patrick.net

bubblesitter says

Clearly,you are running out of patience. Try adding another 10 to 15 years of crazy stuff that has been going on since 2008.

Not sure to whom this comment was meant, but it does describe us.

If I was in my 20's or 30's (and without kids and pets) I could sit on the sidelines and wait a little longer but in the meanwhile we've spent more than a quarter million dollars renting and we are not getting any younger.

Rents are high and our landlord is an a-hole. Bouncing around from rental to rental with a family is not an option.

2002 prices are fine with me, at this point. It's about then that I first felt ready (life, career, family, etc.) to buy, and then the market went crazy and I said no way.

But waiting another 5-10 years for baby boomers to start dying? Sheesh, I'll be almost ready to retire by the time that happens.

Some of us just need a place to live. Housing as an investment is just as effed up as health care for profit.

1sfrenter says

we've spent more than a quarter million dollars renting

Some people lost that and more in 3 years by owning. ;) Think on the bright side of things.

RentingForHalfTheCost says

If I read something from the 1% of potentially unbiased that I think is good facts then I will investigate the source and intent.

Just curious--what are the 1%?

Hey, if you find something you like and the numbers work, and it makes you happy, go for it.

Do I think it's a bottom? Depends on where you are. I think Las Vegas and South Florida are close.
Just remember, at these interest rates you sign on for 200K (as an example what ever) and the price drops for whatever reason, you still owe 200K

APOCALYPSEFUCK is Tony Manero says

It's never been a better time to buy!

Ha!

Hahaha!

Hahahahahahahahahahahaha!

Why so skeptical Tony ?

Baby boomers won't all sell, many will reverse-mortgage. I know some who are planning on this exact thing when they hit the magic age of 62: collect social security, medicare, and reverse mortgage their property. Tough shit for their kids, let them eat MTV.

clambo says

Baby boomers won't all sell, many will reverse-mortgage. I know some who are planning on this exact thing when they hit the magic age of 62: collect social security, medicare, and reverse mortgage their property. Tough shit for their kids, let them eat MTV.

You not listening. Reverse mortgage are gone like the dinosaurs. Your friends will have to sell if they want to use their houses for cash.

http://money.usnews.com/money/personal-finance/articles/2011/06/29/big-banks-bow-out-of-reverse-mortgage-market

toothfairy says

Oh I agree real housing prices are definitely falling

http://www.calculatedriskblog.com/2012/01/real-house-prices-and-house-price-to.html

(snip from the above link about real house prices);

Real House Prices

The second graph shows the same three indexes in real terms (adjusted for inflation using CPI less Shelter). Note: some people use other inflation measures to adjust for real prices.

In real terms, the National index is back to Q1 1999 levels, the Composite 20 index is back to April 2000, and the CoreLogic index back to February 2000.

In real terms, all appreciation in the '00s is gone.

Back to Q1 1999! Not long now before we get back to 1997 and we have then completed the retracement back to where we started. Then guess what? No bubble correct in history has ever just gone back to the beginning, they always over-correct. Not just my words.

SHILLER: Those things have come down a lot. I don't know exactly where the middle is but it's not like we're overpriced anymore. Now the question is whether we'll overshoot, which is a common thing that happens after bubble burst.

From this link.

http://finance.yahoo.com/blogs/daily-ticker/robert-shiller-housing-bottom-thinking-134116144.html

You want someone in the 1% of unbiased group. I'd add Shiller to that group. I'm sure there are a few realtard that would take a shot at him if they could.

tatupu70 says

RentingForHalfTheCost says

If I read something from the 1% of potentially unbiased that I think is good facts then I will investigate the source and intent.

Just curious--what are the 1%?

This site. A lot of blog sites that use web snoopers to collect data that NAR would like to keep under wraps. Things like DOM (real ones) and price adjustments. I'd put all the flipper in trouble sites in that category.

http://flippersintrouble.blogspot.com/
http://phoenixflippers.blogspot.com/
http://seattleflippers.blogspot.com/

This site.
http://www.calculatedriskblog.com/

There are lots of people collecting data that shows what is happening. Over the years it is absolutely amazing the disconnect in main stream media and what is actually really happening. Your see some guys chasing the market down in Sacramento losing a life savings in the process on the flipper site, and then the next day you'll heal some realtard saying sales are fierce in Sacramento and everyone needs to buy! Just idiotic and the worse things got the crazier the realtards screamed buy. Really what I hear is, "Help, my SL500 payment is up this month and I need your money to pay for it!". Scum

1sfrenter says

But waiting another 5-10 years for baby boomers to start dying? Sheesh, I'll be almost ready to retire by the time that happens.

