patrick.net

dunnross says

If 100% of the loans were financed by FHA (3.5%), it's simple math to figure out that houses would have to drop 6 times (20 / 3.5) if the FHA loans disappeared. However, only 80% of the loans are FHA, now, so, that would translate to only a 5x drop (about an 80% drop).

That's definitely simple. Completely and utterly incorrect, but simple.

tatupu70 says

That's definitely simple. Completely and utterly incorrect, but simple.

No, my friend. All my calculations are 100% accurate. Notice how this calculation also perfectly correlates with my 1975 prediction, because, that would put the median US house price at about $36K - quite close to the 1975 median.

Oh, here is the link for all you naysayers.

http://www.google.com/url?sa=t&rct=j&q=median%20price%20of%20homes%20in%20us&source=web&cd=2&ved=0CDYQFjAB&url=http%3A%2F%2Fwww.census.gov%2Fconst%2Fuspricemon.pdf&ei=Ku4ST4aTO-WKiALauaDKDQ&usg=AFQjCNHPSIRejSGnDY6IBjwwLhwS50L1iQ&cad=rja

dunnross says

No, my friend. All my calculations are 100% accurate. Notice how this calculation also perfectly correlates with my 1975 prediction, because, that would put the median US house price at about $36K - quite close to the 1975 median.

Even RENTERS hope the pendulum does not swing that far (1975). I believe prices will return to their phenomenal prices, 2.5 times income. BUT, there are variables OWNERS like to ignore. Unemployment rate, housing inventory, etc.
This chart shows incomes declining and unemployment rising. IF,,,,,, Unemployment is reduced, will the amount of income equate ?http://blogs.reuters.com/felix-salmon/2011/10/10/chart-of-the-day-median-income-edition/

Excellent image of modern day " Those that got rich and those that didn't fight back via Patrick.net "!.

dunnross says

No, my friend. All my calculations are 100% accurate. Notice how this calculation also perfectly correlates with my 1975 prediction, because, that would put the median US house price at about $36K - quite close to the 1975 median.

Your assumptions are the problem. Just because someone takes out an FHA loan doesn't mean that they wouldn't have qualified for a conventional one. Just because someone puts down 3.5 doesn't mean they didn't have 20% if they had to put it down.

Hell, at these rates I'd put down as little as possible too. Invest your downpayment and make more than 3% and you come out ahead.

Nomo,

It is Peninsula Envy.

ease of credit definitely has an impact on housing prices but right now the pendulum has swung in the other direction.

If the GOP succeeds in repealing Dodd-Frank it could reopen the money spigot and have the opposite effect of what you're hoping for.

tatupu70 says

Invest your downpayment and make more than 3% and you come out ahead.

The era of making money on asset appreciation and so-called "investments", is a long by-gone era. After more than a decade of 0% S&P appreciation, and a housing prices which are back to the same level they were 10 years, ago, the fact that we still have people who think that anything other than "wealth preservation" is a possibility, is a major sign that we are still more than a decade away from the true bottom. The true bottom will come, when, people who think like you become the laughing stock, just like I was back in '06 when I sold my house in the Bay Area, and most people told me that I was crazy.

dunnross says

The true bottom will come, when, people who think like you become the laughing stock, just like I was back in '06 when I sold my house in the Bay Area, and most people told me that I was crazy.

No offense, but they are correct. You are crazy.

Nomograph says

and shit into the other

That depends on whether you think that your shit stinks or not!

Nomograph says

Investors are making money hand over fist right now. Have you been asleep at the wheel?

Is that the same hand they've got stuck up their own ass, getting ready to smell their own shit:

http://www.google.com/url?sa=t&rct=j&q=median%20price%20of%20homes%20in%20us&source=web&cd=2&ved=0CDYQFjAB&url=http%3A%2F%2Fwww.census.gov%2Fconst%2Fuspricemon.pdf&ei=Ku4ST4aTO-WKiALauaDKDQ&usg=AFQjCNHPSIRejSGnDY6IBjwwLhwS50L1iQ&cad=rja

tatupu70 says

But, just out of curiosity, where would 1975 prices be on that chart?

