WatchWell, so its about a year now that I bought and here is my current status:
Unlike the patrick.net predictions, I am not underwater, my house is not worthless or worth less and I am not hating life but loving it. Best decision ever. It feels good not to pay rent to somebody and making their retirement plan come true. This summer we did so many updates and improvements, would have never done that in a rental. And the best part - we refinanced our house at 4% and now our payment is actually not what our rent used to be but $280/m less. (and thats for a much bigger house) - Who could have know that interest rates would go even further from where we locked in and that my payment is now way less than rent used to be is definitely an xmas gift.
When I was talking about it last time, everybody jumped the gun on me and told me how I will regret my decision come xmas 2011. How I will be in total financial distress and will regret that I bought and eating ramin noodles. - Quite the contrary.
Well, folks?
The doom and gloom as predicted just didn't kick in, did it now?
I'll be back next year and repost - till then, keep up the good gloom and doom work, post the graphs that prove it and happy thanksgiving and merry xmas!!
:)
(Rumbling sound of an earthquake...)
Follow
Befriend (3)
9 threads
706 comments
Los Angeles, CA
I agree - if Aliens come to invade us, the whole buying vs renting discussion is obsolete...
?!?!
Follow
Befriend
3 threads
243 comments
Los Angeles, CA
SubOink says
That depends on whether they are staying long term, and what their incomes are.
Follow
Befriend (9)
70 threads
930 comments
San Leandro, CA
The sooner the masses learn WHY house prices became detached from reality, the sooner they will back away and wait for phenomenal values to return. In the meantime we must prepare to bailout the blind, or rich.
Follow
Befriend
3 threads
243 comments
Los Angeles, CA
Literally, the trend shows housing prices going to zero, and below, so we should all wait until they are paying people to take houses, and then "buy".
Follow
Befriend
3 threads
243 comments
Los Angeles, CA
I wonder if the price of tulips is more now than it was Feb 3, 1937?
Also, no one really needs tulips, they do need places to live.
Follow
Befriend
3 threads
243 comments
Los Angeles, CA
Which the landlord has to buy or already own (not sell).
Follow
Befriend
3 threads
243 comments
Los Angeles, CA
No, renters still have to live in and pick from the rental stock. Because this tends to be inferior, is one reason to own. And your landlord's problems are indirectly yours (it's like Democrats calling for high[er] taxes on corporations - which becomes a cost of doing business and is usually passed along to... the end consumer).
Not all problems can be passed along, but on the flip side no one I know of ever got rich renting, while the same cannot be said of owning.
Follow
Befriend
3 threads
243 comments
Los Angeles, CA
There have been discussions here and on Redfin forums about renters buying because they couldn't find what they wanted, or got sick of tolerating their options.
That's true about passing on costs/losses, in the short term, for the individual renter. But as with corporate taxes, these costs usually, generally, over the long term, get passed along to renters as a whole. The cost of roof maintenance, repair, and replacement, and insurance on the rental, are all built into your rent payment.
The benefits of appreciation (when applicable, which is, historically, over time, usually), however, never get passed along to the renter.
And while SoCal is a bit of an unusual market, in most of the country, landlords make positive cash flow (profits) in addition to appreciation, which means that renters are not only losing out over time, but month to month as well. Of course, there are exceptions, it's better to rent than own when price depreciation is occurring, etc.
Follow
Befriend
40 threads
856 comments
Oakland, CA
GameOver says
and when your landlord cant pay his debt? That's when it becomes your problem.
Follow
Befriend
3 threads
243 comments
Los Angeles, CA
GameOver says
As long as prices keep declining. But what makes you and your friend think you are better market timers than Wall Street, real estate developers, and other buyers and sellers? In other words, it just as easily, IMO, could have gone the other way, and eventually, in whatever particular market you are talking about, that day will come. Sure, it may be smart to wait til the bottom or even for the upswing - if you can figure out what this is. In the meantime, for most people, a place to live isn't and shouldn't be an investment, so timing the market and sitting on the sidelines forever doesn't make sense for most people.
Also, if the friend is married, does he regret that because he saw a prettier, younger girl walk by one day?