Who recommends to rent for life? DO IT if it makes financial sense to you. You lost 250K in rent? Try buying a $2 mil property and if it looses 500K in value how much have you made? Just a example. Math has been clearly explained in Patrick's calculator. Run the numbers and if you think it makes financial sense(rent v/s buy) then go for it. GL to you.

robertoaribas says

and most bubbles overshoot on the way down.

name a single one that has not.

1sfrenter says

We have been actively looking to buy in San Francisco for the past 2 months.

Buying any place in SF or BA in general today, resignation is your friend and guiding light. Just accept that there are worse fates than paying too much for a house and get on with your life.

Here is a dated looking little bunny hutch I grew up near as teenager that is on the market and pending for over a million dollars.

1167 Pimento Ave

Sunnyvale, CA 94087

Looky what this bad boy sold for in 1999 - a damn good year for industry in America!

RentingForHalfTheCost says

This site. A lot of blog sites that use web snoopers to collect data that NAR would like to keep under wraps. Things like DOM (real ones) and price adjustments. I'd put all the flipper in trouble sites in that category.
http://flippersintrouble.blogspot.com/
http://phoenixflippers.blogspot.com/
http://seattleflippers.blogspot.com/
This site.
http://www.calculatedriskblog.com/

No offense, but it looks to me like you're falling into the trap where sites that agree with what you think are unbiased and those that disagree are biased.

Gentle Readers,
Bottoms, anyone? Link:http://img.metro.co.uk/i/pix/2008/11/sloggibumcompEPA_450x464.jpg
Regards,
Roidy

tatupu70 says

RentingForHalfTheCost says

This site. A lot of blog sites that use web snoopers to collect data that NAR would like to keep under wraps. Things like DOM (real ones) and price adjustments. I'd put all the flipper in trouble sites in that category.

http://flippersintrouble.blogspot.com/

http://phoenixflippers.blogspot.com/

http://seattleflippers.blogspot.com/

This site.

http://www.calculatedriskblog.com/

No offense, but it looks to me like you're falling into the trap where sites that agree with what you think are unbiased and those that disagree are biased.

The flippers and calculatedriskblog are all about numbers. Very little actual opinions, so I disagree with you. Numbers don't lie, unless someone is manipulating them. Could the sites I listed be manipulating the numbers? Absolutely they can. However, for what reason, benefit? There is no money trail to justify the corruption in this case. Just the way I like it. You show me someone making money from something and I will show you some form of manipulation of the data. I work in data and make very good money analyzing it each and every day. Have been doing it for 30 years now and I don't think I am far from the best at it. Each day I see the corruption, even in my work group. I can smell it, like other people can smell a spoil infant in a restaurant. :)

tatupu70 says

No offense, but it looks to me like you're falling into the trap where sites that agree with what you think are unbiased and those that disagree are biased.

classic confirmation bias

toothfairy says

No offense, but it looks to me like you're falling into the trap where sites that agree with what you think are unbiased and those that disagree are biased.

i agree with whoever is right.

Time will tell.

robertoaribas says

flippers in trouble? those examples prove that buying an extremely expensive home in 2006 was a bad idea... thank you for the news flash!

However, in any market today where someone can buy a home 20% down 30 year fixed, and lock in a mortgage way the heck under rent, in some cases at half of rent... what is your point again?

No real point, more of a progress to stupidity. It started with the OP claiming a bottom. I posted data suggesting that it is a tough call (highly improbable) and then there was a backlash saying I only look at data one sided. However, no alternative data was presented. My biasing was questioned and then ridiculed. Still no data. Guess that bottom must be happening with all the proof that was posted. Interesting thought process we have here. ;)

So, can we get all the realtors in this forum to agree that purchasing a house in 2006 was a big mistake? I bet we can't. I bet they have some hair-brained reasoning that makes buying that house still correct in their minds. Remember "It is never a better time to buy... repeat". Have they all called up the clients they sold to during that time and apologized?

