. I hate to admit defeat, but to stay here will eventually lead to financial ruin for countless millions of citizens who played the game and will lose. Even those who "thought" they were prepared.

Costa Mess said :

An RE agent just said to me that “my house is the most important investment I’ll ever make’- I thought for a second and said “No, my daughter is my most important investment, and my wife totally agrees”. She couldn’t think of anything to say to that.

Amen.

20 years from now, will I be worrying about how big by McMansion is or how my kids turned out to be ? When I am saving, I keep reminding myself. It is for my retirement and for kids' education. Not just for downpayment. If I buy now, I will be just helping someone else pockets the profit, and solve the exact same problems for themselves. What good that does to my family ?

Out-of-SF,

actually places like "A walk in the clouds" still exist here, you just need to look a bit harder, but they do exist, and they are still incredibly beautiful. My dream is if I can telecommute, I will go out there and get a 10+-acre ranchette with a small modest home that I design, when RE is absolutely hated in California. It is a dream that needs patience, I am willing to wait for another decade or so for my share of the California dream. If you drive down from San Jose to Salinas, there are still many untouched spots with stunning beauty.

The bubble is really a blessing in disguise, because many of these farmland or ranch land were put under Williamson Act and passed down in a family for a hundred years, and the carrying cost is only mere thousand or even less each year. But for the bubble, these land will never change hand! Thanks to the bubble, so much of these land are now in the hands of speculators, and they will have to spew it out at a huge loss some point down the road. Land is a far less liquid asset than a home, and when credit dries up, it is almost impossible to get a loan on a piece of land. So I am waiting for those speculators / mom-and-pop self-coined developers to get desperate, we will see if their cashflow or my patience runs longer.

California needs a crash to bring sanity back. It has become so much more crowded compared to 15 years ago, and the gold rush has brough in too many people who just want everything but nothing to give back. I was quite happy about the doctom bust, since the traffic lightened up a lot, but the RE boom just brought them all back. A crash of any kind is a pruning process by the nature, so that what is left can grow better on more fertile grounds.

You should come back and take a look a few years down the road.

nomadtoons2,

your frustration is echoed throughout the world, talk to any Canadian, Aussie, Kiwi, Spaniard, British or eve Chinese, people of your age group from many countries are facing the same problem: it's so darn hard to buy a home. I think it is a result of the Fed loosening too much in the past few years, and the money supply through different investment vehicles spilled over to nations far and near.

However, the BA apartments actually have gone down in rent, quite significantly compared to 2000, so a reasonable standard of living in BA is not so hard to sustain. It is unfair that your age group can't afford to buy until later, but that was what life should have been, we just got lucked out. When I was growing up, my parents didn't buy their first home until I was about 15. When I talk to the older immigrants in California, some of them couldn't afford to buy until they were 50! (think about the 1980 mortgage rate under Paul Volcker). People in the early to late 30s just stumbled on this good fortune during the dotcom and the RE boom, which sadly set the wrong expectation for many younger people. I remember in 2000, a 20 something guy told me that if one doesn't make a million when he is 30, he's considered a failure. Therefore, everybody is trying to scam each other in CA in the get-rich-fast scheme.

When all the dust settles, if you are careful with your Hahas, you will be pleasantly surprised with how far your Hahas can go. Just need to be patient.

Owneroc said :

your frustration is echoed throughout the world, talk to any Canadian, Aussie, Kiwi, Spaniard, British or eve Chinese, people of your age group from many countries are facing the same problem: it’s so darn hard to buy a home.

If you think Bay Area (or Phoenix or XYZ US city) has seen outrageous RE gains, take a look at Banglore, India. They measure appreciation in months, not years. Does that surprise anyone ? The new Tech boom their has translated into a RE frenzie never seen before. Note that, not everyone in Banglore is in IT. So not just young people, but people from all other fields now find it very hard to buy a decent apartment.

And I - who believs in RE bubble here - do not think there is as much speculation there. Salaries have gone up - doubled, trippled - in last 5+ years. Interest rates have gone down. The future looks bright, as opposed to here. There is lot of inflow of people and jobs.

Slowly even that is reaching a limit. So companies and people are going to other cities. The same boom is now starting - or has already started - in other cities - Hyderabad, Delhi and Pune.

I take heart in this. At least here, the possibility of houses being affordable is real. If I was in Banglore without a house, I would have been truly priced out forever.

Not to mention India's persistently protectionist bias. They run a very real risk of ending up with inflexible industries that cannot be changed, when economic realities shift, without massive disruption.