Follow
Befriend (3)
9 threads
706 comments
Los Angeles, CA
gameover - you seem to be in some sort of panic. What's the cause? Are you unemployed? Has your wife left you? You seem to be in a very dark place, I feel bad for you. It's called hysteria.
Things aren't nearly as bad as you say. Just go out, enjoy life. Book a flight to Hawaii...you'll notice that most of them are sold out. Buy an ipad...go to a very expensive restaurant, they are all packed with people enjoying life.
Everyone still has to eat, drive, live somewhere etc - nothing has changed. Car's need to be fixed, surgery's need to be performed, goods have to be produced etc...
Not sure where you get the idea of an implosion. I guess a meteor could fall out of the sky and crush us all.
You remind me of the guy that predicted that the world would end in 2011.
Follow
Befriend
3 threads
243 comments
Los Angeles, CA
SubOink says
I notice that! I keep asking, 'where's the recession, why aren't these people at Denny's or at home?' whenever I walk into one.
Follow
Befriend
3 threads
243 comments
Los Angeles, CA
toothfairy says
Which happened to a renter friend of mine. LL got foreclosed on, she had to move somewhere else.
Follow
Befriend
3 threads
243 comments
Los Angeles, CA
SubOink says
In fact, housing-wise, of the two developer/investor types I know, one is holding rather than selling, and the other is buying. (I also know some flippers, who are flipping, but that are market agnostic, more or less.) So it's interesting to me that while many here who would be in the market for one house for themselves are waiting for prices to drop, the big boys - at least the two I refer to here, not much of a sample, I know - won't sell because he thinks a better time to sell will emerge later, and is buying, because he thinks now is a great time to buy, respectively.
Follow
Befriend (3)
9 threads
706 comments
Los Angeles, CA
GameOver says
No, I can't help you because I am too busy packing my stuff - in case the economy implodes...and the world as we know it ends. No time for belly rubbing, or BJ's.
Although, I could meet you at BJ's for a burger though. It's sunday so there is only going to be a 45min. wait...must be all people eating their last meal :)
Follow
Befriend (3)
9 threads
706 comments
Los Angeles, CA
Like I said, I am sorry you feel that way :)
Follow
Befriend
3 threads
243 comments
Los Angeles, CA
GameOver says
We are probably going to be doing better soon because (a) business cycles come and go, and tend not to last forever, (b) the housing bubble burst recovery is either already here or will be one day, and (c) Obama's incompetence will likely earn him a ticket out of the WH this year.
As far as Bush, he was actually smarter than at least his last opponent, so if you were voting based on IQ, you would have to have chosen him, at least once, maybe twice:
http://isteve.blogspot.com/2005/06/my-article-on-john-f-kerrys-iq.html
And anyway, everyone agrees Nixon and Carter were smart, so picking presidents based on IQ, maybe not the best idea.
Follow
Befriend (3)
9 threads
706 comments
Los Angeles, CA
GameOver says
Ah, that explains a lot!
We were also going to have a couple of drinks and dinner tonight but we bailed because the restaurant we like to go to was too crowded due the "shitty" economy...(blink blink)
Follow
Befriend
4 threads
66 comments
I agree Sub, if you can afford a home, go for it. The only problem is when you're negative equity and you have to move due to job relocation or something else. The work arounds for that don't fit every lifestyle or situation.
I also don't beleive a home has to be cheaper than renting a similiar unit. I'm not sure why Pat and others think this is a golden rule while he has no problem buying vehicles that depreciate every year. Nobody expects to buy a car and have it's value increase with inflation. They buy it expecting a 30% drop after a few years and nobody complains. A home doesn't have to be an investment just like everything else you buy in life isn't.