EastCoastBubbleBoy says

Call me crazy.. but I'm calling a bottom!

CNN ..

Too bad none of these news portals like CNN, MSNBC, San Jose Mercury News have come out and apolgoized for dismissing the Housing Bubble in the first place, and frankly getting it wrong.

Bottom.. for a home your buying ... 1997 price PLUS inflation which can be 35-40%. Thats the bottom...

If we overshoot to the downside in housing... I predict we bounce hard off the new bottom, just like the stock market did in March 2009. I dont think we see 2007 prices again though until 2025 or later.. And most of it will be due to inflation... Wages will be a lot higher... Hell, physical money will probably be phased out... Our debt will be so high as a country... The US will only survive by devaluing the dollar... If anyone thinks we will pay off our national debt with more deflation of assets they are insane!

LAO says

I predict we bounce hard off the new bottom, just like the stock market did in March 2009.

The things fuelling equities are not the same that would be fuelling residential real estate.

Here's why I think that we're at bottom.

In the last two bubbles (1970's and 1980's) prices didn't overshoot on the down side. At the end of the 80's bubble (and even in the smaller mid 90's bubble) prices did not revert to the benchmark index value of100. They reverted to an index value of about 110. My hypothesis is that this is due more multi-income homes being commonplace, but I haven't dug up the data to support or refute that.

At the end of the day an index value of just over 110 (say 112 to 113) is about the right place for a bottom. So if the article is correct that prices have returned to 2001 prices in most areas... That's why I'm saying that this is the bottom - certainly time will tell if I am right or wrong.

EastCoastBubbleBoy says

n the last two bubbles (1970's and 1980's) prices didn't overshoot on the down side.

Those weren't really bubbles. Those were like booms or overheated markets. What we had in '02-'06 was first and foremost a credit bubble.

No realtors here. I am a investor. I am buying as many houses as I can. ; -D

Huh? How the hell do you mean?

You show me some evidence that Texas or anywhere here in the Inland Empire is on the fritz and I'll grant you that I am wrong. I am not a proud guy in that way. I am reasonable and sensitive. But otherwise these little tit-for-tats are just wasting both our times and energies.

Time will tell who is right.

I knew I'd get flack for this thread, but I stand by my perdiction that when we look back on this mess in another year or two, early 2012 will bee seen as "the bottom".

EastCoastBubbleBoy says

Time will tell who is right.
I knew I'd get flack for this thread, but I stand by my perdiction that when we look back on this mess in another year or two, early 2012 will bee seen as "the bottom".

It all depends on what the fed does with the money supply and interest rates. If interest rates stay at rock-bottom, and if lots of new money is created and finds its way into real estate, we'll get rising prices again. And if (or when) monetary policy is tightnened, prices will go down. It's all at the mercy of the Fed.

I don't know about you, but I can't predict the Fed's actions. So I'm not going to make bets which are subject to those actions.

I'm going to throw my opinion in the hat and state that no- we haven't hit bottom. At least that's my guess. The only reason I say is due to my own ancedotal observations I'd mentioned on another thread. For all practical purposes where I live is more or less a broad representation of the general Bay Area populace: well-educated, well-paid professionals living in a Bay Area bedroom community in the east bay. Lately I've noticed what seems to be a sudden uptick in short sales and foreclosures. What's more, stuff is just sitting and sitting. We're not talking about a neighborhood full of folks who flip burgers for a living. They're probably about like me and do pretty well financially. Yet I'm starting to see foreclosures and short sales where I haven't seem them before.

So my wild and highly speculative guess is that the bust will finally start affecting the areas that had previously not been affected as much... in other words, the areas most people want to live.

wthrfrk80 says

I don't know about you, but I can't predict the Fed's actions. So I'm not going to make bets which are subject to those actions.

