patrick.net

Reader says

Bigsby says

KILLERJANE says

LA is cool for its diversity, flavor, etc. but the RE is the joke. Those 500,000 properties don't get more than 2,500 in rent, if that much. One can do so much better elsewhere.

Wouldn't that make buying a pretty reasonable choice?

Nope. Why? Because those 500,000 properties are still grossly overpriced.

Reader

They may or may not be, but if they're renting for $2500, then that doesn't strike me as being grossly overpriced given current interest rates.

Bigsby says

Reader says

Bigsby says

KILLERJANE says

LA is cool for its diversity, flavor, etc. but the RE is the joke. Those 500,000 properties don't get more than 2,500 in rent, if that much. One can do so much better elsewhere.

Wouldn't that make buying a pretty reasonable choice?

Nope. Why? Because those 500,000 properties are still grossly overpriced.

Reader

They may or may not be, but if they're renting for $2500, then that doesn't strike me as being grossly overpriced given current interest rates.

If I had to be there I'd gladly pay the $2500 instead of facing the alternative today.

Bigsby says

KILLERJANE says

@Bigsby

No not a good return for rent income. I could take 500,000 in properties and get 6000 a month in rents. So no.

Just keep your blinders on! Common sense is a myth.

What? I'm not talking about an investment property. I'm talking about buying rather than renting. If you are paying $2500 for a house that would cost you $500k, then you may as well buy.

Not if that 500K house is going to be 250K or less in the coming years then you are on a sinking ship.

Reader says

If I had to be there I'd gladly pay the $2500 instead of facing the alternative today.

You'll have to explain what you mean.

Bigsby says

Reader says

If I had to be there I'd gladly pay the $2500 instead of facing the alternative today.

You'll have to explain what you mean.

I mean running the risk that the half a MILLION dollar purchase is going to slide into 250K I'd rather shell out $2500 a month and be free with no 500K debt on my back.

Reader says

I mean running the risk that the half a MILLION dollar purchase is going to slide into 250K I'd rather shell out $2500 a month and be free with no 500K debt on my back.

I don't really see your point. House prices in most areas of the US are around their historical adjusted averages, so what chance is there of prices falling by that extent? What if they stay flat, or track inflation? When does renting stop being a good idea to you? And hey, if you are paying $1800 on a mortgage rather than $2500 in rent for the same house...

Bigsby says

Reader says

I mean running the risk that the half a MILLION dollar purchase is going to slide into 250K I'd rather shell out $2500 a month and be free with no 500K debt on my back.

I don't really see your point. House prices in most areas of the US are around their historical adjusted averages, so what chance is there of prices falling by that extent? What if they stay flat, or track inflation? When does renting stop being a good idea to you? And hey, if you are paying $1800 on a mortgage rather than $2500 in rent for the same house...

If you think this pricing today coast to coast is correct to the dollar? Today? And into the near future? You go ahead and I wish you all the luck you'll need. I'll put my money elsewhere anywhere but RE today and into the near future until I see pricing go way below what it was before this bullshite began.

Reader says

If you think this pricing today coast to coast is correct to the dollar? Today? And into the near future? You go ahead and I wish you all the luck you'll need. I'll put my money elsewhere anywhere but RE today and into the near future until I see pricing go way below what it was before this bullshite began.

In most areas prices are way below the peaks.
And I already have a house, so that's irrelevant.

Bigsby says

Reader says

If you think this pricing today coast to coast is correct to the dollar? Today? And into the near future? You go ahead and I wish you all the luck you'll need. I'll put my money elsewhere anywhere but RE today and into the near future until I see pricing go way below what it was before this bullshite began.

In most areas prices are way below the peaks.

And I already have a house, so that's irrelevant.

Lose the word PEAKS. Peaks of what? The peak or rise was not real, there was in the clearest sense no peak it was all a con a bullshite game. Do you get that point? The prices of even 2000 were way too high, the rest up through '07 was just sheer brainwashed lunacy.

People have been fed a bill of goods, which in the bigger scheme of things unlike that new pricey coat from the department store someone buys and has buyer remorse but with the tags still on and a receipt they can return it, unlike this shite they cannot return from where they started without major repercussions.