Marin County prices hit all time new high!

http://www.marinij.com/fastsearchresults/ci_3613137

When's the charade gonna' end?

Athena,
I have over the years taught my older brother to come to me when he wants encouragment, love, and understanding. But, for me, I have found that helping him monetarily, really doesn't help him at all...it prolongs his problems....and boy does he have issues with money. I just thought I'd give my 2 cents. Best of luck with that!

Another key issue here is,

How we savers, after sacrificing our quality of life, not get fucked by the Fed and the irresponsible US government when this bubble bursts?

I will be royally pissed off if they inflate away my savings, raise my taxes, or force me to chip in to save the asses of the irresponsible squanders. I absolutely don't want to lend a helping hand until 10 years later when the squanders have to sell their assets at a cent on a dollar.

I don't think saving alone will get you ahead any more. One has to be a smart saver, knowing where to put his money so that it won't be available to save the sorry asses of all these idiots when things fall apart. I'd love to speculate where the powers of this country put their money?

It's funny how no sooner someone says they were going to buy in 2003 but didn't b/c they started reading this blog and the trolls come out of the woodwork!

Look, if you are trying to attain a 20% return and you buy at $10, then sell at $12 (calculate transaction expense here) then YOU WIN. From there, I don't care if it goes to $2 or $200, and you shouldn't either. With all of the rugus out there we have become snake fascinated with the "what if". Saying you were thinking about buying a home (and I keep forgetting if it's a home or an investment) in 2002 but thought the bubble peaked and it continued on a "hockey stick" ramp, do yourself a favor and stop worrying about it! You don't want to touch it, especially on "margin". Let's all please try to remember; momentum players are alot like dogs that chase cars. They make alot of noise, they attract alot of attention but unfortunately don't last that long! I'll now say what I said in the summer of 2000 in the stock market. When this is all said and done everyone is going to get exactly what they deserve! The HB will be no different.

I'm not so sure CA housing is entirely a war between socioeconomic classes. There is certainly this aspect, to at least some degree. But the RE bulls would like to frame the issue as nothing but a class war, because this helps feed fear. After all, who would willingly choose to be a downtrodden Prol? I left the Troll's earlier post about "rent if you want to remain poor" in because it helps to provide a point of reference to all the great Biographies people posted here.

There is more at hand than a simple question of who wants to be rich or poor; or even a battle between the classes for housing. There are serious fundamentals out-of-whack, and this thread shows that *a lot* of successful, well educated, even quite affluent people have come to the rational conclusion that something is seriously wrong. My own personal opinion is that it is a clash between two opposed broad philosophies:

* Those who consider their decisions by weighing the benefits/costs now against the benefits/costs in the future. For some this means over their entire lifetimes, over a phase of life, or over some years. For others this includes the lifetimes of their children and grandchildren. Some even consider the larger picture of future generations to come.

* Those who are incapable, unwilling, or for some reason opposed to thinking much beyond a very short time frame when they make decisions. These folks don't worry about things like their children's college funds, their own retirement planning, how the next 10 generations of Americans will pay for the debt of the last 3 generations. Let me correct that. These people would rarely admit they don't care about these things. But, they are willing to let others take the responsibility for planning decisions for them. They let everyone from politicians to real-estate agents make decisions about their own future. So long as they aren't troubled to sacrifice much *now*, they are OK with letting others steer the ship.

I don't think these camps break down easily by income levels, religious convictions, race, ethnicity, gender, or education level. We can see from these many posts that we have Republicans, Democrats, Liberals, Conservatives, Rich, Poor, Over-educated, Undereducated, Self-educated, Devout Religious, Atheists, and even Anarchists; yet for some reason we've all come to the same conclusion about this mega-bubble. This could be an entire thread itself.

I just wanted to raise it because, for me at least, this has been the most unexpected result of this blog. I would have guessed something like "educated people who can do math know there's a bubble". But this has proven false. Others say "poor people are jealous bitter renters, and cry bubble", but we see too many millionaires here who are renting, and are quite humble about their HaHas. They could buy, but don't (or don't buy more). I don't know, maybe it comes down to *common sense*, which appears to be in short supply of late.

