Fellow "Bubbleheads", let this thread be a periodic update on your own personal position in this Great Bubble cycle.
No shame, no insults. I'll delete any comments that mock or ridicule anyone else for decisions they've made. i.e., No piling anyone willing to admit they've bought, for whatever reason. Pilers oners know who they are.
I'll start things off:
Randy H and extended family:
In 2007 we continue to rent, closing in on the start of the third year of renting after over a decade of happy home ownership. We are preparing to rent for another year or longer, but continue to try our best to keep our situation flexible. Renting is an enormous pain in the ass given our situation. We're prepared to pay a reasonably hefty premium for a house: Wheel chair ramps for elderly parents don't easily install in rented McMansions. But these prices are nowhere near a "reasonably hefty premium" yet.
I'm still unsure of how long the correction will take. I'm still sure it is underway. I'm vindicated in my sticky price calls. I'm also sad I was right. I occasionally have wonderful waking dreams in which the remainder of the correction occurs in a single day, and I'm suddenly BBQing in the back yard, all my Patrick.net friends over drinking beer and consuming various charred flesh, surfer-x demonstrating his cannon ball dive into the pool ... oh wait, that's another dream.
Anyway, we're still renting, and still pissed off about it. And it rains too damned much in prime Marin.
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In the BA, there was 2 huge run up in RE prices, one started in 98 and the other around 04. We bubble sit for a while and then bought in late 2003 before the second run up. We are quite happy with our 2300 sq. ft. McMansion. We were fortunate that our down payment is substantial and our PITI is less than 25% of our gross income. Even then, with 2 small kids, it gets very expensive here, we max out both 401ks but save nothing on top of that. I just think the loose credit is bad for everyone and will eventually translate into a deep recession which hurts J6P the most.
My (if you can call it) advice is that people should run a retirement planner before you buy that house. Historically, retirement planner calls for not factoring the sale of your home to be conservative, but that is very difficult to do in CA.
The other issue that we don't talk about much is how stable your income is. If you are good at what you do (in my field it is very easy to spot, one would get recruiting calls from your friends at startups), then you can probably be able to take a bigger risk. If you are afraid of losing your job, then it does not make sense to be very leveraged.
FollowBefriend1 threads750 comments Redwood City, CA
I'm renting... in Redwood Shores! Sooo boring there, but I was sure it would be a 'safe' place to rent sight unseen. My wife and I started looking around for a place to buy after we got settled into our jobs and aquired a serious case of sticker shock.
We figured out we COULD buy if we HAD to, with 20% down and a DINK techie household we could... but kids could knock us out of being able to afford the house.
Still renting, still hoping to find a house and in the meantime saving up cash for larger downpayments while maxxing 401(k) and IRA contributions.
FollowBefriend3 threads1,170 comments
However, I don’t know if everyone else is noticing this, but wages are not going up much, barely above inflation, no bonuses etc - but expenses are going up.
One shocker was the sandwich that I always buy at my local Subway's went from $6.59 aftertax to $7.05 aftertax. Whoa.
That said though, in my circle of tech friends, most people saw a raise of 3-6% last year.
FollowBefriend15 threads5,071 comments astrid's website
Yeah, I was being mildly sarcastic, though a few people here do think "owning" and kids must go hand in hand. Though even without rent, raising kids in the BA is an expensive undertaking.
FollowBefriend (4)117 threads17,655 comments
Though even without rent, raising kids in the BA is an expensive undertaking.
Even raising cats in the BA is not cheap! Groomers are charging so much.
If you plan on having kids, all the more reason to load up on tax sheltered retirement accounts now. The school can touch your house "equity" but they can't touch your retirement accounts.
Before I realized I didn't have to have kids, I had this plan of hording my income in retirement funds and taking a sabbatical when the kids reach college age.
Before I realized I didn’t have to have kids, I had this plan of hording my income in retirement funds and taking a sabbatical when the kids reach college age.
I also do not think having kids is important to me. Perhaps I should think about that when the World is better. Which is Never.
FollowBefriend660 comments Mountain View, CA
Astrid - rasing kids in BA expensive - tell me about it - especially when there are parents that are obviously pulling in a lot more money spending left right and center on everything their kid could possibly want to do - ballet classes, singing classes, acting classes, horse riding, ice skating, gymnastics all at once! Every Summer Class that is going!
Don't get me wrong, mine get to do a fair bit, but only one activity at a time!
