WatchThis might have been posted before but what the heck. Its worth revisiting. How many of you think the bubble will return? Of those of you out there looking- and not just those looking in the fortress areas- what are you seeing? Much of the same or have things changed?
Secondly, if another bubble rears its ugly head, what would you do?
A: panic and buy a house ( or get priced out foreva'!)
B: Say: "Screw it, I'm moving
C: Stay and continue to rent
D: ( for those that already own) brag about how much your house is worth.
E: None of the above.
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RentingForHalfTheCost says
You have a mindset in the public today, that must have their "Bling".
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Los Angeles, CA
RentingForHalfTheCost says
And certainly don't believe everything you read.
:)
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Laguna Beach, CA
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SubOink says
Stanley accounted for those people, remember the 10% I mentioned?
He called these "rich" people UAWs, or Under Accumulators of Wealth. They appeared wealthy on the outside, but didn't accumulate as much wealth as PAWs, Prodigious Accumulators of Wealth.
The main difference was that UAWs, like the rich people you know, spent lots of their income on lots of cars, really expensive homes, but held much less wealth than PAWs who spent their money more practically, and invested into assets that returned money (unlike Ferrari's like your rich friends).
Warren Buffet drives an old Cadillac, he's considered one of the Top 5 wealthiest people in the world.
Scottie Pippen bought a $5 million dollar jet during the height of his career, owned a classic Ferrari F40, and made over $110,000,000 in salary from the NBA.
In 2007, he owed lawyers, and had liens against him in excess of $9,000,000.
Looks can be deceiving.
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This is what a $1.2M house in Palo Alto looks like:
http://www.redfin.com/CA/Palo-Alto/1820-Ash-St-94306/home/595737
But why not save yourself $300K and buy this house in Chicago, in one of the top schools districts in the country, only 35 minutes from the city + right next to a country club + 1.15 acres of land:
http://www.realtor.com/realestateandhomes-detail/2455-Westcourse-Dr_Riverwoods_IL_60015_M79527-93827
Now where would you rather live?
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If anyone drove around Palo Alto for decades there are plenty of very very old cars parked in the drive way... you were unlikley to have seen the latest BMW, Benz, Lambo or Ferrari... more like old clunkers...
LA is a different story... and so is the Cocaine !
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thomas.wong1986 says
So much for rich people living in Palo Alto. How much longer do we have to take this BS?
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dunnross says
It is pathetic.. some people need to go sober up.. take a 12 step program..LOL
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dunnross says
YES! that is a $1M home...a modern 5000 sq ft home! makes sense!
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San Francisco, CA
E-man says
I've read a fair number of words here and none, or almost none, of them suggested what you've written. You're underestimating the writers' understanding of supply and demand or getting confused. If you're thinking some think house prices fitting incomes would have an absolute dollar value equal to bordering/suburb areas now, then I agree, but I think many of them would subsequently think that would simultaneously mean lower prices in the bordering/suburb areas should prices on the peninsula fall in line with incomes.
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E-man says
Oh, you big hearted, merciful one... (I was going to type a smiley emoticon thing-y, but then remembered I have a set of balls.)
Not to worry -- it's rather obvious that the more properties that are converted to rentals, the more rents will fall in the long run anyway -- and the more homes that are sold out of REO or short sales at lower prices (according to Moody's Analytics and others) it will make them viable rentals at lower prices. The later speculators will undercut the earlier ones with the higher cost base.
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RentingForHalfTheCost says
That's freaking hilarious. Thanks for the laugh.
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CrazyMan says
Nice. That says a lot. :)
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If NASDAQ reaches 5000 again, what do you do?
*
*
*
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I may wait for 6000, then short it.
Short Apple at 1000, etc.
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Pleasanton, CA
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dunnross says
Wow, very cute dog house. Must be a special pet.
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San Jose, CA
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RentingForHalfTheCost says
Well, they did say that the value was in the land. It must be sitting on a gold mine, or maybe the door handles are all made of gold.
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Los Angeles, CA
thomas.wong1986 says
What Cocaine?? (sniff)
:)
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Belmont, CA
SubOink says
Pure bull. Having seen the books for several wealthy people, most of the people who I know who are retired rich lived well below their means. Only the nouveau riche and the lucky undeserving burn heard earned money and wealth like it will always come easy.
You realize if all the new money acted like old money we wouldnt have million dollar baselines in middle class neighborhoods. Only idiots with "money" (more like credit) drive things up like this.