Randy H,

"clash between two broad opposed philosophies"

Thank you for bringing some much needed clarity here. I've actually gotten to the point where I somewhat resent being labled a housing "bear". Would it be accurate to say that I am "bearish" on sliding down a bannister full of razor blades? Why? Is there a right way to do it? So when it comes to drunk driving, bungee jumping over pungee sticks and hang gliding in a missle testing range I should be considered bearish on these "activities"? There's bullish and then there's just plain wreckless. Buying a home (when a peak has already been well established) with some kind of exotic loan presents little if any upside with no EXIT STRATEGY! Let's be truthful here, the only reason I bother to look at RE listings is to get a hardy chuckle at the original asking price, track DOM and then chart the inevitable price reductions.

Jeff,

We should consider the source. BankRate is basically a mouthpiece for the lenders. Now that borrowers are stretching ever further to meet their monthly obligations they may be having second thoughts about going further into debt. So the timing of the article is just about perfect. I haven't tracked mortgage activity closely but from what I hear about the lay-offs in the industry it's safe to say they are in a near free fall.

DinOR says

Look, if you are trying to attain a 20% return and you buy at $10, then sell at $12 (calculate transaction expense here) then YOU WIN. From there, I don’t care if it goes to $2 or $200, and you shouldn’t either.

Your statement really hit home for me. I bought 5 houses in the mid ninties to use as rentals. The rents did not quite cover the mortgages on two of them, the rest I had strong equity in. I considered them long term investements. My plan was to eventually own these houses free and clear, and thus have a good steady monthly income. Paid off real estate protects against inflation and deflation. Under inflation, the rents go up. Under deflation, the rents go down, but the money is worth more and you have no killer debt to service.

But then the bubble hit, and the houses went way up in price. In 2003 I thought this bubble must pop, so I sold one of the houses. In 2004, I was even more sure so I sold 2 more. In 2005 I sold another. I am keeping that last one as a hedge just in case the government tries to inflate its way out of our collective debt (my own house is free and clear, so that will help if my money in the bank gets "Weimared" by the Wasington turbo-inflation machine). I would have made a extra Ha Ha by selling those 4 houses in 2005. It is still possible that after the bubble pops, I'll be able to pick up similar houses at pre-2003 prices. I like to buy when the rent is close to the 30 yr fixed mort payment.

Someone mentioned renting a $200,000 house for $1,500/mo. My remaining rental is a $200,000 house, and I rent it for $995. In this area (Va Peninsula), $1,500 will get you a $350,000 home. Good tenents are hard to find since anyone with decent credit is jumping on the homedebtor bandwagon. It is a tenents market right now.

Randy H Says:

> I would have guessed something like “educated people who
> can do math know there’s a bubble”. But this has proven false.

I disagree with Randy and think that almost all educated people that can do math "know" that there is a bubble, for some reason they buy anyway...

These same educated people "knew" that a dot com company with no earnings should not be worth many billions of dollars but they bought the stock anyway...

I meet educated people who "know" that the lottery is just a tax on people who don't understand statistics, but they buy the tickets anyway...

When I'm in Vegas I'm often with very smart people who "know" that they have very little chance of winning but time and time again they bet (and loose) thousands of dollars...

Smart women "know" that there is not a (straight) guy on the planet that cares of they are wearing $500 shoes and holding a $5,000 handbag but they will claim they need nice shoes and handbags to attract men...

Educated people "know" that it's not smart to drink an entire bottle of wine and then drive home to save the $8 cab fare but they do it all the time...

For a more dramatic example why do women live with guys who beat them up when they "know" it is a bad idea (I dated an Assistant DA who worked in domestic violence for a while until she quit telling me that she was worried she would loose control and beat the crap out of one of these women since almost none of them would press charges against the guys that beat them up)...

Another topic to tag on to "why do people buy things they don't need" we can add "why do people do things that they "know" they shouldn't do"

David Clark,

Not a problem. Your actions were decisive and appropriate. I especially like the way you haven't burned any bridges and leave the door wide open to reconsidering when your Price/Rent ratio is more in your parameters! You've also managed to walk away from this with a home that is fully paid for. No small feat.

Clients ALWAYS look back. If you sold them out of an investment and it went up just one more dollar you'll never hear the end of it. If you sell them out just one dollar shy of the peak (and then it takes a serious nose dive) well, you'll never hear about the money you saved them either.

“Smart women “know” that there is not a (straight) guy on the planet that cares of they are wearing $500 shoes and holding a $5,000 handbag but they will claim they need nice shoes and handbags to attract men…”

Perhaps if that is all they are weaing......

FormerApt,

because it is not the education that matters, it is the emotional intelligence that matters.

