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Hey, if I had the cash I'd take out the home loan with a ARM, then be able to dump the cash backwards if things go crazy. Of course, this doesn't work in the middle of a deflationary implosion.
permanent_marker
2009 Aug 13, 3:32am
to get a lousy $135K loan. I’m glad it was tough. No way would I ever have been tempted to take anything else than a nice, predictable fixed rate. BTW, I sold to some idiot in 2003 who paid me 3.5 times what I paid, and invested most of the cash, so am able to pay cash for a small house in Oregon where sanity prevails and retire at 55!
Chris,
looks like you 'pocketed' the money, and didn't 'upgrade' to another expensive home (or did you?)
One of my friend bragged that he sold his condo at the peak of 2006. I asked him, what he'd done with the money. He 'upgraded' to a single family home in Fremont! at the same peak !!
I laughed my ass off and pointed out to him, he just got into more debt into another overpriced home.
oh well.
missgredenko
2009 Aug 16, 3:14am
Thanks warblah!
I'd also like to point out to renter for ever that California may feel like it's bottoming. But the country is not moving in unison. Our county's median sales price is up 2.3% from what others id as the peak. We saw mark downs after the indices started to implode last fall. Then the $8k tax incentive and low mortgage interest rates saw list prices move back up. Some neighborhoods experienced a 50% jump in median prices since '02 so there's a correction coming somewhere. The sales numbers have taken a hit and inventory is building in some price niches. Still unless you're shopping for aspirational level homes there hasn't been any significant correction......yet.
Japanese economy out of recession
http://business.timesonline.co.uk/tol/business/economics/article6798681.ece
I though japanese economy too had a second bubble to bust ..
If it was that easy to explain away the bubbles and busts , everybody would have been rich.
Pretty much 100 percent in all SF BA counties and more on top of the 100% from 1998-2000. The people calling 02 prices are way off. We will be going down further than that
Whats so different now that the prices will be way DOWN from case shiller long term trend ?
BTW, i use to ask the same EXACT question during bubble (2005)
"Whats so different now that the prices will be way UP from case shiller long term trend ?"
my reference is only long term case shiller index ! it worked before and it will always work.
So you believe 100% of wealth created during the tech bubble was fake...not even a small % was real ?
what happened to the real wealth that was created ?
last i checked , tech stocks bottomed to 2000 prices not 1990 prices !
Lets assume there was no bubble, what would be the total wealth that would have been created in bay area ? same as inflation ?
looks like you belive everything is zero sum game...dude wake up. I was there in 1990's and i know 80% of the bubble was fake but real wealth was created too. did you check out oracle/cisco/intel stock ? its not at 1990 level
There is lot of truth to what you are saying about bubbles in general but the tech bubble came and went.
bay area median income is very high compared to other areas. unless median income falls i don't see why we will see correction beyond shiller index.
bay area median income graph.
Do you believe tech market will crash even further dragging the income level.
http://www.data360.org/dataset.aspx?Data_Set_Id=9357
bay area household incomes have grown much faster than rest of US.
zetabeos1 : if i go by your theory, the house hold income across US should be same...but its not.
hollywood would always have higher income that a suburban town. film prodcution won't be COMPLETELY shifted to the town just because its cheap. just like big companies have wide moat so do some areas.
The world has gone flat!
true ..but that does not apply to BA area alone. it applies to all us cities.
the prices should go down everywhere due to deflation. fed kicks in during deflation and prints money like crazy and increase money supply so that won't happen. I believe that bay area prices will fall if the jobs in bay area are outsourced relatively more than other places in US.
if i go by your theory, the house hold income across US should be same…but its not.
hollywood would always have higher income that a suburban town. film prodcution won’t be COMPLETELY shifted to the town just because its cheap. just like big companies have wide moat so do some areas.
I actually just read last week that a lot of Hollywood production types are heading for the hills because of California's ridiculous taxes. It was a different article than the one below, but this one touches on it, too.
http://www.theinsider.com/news/2240662_Hollywood_workers_settling_in_tax_friendly_states
http://en.wikipedia.org/wiki/Confirmation_bias
"confirmation bias is a tendency to search for or interpret new information in a way that confirms one's preconceptions"
Japan did not descend into their lost decade with the level of national debt that we had (and have) at the outset of this downturn. A rather big difference.
then tell me how come bay area median incomes have been rising for past three decades.
I'll believe when i start seeing actual numbers like what happened in michigan and detriot.
If its in the benefit of a company to secure its intellectual property and trade secrets, how does giving away the core stengths to other countries help USA. ...I think this globalization is another academic term abused by rich corps to bankrupt USA , just like wall street used free market to sell derivatives and bankrupt us.
Just like a private company keeps its trade secrets and intellectual property well guarded. A country needs to keep its core strengths ( key R&D , certain manufacturing technologies..etc) well guarded and only use globalization for its OWN benefit and ship out redundant stuff ( labor intensive, low skill work)
The countries long term benefit should be one important aspect in globalization.I am not against globalization but its should be well regulated globalization just like you have well regulated immigration ( atleast on paper :-) Just like opening borders completely to the whole world doesn't make sense , completely free globalization does not make sense.
As far as global competition, its become meaningless, do you consider that what we do here is already well known by other global companies. Ever hear of SAP, Toshiba Microelectronics, TEL ( Japan), TSM (Taiwan), Nokia, Samsung, and thousand other overseas … They all have competing products and cheaper labor cutting their product prices to gain market share. The genie got of the bottle decades ago
I know how things work in these countries...they can never compete without US (USA) enabling them.
R&D is still US Forte...but they are catching up.
I agree the genie go tout of the bottle decades ago ...but only for the industries which are already now mature. what about the new emerging technologies...will we be exporting R&D for thses as well.. till these countries learn to do that as well ? then what would our country's competetive edge would be ?
believe me...once the countries learn to do thier own R&D...we as a country are toast. Out ability to enjoy worlds resources at cheaper price will be gone. our standard of living will go down as well ( we are already seeing this trend)
zzyzzx
2009 Sep 2, 5:07am
perhaps it’s wishful thinking on my part.
It's wishful thinking on your part. Housing prices still have plenty of room to fall. Just wait until the summer buying season is over.
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Does anyone beleive the market has hit bottom yet? Prices have fallen pretty fall and although there may still be some wiggle room for prices to fall a little bit further, I believe that even if you buy now, you will not take much of a hit if prices continue to slide a bit more. Wishful thinking? Perhaps, but remember that chances of you buying at the absolute bottom of the market are slim. Chances are that prices will begin to climb before you decide to jump in. Actually I beleive once the "bottom" is reached and prices begin to climb again, that they will raise somewhat rapidly at least initially, as people realize they missed the bottom and if they don't buy today, it will cost more tommorrow. I don't expect the kinds of run ups as we had during the housing bubble years, but there will be an initial surge of 20 to 30% increase in prices as people scramble to get a house while prices are still low. While 30% seems high, you have to remember housing prices are down alot. If a house cost 100k and prices dropped 30%, the house price is now 70k. If that house raises in value by 30%, the price increase is 21k, not the original 30k it lost when it dropped 30% in value. A better examble would be a 400k Las Vegas house that lost 50% in value, a 200k lost, making the price of the house 200k now. Even if the housing market dramatically increases and house increase 50% in value, they only regain 100k in lost value, making it 300k.
 I for one can't see the housing market losing more than another 10% in value, perhaps it's wishful thinking on my part.
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