patrick.net

RentingForHalfTheCost says

Seems pretty clear english to me.

"When they do come back in the BA, maybe the humanity will return to this area as well. I can only hope."

You would hope so...you wrote it.

tiny tina says

RentingForHalfTheCost says

Tina, can you help me buy this place? It rents for 3300/mth so should be in the 550-650K range to purchase. If you can set this up for me I'll cut you a 20K check on top of you usual commission. I will not even report that I gave you 20K cash, it'll be our little secret. Thanks

http://sfbay.craigslist.org/sby/apa/2880049402.html

Not sure why you guys think I'm an agent. Or is that just a petty ploy to discredit anyone who doesn't groupthink that prices are collapsing? Talk about personal attacks.

Not a personal attack. I was hoping you would take the challenge and find me that house you think make sense to buy in the bay area. It would be a win-win. You would be happy because it would prove you have been completely correct all along, and I would be happy because I would pay a reasonable amount of my savings for a house. No one looses except the poor sucker that is paying 1.7m for a 800k in mountain view. So sad...

RentingForHalfTheCost says

Not a personal attack. I was hoping you would take the challenge and find me that house you think make sense to buy in the bay area. It would be a win-win. You would be happy because it would prove you have been completely correct all along, and I would be happy because I would pay a reasonable amount of my savings for a house. No one looses except the poor sucker that is paying 1.7m for a 800k in mountain view. So sad...

Ok. Here's a deal. Get some money - you know, invest in AAPL 10 years retroactively, come up with an offer that is consistent with the current market, and in return I'll go take the agent/broker exam and will represent you. I'll take $10k (half price) for that Monta Vista house you are dreaming about. Deal? If not, keep "hoping" that prices in Monta Vista will fall to $600k.

RentingForHalfTheCost says

tiny tina says

It's not my fault you weren't clear what you were hopeful for.

Seems pretty clear english to me.

"When they do come back in the BA, maybe the humanity will return to this area as well. I can only hope."

I can't find the quote, but Michael Bloomberg said something fairly recently that I think also applies to the Bay Area. He said certain places (initially referring to NYC) simply won't be for middle class people anymore. It's a combination of a lot of things: the job base, the preexisting commitment to public employees who support the infrastructure and public education system, overall expectations for living standards and the types of people places like this attract.

My earliest memories go back to about 1968-1970, when my father bought a brand new 1971 Pontiac Catalina (I remember it sitting in the driveway) and had a 1968 Bonneville and 1965 Catalina before that. Middle class America at least in heavily industrial NE Ohio was still alive then. Goodyear, Goodrich, Firestone, General and to a lesser extent Seiberling were all still in business in Akron. Mom didn't work, Dad sold life insurance to blue collar workers in the surrounding area. Life was good.

I'd love to go back to those days but we can't. We've come so far societally and technologically since then and we live a lot longer, too.

I would tell you there are still good jobs out there for the kids in normal times but they aren't in the industries they used to be and they sure aren't where they used to be. The Democratic party and its allies in organized labor had a lot to do with that but no matter, it's all largely water under the bridge at this point.

The Bay Area is expensive. This is a top drawer place to live and it costs like hell. There's no such thing as living the way my parents' Great Depression era friends lived in Ohio. If you want to live that way you have to go over the hill to Tracy and if you have to live that way you probably should relocate out of state. That's the hard fact. That's what Bloomberg was trying to find a diplomatic way of saying. People who are attracted here have money or make money and that's reflected in the cost of everything and even in the surrounding popular culture. People think they're entitled to things (especially bad around Walnut Creek for some reason) and that drives me nuts but we're HERE. I've sort of learned to deal with it. Sort of.

RentingForHalfTheCost says

Tina, can you help me buy this place? It rents for 3300/mth so should be in the 550-650K range to purchase. If you can set this up for me I'll cut you a 20K check on top of you usual commission. I will not even report that I gave you 20K cash, it'll be our little secret. Thanks

http://sfbay.craigslist.org/sby/apa/2880049402.html

A lot of things should be but aren't. That's what this conversation is really about.