For all of you 1-celled organisms out there, 1975 is the year on the left of the chart, and 2011 is the year on the right of the chart.

dunnross says

tatupu70 says

But, just out of curiosity, where would 1975 prices be on that chart?

For all of you 1-celled organisms out there, 1975 is the year on the left of the chart, and 2011 is the year on the right of the chart.

Nice. So you think real prices should be 67% lower than in 1975?

dunnross says

Investors are making money hand over fist right now. Have you been asleep at the wheel?

Here is where most of those 2-bit investors wind up.

tatupu70 says

Nice. So you think real prices should be 67% lower than in 1975?

Yes, nominal will be at 1975, real, probably 67% lower. Just like the "real" price of gold at $250/oz back in 2001, where it took 4000 ounces of gold to buy a terminate-infested 2x4 in cury-stinking cupertino.

E-man says

Or is it better to live in your "what if" dream logic?

So far, my "what if" dream logic has really paid off. In fact, selling my house back in 2006 and buying precious metals with all the proceeds has really paid off for me, so that now, I don't have to eat yam and yucca. But, if you do, I am really sorry. All that yam and yucca you ate, should have taught you not to make rash assumptions about other people. In fact, what you don't know about me, is that I was born to a very poor family.

E-man says

Instead of being frustrated with RE prices in the bay area

Why frustrated? I am just sitting back and watching the show with glee, as all of you bulls, run around scratching your heads, and wondering why house prices are still dropping after 5 years, where all the self-acclaimed economists predicted a recovery in '09, '10, '11, '12, at infinitum.

Somehow, I think, at this point I strongly suspect that most of you bulls on this blog are a lot more worried than I am. I start to notice that a lot of you are actually, considering my 1975 prediction, where you wouldn't give me the time of day a mere 2-3 years ago.

But the mainstream media is still impervious to this "reality show" of a housing collapse. After all we still get statements like this from the Mercury News:

"After years of decline, housing prices are expected to stabilize or even increase in some parts of the Bay Area this year, according to a new forecast."

Ha, ha, ha. What a joke. And these people call themselves a "News Organization".

Nomograph says

Based on how you carry yourself, I'm guessing you actually did neither.

Like I said, I trust my bank account a lot more than 2-bit BS'ers like you.

Nomograph says

It's easy to say that you sold a house at the height and bought gold at a low. Based on how you carry yourself, I'm guessing you actually did neither.

And, as usual, I challenge you to eat your hat, about 10 years from now, when house prices do fall to 1975 levels.

Nomograph says

It's easy to say that you sold a house at the height and bought gold at a low. Based on how you carry yourself, I'm guessing you actually did neither.

Yes, and I bet you were among one of those people who would have laughed me out of town, back in '06, if I had mentioned even a 20% decline, back then. That's why it's so hard for you to believe that somebody could sell their "HOME" and buy a worthless piece of a "barberous relic" back in '06.

Nomograph says

In 10 years I will have blissfully forgotten all about you.

Probably, because you'll be long-time dead, having eaten so many hats!

tatupu70 says

Just because someone puts down 3.5 doesn't mean they didn't have 20% if they had to put it down

Exactly. We ended up using 20%, I just hated the idea of $300/month PMI...but at some point we almost went with 3.5 down FHA. If we did, dunross would assume that we NEEDED to go that route.

dunnross says

Yes, and I bet you were among one of those people who would have laughed me out of town, back in '06, if I had mentioned even a 20% decline, back then

Just because you were right then (in hindsight), does not mean you are right now. Every broken clock is right twice a day...

If we were to go back to 1975 prices, you wouldn't buy a house then because you would have lost all your money, have no job and things would be very ugly - be careful what you wish for...it may work against you.

I also don't "buy" that you sold a house in 2006 and bought Gold with the proceeds. I got that feeling. Just like I had that feeling in 2006 houses were too expensive...I was right then, so I am right now. (applying your logic)

Nomograph says

You can't compose a grammatically correct sentence, and you want us to believe you are some kind of financial genius?