Education is a way to raise the emotional intelligence, but this is not guaranteed. I too often run into people who are over-educated and have zero common sense / street smartness.

People buy things they don't need because they are insecure. They want to be recognized, respected, looked up to, and buying things they don't need is a way to conform to the cool-aid fed by marketers (I am guilty here, I do a lot of these marketing tricks in messaging and positioning). A marketer's wet dream is a consumer who doesn't look at his own needs and buy things based on self-doubt and insecurity, you can literally make him pay whatever.

People do things that they "know" they shouldn't do because of fear, and greed. Acquiring emotional intelligence is to overcome one's greed and fear.

I have been a stay at home mom for 15 years. (3 kids) We also can be added to the list of people with ha ha's and are going to sit this out. I finished high school but that is all, hubby is an engineer that made the ha ha's. I am not so talented at posting as so many here are, but I really like to come here and read all the interesting posts. One day I was flipping through the tv channels and heard Donald Trump say something like "there better not be a housing bubble" WHAT? So I googled Housing Bubble and found this site, this was around December. We just moved back here to the BA after spending 5 1/2 years freezing in Colorado. We will be moving into our rental in a few days!

SQT/SF Woman,

Uh, I don't know anybody that goes by FormerAptBroker. But seriously, the guy that runs our HOA is now going out of his way to bring to our attention all of the wonderful things they are working on. They have had a landscaping crew in since Saturday and they were at it again today to build a rock wall and landing by the creek for a gazeebo etc. My wife asked me if I was impressed and in typical "southside" fashion I said, "Yeah, this is all the stuff they should have done when they were asking about 50K more!"

O.K. Now I don't know anybody named seattledude.

I am a 57 year old boomer, I went to Woodstock, and I had copious amounts of drug fueled sex. My summer of love was in dog years. I never worried about education, retirement or career security because these were always accepted as a given. I have no children because quite frankly I don't think my trust fund would accommodate them.

Oh Jeebus what was I thinking?

I am 40, my Father is a drug addled boomer biker, never met my Mother. I raised myself, put myself through school, my favorite quote is from my HS "guidance" counselor, Surfer-X to HSGC "can you tell me how to apply for college" HSGC to Surfer-X "don't worry about it you aren't even going to graduate HS". Love it. I am a 5th generation Californian and am just old enough to remember what it was like. Originally from $anta Cash, but went to undergraduate school at Cal Poly (no dipshit, there isn't a which one, there is only one Cal Poly, SLO) SLO was amazing back then, now it could use a B-52 strike. Went to Cal Poly because my ex-narcissist GF's Mom suggested it, "why don't you go to Cal Poly", "because I won't get in", "why don't you apply and see what happens", "because I can't afford it", "why don't you apply for financial aid", "hmmm, what is the financial aid you speak of?" Worked in Oregon after graduating, ahhh aerospace in '91, company took a big poopy, I wasn't going to get laid off, but volunteered as the moral bit ass. Moved back to California, got a job in the semicon industry, ahhh semicon in 95, company and semicon took a big poopy, went to graduate school at Cal Poly, (ok, so there was a fair amount of surfing and skirt chasing also), went to work in IT circa '99 was amazed at tech bubble blow up, "I'm the vice president of desserts". Sure you are sweetie. Black razor, blue martini. Those jackasses from Razorfish. Feel like a fool as I worked in Japan for a few years and came back in 96 with about 50K in cash, a friend said buy Yahoo!, I didn't, I used the money for my MS. As I look back at my PhD in Materials Science from UC Davis, awarded with Distinction, funded by the Surfer-X memorial foundation, I have to laugh on how long and hard and how much fellatio I had to perform to get here. I advise not discussing whether or not there is a class struggle in the US. I "work" in defense and make 0.7Haha. I despise the boomers with all my being because I have witness first hand what they truly represent. Yes, some don't fit the mold, but riddle me this, why is it that the one's who object to the generations even object in the first place? If the generalization doesn't fit you, congratulations. Ok, now if you feel you have to defend your generation, what does that really say? Now back to our original discussion. My friend Nizo turned me on to this blog, at first I just came for the links, and then I realized I could voice my opinions on not just housing but the related greed (boomer filled orgies) behind it. Much happy. I have become hooked on the patrick.net junk and need my daily fix. There are several people here that I would like to have over to my pathetic rental in $anta Barbara for an ammmmmazing margarita. I am half white or as I like to say on job and school application, half Mexican. Many things really piss me off; I need not list them here. Yes Randy most flames end/(originate) with WWII and/or Germany/Hitler. See that's what I love about this site, amazing wit. Screw you HARM (note sarcasms, HARM actually gets a double sized margarita). I have great friends and one cat who I adore, my other cat Mr. Fuchs is presently not available but I remain hopeful. The bubble just pisses me off because for the life of me I can't figure bullshit like this out

And anyone who bought a house or condo here during that time into the early 2000s has done quite well.

