patrick.net

ch_tah says

dunnross

Renters should be angry at the gov-t for throwing and wasting so much of the tax payer's money on supporting the housing market, and propping up prices, even though, this, in fact, is very bad for the economy. Renters should not be angry at homeowners, because, by defaulting, homeowners are actually helping the economy get back on its feet. The lower house prices go, and the more debt is expunged, the better this will eventually be for the economy. This will happen, eventually, but all the govt intervention is just delaying the recovery, not helping it at all.

Mr.Fantastic says

ChrisLA is talking about the government’s purchasing of MBS from 2008-2010 to keep interest rates low, to the tune of $1.25 trillion. In fact, the government was using our tax dollars to become the biggest purchaser of MBS for 3 years

I'm not sure why I'm even answering you, but just for the record, Chris was saying that the banks took on bad loans because the government was "backing" them. The bad loans were made prior to 2008-2010, so there was no government backing of them. It was, in fact, Wall St.

dunnross says

ch_tah says

dunnross

Renters should be angry at the gov-t for throwing and wasting so much of the tax payer’s money on supporting the housing market, and propping up prices, even though, this, in fact, is very bad for the economy. Renters should not be angry at homeowners, because, by defaulting, homeowners are actually helping the economy get back on its feet. The lower house prices go, and the more debt is expunged, the better this will eventually be for the economy. This will happen, eventually, but all the govt intervention is just delaying the recovery, not helping it at all.

The feds are certainly working hard to postpone the inevitable.

klarek says

SubOink says

So, ooo…I had a deal!! I paid his half of his house off. I feel very good about that. NOT.

You were paying for a place to live. Who cares where the money went? You think that’s not at all comparable to buying a house and then paying the equivalent amount in interest to the banks?

Who cares where the money went? I do. And its not equivalent. Here is my specific example:

Right now I am at the absolute start of the loan, meaning the payment is mostly interest - well my interest portion/month = $1750.- , the much smaller house that I rented was 2400/month rent, the house I bought would rent for 2700/month according to zillow even though the previous tenants actually paid 2800/month (bravo zillow, very close)

Now, remember those $1750 will go down every month from here on out, so next month its 1749 etc..and they are a tax write off. So the actual cost is way less, due to the tax savings.

I really don't know how anybody can not see the no brainer part in this. I could throw out $2700/month for a lifetime, (would require to lock in a lease for lifetime so that rent never goes up) - or I could throw away interest every month which is a tax write off and even without the tax write off, its WAY less - $1000/month to be precise. And my payment won't change for the next 30 years. I locked in my rent for 30 years, then I own it.

If I rented my place out right now, I break even every month. And I just bought the place.

You can hate it as much as you want to but this makes sense to me. On top of it, I work from home :) So, I am not moving anywhere anytime soon.

ch_tah says

You don’t value the security or freedom of owning your own place? As a former owner, you didn’t enjoy saying this is my home and knowing that as long as you paid your bills, no one was going to tell you how long you could stay there?

No. You are trading some stability for the sake of some flexibility. You're still subject to losing your house due to a number of reasons. Ever heard of eminent domain? Natural disasters? Foreclosure? "This is your home" is just another tired and meaningless platitude that realtors tell to dumb potential homeowners to make their emotions trump their logic.

I've stated the benefit to home ownership above. These lame reasons you guys are giving don't help you argue your case at all.

You didn’t ever have the feeling, this is mine. I’m not talking about the silly argument of painting the walls or crap like that, but just the feeling of knowing as long as you fulfill your obligations, this is YOUR place. Maybe it’s a personal thing and maybe the feeling wears off in time, but I personally enjoy knowing that the place is ours. I like being able to tell my kids, we’re “home” without thinking to myself “sort-of.”

That's new homeowner euphoria. It's not a benefit, just an appeal to human emotion. NAr spends a lot of money to convince people to run with this worthless notion, and to massage their emotions.

Philistine says

So I just saw the same commercial now 4 or 5 times this morning on the TV for online foreclosure auctions. “If you can click with a mouse, you can buy a house,” or something dumb like that.