Good luck
Follow
Befriend
4 threads
66 comments
GameOver
Not sure why I hear so many folks talk about their crappy standard of living or how it's sliding. Just the opposite. Ask your parents how many restaurants they had growing up, or how much a TV and car was inflation included. I remember a plasma TV cost 60,000 now it's 600 for a 50inch. Cell phones are out of the question but used to be only for the rich. I saw a samsung flip phone in the paper for $5 bucks. Considering that 60% of Americans are fat asses, I'm sure food prices aren't that much either. As far as real estate, I thought the US had some of the cheapest real estate amongst all non third world countries. Unemployment is at 8.5% and other countries like Bosnia is 40% and is normal for them. (according to this Bosnian guy so not for sure on that). I think the real problem with you and others is you compare yourself to rich people and their lavish life style and can't just be happy with a shack and food on the table like how your parents had it when supposedly everything was so much better, right?
Follow
Befriend (3)
9 threads
706 comments
Los Angeles, CA
well put, snyderkv
Follow
Befriend
3 threads
243 comments
Los Angeles, CA
GameOver says
Is there some candidate that did this, you have in mind?
GWB, like him or not, was clearly of above average, but not genius level intelligence - in the 120s to 130s most likely. He was also far more consistent over time than Kerry, so again based on your own standards, if you were going to vote for either of the two candidates who had half a chance of winning in 2004, you'd have to have voted for Bush. Bush v Gore, one could reasonably differ on who was most consistent, I suppose. McCain v Obama, Obama had a lot less time to be consistent.
Follow
Befriend (3)
9 threads
706 comments
Los Angeles, CA
gameover, so you don't have an iphone 4S?
OMG, no wonder you think the economy is imploding :)
-message sent from my iphone 4S
Follow
Befriend (3)
9 threads
706 comments
Los Angeles, CA
.
Follow
Befriend
4 threads
66 comments
GameOver says
What's that Mr straw man? Wow I must of really hurt you. Sorry for giving you my opinion. If you disagree with me, you could have chosen different words over making yourself sound like a fool. I guess there is nothing more for us to discuss then.
Follow
Befriend
40 threads
856 comments
Oakland, CA
I will go on record today to predict that there will be another economic bubble.
Follow
Befriend
4 threads
66 comments
toothfairy says
Good call tooth, bubbles happen before we see them. Next one might be the school loan bubble, energy bubble but most likely something we don't predict. Someone quote this for me
GameOver, You are taking this way too seriously.
Follow
Befriend (3)
9 threads
706 comments
Los Angeles, CA
game over hates kids, hates cars, hates progress, hates life, hates himself. Poor guy.
I wouldn't worry too much about what an individual like that thinks...
Follow
Befriend (3)
9 threads
706 comments
Los Angeles, CA
GameOver says
Boy, you showed me!! LOL.
Follow
Befriend
4 threads
66 comments
SubOink says
I don't know how many times he's going to ignore people before he actually commits to it. I kinda feel bad for him too.
Sorry to contribute to the derailing of this thread. Good luck everyone!
Follow
Befriend (3)
9 threads
706 comments
Los Angeles, CA
snyderkv says
lol - I have never tried or even noticed the "ignore" functionality. It's pretty neat. The posts actually disappear. - Game Over -
:)
Follow
Befriend
1 threads
78 comments
Going back to the orginal post, above: "The doom and gloom as predicted just didn't kick in, did it now? (over the last year)"
I am seeing many bloggers writing about how the end of the world as we know it is not happening, insinuating that everything is okay, and it's business as usual.
The Fabians are a group of socialists whose strategy differs from that of Karl Marx in that they seek world domination through what they call the “doctrine of inevitability of gradualism.” This means their goals will be achieved “without breach of continuity or abrupt change of the entire social issue,” by infiltrating educational institutions, government agencies, and political parties.
Prominent Fabian and writer, George Bernard Shaw, revealed that their goal was to be achieved by “stealth, intrigue, subversion, and the deception of never calling socialism by its right name.”
The central bankers who own 150+ private central banks, one in nearly every country, are Fabian socialist. This is where the endless money for this movement is coming from.
The tactic employed appears to be to use fear in the media, and expected catastrophe, to distract from what is going on at the international and local political level. Sustainable development (the UN Agenda 21 "green" movement), as an answer to purported global warming, is the creeping mechanism by which the Fabians are infiltrating every facet of American life.