What does this mean exactly? Ok, so you can borrow the money, but then it isn't really yours is it? Or you can sell the house. Which means you either have to take on an increased debt burden or leave the area. I cannot leave the area, I know of no other areas; I do not Grok other states.

Ok enough for now.

SFWoman,

Berkeins are fine, but the ugliest and most obnoxious POS handbag that I have ever seen is the LV Murakami bag, honestly the first time I saw those I thought someone was deliberately playing a joke on LV. It is quite a statement, any women carrying that handbag puts me off big time, it essentially spells out "I spend $2K to show you that I have no taste".

From a marketing point of view, it is smart, it certainly looks distinctive, and it has limited editions so that women can easily spot such a POS in sight and attach a price tag to it, feeling competitive against each other. Even so, I still think LV should come out with a more tasteful, distinctive-looking vinyl bag that at least doesn't embarrass the buyer.

Here’s one thing that pisses me off royally. Newspapers and their bend-over stance with realtors and lending agencies. It can easily be explained via basic marketing tactics. For example, my local Newspaper, the Alameda Sun is heavily funded by several large real estate companies. The real estate section is actually the largest chunk of the paper, and the articles are written mostly by real estate agents. Naturally, there's hardly a negative word of caution ever mentioned. One recent article featured a college grad who wondered when he should "get in" to start real estate investment. The reply was from yet another agent who said to " do it at all costs". Yet another article was written about the history of Alameda real estate, and how that the creation of a new shopping center( with a new Target) along with the immigration of wealthy Asians will assure that housing prices will be maintained for years to come. What total absurdity. Flip to the real estate for sale section, and the agents cleverly list all the homes with "sale pending" and SOLD! Of course the desire is to create an artificial image of housing being sold like no tomorrow and instill a sense of panic in people who believe the hogwash the papers, media, and agents publish like yellow journalism.
I’ve actually written to the Alameda Sun several times, along with several other publications informing them of their total bias and willful ignorance on the matter. To me, this kind of controlled information is what mislead so many people to start with, and now that it’s far too late to stop it, they’ll ride it on out in Enron flourishment fashion. I have no doubt that at the end of this, there will be a lot of people going to jail, and perhaps once again, Americans will learn the value of the dollar.

Nomad
Well said. This is why I'm drawn to this site. The outrage.

I don’t think these camps break down easily by income levels, religious convictions, race, ethnicity, gender, or education level. We can see from these many posts that we have Republicans, Democrats, Liberals, Conservatives, Rich, Poor, Over-educated, Undereducated, Self-educated, Devout Religious, Atheists, and even Anarchists; yet for some reason we’ve all come to the same conclusion about this mega-bubble. This could be an entire thread itself.

Very well said, Randy.

Would it be accurate to say that I am “bearish” on sliding down a bannister full of razor blades? Why? Is there a right way to do it? So when it comes to drunk driving, bungee jumping over pungee sticks and hang gliding in a missle testing range I should be considered bearish on these “activities”? There’s bullish and then there’s just plain wreckless.

Now, DinOR, there you go again hating Amerika... ;-)

A good deal is a good deal and a bad deal is a deal that was not negotiated correctly.

Ummm... geee, thanks for those sage words of wisdom, "REO Mentor", did you think of that by yourself?

If you purchase an investment property that provides positive cash flow at the end of the month and you have the right type of loan, why would you pass that up?

Sounds great. Show me how purchasing anything at today's prices in Bubble states like California will generate positive cash flow, and sign me up, buddy! And I'm not talking about basing your "cash flow" on the temporary "teaser rate" on a neg-am loan. I mean a real, amortizing mortgage at prevailing interest rates.

Followed your link to sales pitches for "Nouveau Riche". Thanks for the Ponzi/pyramid/multi-level-marketing get-rich-quick "investment opportunity". I wish you lots 'o luck with that.

@TN,

Those are some good suggestions. Another alternative might be to peg the HaHa directly to the CPI, PPP, GDP deflator or some other less politically-manipulated inflation index. I understand from reliable sources* that the Iranians have recently announced they're considered pegging their oil bourse to the HaHa. This would really give the HaHa a huge boost in the international finance markets.

