patrick.net

RentingForHalfTheCost says

Now, the question to me has always been the rent verses buy debate. Haven't seen the type of house I want/need win the buy side yet in SFBA. If it does, I'll be the first to report and jump in the buyers camp. I see the buyers, know most of them. A lot is family money, a lot is options/RSUs. Both them groups don't mind at all if a 20% downturn hits us. Me on the other hand do. All my money was hard earned, not given.

sure we had lots of family money and stock options in the past.. yet prices didnt sky rocket. many kept that money in savings.. we had 340 public companies back in early 90s and 400 by year 2000.. yet today we only have 200 active public companies... and a meager start up environment.

today, while options are not so easy and appreciate widely as before, prices certainly are way way off from the norm. We are still way way off the mark and certainly can be called Crazy market prices.

Keep Savings..

robertoaribas says

I guess you are right. I guess that condo for $26K, the other one for $31.5K and the one for $40K should have dropped down to less than a McCafe latte before I bought them. Silly me. All rented continuously for 2 years now, at $825, $875 and $775.... I've had exactly one months total vacancy on one of them over the 2 years..

LOL never admit Robert Shiller was right.. prices over the long run track inflation.

That was your measure "how much to pay", but not so much "when to buy".

robertoaribas says

If they track inflation I'll end up very very rich... Are you so dense that you don't realize "revert to the mean" works from both sides?

i always have advocated reverting to the mean... so whats your method...

tracking just inflation means nothing if you dont have growth. anyway my

stock portfolio/IRA since 1980 is doing just peachy given the growth we had

in our econony... how them bricks looking these days, they grow overnight!

thomaswong.1986 says

how are you measuring prices to state it over corrected. the only way to do that

is to peg past prices pegged to inflation. Rents have limits since they fluctuate.

OK Thomas. So how do you know what year was "right" to peg to?

That's why the inflation measure is worse than using rent/buy.

Goran_K says

Whoa look at the dick waving

I'd rather not look at that, thank you very much.

B.A.C.A.H. says

I'd rather not look at that, thank you very much.

Then this thread isn't for you.

tatupu70 says

OK Thomas. So how do you know what year was "right" to peg to?

That's why the inflation measure is worse than using rent/buy.

Roberto doesnt want to admit Robert shiller was right about long term prices,
but avoids admitting so much. Time is not the issue to buy, its the price which
reduces the risk to the downside.

thomaswong.1986 says

Roberto doesnt want to admit Robert shiller was right about long term prices,

but avoids admitting so much. Time is not the issue to buy, its the price which

reduces the risk to the downside.

Not to speak for Roberto, but I don't think he has too much issue with Shiller. And Roberto did buy at a price that reduced his downside risk to almost zero. He did this by realizing that the rent/buy was strongly in favor of buying.

But back to my post--timing is essential if you want to use inflation adjusting to determine the right price for your home. If you adjust from the wrong starting point, you'll get a completely useless number....

tatupu70 says

But back to my post--timing is essential if you want to use inflation adjusting to determine the right price for your home. If you adjust from the wrong starting point, you'll get a completely useless number....

but if your marking time waiting for someone else to actually make an offer instead of being infront of the sale... therefore your constant lowballs eventual come to an deal instead of waiting for some numbers to get published.

thomaswong.1986 says

but if your marking time waiting for someone else to actually make an offer instead of being infront of the sale... therefore your constant lowballs eventual come to an deal instead of waiting for some numbers to get published.

What the hell are you talking about? I'm trying to explain to you why you shouldn't rely solely on inflation adjusted prices.

Did you mean to reply to a different post?

tatupu70 says

What the hell are you talking about? I'm trying to explain to you why you shouldn't rely solely on inflation adjusted prices.

your going to go against a trend in home prices across all major regions which has held true and has been documented as fact since 1945 ?

Is that what your saying.... good luck with that !

https://www.youtube.com/watch?v=d__GPqOVNbE

thomaswong.1986 says

tatupu70 says

What the hell are you talking about? I'm trying to explain to you why you shouldn't rely solely on inflation adjusted prices.

your going to go against a trend in home prices across all major regions which has held true and has been documented as fact since 1945 ?

Is that what your saying.... good luck with that !

https://www.youtube.com/watch?v=d__GPqOVNbE

He's saying that even if you believe real-estate only increases at the inflation rate, the starting date you pick makes a real difference. Also, you continually overlook the fact that the way the inflation rate is measured has changed drastically over time. Try this experiment:

Assume the real inflation rate for the last 10 years has been 10% per year. What then is the correct price for a house? 2000 + 10%/year increase?

thomaswong.1986 says

your going to go against a trend in home prices across all major regions
which has held true and has been documented as fact since 1945 ?

Is that what your saying.... good luck with that !

Nope--that's not what I'm saying. Go back and read my posts again and hopefully you'll get it. JFP gets it.

JFP says

Assume the real inflation rate for the last 10 years has been 10% per year. What then is the correct price for a house? 2000 + 10%/year increase?

for the most part we were past the bubble in 1998 to 2000 prices doubled in SFBA.. we (SFBA) already saw prices double and double again...

so you see.. even with 10%.. prices were already way above your numbers.

as for inflation being over 10% .. well good luck on that...

New Renter says

RentingForHalfTheCost says

CDon says

out of curiosity, are you now tripling down on your lie, or do you not see (a few pages in) where it shows the address, 573 tawny drive and the word "leased" next to it?

http://www.craigpm.com/Nav.aspx/Page=%2fListNow%2fDefault.aspx%2flstStatusID%3d20

Funny, no one has provided a link that show it. What a bunch of clowns you are.

I understand - web browsers are beyond your abilities. Here you are!

Place is still vacant with no renter. Guess the owner would rather it sit idle than risk the damage a renter would do to the place. It is like money going down the drain. Hope you are not invested in that REIT.

This blog is so polarizing. So I'm just going to put my spin on the comments related to this thread. If your making a combined income 240,000 dollars a year you can afford a house in a nice bay area city. If your don't make this much you have to settle for a part of town that you might not be happy living in. If your rich it does not matter live in the city of your choice. If your single get a roommate and save a ton of money. If you want to start a family and you make less than 240,000 k a year then move to cheaper place or live in a less desirable place in the bay. Live simply, be happy and help your neighbor.

Tim Aurora says

So you have to take his predictions with a grain of salt

He's really careful to not make predictions. In all the videos, interviews I've watched/read he's made one or two statements that could reasonable called predictions. I suggest you work on your power of observation. Read/listen to each word and be careful not to apply your own interpretation or that of the headline/interviewer.

I suggest I work on my power of typing.

RentingForHalfTheCost says

I understand - web browsers are beyond your abilities. Here you are!

Place is still vacant with no renter. Guess the owner would rather it sit idle than risk the damage a renter would do to the place. It is like money going down the drain. Hope you are not invested in that REIT.

Today, it is still vacant. No one willing to rent this place even though the rent is a fraction of the ownership cost. Gives me a lot of faith in the market. I contacted them asking if I could use it for when I have a bunch of relatives in the area. There were obviously pissed I asked. I can sense the frustration they are having with this place. Every month thousands of dollars down the drain. It'll probably be on the market again forsale soon.

Only in Sunnyvale and Mountain View are rents going up. Thats why I am moving to San Jose next year. Rents are 500 a month cheaper!

egads101 says

thanks! clearly you really understand real estate investing! do tell us more!

Bob, give it a rest.

We've gone over, and over, and over the same set of concerns you have about my business, which you know nothing about.

I make more money than you Bob.

Tell us all again about your million dollar equity, and $6K in passive income. It never gets old.