comments by SFace

SFace   befriend (1)   ignore (2)   Thu, 8 Oct 2015, 11:16am PDT   Share   Quote   Like   Dislike     Comment 1

net of tax, borrowing cost is around 2-3%. makes perfect sense for the financial savvy. if you have another means to borrow large sum of cash at less than 3%, let me know.

SFace   befriend (1)   ignore (2)   Thu, 8 Oct 2015, 11:08am PDT   Share   Quote   Like   Dislike     Comment 2

Patrick says

so tell me how to go from that to the correct price to pay. the problem is that rents still do not cover expenses, not even in sf. just pay anything? whatever the seller asks?

It's damn if you buy and damn if you rent. Wither way cost a shitload of $$. No advice here other than there is no need to sell when supply/demand is in landowners favor. A seller's market means they choose buyers. Buyer's don't call the shots so rent price is irrelevant.

That SF rent/price argument was the same 5 years ago, 10 years, 30 years. It does not work. Time to think about thinking about housing in a different way. Ratio always tell you to buy in the Ghetto and not buy prime, which is opposite of reality. People buy prime and will pay even more in the future. location location location is going to be location X5.

SFace   befriend (1)   ignore (2)   Mon, 5 Oct 2015, 10:52am PDT   Share   Quote   Like   Dislike     Comment 3

Why I would not sell in San Francisco.

* No new SFH for the past 40 years or forever. Owning land is a no-brainer
* San Francisco's industry is just getting started. Rents are not calming down anytime soon.
* Low property tax. Not just you but 80% of the homeowners. Combine with step up basis and you have a homes that are off the market forever. Supply will always be chump change.
* There is no basics of a crash (supply, locked in low interest rates with huge equity cushion and local economy).

SFace   befriend (1)   ignore (2)   Fri, 2 Oct 2015, 11:02am PDT   Share   Quote   Like   Dislike     Comment 4

iggy says

The reason others don't want to sell is because the Prop 13 lock in. The house has very low property tax rates. Also, no mortgage.

Have the others buy you out. It will not crash like last time. That's of course your opinion but don't force it on others. Just sell your portion. Simple transaction, easy financing.

The price should take into consideration the step up in bases and wiping out the income tax completely no matter how much appreciation. The biggest tax loophole in the US is death.

There's a lot of value in buying a SF house with 1K in property tax vs. say 15K a year. I will never sell a property that costs nothing to maintain. Maintenance are value adding. Property tax is a sunk cost.

SFace   befriend (1)   ignore (2)   Thu, 24 Sep 2015, 1:53pm PDT   Share   Quote   Like   Dislike     Comment 5

Logan Mohtashami says

You didn't read the statement correctly , supply is more important for prices, especially when supply is conventional sales to distress

That's the whole point. Thousands of words on demand, when anyone know it's a supply issue. You can't buy what's not for sale.

It's like someone buying a car and you talk about the extended warranty - completely useless information. when people talk about housing market, the default context is price movement. No one gives a crap about sales volume. Sales volume is a function of supplies. How do owners get bitched slapped when renters are puking?

SFace   befriend (1)   ignore (2)   Thu, 24 Sep 2015, 11:39am PDT   Share   Quote   Like   Dislike     Comment 6

It's hard to say bitch slap when the renters are puking.

No one cares about sales except economists. The economy would not be bitch slapped because of demand of housing now anyway so you metric is completely no value. when homes sales were crappy, the market (housing price) just bitch slapped by doubling.

SFace   befriend (1)   ignore (2)   Thu, 24 Sep 2015, 10:25am PDT   Share   Quote   Like   Dislike     Comment 7

Jarhead says

Picture this scenario. I just opened a 500K line of credit to take care of my cash needs for 10 years in case TSHTF.

I understand, but remember, banks can close lines of credit if shtf. Unless you actually draw on the money, having the credit is just having the credit for now. Banks are going to get crunched hard, lending will tighten. Having access to real money is key.

It takes me one click and 10 seconds to move the money as I know the circumstance specifically (equity and economy). The bank will drag their feet for 6 months. When SHTF where they have to take away the LOC, the money is long gone in my account somewhere. Like I don't know what the bank does.

The great thing is WTSHTF, interest rates will be all time low again.

SFace   befriend (1)   ignore (2)   Tue, 22 Sep 2015, 9:25am PDT   Share   Quote   Like   Dislike     Comment 8

2016 will be the same as 2013, 2014 and 2015. which was also was my last three years prediction. After the superbowl in Santa Clara, buyers will go bat crazy to buy real estate that has no supply.

SFace   befriend (1)   ignore (2)   Mon, 14 Sep 2015, 1:45pm PDT   Share   Quote   Like   Dislike     Comment 9

Jarhead says

But picture this scenario. One buys a home for 700k, puts 140 down (or 70 down) and ties up most of their cash in the home, between the down and renovations/updates/upkeep. They don't mind, they figure they will stay.

Picture this scenario. I just opened a 500K line of credit to take care of my cash needs for 10 years in case TSHTF.