Why do you think we did what we did? I spent a lot of years pushing my feet under the table of someone who put on a suit and went out every day for forty years and sold people on the idea of giving him money because something bad might happen to them and they should be ready for it. Did I not learn anything during all those years? If you say yes, you're either being horribly disingenuous or I haven't been a good enough communicator since I opened my account here.

tiny tina says

RentingForHalfTheCost says

Not a personal attack. I was hoping you would take the challenge and find me that house you think make sense to buy in the bay area. It would be a win-win. You would be happy because it would prove you have been completely correct all along, and I would be happy because I would pay a reasonable amount of my savings for a house. No one looses except the poor sucker that is paying 1.7m for a 800k in mountain view. So sad...

Ok. Here's a deal. Get some money - you know, invest in AAPL 10 years retroactively, come up with an offer that is consistent with the current market, and in return I'll go take the agent/broker exam and will represent you. I'll take $10k (half price) for that Monta Vista house you are dreaming about. Deal? If not, keep "hoping" that prices in Monta Vista will fall to $600k.

Been there done that. Invested in AAPL correctly, also CSCO, and DELL. The problem is not having the money, it is not losing it. I already have houses that show my good market timing. They are just not here in the BA.

RentingForHalfTheCost says

Been there done that. Invested in AAPL correctly, also CSCO, and DELL. The problem is not having the money, it is not losing it. I already have houses that show my good market timing. They are just not here in the BA.

Yeah, yeah, yeah. Yet you completely missed out with your timing on where you actually live. If you were as savvy as you think you are you wouldn't be quoting $600k for Monta Vista houses that are are selling for over $1M. I'm pretty sure I've said this before...it isn't 2007 anymore.

Again, I would no more hope for that kind of a drop in housing values that close to Silicon Valley than I would slit my wrists.

There's TOO MUCH money here, and too much money in the hands of people who never earned it or earned it too easily or grew up in upper middle class circumstances and take it for granted. You can't beat that with logic. You pay the freight or you leave. We can't leave and we don't want to live in the United Colors of Benetton.

tiny tina says

If not, keep "hoping" that prices in Monta Vista will fall to $600k.

Correct me if I am getting this wrong. Are you saying that it is a much better deal to rent this million dollar home in Monta Vista for 3300/mth than to buy it? I seem like I have been here before, but the answer is starting to change now. I thought it was a great time to buy around here?

tiny tina says

RentingForHalfTheCost says

Been there done that. Invested in AAPL correctly, also CSCO, and DELL. The problem is not having the money, it is not losing it. I already have houses that show my good market timing. They are just not here in the BA.

Yeah, yeah, yeah. Yet you completely missed out with your timing on where you actually live. If you were as savvy as you think you are you wouldn't be quoting $600k for Monta Vista houses that are are selling for over $1M. I'm pretty sure I've said this before...it isn't 2007 anymore.

I live in a million dollar home already. Just rent it for $3000/mth just like that Monte Vista home. You argue in circles. It is not 2007, that is absolutely true, from a real estate point of view it is almost 2001. This means that Monte Vista house owner doesn't get it. He still thinks it is 2007, and part of the reason he doesn't sell. He then decide to rent while he waits for 2007 to return. However, when he researches the market he realizes he can only get 3300/mth for the place. They are 2001 rents btw. I rented down there in 1998 for $2000 and only got a clean but small 2/1 duplex. So the renting market is aware of the date change because it needs cash (real cash), however, the buying market is still in a manipulation phase that will slowly end with time.

RentingForHalfTheCost says

Correct me if I am getting this wrong. Are you saying that it is a much better deal to rent this million dollar home in Monta Vista for 3300/mth than to buy it? I seem like I have been here before, but the answer is starting to change now. I thought it was a great time to buy around here?

Where did I say it was a great time to buy in Monta Vista? Everything I have said is clearly documented. Please copy and paste it below.

RentingForHalfTheCost says

I live in a million dollar home already. Just rent it for $3000/mth just like that Monte Vista home. You argue in circles. It is not 2007, that is absolutely true, from a real estate point of view it is almost 2001. This means that Monte Vista house owner doesn't get it. He still thinks it is 2007, and part of the reason he doesn't sell. He then decide to rent while he waits for 2007 to return. However, when he researches the market he realizes he can only get 3300/mth for the place. They are 2001 rents btw. I rented down there in 1998 for $2000 and only got a clean but small 2/1 duplex. So the renting market is aware of the date change because it needs cash (real cash), however, the buying market is still in a manipulation phase that will slowly end with time.