Oh, BTW, remember goldboy back from 2006. Yes, the same one who told you to sell your house and buy gold back then at $500/oz. Well, why do think you can still read about him in my history. That's because he and I are the same people.

Nomograph says

Probably, because you'll be long-time dead, having eaten so many hats!

Neither could Henry Kissinger.

dunnross says

you would still be able to buy that house in Palo Alto with just 30 of your gold coins, no matter how low the price of gold gets

Now, let me explain to all you multi-cell organisms out there, how far-sighted my calculations really were, back in '06:

House Price in Palo Alto in 2001: $750,000
Price of Gold in '01: $250
PA/Gold Ration: 3000

House Price in Palo Alto in 2006: $1,200,000
Price of Gold in '06: $500
PA/Gold Ratio: 2400

House Price in Palo Alto in 2012: $1,000,000
Price of Gold in '12: $2000
PA/Gold Ratio: 500 (notice the trend already)

House Price in Palo Alto in 2020: $300,000
Price of Gold in '20: $10,000
PA/Gold Ration: 30 (as predicted by goldboy (alias dunnross) in '06)

dunnross says

You can't compose a grammatically correct sentence, and you want us to believe you are some kind of financial genius?

Actually, I am not the financial genius. All my ideas came from my friend, Kondratieff, who lived over 100 years ago.

Depending on where you live if you sold in 06 you are still down a significant amount

toothfairy says

Depending on where you live if you sold in 06 you are still down a significant amount

Not if you traded your greenback for gold & silver, like I did.

toothfairy says

Depending on where you live if you sold in 06 you are still down a significant amount

Oh really? I thought we were at the bottom?

Nomograph says

If you don't mind me asking, how much did you lose, dunnross?

Ha, Ha, Ha. Gold prices are up 300% since '06, and you are asking me how much did I lose? For a guy who has 4x as many comments, with less than 1/2 of my seniority on patrick, who is the real loser here?

Nomo, get a life! Because, you don't have one right now, and if you don't care about me 10 years from now, I'll definitely know that you lost the miserable one that you had.

Nomograph says

dunnross says

Probably, because you'll be long-time dead, having eaten so many hats!

You can't compose a grammatically correct sentence, and you want us to believe you are some kind of financial genius?

Nomo,
A financial genius does not pay 3500/mo. to rent in San Jose. 'Nuff said.

You pay 3k per month do you realize you've spent 216k in rent money since you sold in 06?

toothfairy says

You pay 3k per month do you realize you've spent 216k in rent money since you sold in 06?

Yes, but I made over $2M in gold, because I didn't have my money tied up in some dead asset like housing.

toothfairy says

You pay 3k per month do you realize you've spent 216k in rent money since you sold in 06?

And how much would I have paid in interest and taxes to a state which takes all my money and gives me nothing in return?

dunnross says

And how much would I have paid in interest and taxes to a state which takes all my money and gives me nothing in return?

Plus, to tell you the truth, I never counted on inhabitants of Bay Area to be that stupid.
While the whole country has already seen the light, these so-called PhD's in the Bay Area are still living in their dream-world.

dunnross says

Plus, to tell you the truth, I never counted on inhabitants of Bay Area to be that stupid.
While the whole country has already seen the light, these so-called PhD's in the Bay Area are still living in their dream-world.

But, it should be no question to anybody on this blog, that, now the Fortress is finally starting to buckle. Nobody, can be that STUPID!

Nomograph says

I made over $2M in gold

Like I said, I believe my bank account a lot more than you. If you don't believe, me, I don't give a shit, because, you are a 2-bit speculator, which can't even read history. If you have read my blogs from 5 years ago, you would have known what I did.

toothfairy says

You pay 3k per month do you realize you've spent 216k in rent money since you sold in 06?

That kinda financial genius.

B.A.C.A.H. says

toothfairy says

You pay 3k per month do you realize you've spent 216k in rent money since you sold in 06?

That kinda financial genius.

And the ironic part - lets say he did buy gold...as he believes that gold is going to be $10,000 an ounce = he will ride it all the way back to 500/ounce = lost house, lost his gold :)

Genius!