patrick.net

SubOink says

All rich people could just rent, multiple homes. After all, they are rich. They can afford it. No need to buy.

Some do.

SubOink says

Why would showing off "the worst investment possible" be even considered showing off then?

Sociology.

Nomograph says

edvard2 says

If the bubble returns to the BA, what will you do?

I have a better question:

When you figure out that there are a lot of wealthy, successful people in the nice areas and you'll never be able to afford a house on the peninsula, what will you do?

There ARE a lot of wealthy, successful people in the nice areas and for that reason those areas will never be affordable. My understanding is Danville and Alamo were high in the early seventies and they're high now.

It's EXPENSIVE to live here. Some will not be able to afford it. Some who are here, should not be.

What else is there to know?

F. Continue posting about how smart you are about not buying.

rootvg says

There ARE a lot of wealthy, successful people in the nice areas and for that reason those areas will never be affordable.

Are you saying that wealthy people like to overpay? How did they become wealthy, then?

rootvg says

There ARE a lot of wealthy, successful people in the nice areas and for that reason those areas will never be affordable. My understanding is Danville and Alamo were high in the early seventies and they're high now.

It's EXPENSIVE to live here. Some will not be able to afford it. Some who are here, should not be.

What else is there to know?

There are a lot of wealthy successful people in Des Moines, Iowa, too. Mountain Brook, Alabama is one of the ten wealthiest communities in the entire country. Bloomfield Hills, Michigan has the second highest median income in the country, just ahead of Beautiful Belle Meade, Tennessee, and just behind Palm Beach, Floriders. It would be interesting to do a comparison of the cost of living in these places and a place like Danville.

Austinhousingbubble says

rootvg says

There ARE a lot of wealthy, successful people in the nice areas and for that reason those areas will never be affordable. My understanding is Danville and Alamo were high in the early seventies and they're high now.

It's EXPENSIVE to live here. Some will not be able to afford it. Some who are here, should not be.

What else is there to know?

There are a lot of wealthy successful people in Des Moines, Iowa, too. Mountain Brook, Alabama is one of the ten wealthiest communities in the entire country. Bloomfield Hills, Michigan has the second highest median income in the country, just ahead of Beautiful Belle Meade, Tennessee, and just behind Palm Beach, Floriders. It would be interesting to do a comparison of the cost of living in these places and a place like Danville.

Fair enough, but there isn't the demand for those places that we have here. There also isn't so much old money and then you have the California emotional, follow-the-leader high school culture thing to worry about.

When we say the Bay Area is a bubble, we mean it. This is Disneyland. When we try to explain this place to my parents, they look at us like we're nuts.

There's too much money here, too many over credentialed arrogant assholes who can't think straight and too many interlopers from all over the world looking to seek their fortunes at someone else's expense by redefining reality. If you come here not knowing that, you will eventually get hurt. The laws of physics, economics and common sense have not been repealed. Two and two will NEVER equal five no matter how many people say so and no matter how many times they say it.

Bloomfield Hills is a nice place. It snows there, but it's nice. Moreland Hills, Ohio is also nice with similar demographics. Around Columbus, Upper Arlington is nice. I think Jack Nicklaus still lives there. In the Cincinnati area, I like Blue Ash. I'd live there in a second.

Down your way, I like Round Rock. Georgetown is also a good bet although it's further away. Go south and there's San Marcos. I got my hair cut there once, during a day trip to the outlet mall.

wthrfrk80 says

SubOink says

Makes no sense. Why would showing off "the worst investment possible" be even considered showing off then?

Because they don't think of it an an investment. They think of it as a luxury good. Like a Ferrari. Or a yacht. Or a glass of fine wine. Or a jet. They don't expect a return on those purchases. They buy them because they're nice to have and they can afford it. They're investments are in stocks and bonds. And maybe real estate if they're collecting rents.

Ross Perot has invested primarily in Treasuries for years and years. He says it's not about return on his money but return OF his money.

wthrfrk80 says

SubOink says

Makes no sense. Why would showing off "the worst investment possible" be even considered showing off then?

Because they don't think of it an an investment. They think of it as a luxury good. Like a Ferrari. Or a yacht. Or a glass of fine wine. Or a jet. They don't expect a return on those purchases. They buy them because they're nice to have and they can afford it. They're investments are in stocks and bonds. And maybe real estate if they're collecting rents.

Even in general aviation, most of the big airplanes are owned by paper corporations for tax and liability reasons. I can name several flight schools right off the top of my head where the school doesn't own the planes. One of them is a fairly prestigious operation over at Livermore Muni.

RentingForHalfTheCost says

BoomAndBustCycle says

The inevitable depression and morale crushing layoffs that would commence... It would be a hard, chaotic reset button on our financial system.