It's not sensationalistic or indicative of a sudden catastrophe, so people don't intuitively feel it's harmful in any way -- people have "bigger" issues to think about, thanks to the media. Little do people know that the catastrophe is slowly creeping into their lives, little by little, and it will continue to do so until all the "big threats" are all forgetten and labelled a hoax by the media that created them. And then a few years later -- like magic -- we live in a 100% Fabian socialist country. This was the Fabian strategy and goal, all along.
"Apocalypse Fuck" and a few others (Alex Jones, Glenn Beck, Michael Savage, etc.) serve a very real purpose here, as Shaw puts it: “stealth, intrigue, subversion, and deception."
As long as the public's attention can be distracted from UN Agenda 21, the Fabian goals will be achieved.
Follow
Befriend
1 comments
Housing historically rises 3% a year, so yes it goes up on average each year but so does inflation. If you inflation adjust houses in places like Cleveland, Atlanta, Detroit, Vegas are back at 1992 prices. Remember, people will stay my home did not fall in value last year. But remember if inflation is 3% the home has to rise in value 3% just to break even. Also remember, if you borrow 100% at 4% and inflation is 3% home needs to rise 7% to cover fact you borrowed at 4% and inflation is 3%. Also remember, homes have lots of costs, insurance, maints, RE taxes etc.
Last year tax free munis rose 10% and long term treasuries rows 30% and could be bought and sold for ten bucks in commission and no work to own.
Owning a home makes sense cause you want to own a home or the cost is less than renting. It is more of a hedge against future rent increases than anything else. But in trutch is is a lousy investment.
Follow
Befriend (3)
9 threads
706 comments
Los Angeles, CA
HouseNut says
And what kind of an investment is renting? Because you do have to live somewhere.
Jason M. says
yeah, yeah, yeah...it's really the illuminati that are behind all of this...bla bla bla...come on.
In my 40 year existence, I get up, work, eat, have fun, hang with friends, play with my kid, make money, spend money, go on vacation, drink coffee, go out...no change. Some years are great, other are not so great but overall life is pretty good and will continue to be great...not sure what is "creeping" up behind me.
People have had those theories for 100's of years. The problem with our mind. It likes to wander of into fantasy land. And when you get trapped in a mind labyrinth you loose track of reality and all of a sudden "it all makes sense".
They are on to us!! AH!!
Follow
Befriend (3)
15 threads
5,653 comments
HouseNut says
I agree that considering only appreciation in housing--it is a bad investment.
But if you borrow money to buy a house, its value decreases with inflation, so your home value really doesn't have to rise to offset inflation.
Follow
Befriend
4 threads
66 comments
tatupu70 says
Good catch, and why does Tatapu, Patrick and others think housing has to be an investment and pay itself off? Nobody buys a car and expects it to pay for itself. We might as well all take the trolly instead of owning our own vehicles since we take a hit on those too, but instead we pay for car ownership because of the perks of getting us to point B faster. Home ownership perks may cost extra too. Nobody said every product in this world has to put cash in your pocket. iPhones don't nor does apartments, therefore, I don't feel owning has to be cheaper then renting to be a good buy and I completely go against Patrick and its herd.
Follow
Befriend (3)
38 threads
801 comments
San Francisco, CA
snyderkv says
I don't think Patrick does believe housing has to be an investment. He's just reflecting one of the most commonly held thoughts in the U.S and debating it.
Follow
Befriend (2)
3 threads
552 comments
Madison, WI
1.5 years have passed, since I sold house, still glad I did.
Follow
Befriend (3)
15 threads
5,653 comments
snyderkv says
I don't. Just that if someone were to buy a house solely for appreciation, it was a bad move. If it's an investment, then you should get cash flow (rent) that exceeds cost. Or if it's your residence, then you get all sorts of other benefits.
Follow
Befriend
1 threads
15 comments
Fair Oaks, CA
Congrats Sub-Oink, I hope you stay happy. I am in a similar position, having bought just over a year and a half ago.
I may have lost about ten percent since then, but I plan to live here for quite some time and having a mortgage that is less than my apartment rental in the Bay Area rocks. Plus the dog seems to be very happy having a yard:)