The cockroaches in the RE industry prey on the gullible, the weak, and the ignorant. Notice how I don't attack home ownership at all, just pointing out the obvious fallacies of these guys' arguments, but have offended their worshiped concept of ownership.

Katy Perry says

My anger comes from watching since “awakening” in 04/05 to the stupidity and craziness of a system that really doesn’t seem to be working for many, yet is still blindly supported, and still seems alive and well.

It has infuriated and awakened me too. It's not why I rent (obviously waiting for prices to correct like many here), but waiting to buy I've paid a lot of attention to how this industry works and how normal, intelligent people are temporarily turned into drooling idiots and putty for a scrupulous industry which constantly feeds them bullshit.

klarek says

No. You are trading some stability for the sake of some flexibility. You’re still subject to losing your house due to a number of reasons. Ever heard of eminent domain? Natural disasters? Foreclosure? “This is your home” is just another tired and meaningless platitude that realtors tell to dumb potential homeowners to make their emotions trump their logic.

I’ve stated the benefit to home ownership above. These lame reasons you guys are giving don’t help you argue your case at all.

I know you're a tin-foiler, but you seriously are going to mention eminent domain as a concern of losing my house? WTF, dude, seriously, stay in bed, forever, something bad may or may not happen to you at some time in the future if you don't. Talk about a stupid point to make.

klarek says

That’s new homeowner euphoria.

I guess there is no such thing as "renters euphoria" - I wonder why?

SubOink says

klarek says

That’s new homeowner euphoria.

I guess there is no such thing as “renters euphoria” - I wonder why?

Well for one, the rental market is a free market, outside of price-controlled areas. I don't expect you'd understand this, or you wouldn't have asked the question, but that's one significant difference.

The cretins that help propagate the b.s. that you eat up - thus fueling the euphoria - make thousands of dollars on your decision to buy. Follow the money. Use your brain for a second.

klarek says

Funny, you never answered my question about the joys and responsibility of having to replace the transmission on your car. Being called a tin-foiler by somebody that’s so desperate to puff up the benefits of owning that he actually includes the added maintenance costs, I consider it a badge of honor.

Funny how I did answer your question. Go back and re-read. In sum, I don't like paying, but if the responsibility of paying comes with the benefit of freedom, I'll pay for it. Search for "mommy and daddy" and you'll find it. Funny also that you bring that up to respond to how stupid your eminent domain remark was. Relevance?
And I don't think I puffed up the benefits of owning. To each his own. Suboink mentioned something he thought was a benefit of owning and I agreed. You see it differently. I'm not sure why you think your way is the only way. Plenty of people enjoy doing yard work and other stuff around the house.

klarek says

So yard work is another reason to own? You guys make home ownership sound worse than it is. “But I can pull weeds! But I can spend $2000 to replace the HVAC!”

Or you could be in the house in 100 degrees hassling your landlord to please fix the A/C (been there, done that)...after 2 weeks of 100 degrees you would beg for just paying 2000 and repair it yourself...

You forget that spending money on the house is only one part of the equation. The other part is using your brand new remodeled kitchen. Swimming in you brand new pool. Enjoying the look of new windows. Does it cost a lot of money, yes but you are still enjoying it 24/7.

SubOink says

Or you could be in the house in 100 degrees hassling your landlord to please fix the A/C (been there, done that)…after 2 weeks of 100 degrees you would beg for just paying 2000 and repair it yourself…

Maybe you think there's a magic homeowner fairy that flies in and fixes all your shit when it breaks, for free.

The AC in the house I'm renting crapped out in August 2009, during a week where it reached over 100 degrees every day. If I were under the spell of the RE industry, I might have thought that it was because I was a renter, that my landlord had an extra AC unit somewhere, and wanted me to be miserable. After all, that helps him pay his mortgage. No. The entire unit was replaced in 48 hours, as soon as you or I could have done it had either of us owned the house. Did I not mention above, twice, that you use your rights enlisted in your lease? Is spending $300k on a house the only way to retro-vindicate your perceived victim status as a renter that didn't do his homework? Surely buying a home without doing your homework will work out so well.

Mr.Fantastic says

Klarek is pretty much destroying ch_tah and SubOink’s arguments. Totally shredding them.