Bring it ON! Time for us sinners to pay and pay dearly. We can take it. Who is not up for a good round of suffering. I'd vote for this if there was a vote. And I own multiple houses (just not any in the BA). I'd rather get us back on track to eventually be prosperous again, regardless of how long it took. Even if it took longer than I live. At least we would be passing down something worth inheriting. Right now, we are passing on an economy build on junk bonds in all honesty. 61% of the bonds are being bought by the fed. What a joke.

Won't happen. It should but it won't.

dunnross says

rootvg says

There ARE a lot of wealthy, successful people in the nice areas and for that reason those areas will never be affordable.

Are you saying that wealthy people like to overpay? How did they become wealthy, then?

Who cares? It's not my business either way.

Nomograph says

dunnross says

Are you saying that wealthy people like to overpay?

Do wealthy people overpay for a Maserati when they could have purchased a Honda Civic?

No, but buying a crappy old house in a place like Palo Alto, is like buying a Honda Civic for the price of Maserati, just because it has Michelin Tires.

rootvg says

cares? It's not my business

Then why do you judge your gay neighbors?

Rich people don't buy a 500k house.

Somebody that makes 1Mill a year, buys a house with a mortgage of 20k/month.

The ratio is very similar then the guy that makes 150k having a mortgage of 3000/month.

Complete nonsense. You guys have no clue what rich people do and why they do it. They do things very similar than everybody else - just add a 0 or 00 or 000 to it.

You think the guy that makes 20 million a year buys a house for 3 million in cash? No, he buys a house for 45Million...and that's the second house or the third house. It still takes 4-5 years of his income to pay for those houses.

Nomograph says

dunnross says

Are you saying that wealthy people like to overpay?

Do wealthy people overpay for a Maserati when they could have purchased a Honda Civic?

I know many wealthy people that do cause price inflation. They pay retail for vehicles, houses, etc. without even trying to haggle. It is not worth their time. I once went tire kicking with a manager, who, spent about 2 hours to decide to buy a BMW convertible. No where in the discussion was anything about price even discussed. I asked him as we were driving back to the office about this, and he said he was fine paying what they were asking for it. He would rather give them the sticker price and make everyone happy and get great service in the process.

Most of us don't work like that. We know that the above person overpaid because anyone that haggles will do better. I don't want just the middle of the price profile, I want to be the person who pays the least out of all the buyers. That will still stay with me, even if I was rich. I'm sure it has to do with living my first 25 years of life so broke it was even hard to "pay" attention. ;)

SubOink says

Rich people don't buy a 500k house.

Somebody that makes 1Mill a year, buys a house with a mortgage of 20k/month.

The ratio is very similar then the guy that makes 150k having a mortgage of 3000/month.

Complete nonsense. You guys have no clue what rich people do and why they do it. They do things very similar than everybody else - just add a 0 or 00 or 000 to it.

You think the guy that makes 20 million a year buys a house for 3 million in cash? No, he buys a house for 45Million...and that's the second house or the third house. It still takes 4-5 years of his income to pay for those houses.

I completely agree with your argument here. However, I read all the previous posts and I can't figure out what you are arguing about. I didn't see any comment saying anything opposite of what you are saying here. Rich people do buy houses, and they do buy at their comfort level. That level is way above what is comfortable to most of us overpaid pheasants.

dunnross says

Nomograph says

dunnross says

Are you saying that wealthy people like to overpay?

Do wealthy people overpay for a Maserati when they could have purchased a Honda Civic?

No, but buying a crappy old house in a place like Palo Alto, is like buying a Honda Civic for the price of Maserati, just because it has Michelin Tires.

You don't have to buy in Palo Alto. You don't even have to live in Palo Alto.

SubOink says

Rich people don't buy a 500k house.

Somebody that makes 1Mill a year, buys a house with a mortgage of 20k/month.

The ratio is very similar then the guy that makes 150k having a mortgage of 3000/month.

You think the guy that makes 20 million a year buys a house for 3 million in cash? No, he buys a house for 45Million...and that's the second house or the third house. It still takes 4-5 years of his income to pay for those houses.

Actually no. Thomas Stanley's book titled "The Millionaire Next Door" interviewed about a thousand people with a net worth of over $1,000,000(U.S) on exactly what you're talking about:

Who are the rich in this country?

What do they do?

Where do they shop?

What do they drive?

How do they invest?

Many rich people tend to be fairly conservative and practical in their purchasing decisions. The most popular car for a millionaire? Toyota Camry. Less than 10% actually drove a "Luxury" brand car (Porsche, Ferrari, etc). One person he interviewed had a $10,000,000 net worth but lived in a sub-$800,000 home.

The book was published in 1996, before the dot.com bust, and Real estate bubble, so the millionaires Stanley interviewed were "real" wealthy people, not on-paper millionaires because they held inflated assets like unproven tech stock, or real estate.