They are going to kick the can down the road until it causes so much inflationary pressure it will likely get out of hand fairly quickly. The country would default very quickly if rates were to rise to even a normally low rate of 5%

What are we at now? 0 to 0.25%?

edvard2 says

So my wild and highly speculative guess is that the bust will finally start affecting the areas that had previously not been affected as much... in other words, the areas most people want to live.

i've noticed the west side (ie the nice side) of belmont, san carlos, millbrae which are second tier cities start to have reasonably priced non-crappy, non-tear-down homes - as low as $600k which i've never seen before this year.

this coming year should see more inventory priced in this lower range.

$600k seems still rather steep. Then again I'm not familiar with stuff in Millbrae or Belmont. Around here we're seeing stuff sell in the $350-$450k range. Anything higher generally sits. Even the lower priced stuff doesn't sell immediately.

1sfrenter says

599K for a nice 3/2 in a decent neighborhood and 499K for a crappy house in a really terrible neighborhood.

I think your anecdote shows a lot of truth to where things are - a market trying to find it's equilibrium.

The crappy over-priced specifically smells like desperation, sucker fishing, or folks hoping the fringe effect (people settling for less, and sketchy loan instruments pumping up buying power) isn't really gone.

pkowen says

sucker fishing

That spells it out for me.

The real issue is that because the market is so disjointed, everyone here could be right. Some places in the Bay Area are probably at or near bottom. Others still have a way to go.

Here's an excellent comparison of zip codes 94611 and 94621 in Oakland. 94621 is probably, pretty darn safely, bouncing along the bottom.

http://bayarearealestatetrends.com/2012/02/27/location-location-locationand-a-reversion-to-the-mean/

The big gorilla in the room is the 70 million baby boomers that will be dying in the next 30 years.
My crystal ball is very murky, but here's one other possible scenario. Housing starts have been crushed by the downturn. Perhaps they never return to historic levels and demand is met by boomer inventory. Hard to know how the markets will reach their equilibrium as we've got the normal business cycle and boomer dieoff both feeding back into the system.

Katy Perry says

save your cash (haha yeah right)

buy with all cash in five years.

that's exactly why it won't go there

EBGuy says

The big gorilla in the room is the 70 million baby boomers that will be dying in the next 30 years.

Newsflash - People die all day. And baby's are also born daily. Amazing, eh?

Those houses will be passed on to the next generation that will rent them out, fixed income without having a dime invested is nice. I wish I had that coming.

gregpfielding says

The real issue is that because the market is so disjointed, everyone here could be right. Some places in the Bay Area are probably at or near bottom. Others still have a way to go.

Here's an excellent comparison of zip codes 94611 and 94621 in Oakland. 94621 is probably, pretty darn safely, bouncing along the bottom.

http://bayarearealestatetrends.com/2012/02/27/location-location-locationand-a-reversion-to-the-mean/

East Bay Real Estate Agent and Blogger

Nope, eventually all prices will track down. Only one group will be right. Houses from the sea, in the hills, across the valleys will all be aging and devaluing in this country. "Location, Location, Location" will only be heard from someone that stutters. If a realtor even so much as mumbles the words people will be running them out of town. The "Buy now!", "Interests rates will never be better", "Home prices always go up" rhetoric is old. It worked during the Ponzi scheme growth, but now that everyone is wiser (well almost everyone), realtards better change the vocabulary. Buy for quality, value, because you cannot see yourself living anywhere else. Stop trying to time the market and make a buck. Go to work for money, invest in stocks to grow your savings, live in a friggin house Goddammit. If you want get rich quick, then watch the late night infomercials.

SubOink says

Katy Perry says

save your cash (haha yeah right)

buy with all cash in five years.

that's exactly why it won't go there

EBGuy says

The big gorilla in the room is the 70 million baby boomers that will be dying in the next 30 years.

Newsflash - People die all day. And baby's are also born daily. Amazing, eh?

Those houses will be passed on to the next generation that will rent them out, fixed income without having a dime invested is nice. I wish I had that coming.

SubO, you aren't saying that the baby boomers are being replaced 1-to-1 with the new generation. Wow, that is out there. We are not having another bab boom right now. If anything our baby rate is pathetic. We are going to be screwed by the aging baby boomers, no doubt. They put us in the hole with the debt and they will keep putting us in the hole. As soon as a baby is born he/she goes ~50K in debt. Thanks baby boomers, we love you.

http://www.brillig.com/debt_clock/