SFace   befriend (1)   ignore (2)   Mon, 14 Sep 2015, 1:41pm PDT   Share   Quote   Like   Dislike     Comment 10

jvolstad says

http://www.usatoday.com/story/money/personalfinance/2015/09/12/15-year-mortgage-rates-house-payments-pete-planner/71488816/

Can't afford 15-year mortgage? Then don't buy

I have an offer for you. I'm going to give you the opportunity to buy a $250,000 item for either $310,000 or $416,000. It's not a trick. It's a 15-year mortgage vs. a 30-year mortgage.

Check out this story on USATODAY.com: http://usat.

If 30 year mortgage is so awful. I would love to see a raise of hand who would take the bank position and lend for 30 years at 3.75% or so.

Whether the 15 year or 30 year make sense depends on the difference in rate between the 15 or 30, nothing more. (less than 50bps, there is no chance to go for 15.) 75 bps or more, then consider it.

SFace   befriend (1)   ignore (2)   Mon, 14 Sep 2015, 1:15pm PDT   Share   Quote   Like   Dislike     Comment 11

Ironman says

tatupu70 says

Very, very few people (nobody?) buy(s) a house to let it sit empty and hopefully get capital appreciation.

Here we go again.... Where did say anywhere in the OP or thread that people were buying a house and letting it sit empty just to get appreciation?

If you buy a house, you either rent to someone else or rent to yourself (which saves rent which is all the same). Once you layer that in, housing has performed in par with the stock market. Long term, it is proven to be the best investment there is as all the rich ass mofo owns all the homes and renter's certainly don't own much, including stocks. Housing reits index has outperformed the S&P 500 over 30 years so you know housing performed better than stocks. The difference is the extra tax advantage, leverage and inflation hedge.

And besides, why don't you want to own your Headquarters.

SFace   befriend (1)   ignore (2)   Wed, 12 Aug 2015, 5:57pm PDT   Share   Quote   Like (2)   Dislike     Comment 12

"10.Because there is a huge glut of empty new houses. Builders are being forced
to drop prices even faster than owners"

It's 2015 not 2009.

SFace   befriend (1)   ignore (2)   Wed, 12 Aug 2015, 5:56pm PDT   Share   Quote   Like (1)   Dislike     Comment 13

"9.Because boomers are retiring. There are 70 million Americans born between
1945-1960. One-third have zero retirement savings. The oldest are 66. The
only money they have is equity in a house, so they must sell."

The boomer will not sell for another 20 years.

SFace   befriend (1)   ignore (2)   Wed, 12 Aug 2015, 5:55pm PDT   Share   Quote   Like (1)   Dislike     Comment 14

"8.Because first-time buyers have all been ruthlessly exploited and the
supply of new victims is very low."

Prices are at record in-spite of record low home ownership rate. Money buys home not first time buyers.

SFace   befriend (1)   ignore (2)   Wed, 12 Aug 2015, 5:54pm PDT   Share   Quote   Like (1)   Dislike     Comment 15

"7.Because there is still a massive backlog of latent foreclosures"

It's 2015 not 2009.

SFace   befriend (1)   ignore (2)   Wed, 12 Aug 2015, 5:51pm PDT   Share   Quote   Like (1)   Dislike     Comment 16

"6.Because the housing bubble was not driven by supply and demand. There
is huge supply because of overbuilding, and there is less demand now that the
baby boomers are retiring and selling."

This is also so 2005 when 2M homes were built for 5 straight years, most in suburbs and exburbs. For the past 8 years, homes are underbuilt, less than 1M, which drives the supply problem now. Boomers are not selling for another 20 years which means the generation x will pay for it.

SFace   befriend (1)   ignore (2)   Wed, 12 Aug 2015, 5:50pm PDT   Share   Quote   Like (1)   Dislike     Comment 17

"5.Because buyers used too much leverage. Leverage means using debt to amplify
gain"

This is also so 2005. real estate leverage is pretty low.

SFace   befriend (1)   ignore (2)   Wed, 12 Aug 2015, 5:48pm PDT   Share   Quote   Like (1)   Dislike     Comment 18

"4.Because buyers already borrowed too much money and cannot pay it back."

That is a 2005 argument, not 2015.

SFace   befriend (1)   ignore (2)   Wed, 12 Aug 2015, 5:46pm PDT   Share   Quote   Like (1)   Dislike     Comment 19

"3.Because it's a terrible time to buy when interest rates are low, like now."

While that may true, interest rate have trended down in one direction for 30 years. Good luck waiting for interest to be back to 1980, which is never. Low interest makes carrying assets cheaper. Most homes are now off the market forever because of low interest rates. record low inventory amid record prices proves this

SFace   befriend (1)   ignore (2)   Wed, 12 Aug 2015, 5:43pm PDT   Share   Quote   Like (1)   Dislike (1)     Comment 20

"2.Because it's usually still much cheaper to rent than to own the same size
and quality house, "

flawed logic. whether it is cheaper to own or rent is based on future unknown factors (future rent and future price). The lifetime owner in Palo Alto is at least 10 time richer than the liftetime renter in Palo Alto.

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