patrick.net

RentingForHalfTheCost says

I bought in California in 2003 and when someone said they would give me 50% more than I paid just 5 years earlier, I gladly sold

er.. so you rented in the BA saved up a whole bunch of cash by renting and then in 2003 bought two homes, one for yourself and a home in Canada for your parents?

What made you think that 2003 was the right time to buy after renting in the BA for so many years? .. and why didn't you sell earlier than '08? Surely you should have seen the frothy signs in 04 or 05.

Don't you ever regret not buying in the 90s? You'd probably have the house paid off by now.

Derp derp herp derp

E-man says

SubOink says

living with a shitty stove that doesn't work right. Or the dishwasher breaks so you call the landlord and he gets you a new one - the cheapest one out there.

I couldn't stop laughing reading this. So true so true.

We were crying for years...and now we are finally laughing about it too :)

zesta says

RentingForHalfTheCost says

I bought in California in 2003 and when someone said they would give me 50% more than I paid just 5 years earlier, I gladly sold

er.. so you rented in the BA saved up a whole bunch of cash by renting and then in 2003 bought two homes, one for yourself and a home in Canada for your parents?

What made you think that 2003 was the right time to buy after renting in the BA for so many years? .. and why didn't you sell earlier than '08? Surely you should have seen the frothy signs in 04 or 05.

Don't you ever regret not buying in the 90s? You'd probably have the house paid off by now.

I never bought in the BA, I bought in the surrounding area where prices/rents/income made sense at the time. It was just a weekend home on my way to Tahoe.

I never bought in the 90's because I was only in a position to buy in the BA around 2000 and by then things were already getting overpriced. Looking back I never really had an opportunity unless I did a 5% down and that is not in my blood. I watched my parents lose their home during the 1980 interest rate increases. Once you live through it once you don't ever want to do that to your family. In Canada there is no such things as a 30 year fixed. It is a 30 yr amortization with a refi every 5 years. You can lose your home with big jumps in interest rates.

Anyway, I have regrets in life, I sure we all do. But my housing decision don't have any of them. I have always stayed true to my conservative thinking. Others can go chase big money, but all I want is a place to call my own eventually. I will never overpay for it. It has value, but nothing close to what BA housing sells for today in my opinion.

zesta says

Don't you ever regret not buying in the 90s? You'd probably have the house paid off by now.

I got a house paid off already now. Just don't have it in decaying wood and chalk. It is in real investments where I like it. People keep saying that, thinking that renters can't invest the difference and save.

Buying with other people money is easy. Buying with your own is much harder. Kinda like looking at the monthly payment instead of the full purchase amount. Each year right now I actually am avoiding another 50K drop in my worth by not buying. Even with a high paying tech job, that is more than a years of hard savings. I think there are still a few years left like that.

fizbin says

That's what RE leverage does brilliantly: you have both the inflating asset, and the depreciating mortgage.

Is one of the reason why I bought another RE in addition to the mortgage-free owner-occupied SFH.

hanera says

fizbin says

That's what RE leverage does brilliantly: you have both the inflating asset, and the depreciating mortgage.

Is one of the reason why I bought another RE in addition to the mortgage-free owner-occupied SFH.

Leverage is great when it works in your favor. Stings like a bugger when it flows against you though. Careful out there.

RentingForHalfTheCost says

I never bought in the BA, I bought in the surrounding area where prices/rents/income made sense at the time. It was just a weekend home on my way to Tahoe.

Thanks for sharing. I'm interested because you're one of the bigger bears on this board (and that's saying something) but yet you jumped in 2003, but didn't get out until 2008.

What areas of CA made so much sense to buy in 2003? and seeing the disconnect between rents/prices why didn't you sell earlier?

I confess I thought CA real estate was overpriced in 2002.

Bought a condo in 2003 (just like RFHTC did), sold it in mid 2007 and bought a SFH in early 2011. So just like zesta, is interested to know why RFHTC is so bearish. With Fed printing monies like crazy, is a matter of time before hyperinflation catches fire. Real worth of SFH might decline because of unfavorable economic conditions but nominal value is likely to be up because of Fed's action. Many folks buy precious metals to hedge but I prefer SFH because can rent it out so cost of hedging is lower.

hanera says

Bought a condo in 2003 (just like RFHTC did), sold it in mid 2007 and bought a SFH in early 2011. So just like zesta, is interested to know why RFHTC is so bearish. With Fed printing monies like crazy, is a matter of time before hyperinflation catches fire. Real worth of SFH might decline because of unfavorable economic conditions but nominal value is likely to be up because of Fed's action. Many folks buy precious metals to hedge but I prefer SFH because can rent it out so cost of hedging is lower.

Don't bet on inflation, there are plenty of instruments to absorb all that liquidity without any trickling down to create any inflation that you will feel. It isn't going to come to the main street.