Not really.

klarek says

Surely buying a home without doing your homework will work out so well.

It sounds to me that klarek is the one that didn't do his homework when he bought a home, after all, he is the one that is no longer a homeowner. It explains the bitterness.

Well said.

Clarence 13X says

This is why I never debate with Kevin, too many fact based statements….I’d rather watch and learn…:)

I didn't go back to see that he wrote all of that until today. I didn't even know I was debating him! I just thought I was commenting about what I thought. He put a good bit of thought and effort into all of that. You gotta appreciate that.

SubOink says

It sounds to me that klarek is the one that didn’t do his homework when he bought a home, after all, he is the one that is no longer a homeowner. It explains the bitterness.

I sold for a profit and rented while the market tanked. People like you were telling me that I was giving up something, the joy of ownership and a bribe from the IRS (for being a good little debt prisoner), and that it was stupid.

You can only list burdens and liabilities as reasons that owning is a good thing, shows what you guys actually know. Part of new homeowner euphoria is that kind of condescending snobbery where you view renters as sub-human, or less than owners. Hence the negative connotation with "is no longer a homeowner", like I failed at being awesome. I have a much better understanding of what home ownership means than you, and am 1-0 so far. Talk to me when you sell for a profit.

klarek says

That was a dodge. Do you feel the joy and responsibility of owning a car when you pay for a new transmission?

So yard work is another reason to own? You guys make home ownership sound worse than it is. “But I can pull weeds! But I can spend $2000 to replace the HVAC!”

You’re living up to the stereotype of naive homeowners getting high off of the euphoric farts your agent let out at the closing table as he earned his commission check off of another naive client.

How was that a dodge? Like most things in life, there are good aspects and bad. I like the freedom of my own car, but I don't like having to pay for fixing the transmission. I traded cost for freedom, in that example. Why is that concept escaping you? What in life comes with absolutely no downside? If you dwell on the negative, everything is terrible.

Actually our agent told us very little, and what he did tell us, we ignored. Our current pleasure with our house comes from how we feel each and every day. We never even think about the annoying process of buying the house. I don't know what happened to you, but your negativity is just overwhelming. I really don't see how or why you get out of bed each morning.

You know what Klarek, go ahead and be a curmudgeon and chicken little the rest of your life. I'm going to enjoy mine instead.

klarek says

You were using it as a reason that it’s better than renting, to not have somebody else tend to and pay for the repairs. I asked what the benefit is in that aspect, and now you’re saying it’s a worthwhile trade-off. If that’s not a dodge, then it’s an admission that you don’t really know why renting is better than owning, and pointing out any difference you can to substitute for not having a thoughtful opinion.

I never said having to pay for repairs was a reason why buying is better than renting. I said the freedom to do what you want is a reason why buying better than renting. There is a difference. You keep dwelling on one small aspect that comes with that freedom. Your parlor tricks of trying to say I said something I didn't and then claiming I'm dodging what you made up are pathetic.

klarek says

Your hyperbole suggests that I have struck a nerve. Don’t like the truth much, do you?

Ummm...go look up hyperbole. You cite eminent domain as a reason why you could lose the house. Thus, chicken little is an apt description. You dwell on the negative of everything related to owning. Curmudgeon is a perfect fit. No hyperbole here.

It took you all that to say a basic catch phrase, "nothing in life is guaranteed." Way to go!

bubblesitter says

I still have to see a 0.00001% hike in my rent this year. LOL.

Same. But that wasn't the point of him posting it, it was to distract from having just been nailed for his bullshit. S.O.P., he just changes the subject.

klarek says

bubblesitter says

I still have to see a 0.00001% hike in my rent this year. LOL.

Same. But that wasn’t the point of him posting it, it was to distract from having just been nailed for his bullshit. S.O.P., he just changes the subject.

Nothing new there...

Thank you guys for posting first hand experiences and sharing the knowledge. I have been browsing this site for a while but haven't posted. I am thinking about buying a rental property in Antioch. I see a large number of SFH for rent in the area, do you see rents going down by 20% before rising? Is it easy to rent out in current market? I am a first time buyer any recommendation of a buyer's agent in the area will be much appreciated?

klarek says

You’re at the mercy of the IRS, your municipality and tax collection office, your HOA, and not least of all your mortgage company which can take your house from you for missed payments just like my landlord can kick me out of mine.

