patrick.net

wthrfrk80 says

I don't know about you, but I can't predict the Fed's actions. So I'm not going to make bets which are subject to those actions.

They are going to kick the can down the road until it causes so much inflationary pressure it will likely get out of hand fairly quickly. The country would default very quickly if rates were to rise to even a normally low rate of 5%

What are we at now? 0 to 0.25%?

edvard2 says

So my wild and highly speculative guess is that the bust will finally start affecting the areas that had previously not been affected as much... in other words, the areas most people want to live.

i've noticed the west side (ie the nice side) of belmont, san carlos, millbrae which are second tier cities start to have reasonably priced non-crappy, non-tear-down homes - as low as $600k which i've never seen before this year.

this coming year should see more inventory priced in this lower range.

$600k seems still rather steep. Then again I'm not familiar with stuff in Millbrae or Belmont. Around here we're seeing stuff sell in the $350-$450k range. Anything higher generally sits. Even the lower priced stuff doesn't sell immediately.

1sfrenter says

599K for a nice 3/2 in a decent neighborhood and 499K for a crappy house in a really terrible neighborhood.

I think your anecdote shows a lot of truth to where things are - a market trying to find it's equilibrium.

The crappy over-priced specifically smells like desperation, sucker fishing, or folks hoping the fringe effect (people settling for less, and sketchy loan instruments pumping up buying power) isn't really gone.

pkowen says

sucker fishing

That spells it out for me.

The real issue is that because the market is so disjointed, everyone here could be right. Some places in the Bay Area are probably at or near bottom. Others still have a way to go.

Here's an excellent comparison of zip codes 94611 and 94621 in Oakland. 94621 is probably, pretty darn safely, bouncing along the bottom.

http://bayarearealestatetrends.com/2012/02/27/location-location-locationand-a-reversion-to-the-mean/

The big gorilla in the room is the 70 million baby boomers that will be dying in the next 30 years.
My crystal ball is very murky, but here's one other possible scenario. Housing starts have been crushed by the downturn. Perhaps they never return to historic levels and demand is met by boomer inventory. Hard to know how the markets will reach their equilibrium as we've got the normal business cycle and boomer dieoff both feeding back into the system.

Katy Perry says

save your cash (haha yeah right)

buy with all cash in five years.

that's exactly why it won't go there

EBGuy says

The big gorilla in the room is the 70 million baby boomers that will be dying in the next 30 years.

Newsflash - People die all day. And baby's are also born daily. Amazing, eh?

Those houses will be passed on to the next generation that will rent them out, fixed income without having a dime invested is nice. I wish I had that coming.

gregpfielding says

The real issue is that because the market is so disjointed, everyone here could be right. Some places in the Bay Area are probably at or near bottom. Others still have a way to go.

Here's an excellent comparison of zip codes 94611 and 94621 in Oakland. 94621 is probably, pretty darn safely, bouncing along the bottom.

http://bayarearealestatetrends.com/2012/02/27/location-location-locationand-a-reversion-to-the-mean/

East Bay Real Estate Agent and Blogger

Nope, eventually all prices will track down. Only one group will be right. Houses from the sea, in the hills, across the valleys will all be aging and devaluing in this country. "Location, Location, Location" will only be heard from someone that stutters. If a realtor even so much as mumbles the words people will be running them out of town. The "Buy now!", "Interests rates will never be better", "Home prices always go up" rhetoric is old. It worked during the Ponzi scheme growth, but now that everyone is wiser (well almost everyone), realtards better change the vocabulary. Buy for quality, value, because you cannot see yourself living anywhere else. Stop trying to time the market and make a buck. Go to work for money, invest in stocks to grow your savings, live in a friggin house Goddammit. If you want get rich quick, then watch the late night infomercials.

SubOink says

Katy Perry says

save your cash (haha yeah right)

buy with all cash in five years.

that's exactly why it won't go there

EBGuy says

The big gorilla in the room is the 70 million baby boomers that will be dying in the next 30 years.

Newsflash - People die all day. And baby's are also born daily. Amazing, eh?

Those houses will be passed on to the next generation that will rent them out, fixed income without having a dime invested is nice. I wish I had that coming.