My wife pretty much thinks "owning" and "kids" go hand in hand.
CB, if I could get into a situation where I was happy with the house and location and had a reasonable chance of keeping the PITI to under 33% of the income (25% is awesome!) I wouldn't care if I overpaid right now. Down the road, overpaying would eventually sort itself out. I'm hoping the bubble will deflate enough soon enough for me to overpay for a house I can manage with a reasonable payment. Right now, I can't find one. And my wife thinks I'm a little neurotic worrying about one of us not being able to work and have to stay home with the kids full time. "If we both have to work, we both have to work!" Since the houses we're finding that we'd be willing to stay in come up to about 50% PITI, we'd both definately have to work. Even if we managed a 40% PITI, if one of us had to stop working for a few years, we'd be as screwed as if we were 50% PITI. (Or 75% PITI, for that matter.) 33% and one of us having to quit would still suck (Jumps to 66% PITA!), but with the savings and reserves we have, we could swing it for several years. 80-100% PITA if one of us has to quit working is completely undoable for more than a very short term.
We are still renting. My landlord has informed me that he is looking for "long term" tenants and thus has been most kind with his rental charge. We are DINK (no plans to ever have children), and we do not have pets (husband has terrible allergies to all furry creatures, unfortunately). We are good candidates for renting since there really is no pressure for a great school district, or pet friendly environment, plus the rent is so very reasonable for us.
At this point, I am just a fascinated spectator. Also, after saving a large down payment I don't want to part with it so easily. Of course there is still the occasional questioning from friends about why we have not bought. I just tell them we are happy renting. I don't think they understand. But that is okay, I still get to drink my Insignia and go on nice vacations :)
I feel for your situation, we put down a deposit for a house in Santa Clar (with Cupertino schools) before our first kid, but it needed 100K worth of work so we backed out. Our first kid was born in the townhouse I bought long time ago and the pressure to get a SFH was there from the time we got married.
I was very conservative and was only try to buy something that don't need my wife's income, needless to say, there's not much to look at. I finally relented and bought something 100K more than what I budgeted for.
The bubble will pop, my brother lives in Hong Kong, he has seen his place lose 30% of its value and just now 12 years after he bought the prices came back to around what he paid for, but that means he has no nominal increase for 12 years. All that because his wife wanted to live on the hills (they are not even half way up the hills), my brother is not dumb, he's got an MBA and is a VP of finance of all discipline :)
Peter P sez: "Even raising cats in the BA is not cheap! Groomers are charging so much."
Who grooms a CAT?!?......and is that even possible, without a transfusion to replace the blood.
Yah... I wouldn't mind mild overpaying if I was sure I could carry it in pretty much all eventualities... because it would make my wife happy to own a home for kids. We could definately get a 'starter home' right now no problems, but to me buying a starter home near what looks like the top of a bubble is begging for trouble. It almost completely wipes out your ability to 'trade up' when you want more bedrooms/better schools/less crime.
I've talked her into waiting for awhile. Hopefully the market will soften enough and we'll save enough extra down payment to get us into a house we want instead of a house we'll settle for, and one we can definately keep.
Who grooms a CAT?!?……and is that even possible, without a transfusion to replace the blood.
Our cats require grooming at least once every few months. Otherwise, the hair will get too long and/or tangled.
Astrid - rasing kids in BA expensive - tell me about it - especially when there are parents that are obviously pulling in a lot more money spending left right and center on everything their kid could possibly want to do - ballet classes, singing classes, acting classes, horse riding, ice skating, gymnastics all at once!
I was in Stanford Mall and Valley Fair Mall recently, and it's really come to me that people here have a lot of money. And that I'm not one of them.
Yeah yeah, we always joke around here that people are buying their hummers using MEW and HELOCs - but is that really so true? It seems to me that a lot of the MEW/HELOC crowd here are either PreProp13ers using it for groceries, or fools getting American brand SUVs.
I don't think the MEW/HELOC crowd are getting the S550's I keep seeing, or the 2 BMW Z8's I saw one day at Stanford Mall (each one was about $128k new).
I also think the median income is skewed lower via the PreProp13ers, as well as the class of people who have no chance of buying (landscapers, etc).
$200k really is the new $100k around here. I really need to find a Pre-IPO company to join.
Having been in a few pre IPOs... you can't count on them to buy you a house. You can just be pleasantly suprised if they do.
I'm kicking myself for turning Google down before they'd launched. "No way can you beat AltaVista for searches!"