So, as long as you don't miss payments, the mortgage company CANNOT kick you out. You really don't see the difference between this and a 1 year lease? Not to mention the fact that if the landlord sells or is foreclosed on, depending on the local laws, you could be kicked out sooner than 1 year. You really don't see how you, as a buyer, control whether you stay in the house or not, aside from your stupid point about eminent domain, but as a renter, there are plenty of likely events that could cause you to have to move in a short period of time?

F-R-E-E-D-O-M

Gotta love how the vested interest wrap themself in the term... I guess at what ever cost,
you are paying for Freedom, so Pay Up... Freedom isnt cheap.. They come up with the craziest marketing crap...

We saw this oh too many times on chat boards during the bubble...
I guess not many had this so called freedom when they overbid, overpaid, and couldnt
make the montly payment and went into foreclosure... I call it way over-marketing...

You can do whatever you want when you own, but there is no sense overpaying
for hype so a vested group can benefit at your cost.

SubOink says

f you are so confident that prices will fall 20% - then put your money where your mouth is and short the appropriate stocks that would reflect such a drop. You can probably short the entire index because if prices were to fall 20%, then none of us will have a job anymore and things will be so bad that you will not buy a house even then. Be careful what you wish for. YOU won’t make out any better in this than anybody else if such a scenario was to happen because that money you are putting in the bank right now will be WORTHLESS. At least I have a house, an asset with actual value because you have to live somewhere.

I don't gamble with my money.

thomas.wong1986 says

I guess not many had this so called freedom when they overbid, overpaid, and couldnt
make the montly payment and went into foreclosure… I call it way over-marketing…

Then you shouldn't have bought a house - when idiots buy houses that they can't afford, its not proof for buying sucks vs renting - Obviously, you gotta be able to afford it.

The whole point here is, that it is now more affordable than it has been in a long time but that doesn't mean everybody can buy a house. Everybody can not have a ferrari and a house and a private jet. That's just how it is and always will be.

Just because I can't buy a ferrari does not mean prices on ferrari's are coming down 30%.

thomas.wong1986 says

You can do whatever you want when you own, but there is no sense overpaying
for hype so a vested group can benefit at your cost.

What a novel thought...kinda of like how I said it above in this very thread.

ch_tah says

I happen to agree with suboink that being able to handle issues yourself is a good thing. Yes, it stinks that you are the one on the hook for the expenses, but the ability to make these decisions is a positive. It’s not enough of a positive to go overpay by $100k, but it is one of the benefits of owning.

ch_tah says

thomas.wong1986 says

You can do whatever you want when you own, but there is no sense overpaying
for hype so a vested group can benefit at your cost.

When is overpaying ever a good thing? We overpay for gas EVERY day, we overpay for water EVERY day...the list is long.

Nobody says...go and buy a house and make sure you overpay for it. Look around your neighborhood, if you find something you like, make an offer, something that YOU think it would be worth it to you. If you get it, great, if somebody else thinks its worth more to them and they offer more, then they will get it. Just because you can't afford a mansion, does not mean $1million for a specific house is too much. In my opinion a house is worth as much as somebody else is willing to pay for it. That's it. Not what zillow says or what the realtor says or what the sellers say...but if you find yourself in the position of loosing every offer you put out, then maybe you are just a cheapskate who is not willing to pay up what something is worth to others and so you will never buy a house. Maybe you have to make more money or move to a different, cheaper location. There is a cover for every pot.

But it does not mean that the market needs to crash because of it.

SubOink says

Just because I can’t buy a ferrari does not mean prices on ferrari’s are coming down 30%.

Could you afford a Ferrari ten years ago?

SubOink says

Nobody says…go and buy a house and make sure you overpay for it.

Correct. It takes collective ignorance to bid the price up, for reasons that are baseless.

klarek says

SubOink says

Just because I can’t buy a ferrari does not mean prices on ferrari’s are coming down 30%.