I may be wrong but I feel a few things need to be asked since this is irrelevant to you. Do 1. You have a mortgage? 2. If so is it is well over 250K? 3. And do you have an auto loan or loans?

Darrell In Phoenix says

Bigsby says

House prices in most areas of the US are around their historical adjusted averages,

Prices are at 2004 levels still, thus you just LIED.

You are a LIAR.

2004 prices? Post a link up please. Or shall I save you the bother?

My point is if you are going to invest 500,000, then why not do it where it can create income and use that income to rent where the cost of buying is insane overpriced? Your investment will pay your rent rather than it coming out of pocket from a job.

KILLERJANE says

My point is if you are going to invest 500,000, then why not do it where it can create income and use that income to rent where the cost of buying is insane overpriced? Your investment will pay your rent rather than it coming out of pocket from a job.

Just keep your blinders on! Common sense is a myth.

And my point is that if you have to pay $2500 to rent a house that you can buy for $1800 a month, then that property doesn't strike me as being insanely overpriced.

Reader says

Lose the word PEAKS. Peaks of what? The peak or rise was not real, there was in the clearest sense no peak it was all a con a bullshite game. Do you get that point? The prices of even 2000 were way too high, the rest up through '07 was just sheer brainwashed lunacy.

So? If you look at any charts for housing, then prices are pretty much back to historical norms for the US as a whole - hence my point about prices being MUCH lower than the peaks in most areas. That might not be the case in the BA and certain other areas, but hey, not everybody lives there.

So you pay 1800 a month when you could be getting 6000 rents minus 1800 netting you 4200 before other expenses. I see the the math works better in rents on my scenario than yours.

Reader says

I may be wrong but I feel a few things need to be asked since this is irrelevant to you. Do 1. You have a mortgage? 2. If so is it is well over 250K? 3. And do you have an auto loan or loans?

1. Yes
2. No
3. No

500,000 home in LA 1800 mortgage plus 6500 a year in taxes plus plus plus old ugly fixer costs.= not worth it, debt slavery.

KILLERJANE says

So you pay 1800 a month when you could be getting 6000 rents minus 1800 netting you 4200 before other expenses. I see the the math works better in rents on my scenario than yours.

Just keep your blinders on! Common sense is a myth.

That's if you want to become a landlord and presumably of properties a long way away from where you live. Quite clearly, most people don't want to follow that path, so your point is rather moot when it comes to assessing how overpriced a house is that rents for $2500 but costs $500k to buy.

KILLERJANE says

500,000 home in LA 1800 mortgage plus 6500 a year in taxes plus plus plus old ugly fixer costs.

Just keep your blinders on! Common sense is a myth.

Tax break, potential equity... Why is that so much worse for someone who just wants their own home than paying $2500?

Well a property is actually only worth what you can rent it for, that is the point.

KILLERJANE says

Well a property is actually only worth what you can rent it for, that is the point.

Just keep your blinders on! Common sense is a myth.

You still aren't directly addressing my point. Why do you consider a house that costs $500k but rents for $2500 to be massively overpriced?

Perspective 1, use your money to chase the mortgage payment.
Perspective 2, use your money to create more money.

KILLERJANE says

Perspective 1, use your money to chase the mortgage payment.

Perspective 2, use your money to create more money.

Just keep your blinders on! Common sense is a myth.

As I said, that's fine if you want to be a landlord. If you don't, your point is irrelevant. Either way, you still haven't answered my question.

Because a smart move is one that allows an investment to pay for itself and then some extra for the effort. 500,000 house for not even 1% return is sad.
Bigsby says

KILLERJANE says

Well a property is actually only worth what you can rent it for, that is the point.

Just keep your blinders on! Common sense is a myth.

You still aren't directly addressing my point. Why do you consider a house that costs $500k but rents for $2500 to be massively overpriced?

Darrell In Phoenix says

Bigsby says

House prices in most areas of the US are around their historical adjusted averages,

Post up a link please or shall I save you the bother?

KILLERJANE says

Because a smart move is one that allows an investment to pay for itself and then some extra for the effort. 500,000 house for not even 1% return is sad.