SubO, you aren't saying that the baby boomers are being replaced 1-to-1 with the new generation. Wow, that is out there. We are not having another bab boom right now. If anything our baby rate is pathetic. We are going to be screwed by the aging baby boomers, no doubt. They put us in the hole with the debt and they will keep putting us in the hole. As soon as a baby is born he/she goes ~50K in debt. Thanks baby boomers, we love you.

http://www.brillig.com/debt_clock/

I think we'll have several more years of no movement in real estate industry. I certainly do not see prices go up without people willing to go into debt with as much uncertainty as there exists today, and huge rotting inventory.

At most you'll get a tiny temporary increase during summer for seasonal adjustment. And NAR will use this Bull Trap as an excuse to sucker unsuspecting buyers.

A few rare deals here and there is not a trend, plenty of crazy people out there trying to live off flipping still. Stocks returning 10% last year now that was a trend, which has at least few more years to go.

RentingForHalfTheCost says

Nope, eventually all prices will track down. Only one group will be right.

Clearly you were so excited to promote your own point of view that you didn't bother to read the article...

gregpfielding says

RentingForHalfTheCost says

Nope, eventually all prices will track down. Only one group will be right.

Clearly you were so excited to promote your own point of view that you didn't bother to read the article...

East Bay Real Estate Agent and Blogger

I read it, and concluded that one area has more people in denial than the other. The macro economics of the country will affect all areas. The more distress quicker than the more affluent. Eventually, though, even the affluent neighborhoods will adjust to the circumstances. Remember, many people who are buyers of the higher priced homes actually come from the selling group of the lower priced. Not many people just start out buying a million dollar home. You need locked in equity or other forms of luck. We just screwed a whole generation of starter home folks in the 2000's. You don't think that will affect the high end homes? Just because there is a lag, doesn't mean there isn't correlation.

RentingForHalfTheCost says

SubO, you aren't saying that the baby boomers are being replaced 1-to-1 with the new generation. Wow, that is out there. We are not having another bay boom right now. If anything our baby rate is pathetic

What does this look like to you?

Realtors Are Liars says

The most recent US Census demonstrated that population growth is at the lowest level in US history.

what does that tell you?

Housing prices are falling.

Ok. So growth is at the lowest level - that means its still growing! Just slower. What don't you understand about the very straight forward graph that I posted. Do you have data that shows that the population in the US is actually going down?? Please upload. Just because you say it is - doesn't mean it is.

Realtors Are Liars says

Population growth is at the Lowest Level in US history.

Even if you say it 100 times....population growth is what it is. It describes GROWTH as in MORE PEOPLE.

My graph is very clear and useless to argue.

Period.

Realtors are liars (what does that have to do with anything we are discussing???)

Nomograph says

Real estate only goes up. Buy now, or be priced out forever.

No, don't do that. 1975 prices just around the corner...

robertoaribas says

Population growth ranks as one of the stupidest claims for real estate investment ever!
Did the population grow over the past 4 years? YES! did it keep house prices from collapsing? NO!

Correct.

The population growth discussion started with somebody talking about baby boomers dying, I then posted a response to that...it was not really meant to prove anything that had to do with house prices going up or down.

I was saying that it wouldn't matter if baby boomers died because old ones die and new ones are born. The population curve is going up, even with baby boomers dying so the point of house prices must go down because the baby boomers will die is BS just like saying house prices must go up for the same reason.

But some here are so determined for house prices must go down - realtors are liars that they don't even leave things alone...

Me: I just ate at McDonalds

RaLiars: Don't twist it around. House prices must go down. Realtors are liars.

Lol

Just because a bottom was called with interest rates?

SubOink says

What does this look like to you?

Can you show the birth rate numbers that are offsetting the retiring baby boomers. Most of the growth in the US right now is not organic, it is foreigners that are much older than babies, which actually adds to the problem.

The U.S. population growth rate is slowing.

Despite these large increases in the number of persons in the population, the rate of population growth, referred to as the average annual percent change,1 is projected to decrease during the next six decades by about 50 percent, from 1.10 between 1990 and 1995 to 0.54 between 2040 and 2050. The decrease in the rate of growth is predominantly due to the aging of the population and, consequently, a dramatic increase in the number of deaths. From 2030 to 2050, the United States would grow more slowly than ever before in its history.

From this link

http://www.census.gov/population/www/pop-profile/natproj.html

RentingForHalfTheCost says

it is foreigners that are much older than

Foreigners with money. I forgot, they don't live anywhere. They just are.

come on dude.