Maybe, if the commute time could be make less by more efficient public transportation, location could be less of an issue. For e.g, there's VTA right in front our place that would go to mountain view Caltrain except it takes twice as long as driving, almost twice as much as the monthly caltrain parking permit. Before the gas price skyrockets, think Caltrain pass costs would exceed fuel cost. As much as California is trying to be green, they haven't been that successful in public transportation. How about public transportation connecting east bay with the Caltrain crossing the bridge? Of course, I don't know the difficulty in construction, but there is eurostar crossing English channel, it shouldn't be mission impossible.

rootvg says

There's too much money here, too many over credentialed arrogant assholes who can't think straight and too many interlopers from all over the world looking to seek their fortunes at someone else's expense by redefining reality. If you come here not knowing that, you will eventually get hurt. The laws of physics, economics and common sense have not been repealed. Two and two will NEVER equal five no matter how many people say so and no matter how many times they say it.

That's probably the best description of the Bay Area I've ever seen. Well said.

SparrowBell says

Maybe, if the commute time could be make less by more efficient public transportation, location could be less of an issue. For e.g, there's VTA right in front our place that would go to mountain view Caltrain except it takes twice as long as driving, almost twice as much as the monthly caltrain parking permit. Before the gas price skyrockets, think Caltrain pass costs would exceed fuel cost. As much as California is trying to be green, they haven't been that successful in public transportation. How about public transportation connecting east bay with the Caltrain crossing the bridge? Of course, I don't know the difficulty in construction, but there is eurostar crossing English channel, it shouldn't be mission impossible.

I can easily beat the lightrail from Milpitas to Mountain View by biking. Have been doing it for years. The caltrain catches back up to me around Redwood city area. So sad.

RentingForHalfTheCost says

That level is way above what is comfortable to most of us overpaid pheasants.

You mean like this guy? ;)

Goran_K says

Many rich people tend to be fairly conservative and practical in their purchasing decisions. The most popular car for a millionaire? Toyota Camry

I work with many very wealthy people. They all have more cars than I can keep track of and there is no toyota camry in sight. Actually, the camry is what the cleaning lady drives.
What nonsense is that. Look around the rich neighborhoods. Here in LA, you can look at miles and miles of neighbordhoods where each house costs 1.5mill and up...who do you think buys those if not the rich??

Look at ferrari and luxury car sales...who do you think buys those?

And look at Richard Branson type characters. You think he drives a Toyota Camry? LOL.

RentingForHalfTheCost says

However, I read all the previous posts and I can't figure out what you are arguing about.

You are right. I can't figure it out either. :) ...ah, wait...I guess we got on a tangent about houses being a terrible investment and then blabla and then bla and then more blabla...and now we are talking abut ferrari's and organic beans. LOL.

Happy Easter!!

Goran_K says

Actually no. Thomas Stanley's book titled "The Millionaire Next Door" interviewed about a thousand people with a net worth of over $1,000,000(U.S) on exactly what you're talking about:

Many rich people tend to be fairly conservative and practical in their purchasing decisions. The most popular car for a millionaire? Toyota Camry. Less than 10% actually drove a "Luxury" brand car (Porsche, Ferrari, etc). One person he interviewed had a $10,000,000 net worth but lived in a sub-$800,000 home.

this is correct

the data is fairly recent - it's from 2009.

also, stanley has a phd, was a professor for 20 years and his current job is studying and researching wealthy people. he studies the wealthy for a living. he has multiple best selling and widely acclaimed books (with actual data) on his findings on who the wealthy are and profiles them accurate.

these credentials trump anyone's lame "observations" pulled from their ass.

From the book "Millionaire Teacher: The Nine Rules of Wealth You Should Have Learned in School", Thomas Stanley, wealth researcher and author of "The Millionaire Mind" and "The Millionaire Next Door" conducted a survey and found:

"""Most US homes valued at a million dollars or more (as of 2009) were not owned by millionaires.
Instead, the majority of million-dollar homes were owned by non-millionaires with large mortgages and very expensive tastes.

In sharp contrast, 90 percent of those who met the defined criterion to be a millionaire -- having a net worth of more than $1 million -- lived in homes valued at less than a million dollars."""

Hysteresis says

this is correct

I guess its really all the poor people living in the 30mill+ houses down at the beach...NOT

E-man says

Many people on this board wants to buy/own a house in Palo Alto or the Peninsula, and they don't deny it. The only problem is that they want to pay Concord or the Central Valley home prices.

This is one of the dumber things you've ever posted, which is saying a lot.