*"reliable sources" = complete fabrication

TN, thanks for the wise economic correction for our base unit of measure, the HaHa.

For current purposes, 1HaHa = USD 150,000.

The precise definition of 1HaHa is 3x National median family income*, for which HaHa (after which the unit of measure is named) stands as a reasonable substitute. Therefore, we may peg the unit of 1HaHa to HaHa himself so long as:

1) HaHa remains in the state of California; preferably in the San Francisco Bay Area;
2) HaHa's family median income remains within alpha=.05 of the predicted Bay Area median income level;
3) HaHa is still living.

At such time as HaHa becomes disqualified, the base formula may be still used to determine the HaHa unit of measure or a more suitable peg may be established which captures the spirit and intent of the measure.**

*Note that 1HaHa is a relative measure vis-a-vis National median family income compared to SFBA median family income. Therefore, the 3x multiplier will also be a dynamic variable in this system of measure.

**It is for the reasons of this inherit complexity that we prefer to us the HaHa measure as shortcut nomenclature when discussing real-estate issues on this blog. It's also funny.

Peter P will shortly be disclosing plans to create a CME traded HaHa hedging instrument.* HaHa-hedges should swiftly gain popularity among mutual fund managers, hedge fund managers, pension fund managers, and individual investors as a way to protect against or directionally bet on real-estate armageddon.

*The alpha for confidence that this prediction actually occurs is .9999

From info found on this site, it helped me make a decision to leave behind SF and move to another state with a much lower cost of living.

May I ask which state? (hoping to get out of dodge myself)

And, on the article… I really do believe it makes sense to own long term than rent long term.

Generally speaking I would agree with this sentiment, with one major exception: buying into a speculative asset bubble, when housing prices are not supported by economic fundamentals and cash-flow (i.e., rents & incomes).

Seize the day I say, and live life to the fullest.

Can't argue with that, except to disagree with the implicit assumption that mortgage "ownership" = happiness. I believe I can "seize the day" and live life to the fullest without making crushing mortgage payments, thank you very much. Naturally, I plan to own someday, either when I: (a) move to a non-bubble market, or (b) prices re-align with economic fundamentals / mean-revert.

If you want to hate me because I figured out how to make money regardless of what the market does then go ahead. Finding a reason to hate me is easy, but realizing that I am not your enemy or problem is difficult.

"Don't hate me because I'm [beautiful, rich, popular, etc._______]"
:lol:

@REO Mentor,

SLC aside, if you can find a cash-flow positive investment opportunity here in Bubble-ville Central (aka California), I say more power to ya'.
No one here "hates" you for being a playa/RE pimp. We just prefer to stick to RE/economic discussions and leave out the slick sales pitches. Thanks for stopping by, though.

Hokies,

you are really wasting your time here, you are not going to convert one person using your line of reasoning. You think it is easy to change the way people think on the internet? No, people come out here to confirm what they already believe in, so here is the bear site, we are trying to figure out how to make more Hahas as the market implode, not from RE. What we are more interested in is how to profit from it. If you have something to say in that regard, speak now. Or just get lost.

I’m saying don’t let the high housing prices deter him/you guys from living a comfortable lifestyle... Don’t let high home prices negatively affect people’s lives.

I/we aren't. One great side effect of the bubble is that it's made renting an incredible bargain, and there's tons of vacant specuvestor-owned property out there to be rented.

I am not convinced that housing is a ’speculative asset bubble.’ Yes, prices have gone up tremendously, and could come down 10-20% on case by case basis. But, I just think there’s much more wealth out there than anybody can imagine. Economy is booming, there’s wage inflation, the 10-yr is still at 4.7%. How on earth is the housing market going to implode?

Oh where to begin debunking...? Debt = wealth? Wage inflation??

On second thought, I really don't have the time or inclination to debunk every erroneous claim made by every newb RE bull who shows up here. Thus, I recommend mining the archives for the enlightenment you so desperately need, grasshopper.

Why is living in a 1200sf 1br apt. not living life to the fullest? All the time you save not having to clean a huge house and doing yard work allows you to live life to its fullest (unless cleaning and yardwork is your thing).

I fully agree with Hokies. There is a limit to what you want to save. Dont forget that life can be short or can be waaaay too long. It is not in your hands and it will never be. Enjoy it in the right way and slumming it in a 1 bd apt on a 300K salary is a little extreme in my opinion.