Rather expect deflation in US for several years due to global labor competition intermixed with consumer deflation arising from that.

zesta says

Thanks for sharing. I'm interested because you're one of the bigger bears on this board (and that's saying something) but yet you jumped in 2003, but didn't get out until 2008.

What areas of CA made so much sense to buy in 2003? and seeing the disconnect between rents/prices why didn't you sell earlier?

In 2003 I bought a new home in Folsom for $127/sqft which when I crunched the numbers for construction costs, land value, property taxes, it wasn't that bad. I was able to take out only a small mortgage on it. The monthly was less than $800/mth at a 4.25% 5/1 ARM. I planned and did pay it off in the 5 years so never needed the readjustment. Part of me wanted to completely pay off the house before contemplating selling. I know, I should have sold in 2007, but still selling in 2008 wasn't that bad either.

As far as being bearish, I don't think there is any other way to be. Believe me, if there were signs that pointed to being a bull or even on the fence I would. I actually want to buy a house NOW, just don't want to throw away any of my money. As long as I thought the prices would be stable I would buy. However, hearing all the realtors and housing bulls misinterpret the data over and over really makes me a skeptic. I look at data each and every day, it is my job to crunch through and interpret it. This last year I have used my work skill to do the same for housing and I don't see any good indicators. The momentum has been down and like the housing boom, once momentum starts it really needs something to turn it around. Many have said it here, it is related to jobs and incomes. These both are not good and then add in the shadow inventory and the picture gets worse. Enter the foreign buyer that is suppose to save the US housing market. I don't think so.

FortWayne says

Rather expect deflation in US for several years due to global labor competition intermixed with consumer deflation arising from that.

Yes.
- Just go to the grocery store, things are so much cheaper now than 2 years ago...NOT.
- Go to the gas station...Man, gas has never been cheaper...NOT
- Check your electric bill...notice the decrease?...NOT.
- Health Care Costs...Lower?...NOT
- Insurance premiums on anything...Lower?...NOT
- Rents...Lower??...NOT

We are clearly on our way to deflation...NOT

SubOink says

FortWayne says

Rather expect deflation in US for several years due to global labor competition intermixed with consumer deflation arising from that.

Yes.

- Just go to the grocery store, things are so much cheaper now than 2 years ago...NOT.

- Go to the gas station...Man, gas has never been cheaper...NOT

- Check your electric bill...notice the decrease?...NOT.

- Health Care Costs...Lower?...NOT

- Insurance premiums on anything...Lower?...NOT

- Rents...Lower??...NOT

We are clearly on our way to deflation...NOT

Because we seem to differ on many points in other threads, I think it is only fair to say that I am in full agreement with you here. Inflation is alive and well. Print print print print ... I'm just a full of crap armchair economists, so take it for what it is worth. ;)

SubOink,

We agree for once.

SubOink says

It also doesn't include that the landlord keeps security deposit at the end of the lease for those repairs, or a portion of it because your dog peeed on the carpet and your son threw up at the walls :)

I don't think it factors in the interest earned on security deposits either. In San Francisco, renters earn interest on their security deposits.

If you're struggling with whether to buy versus rent, consider these 10 reasons to take the plunge into homeownership:

A friend of mine and I often joke about the phrases used to describe buying a house. "Take the plunge!" Sounds so inviting.

SubOink says

Keep renting...even though you are the best proof that it does work because somebody out there is renting out THEIR house to you :)

A logical component of your comment is that the person renting the house is a competent, or careful, accountant or manager of their money. Most clearly are not as I understand most people to manage money to clear their costs slightly each month rather than building their net worth each ten years.

RentingForHalfTheCost says

Because we seem to differ on many points in other threads, I think it is only fair to say that I am in full agreement with you here

wthrfrk80 says

SubOink,

We agree for once.

Ok, guys! DRINKS ON ME!

I'll take a scotch on the rocks...

It's past noon here. ;-)

RentingForHalfTheCost says

In 2003 I bought a new home in Folsom for $127/sqft which when I crunched the numbers for construction costs, land value, property taxes, it wasn't that bad. I was able to take out only a small mortgage on it. The monthly was less than $800/mth at a 4.25% 5/1 ARM. I planned and did pay it off in the 5 years so never needed the readjustment. Part of me wanted to completely pay off the house before contemplating selling. I know, I should have sold in 2007, but still selling in 2008 wasn't that bad eithe

I have no idea what home prices are like in Folsom, but if they're back 2002/2003 territory would you recommend someone who's looking in that area to buy? Especially since their monthly nut would be less than it was '03 with a 30 year fixed.

Zestimate $149,400 $109K – $202K -$3,400 $67 05/01/2012

Rent Zestimate $1,690/mo $1.3K – $2K/mo +$23 $0.77 05/02/2012

Nuff said!