Not everybody wants to live in PA or MV, most people just want to live in the BA without spending 80% of their income to do so. I don't think anyone expects a PA home to 300K =/

Also, some of us get reasonable deals because we pay rent on time and take care of the properties we live in. Trust me, you aren't doing anyone any favors. My landlord raises my rent, and they'll be over here changing light bulbs. They know this and I treat their place well, so they don't raise my rent.

SubOink says

Hysteresis says

this is correct

I guess its really all the poor people living in the 30mill+ houses down at the beach...NOT

this is retarded. no one said such a stupid thing. were did you learn to read?

Hysteresis says

were did you learn to read?

Oh, the irony.

tiny tina says

Hysteresis says

were did you learn to read?

Oh, the irony.

likewise

E-man says

As a landlord, I haven't realized this rent increase. I feel for the renters and haven't increased the rent in the past 3 years. However, I'm so tempted to raise rent on all of my rentals because it seems like the renters on this board don't appreciate that their landlord is giving them a deal. :)

Stick it to them. 25% increase retro back 3 months! Wait, are you my landlord? Crap, ignore what I just said. Nothing to see here, keep moving...

SubOink says

Hysteresis says

this is correct

I guess its really all the poor people living in the 30mill+ houses down at the beach...NOT

I'm actually reading this book now and it is very enlightening. Sure, there are rich that show things off and use their wealth to buy what others can't. But we are talking averages here. There is a vast majority of millionaires that live in middle of the line homes. They live a life you wouldn't suspect considering they are worth 4-5million. It is a good read. "The Millionaire Next Door: The Surprising Secrets of America's Wealthy". The moral of the book. Don't believe everything you see.

E-man says

Many people on this board wants to buy/own a house in Palo Alto or the Peninsula, and they don't deny it. The only problem is that they want to pay Concord or the Central Valley home prices.

But when you compare a $1M 1100 sq ft home in Palo Alto to a home 3x bigger and much modern located 15min drive in Silver Creek ... you ask what am i paying $1M in PA for ?

LOL! for many of use who have lived here all of lives.. it really doesnt make sense. So why get so little for so much ?

No PA prices dont make sense compared to the nearby areas.

RentingForHalfTheCost says

There is a vast majority of millionaires that live in middle of the line homes. They live a life you wouldn't suspect considering they are worth 4-5million. It is a good read.

You have a mindset in the public today, that must have their "Bling".

RentingForHalfTheCost says

Don't believe everything you see.

And certainly don't believe everything you read.

:)

SubOink says

I work with many very wealthy people. They all have more cars than I can keep track of and there is no toyota camry in sight. Actually, the camry is what the cleaning lady drives.
What nonsense is that. Look around the rich neighborhoods. Here in LA, you can look at miles and miles of neighbordhoods where each house costs 1.5mill and up...who do you think buys those if not the rich??

Look at ferrari and luxury car sales...who do you think buys those?

Stanley accounted for those people, remember the 10% I mentioned?

He called these "rich" people UAWs, or Under Accumulators of Wealth. They appeared wealthy on the outside, but didn't accumulate as much wealth as PAWs, Prodigious Accumulators of Wealth.

The main difference was that UAWs, like the rich people you know, spent lots of their income on lots of cars, really expensive homes, but held much less wealth than PAWs who spent their money more practically, and invested into assets that returned money (unlike Ferrari's like your rich friends).

Warren Buffet drives an old Cadillac, he's considered one of the Top 5 wealthiest people in the world.

Scottie Pippen bought a $5 million dollar jet during the height of his career, owned a classic Ferrari F40, and made over $110,000,000 in salary from the NBA.

In 2007, he owed lawyers, and had liens against him in excess of $9,000,000.

Looks can be deceiving.

This is what a $1.2M house in Palo Alto looks like:

http://www.redfin.com/CA/Palo-Alto/1820-Ash-St-94306/home/595737

But why not save yourself $300K and buy this house in Chicago, in one of the top schools districts in the country, only 35 minutes from the city + right next to a country club + 1.15 acres of land:

http://www.realtor.com/realestateandhomes-detail/2455-Westcourse-Dr_Riverwoods_IL_60015_M79527-93827

Now where would you rather live?

If anyone drove around Palo Alto for decades there are plenty of very very old cars parked in the drive way... you were unlikley to have seen the latest BMW, Benz, Lambo or Ferrari... more like old clunkers...

LA is a different story... and so is the Cocaine !

thomas.wong1986 says

If anyone drove around Palo Alto for decades there are plenty of very very old cars parked in the drive way... you were unlikley to have seen the latest BMW, Benz, Lambo or Ferrari... more like old clunkers...

LA is a different story... and so is the Cocaine !

So much for rich people living in Palo Alto. How much longer do we have to take this BS?

dunnross says

So much for rich people living in Palo Alto. How much longer do we have to take this BS?

It is pathetic.. some people need to go sober up.. take a 12 step program..LOL