Could you afford a Ferrari ten years ago?
SubOink says

Nobody says…go and buy a house and make sure you overpay for it.

Correct. It takes collective ignorance to bid the price up, for reasons that are baseless.

Are you a lawyer? You seem to ignore what somebody's point is.

No, I could not afford a ferrari 10 years ago, and I also could not afford a house 10 years ago...now, I can, so I bought one. Your Point?

klarek says

Your logic would be no different during the housing bubble. “I couldn’t afford a $200k house, but now I can afford a $600k house.”

Huh?

No, its a little different - I couldn't afford a 550k house...then the 550k house became a 800k house...then the 800k house became a 550k house again...10 years after..and now I can afford it and my payment is less than rent :)

Pretty simple? I am sure you find a way to twist that around too...

SubOink says

The whole point here is, that it is now more affordable than it has been in a long time but that doesn’t mean everybody can buy a house.

LOL! depends what your matrix on affordability is. The Cali Asses of Realtors was using med incomes to med prices using 30 yr fixed rates for decades. Once the affordability went 5-6% back in 2004-2005 they switched to a new affordability matrix which includes med incomes to "starter homes" using ARM only loans. No definition on what a "starter home " is and dropped the whole 30 year fixed. And presto it went to 25% overnight. And after much denial of a bubble and over hype that homes were indeed affordable based on new numbers, the bubble popped...

Affordibilty? Sure! And people today are still using the highly inaccurate affordibilty matrix from the CAR. WoW !

klarek says

Your logic would be no different during the housing bubble. “I couldn’t afford a $200k house, but now I can afford a $600k house.”

More accurate to say its the... "same house priced at $600K today".

No changes no improvements just the same paint on the same house plus 10 years later.

SubOink says

No, its a little different - I couldn’t afford a 550k house…then the 550k house became a 800k house…then the 800k house became a 550k house again…10 years after..and now I can afford it and my payment is less than rent :)

Pretty simple? I am sure you find a way to twist that around too…

The $350k house became a $1m house. Now it's a $550k house. Still overpriced, but you think it's a deal since that's what it sold for at some arbitrary point in the past.

If you can afford now what you couldn't then, it's because you earn a lot more. Your income now adjusted for dollars back then could more easily afford the equivalent house at that time. Do the math on household income in your area vs prices, adjust for interest rates, compare it to 10 and 15 years ago. Do the numbers add up?

This is something that should be done before you buy, but most people don't, despite the lessons of the bubble.

SubOink says

No, its a little different - I couldn’t afford a 550k house…then the 550k house became a 800k house…then the 800k house became a 550k house again…10 years after..and now I can afford it and my payment is less than rent

Or more like 250K home in 1997 became a 500K home in 2000 and than a 800K home in 2005... But now its just a $600K home so its more affordable...
But what do you call the gap between $250K to 600K ?
More bubbles!! But only in the Bay Area.

Gosh.. im so lucky to have bought my Los Gatos crip back in 92 and
certainly didnt even pay 300K for it.

thomas.wong1986 says

SubOink says

No, its a little different - I couldn’t afford a 550k house…then the 550k house became a 800k house…then the 800k house became a 550k house again…10 years after..and now I can afford it and my payment is less than rent

Or more like 250K home in 1997 became a 500K home in 2000 and than a 800K home in 2005… But now its just a $600K home so its more affordable…

But what do you call the gap between $250K to 600K ?

More bubbles!! But only in the Bay Area.

Encino is still a bubble very much too. We have those exact homes going for 500k still, right next door to a 250k home.

We are still a few years away from housing market leveling off to reality.

SubOink says

Bulls have their set of graphs and bears have their opposing ones - Never ending battle

And CEOs who sign the payroll check like ex Sun CEO have their own.

"there are lots of technical engineers (other regions of the world) who are willing to work at a more reasonable salary because they don't have to spend $3.5 million on a home and pay half of it to taxes."

http://online.wsj.com/article/SB10001424052748704422204576130520662465078.html

Oh right, you have rentals in concord. forgot thought you lived there. this helps me understand your posts more.
thanks for responding. ;-)