Realtors Are Liars says

Foriegners??? lmao

Ok then...don't want to hold you back from LOL about yourself. After all, YOU said it...

lol!

SubOink says

I was saying that it wouldn't matter if baby boomers died because old ones die and new ones are born. The population curve is going up, even with baby boomers dying so the point of house prices must go down because the baby boomers will die is BS just like saying house prices must go up for the same reason.

Yes it does matter. Baby boomers are something like 27% of the population. GenX/Geny the next 20 years of births are a much smaller group. Immigration and babies coming of age in the next 20 years is not going to make up the difference in the decrease in the number of people of house owning age with the ability to buy a house. Babies being born today won't be in the market for a house until the vast majority of boomers are dead.

robertoaribas says

Rentingwithhalfabrain, these kind of quotes make you look like an utter idiot!

There you go again doing personal attacks instead of using any valid arguments. Same story different day. Don't worry about what I am looking like, take more of your energy and worry about yourself.

SubOink says

RentingForHalfTheCost says

it is foreigners that are much older than

Foreigners with money. I forgot, they don't live anywhere. They just are.

come on dude.

You guys find it hard to stay on subject. The issue started with someone saying that the birthrate in this country will offset the baby boomers growing old and having to sell their house. How is an influx of foreigners (what is driving the population growth right now) adding that original theory. It doesn't, that was my point. Then you take sentences I say and use them any which way you want. If it is a game of win/lose then you can win. I'll save my victories in life for those that matter, like being financially wise, for providing for my family, for keeping healthy, for adding to society. You can win the tick-for-tact here on the forum that keeps you up at night. Congrats.

More data about baby boomers and their ultimate effect on practically everything from soap to houses. A great real to put you mind pointed in the proper direction is "Freakonomics". It makes you realize that many things you thought were just chance, where not at all. Just people and ideas that happened to be in the right place at the right time. The gen-X and gen-Y are going to go down in history as being in the wrong place at the wrong time unfortunately.

http://en.wikipedia.org/wiki/Baby_boomer

SubOink says

The population curve is going up, even with baby boomers dying

The boomers as a class were far more wealthy than the next crop. Gen X to buy what the boomers leave behind in today's prices are not prepared to handle that. The move up buyers arent doing well.

Now that you've bought, you want prices to rise, yes? well, think about your kids. You want housing to skyrocket so your kids can live nowhere near you? Realize that with massive house price bubble inflation so goes the electric bill and tuition. You really want that?

Stable prices would be great, but instead we have FHA-backed speculation. Again. It will be different this time - how?

robertoaribas says

I've already made back 15% of the outlay in one years rent.

No, some poor destitute hard working wage slave paid for you to sit around and collect his money while not doing anything productive. Its called rentier income. Its called unearned for a reason.

The obsession with renting to hardworking people after hoarding land is strange to me. They should savagely rental incomes and properties to cut this madness out. Instead, the system of banksters and the rentier class conspire to reinflate the crushing housing bubble.

SubOink says

Those houses will be passed on to the next generation that will rent them out, fixed income without having a dime invested is nice. I wish I had that coming.

Keep doing this long enough, and violence becomes logical. Having a rentier class sucking up the wealth of nations with unearned income leaves most people poor, hungry, angry and without security.

robertoaribas says

I've already made back 15% of the outlay in one years rent... but hey this could happen or the other could happen.

Correct, a sample size of 1 doesn't mean a trend. I'm glad you are doing everything correctly. Creating positive cash flow in your market and doing the work to analysis and then go after the deals. Most of us here have full time jobs and demanding families and are far from the trenches of low income housing and rentals. I, personally, don't have the time or energy to go hunting for them. I am solely and only interested in my families health and well being. I do my engineering job the best I can to make money and invest. I don't see housing as an investment, I see it as an asset to be used for shelter. One that I feel should be exchanged at the proper value given the supply/demand theory. It is nothing but this, though, with the people in power always adding manipulation. We are talking about two completely different things. Don't confuse them. You are creating cash from the distressed. I am looking at the overall trends and deciding when this downward roller coaster is safe to join.

robertoaribas says

1. baby boomers won't be selling and moving off to Florida, or Arizona as predicted. They are often too financially screwed, so they will stay working. many will stay in the same homes far longer than the planned, because they don't have any real equity anyways.