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bmwman91's website
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It seems like it may already be back (perhaps for a short time). What am I doing?
Well...my old BMW's motor finally took a dump (I could fix it, but the same damn thing has broken 3 times in 2 years now and it is a 12 hour repair I am tired of doing on a 22 year old engine with 220,000 hard miles). There is a fully built version of this motor that I have wanted, for years. It costs less than a new car (well, most of them), and since I was saving for a house, I think I'll blow 20% of that savings on something that I will enjoy on a regular basis. If anything, this is one reason that I am glad that the BA housing market is frothed to hell. It keeps me from wanting to participate, which frees up a little money for a project I have wanted to do for YEARS. Screw the house, I just wanted it for a garage for this anyway! My dad is cool with me leaving the chassis in their driveway & doing the motor swap there in the next couple of months (they live about 20 miles from me).
Here's where I sort of lose some people; what do I get for this price? This bored & stroked-to-2.1L motor, which I am embarrassed to say how much it costs, will net me a whopping 205HP at the crank. Anyone that knows much about cars will usually scrunch up their eyes & say, "huh?" However, you can run it off of its 7700RPM red line all day long because it is way over-built, the crank & valvetrain assemblies have about 4.5kg of moving mass knocked off of them (versus the stock setup), and the car only weighs 2550lbs, with the entire engine's center of mass behind the front wheels. I rebuilt the whole suspension a few years ago and the chassis is rust-free & stiff. The feedback from the road in this car is unreal, Almost any new car can probably take a corner as fast or faster, but I have yet to sit in one that gives this level of feedback (hence my hesitance to part with it, despite its dubious reliability).
Holy crap, if I can get myself to pull the trigger on this motor (and a fully rebuilt transmission & 5-clutch differential), it will be INSANE. This gets me so much more excited than some stupid wooden box that would suck up all of my disposable income, it is insane. I will have to take out an insurance policy on the motor & drivetrain alone (which are about 4x the fair-market value of the car itself)! God I love hobbies! Shit, even my fiancee is at least somewhat supportive since she knows this would make me giddy like a kid in a candy store. She isn't fully aware of the price tag yet, but I'll work something out lol.
OK, coming back from grease-monkey land, that's what I am doing while this housing market circle-jerks itself to hell. In the end it is all about living your life in a fashion that suits you! (with some degree of responsibility & forward-looking, of course)
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bmwman91, we salute you!
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Whenever someone mentions motor swap, the answer is always the LS series (yes GM) small block v8. Despite the large displacement, the ohv design means it can fit in a compartment a small as a Solstice. Its AL block/heads and low part count means light weight and low cg. (its lighter then the iron block tiny bmw motors). With the proper 6speed which you'll prob get from the same donor car, the fuel milage will be in the 30mpg+ range highway. Aftermarket parts are cheap and some has already done the swap in an E30.
Dont bother with modest power gains that will still pale compared to modern Japanese 4 bangers. With this swap you'll be running with the big boys and smoking modern M5s
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Oh if you want feed back, go test drive an Elise. $25k will get you a decent used one with the reliable Toyota/yamaha drive train, telepathic steering, and unreal cornering.
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Serpentor says
Oh, an LS swap has been on my radar for a while. A few E30 guys have done it. It is a super labor-intensive project, but most definitely worth it from what I can tell. I have no issues with putting a Chevy small block into a BMW. However, it is way too much work that I would have to do in borrowed space, and it would put my car out of commission for 5-6 months. Well, that and no good can come from me having that much power in a car. I would either end up dead or in jail. My personal take on street cars with 300HP or more is that they have no real purpose. They are fun, but dangerous to have fun with in public and really should just be used on the track. After I almost died in a car that I crashed while driving like a moron in 2005, my view on "performance" cars changed a bit.
The Elise would be loads of fun. Alas, I want the option of cramming 4 people & a load of climbing gear into the vehicle as well. The Elise would be a car I'd buy ONLY to drive for fun since it is really not very practical. And, at least in Mountain View, there are way too many of those darting around the area as it is. I want something a little more unique, even if it isn't going to be blowing the doors off of new sports cars. The MM motors are ridiculously reliable and the power band is well adjusted. My opinion is that ~210HP in an E30 is the perfect amount for a street car. More than that, and you have to start rolling fenders to fit more rubber in there to keep the wheels down.