You argue based on "hope" instead of reality. Here's a Monta Vista home that recently sold for $1.1M:
http://www.redfin.com/CA/Cupertino/21905-Hyannisport-Dr-95014/home/781559

People ARE buying. Qualified buyers are buying. This isn't funny money of 2007. There is no reason to think the Monta Vista market is going to collapse.

Renting...
Since you seem to be having trouble keeping up, here's part of my first post on this thread:
The best metric is PITI versus rent, and even that is questionable in some of the more expensive cities where people are loaded with money (i.e. Los Altos Hills).

Time for the weekend. Adios.

tiny tina says

People ARE buying. Qualified buyers are buying. This isn't funny money of 2007. There is no reason to think the Monta Vista market is going to collapse.

Is absolutely is funny money. People are not buying in most cases. The fed is buying. They are the ones buying up the bonds to keep interest rates down. It is called manipulation and I can't help the person that looks at the reasonable monthly when they make a purchase decision rather than the actually amount they are paying. Stop the free money (and it will stop) and this ride will come to a pretty awful finale. Anyone telling people to buy is just wrong in my opinion. Time will be the test.

tiny tina says

Renting...

Since you seem to be having trouble keeping up, here's part of my first post on this thread:

The best metric is PITI versus rent, and even that is questionable in some of the more expensive cities where people are loaded with money (i.e. Los Altos Hills).

Time for the weekend. Adios.

I followed and I still think you are incorrect. Use the calculator if you want to cover the math. It is not as simple as you make it.

tiny tina says

RentingForHalfTheCost says

Correct me if I am getting this wrong. Are you saying that it is a much better deal to rent this million dollar home in Monta Vista for 3300/mth than to buy it? I seem like I have been here before, but the answer is starting to change now. I thought it was a great time to buy around here?

Where did I say it was a great time to buy in Monta Vista? Everything I have said is clearly documented. Please copy and paste it below.

Can you please just answer the question? Don't understand the hesitation and resistance. I'll repeat it again

Is it a better deal to rent this place in Monta Vista for 3300/mth verses buying it for the 1million+ it would take? Possible answers are below

1) Yes
2) No

tiny tina says

You argue based on "hope" instead of reality. Here's a Monta Vista home that recently sold for $1.1M:
http://www.redfin.com/CA/Cupertino/21905-Hyannisport-Dr-95014/home/781559
People ARE buying. Qualified buyers are buying. This isn't funny money of 2007. There is no reason to think the Monta Vista market is going to collapse.

Its not a $1 Million home.. you need to figure out what it was selling before the bubble began.

If you want a $1M home.. go to Silver Creek Country Club where $1M gets a home 3x bigger and more modern.

First mistake is to believe "funny money" created the bubble. More like it was the Irrational Behavior of homebuyers in believing prices go up double digit EVERY YEAR...

In the BA that hasnt changed... everywhere else they learned a bitter lesson. No funny money and no irrational behavior.

Tom, the Bay Area IS irrational behavior and the sick part of it is, it pays.

RentingForHalfTheCost says

Is it a better deal to rent this place in Monta Vista for 3300/mth verses buying it for the 1million+ it would take? Possible answers are below
1) Yes
2) No

That (rent) wont last long when taxes start going up...

rootvg says

Tom, the Bay Area IS irrational behavior and the sick part of it is, it pays.

Eventually eveyone goes to rehab.. or they die out.

edvard2 says

TX is the same. There are few if any regulations or rules to prevent companies from building new houses like crazy. What happens ANYTIME a housing development is suggested anywhere near the Bay Area? People cry foul, whine, and complain about it. So as a result no new housing gets built. Prices are high as a result. No such thing happens in TX or the other robust growth states.

Ed: the obverse to this is that explosive growth and over development is presage to inevitable bust. Ideally what you want is steady but strong growth rooted in some fundamental private sector growth. Texas is one of the biggest welfare queen states in the union; the number of government jobs and subsidies to corporations in the form of multi-million dollar blandishments is higher than any other state, and the returns on that outlay, contrary to what you might believe, have not always been so robust.