Kids lessons are big businesses, 2 of my friends in Canada said their boys have to go to skating school, they were both on the high school hockey team, I asked them whatever happened to letting your kids skate in the neighborhood rink and they said, times are different now, how weird.
I don’t think the MEW/HELOC crowd are getting the S550’s I keep seeing, or the 2 BMW Z8’s I saw one day at Stanford Mall (each one was about $128k new).
When the Z8 first came out, it had a 40K markup, I remember in the SF car show they kept it behind the ropes on the platter, and I told my wife that I can probably sit in one because there is one in our work, when the Z-8 drives up the garage, it will set off all the other car's alarms.
But the Bay Area does not seem to have many RRs. I wonder why. S550's are probably considered low-class in Asia.
Rolles Royces are chauffeur cars. They're not very attractive or practical unless you have a chauffeur or two.
Rolles Royces are chauffeur cars. They’re not very attractive or practical unless you have a chauffeur or two.
I also wonder why the rich people in the Bay Area do not hire chauffeurs. Driving can be quite dangerous. (Think potential vehicular manslaughter charges and MEGA civil suits).
Girlfriend and I bought a 180 square foot studio on the Upper West in 2004 for what it would take to rent one.
Did you mean 1800 sqft?
Venture capital/IPO $ in BA has a highly inflationary effect on BA housing. It's kind of like living in 1650 Spain. All that cash doesn't increase living standards, it just makes the previously middle class feel poor.
180 sq ft studio is not unheard of.
Not just the Bay Area - but speaking of civil suits why was Brandy driving herself? Why do Paris/Britney/etc drive themselves?
No idea. The moment I can reasonably afford a chauffeur, I will get one.
Is an East Coast sqft the same as a California sqft?
I've seen a lot of Gawker pictures and I don't think Paris/Britney drives that much, especially after clubbing. But generally, chauffeurs are expensive in America, particularly good chauffeurs who are discreet and good drivers. Chauffeurs are more common in Asia because good chauffeurs are cheap relative to decent cars.
Chauffeurs are more common in Asia because good chauffeurs are cheap relative to decent cars.
True. But rich people here should be able to afford even the best chauffeurs with carry permits.
As far as I know, feet does not expand as you cross the Rockies or the Mississippi. Though I've never actually seen a sub 300 sq. ft. studio or a sub 1000 sq. ft. SFH. I just read about them online.
DINK household + a dog, with income that is approaching 300k.
Is your company hiring? :)
The most climby woman I know in SF just hired a driver.
Chauffeurs are definitely worth the money in Mainland China. It's a complete pain trying to drive or find parking space in Shanghai.
FollowBefriend23 threads2,038 comments surfer-x's website
simply amazing. my personal fave is
Standard of Practice 1-3
REALTORS®, in attempting to secure a listing, shall not deliberately mislead the owner as to market value.
No way! If I have the money, a top end German car would definitely be the way to go. Hummers are pretty terrible vehicles all around. Shanghai drivers aren't too bad, Beijing drivers are awful.
No way! If I have the money, a top end German car would definitely be the way to go. Hummers are pretty terrible vehicles all around. Shanghai drivers aren’t too bad, Beijing drivers are awful.
Does China have a well-defined legal framework for civil liabilities? Can the owners of the vehicles shield themselves from liabilities?
> The most climby woman I know in SF just hired a driver.
Does he drive the standard issue Town Car or did she step up to the Maybach 62?
Since MBZ/Maybach was a sponsor of the last B&W Ball I got to drive around in a Maybach and I decided that if I ever make a lot of money I’ll get a McLaren F1 as a daily driver and have a Maybach with a driver for when I don’t feel like driving…
Never owned a cat.....grooming a cat sounds like a guaranteed trip to the emergency room.
Never owned a cat…..grooming a cat sounds like a guaranteed trip to the emergency room.
I have even bathed a cat before. Not easy. But doable.
I have no clue as to what her car is. A lot of people were snickering about it when I got my hair cut. She apparently got the driver because she wants to become friends with SF's newest socialite (who from what I hear is rather down to earth and not terribly impressed with the whole thing).
I was invited to a Maybach party a few years ago. I didn't know what one was, and had to ask a friend. Do they sell them like Tupperware or something?
I am a Lurker here for at least a year....we have been renting in the south bay for a year and a half. Prices are just too expensive in our neck of the woods. Seems like houses are still selling pretty quickly. Rent is about $2850 for 4 bd house.
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