Heh. Not everyone of these old farts were as smart as Jody and opened up the own Tutti Fruitti or bought rentals like I did. Theyfore, are often unable to keep these jobs as they are age discriminated. That and the bossman can hire up a young turk for half the shekels.

robertoaribas says

In other words, it doesn't seem ANY price / interest rate and price/rent ratio would justify buying to him.

You're picking on the guy because he's thinking a few moves ahead? I bet you're a shitty chess player!

Mick Russom says

SubOink says

The population curve is going up, even with baby boomers dying

The boomers as a class were far more wealthy than the next crop. Gen X to buy what the boomers leave behind in today's prices are not prepared to handle that. The move up buyers arent doing well.

Now that you've bought, you want prices to rise, yes? well, think about your kids. You want housing to skyrocket so your kids can live nowhere near you? Realize that with massive house price bubble inflation so goes the electric bill and tuition. You really want that?

Stable prices would be great, but instead we have FHA-backed speculation. Again. It will be different this time - how?

+1

robertoaribas says

My family left Cuba for a reason!

They left a beautiful country with the most beautiful people in the world.

People can make ANY call they like! IF..they happen to think the housing market has hit bottom I'd suggest a look 6 months from now. ANY little flush of love you're seeing now..is just that...

robertoaribas says

Nope, the ridiculousness of your claims was clearly stated in my post. You seriously think the 'predicted population growth 60 years from now' affects today's prices? I will be 108 then! half the homes we are talking about will have been destroyed and replaced!

Hey, the sun may supernova in just a billion years, shouldn't we factor that in to today's prices too? You really are clueless!

You pulled 60 years out of thin air. My post was showing that our poplulation growth was slowly at an alarming rate. The original post I was eluding to from SubO implied that our growth will offset any issue with the baby boomers as then retire and unload. I have no idea how anyone (including you) can predict what each baby boomer is going to do. You guys are way smarter than me. I don't even know what I am going to have for breakfast tomorrow. That is only in 10 hrs and it is from my own mind. Guessing at the behavior of 70 million plus is the most ludicrous things I have heard. Before you go all slanted, I didn't predict anything. I have been talking in reference to someone saying the baby boomers don't matter. Ludicrous, if all the baby boomers decided to have coke all on the same day, it would cause an instant shortage in all the vending machines. That is power.

robertoaribas says

You really are clueless!

Thanks. Glad you have to resort to personal attacks and name calling to get enjoyment. I hope you continue to do well, but eventually give other people to credit they deserve as well. I work hard, have a great family, am one of the top engineers in my specialty and have so far avoided both the two major stock markets crashes (both time close to 100% cash) and the housing crash. These were not flukes on my account, they were calculated actions I took. I don't see myself as clueless at all. I might get emotional, might get distracted, have definitely been know to be utter wrong (just ask my wife). But clueless, nope. Never been in that area before. Thanks for challenging me though. It keeps me sharp and maybe just maybe makes me take advantage of opportunities to come. Your contempt for people actually helps people. Maybe that is your intention. I had a coach like that once. We all thought he hated us, but then the year we went undefeated we finally made him smile. ;)

Mick Russom says

Now that you've bought, you want prices to rise, yes? well, think about your kids. You want housing to skyrocket so your kids can live nowhere near you? Realize that with massive house price bubble inflation so goes the electric bill and tuition. You really want that?

Actually, I could care less if prices go up or down as I never want to sell this house. I spend less money on my mortgage now than in previous years renting. We save more money than before and speaking of kids - They will inherit at least this house fully free and clear. They will be able to rent it out for income or live in it themselves and get a financial head start in life that I never had. That alone is making me happy.

It took a lot of work for us to get here but we did it and are proud of it. It feels great to wake up in your own home and be in a financial better situation than while renting and dealing with a$$whole landlords.

I am gonna keep on working and saving money until I can buy a second home that I can rent out to one of you guys that are waiting for 1975 prices.

And why do you hate me for that?? Why can I not buy a second and third home if I make enough money??

SubOink says

ctually, I could care less if prices go up or down as I never want to sell this house.

That's the right spirit, though you might could start to care when you see junior move in ten or fifteen years up the road and he's buying the same digs for half and taking his left over lucre and putting toward other more fabulous discretionary purchases which remain out of reach for your family on account of that one line item eating into a such disproportionate amount of your personal wealth.