Herds migrating from majors to flyover country in order to enjoy what amounts to wealth effect is really just another form of market speculation. It's great for flyover country only if that capital finds its way into small businesses or some other ventures which generate returns. Otherwise, it can actually have deleterious effects on things like price inflation, infrastructure, traffic and crime rates. Plus, trends shift and those people who moved can just as easily move again in a few years once they get all the sugar they can get out of a place. There is definitely a mentality among many transplants that they will simply park their wealth for a while in a low tax place like TN and wait for the price correction in CA before moving back. I can't find any fancy charts for you, but I would bet most will move back to wherever they moved from within 5-7 years, especially if they came from California. Ask a Californian in NC next time you meet one.

thomas.wong1986 says

Its not a $1 Million home.. you need to figure out what it was selling before the bubble began.

Very true. Considering it rents for 3300/mth and assuming the rental market is more reflective (government doesn't give out handouts for renting) of the current economy, then I would place the value at 600K. Hence, why I offer our staff realtor "Tina Tina" to broker this deal for me. She balked because she probably already called the owners and when she mentioned 600K they hung up. The washer/dryer upgrade they added last year cost them $1500 alone. Not to mention the $6k granite countertops. Why in the world would thy consider 600K when they have spent so much on the place to upgrade. Word.

What's with the spam all of a sudden?

RentingForHalfTheCost says

tiny tina says

RentingForHalfTheCost says

Correct me if I am getting this wrong. Are you saying that it is a much better deal to rent this million dollar home in Monta Vista for 3300/mth than to buy it? I seem like I have been here before, but the answer is starting to change now. I thought it was a great time to buy around here?

Where did I say it was a great time to buy in Monta Vista? Everything I have said is clearly documented. Please copy and paste it below.

Can you please just answer the question? Don't understand the hesitation and resistance. I'll repeat it again

Is it a better deal to rent this place in Monta Vista for 3300/mth verses buying it for the 1million+ it would take? Possible answers are below

1) Yes

2) No

Before I paid $3300 per month, I'd buy something I could afford.

So, we did.

thomas.wong1986 says

RentingForHalfTheCost says

Is it a better deal to rent this place in Monta Vista for 3300/mth verses buying it for the 1million+ it would take? Possible answers are below

1) Yes

2) No

That (rent) wont last long when taxes start going up...

Not so. I have been renting into these types of places for 14 years now. Good landlords care more about their place than raping people. This rental is having an open house so the landlord can select the proper tenants. As a tenant you need to sell yourself. You are taking care of an asset that is most likely the majority of the owners wealth. If you want to try to find the highest bidder in the BA, you are taking your chances. A persons ability to pay high rent doesn't mean they are great tenants.

To dismiss perfectly good rentals because they don't fit your "buy now" attitude is not fair. I bet you can even get a multi-year lease on this place and lock in for as long as you want. That is if you sell your tenant qualities properly.

It is not unlike selling yourself to the bank to get the mortgage. Everyone is more than willing to jump through hoops to improve their credit so they can go into huge debt, but they feel threatened when another individual would like to know their character before letting them rent their house. Doesn't make sense to me.

rootvg says

#

Before I paid $3300 per month, I'd buy something I could afford.

So, we did.

#

Good for you. You drank the "buy what you can afford" kool-aid. I would still sell immediately and you would come out ahead in 5 years. Enjoy the fake ownership lifestyle while you have it.

RentingForHalfTheCost says

rootvg says

#

Before I paid $3300 per month, I'd buy something I could afford.

So, we did.

#

Good for you. You drank the "buy what you can afford" kool-aid. I would still sell immediately and you would come out ahead in 5 years. Enjoy the fake ownership lifestyle while you have it.

No, I bought what I could afford and it's apparently more than you could afford...so therefore I am evil or stupid or both.

I don't come from a place where people think this way. I don't come from a place where people are chronically angry and petty and act like children most of the time. We've done pretty well with those values so far and I'm almost fifty years old.

My lifestyle won't change one bit. I'm still gonna fly once or twice per month. I still have my ham radio toys. My wife and I do work we enjoy and are good at what we do and make low six figures each.

I mean, what the hell's your problem? Can I recommend a good therapist?

Let me be even more frank. If this is what you really believe, you may want to consider relocation. This is what it costs to live here. It's expensive. Some people can't afford it or don't know how to manage their money or whatever but this is how it is. It's been this way for a very long time and now it's getting worse. Living in DC or New York or Boston or even Atlanta (I hear it's starting to get very dense and expensive there in place) are always going to be like this. If you can't afford it, MOVE.

rootvg says

No, I bought what I could afford and it's apparently more than you could afford...so therefore I am evil or stupid or both.