I have driven cars with a lot more power than that, and it is loads of fun. The thing is though, that I can't trust myself to behave with it when in public. I'd either end up in a lot of trouble, or if I behaved, the car would just be a waste of money. Laguna Seca is pretty close by here, and when I have the space & cash for it, I am building a dedicated track vehicle that I can go nuts with & not worry about driving legally (since it would never touch a public road).
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Mick Russom says
It's easy to live below your means when you make 50mill a year, isn't it?
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Most people don't live below their means.
Why? you cannot bring money to heaven/hell after death.
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xenogear3 says
True. However, you may be able to quit working & spend the last third of your life spending your time on whatever you choose if you live cheap & keep things simple.
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Hysteresis says
As someone that works in statistics, I take issue with the above research. Stats can be used to prove any point you want, and if taken out of context, are meaningless.
Thomas Stanley tended to concentrate his research in small/medium cities in the US, away from the right/left coasts.
Many millionaires living pretty much anywhere other than California/New York can live in an amazing mansion for $500k, not remotely possible in SF/LA/NY.
Should his survey be limited to people in the top 5 major metro areas, I think he'd get a different result.
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bmwman91 says
Way to go,but that's not the American way. Mind set of people is set to take debt. It is the system and I am one of the few who refuse to accept that system. I paid for my car upfront rather then borrowing. :)
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bubblesitter says
Aaah, nevermind, couldn't detect the sarcasm through the intertubes.
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bmwman91 says
By the way,congrats on getting heck of 22 years out of your BMW. I am jealous(as some one of this forum used to accuse me,repeatedly). :)
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Goran_K says
bmwman91, buy the motor already. BA people have lost that kind of loot in a week. Last week as an example.
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bmwman91 says
Odds are greater the last 3rd of your life you will have an ailment that keeps you from enjoying your life as much as earlier too.
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BoomAndBustCycle says
Ultimately, the bottomest of the bottom lines is, do whatever you think best facilitates your pursuit of happiness, as long as it doesn't involve impeding anyone else's pursuit of the same. After all, where is the pleasure in living your life like an actuarial scientist?
http://www.guardian.co.uk/lifeandstyle/2012/feb/01/top-five-regrets-of-the-dying
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BoomAndBustCycle says
Oh really? So explain then how is it the first 2/3rd you will enjoy?
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Belmont, CA
SubOink says
As someone who is house poor you would know.
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RentingForHalfTheCost says
Working on it today. My only concern is the 11.5:1 compression...that will increase NOx emissions and I need to be able to pass CA SMOG! I think I'll pass on the rebuilt transmission & differential since the ones in the car are fine and usually don't die unless you abuse them, and $4500 is a lot to drop on two parts that aren't broken! I have a psare transmission laying around somewhere anyway lol.
So as to keep up the appearance of not hijacking this thread...I think that the BA is still in a bubble. It looks like 2012 is either going to be a year of mild re-inflation, or at the very least a year of no deflation (in the peninsula & SV areas).
Since analogies are fun, this is my take on "the bubble." Most people here think of water & dish soap bubbles. They are weak and will POP without warning after a short time. Being a car nut, and looking at what has been going on in the BA, I think that our bubble is more akin to a blistered figerglass shell. Damaged layers delaminate & can form very large bubbles. You can't pop them because the bubble is made of structural material. Fixing them involves stripping the bad layers off, cutting that section out & completely rebuilding it. The difference between popping a soap bubble & repairing a delaminated fiberglass structure is more or less how I see the difference between the RE bubble in most of the US, versus the RE bubble in the BA. RE in the BA is rotten to the core and it is a structural issue. Only something major is going to "fix" this, and anyone that has done work with fiberglass knows just how unpleasant, uncomfortable and even dangerous (without proper safety precautions) it can be! So it is with the BA too.
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Santa Cruz, CA
I don't understand the original question. I thought the bay area bubble never completely popped yet.
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Danville, CA
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clambo says
Some places did, other places did not. Some will not, such as Palo Alto.
Our place was valued at $1.2M at the peak. We bought it in the low sixes because it was fixer. The houses around us are all owned by older people who've been here for years and are valued anywhere between $750-800K. The foreclosure down the street (that smelled like mold) was on the market for one week before going pending.
This isn't Columbus.
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Los Angeles, CA
Mick Russom says
house poor?
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Santa Cruz, CA
Did you guys read about the billionaire Nicolas Bergguen who just lives in hotels?
Chicks still dig him. Imagine that.
Something tells me he's not dealing with pajama parties, pampers, school pta meetings either.
Something also tells me he is not dating any fat chicks.
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rootvg says
Which neighborhood didn't pop?