Incorrect. It is not at all about what you can afford. That is the trick realtors use on people to forget about assessing the value in the asset. I can afford a lot, and mainly because I didn't fall for the "buy what you can afford" crap. I don't think you are evil, stupid or both. Like I said, though, I think it was not a wise idea to buy into a soft market. Your idea was not wise. Wise people can do things that are not wise. It doesn't mean that they live an evil and stupid life. It mean they made a mistake and they are human. I have made many, and learned and now think that my judgement helps me asses situations and avoid making more mistakes. You could be the smartest, kindest person in the world, but if you tell me your just bought a house in the BA, I would tell you that you were incorrect to do so.

rootvg says

Before I paid $3300 per month, I'd buy something I could afford.

Anyone explored the asymptotic effect this type of thinking might have on rents?

I guess only time will tell who is right. Both sides have placed their "bets."

RentingForHalfTheCost says

Can you please just answer the question? Don't understand the hesitation and resistance. I'll repeat it again

Is it a better deal to rent this place in Monta Vista for 3300/mth verses buying it for the 1million+ it would take? Possible answers are below

1) Yes
2) No

Answer:
3) It depends.

I wouldn't pick either. If you are spending that much on rent, you probably aren't saving much towards purchasing. And I wouldn't buy such a small place for that much money.

If someone really wants to live in the Monta Vista hood, I don't think there are many options in terms of renting, so I could see why some people choose to buy even though renting is technically cheaper. Some people are so hooked on the schools that they figure owning guarantees they'll be there, whereas renting could force them to move.

RentingForHalfTheCost says

Can you please just answer the question? Don't understand the hesitation and resistance. I'll repeat it again

Is it a better deal to rent this place in Monta Vista for 3300/mth verses buying it for the 1million+ it would take? Possible answers are below

1) Yes
2) No

The answer is YES, it is a better deal to rent.

http://patrick.net/housing/calculator.php?uaddr=%2C+&rent=3300&price=1000000

It's not even close. Do not buy for $1,000,000 if you can rent the same thing for $3,300/month.

The only factor that could possibly change that is appreciation. Will the house appreciate significantly in the time you own it? I don't think you should count on that.

On craigslist I see two other houses that are comparable in terms of rent/size - one is $3500 and another $3800. So if Mr. Landlord kicks you out, your rent goes up (still cheaper than buying) or you are stuck moving your kids from their friends and school (that's gonna be fun for everyone I'm sure). I don't think it is as clear cut as you make it. If you want to only look at it in terms of money and ignore all other aspects of life, then sure, renting is the clear choice in this example. I think when talking about Monta Vista, many people are thinking beyond the numbers.

tiny tina says

If you want to only look at it in terms of money and ignore all other aspects of life, then sure, renting is the clear choice in this example. I think when talking about Monta Vista, many people are thinking beyond the numbers.

Like I've said before, I'm in the wrong business. I need to get into money lending.

tiny tina says

Answer:
3) It depends.

Why am I not surprised you would invent a new answer. ;)

Patrick: Is there any city in the US where the upper tier of housing is in line with rents? I checked into San Antonio (very little bubble if any) and Asheville, NC (not sure if there was a bubble there) and they have plenty of million dollar houses with rents around $3k.

Edit: A list of cities would be better than just finding one.

RentingForHalfTheCost says

Why am I not surprised you would invent a new answer. ;)

I know, I'm the first person ever not to be boxed in when given 2 choices. So creative of me...

I need to lend money to creative people...

wthrfrk80 says

I need to lend money to creative people...

Well, we are close. We have money being lent to people who know how to use creative income reporting.

tiny tina says

RentingForHalfTheCost says

Why am I not surprised you would invent a new answer. ;)

I know, I'm the first person ever not to be boxed in when given 2 choices. So creative of me...

It is called winning every argument you ever entered into. I have lost many and I use it as a sign of my ability to learn. If someone poses new data then I try my best (I'm sure I fail sometimes) to read it, analyze, and then form an opinion. Not an easy skill to stick to, but we all should at least try. The inability to answer yes/no is a sign that you might be slipping on that virtue. Just an observation from a stranger.