That's not addressing my point. Most people don't want to borrow 500k to set themselves up as an out of state landlord, so that isn't an issue. The question is if you want to buy a house to live in, then why is a 500k house that would cost you $2500 to rent such a bad purchase?

Chart is not accurate for Major CA RE hotspots. Houses could be bought for 200,000 in LA in 2000 and still can be sold for close to 3x that today.

KILLERJANE says

Chart is not accurate for Major CA RE hotspots. Houses could be bought for 200,000 in LA in 2000 and still can be sold for close to 3x that today.

Just keep your blinders on! Common sense is a myth.

And where exactly did I say it was? Everything I said was for the US as a whole. And that is a chart for the US as a whole. Do you suddenly want to change the goalposts? And anyway, it more than relates to Darrell's imaginary place of residence for starters.

Common sense is a myth. I find this out every time I read the blog.

KILLERJANE says

Chart is not accurate for Major CA RE hotspots. Houses could be bought for 200,000 in LA in 2000 and still can be sold for close to 3x that today.

Just keep your blinders on! Common sense is a myth.

And I don't know how accurate that comment is, but this chart certainly doesn't seem to match your assertion:

That is not accurate, IMO. I have seen it firsthand, on the ground in LA. If you bought in 2000, you tripled your "value" by 2005-6, sometimes more. And now now you could sell or a bit less but not much. I know, I did it. Did you? Are you there?

Not interested in a fight, just have learned that there are different ways to do things. And those charts are macro, not local.

KILLERJANE says

That is not accurate, IMO. I have seen it firsthand, on the ground in LA. If you bought in 2000, you tripled your "value" by 2005-6, sometimes more. And now now you could sell or a bit less but not much. I know, I did it. Did you? Are you there?

Not interested in a fight, just have learned that there are different ways to do things. And those charts are macro, not local.

Just keep your blinders on! Common sense is a myth.

If you say so. Presumably they collected the available data, whereas you... And yes, if you want to take it down to very specific pockets of LA, then I'm sure you can find what you want, but that is hardly painting an accurate picture of the area as a whole.
And I'm not looking for a fight, but I think talking from the perspective of an investor is not particularly relevant or constructive for those people who are simply looking to buy a home.

Check out Redfin. 90041

Find history of 2000-2001 sales and then find otu what the same sold for this year. Best to you, gotta do some work now.

KILLERJANE says

Check out Redfin. 90041

Find history of 2000-2001 sales and then find otu what the same sold for this year. Best to you, gotta do some work now.

Just keep your blinders on! Common sense is a myth.

Like I said, I'm quite sure you can find what you want if you select individual zip codes, but that quite clearly isn't the experience for LA as a whole though, and surely that is the much more relevant point for most people.

Darrell In Phoenix says

Housing prices are still at the grossly inflated levels of 2004..... and falling

Ho, ho, ho. Even using a chart showing NOMINAL house prices, it indicates prices back to those of 2003. Last time I checked 2003 was not 2004.

Darrell In Phoenix says

run Bibsy run!!!! lmao

Now, now Darrell, we all know facts aren't your strong point. You can't even get your place of residence right. And remind me again how many vacant homes there are (in your imagination).

I don't see Bigsby's argument. The bubble was inflating pretty good by 2001, so 2003 or 2004 prices aren't anything to be excited about.

Goran_K says

I don't see Bigsby's argument. The bubble was inflating pretty good by 2001, so 2003 or 2004 prices aren't anything to be excited about.

Er, why don't you look at the real house price chart rather than Darrell's nominal one? Real house prices look like they are basically back to their norms and given the record low interest rates, then presumably affordability must be pretty damn good for most people (read most people, not necessarily those living in the BA etc.). Do you see my point now?

Darrell In Phoenix says

Goran_K says

I don't see Bigsby's argument. The bubble was inflating pretty good by 2001, so 2003 or 2004 prices aren't anything to be excited about.

He got caught lying once again.

Darrell, Darrell, every time your knuckles scrape across your keyboard you get caught lying.

You already posted that Darrell. Is your memory really that bad?

Darrell In Phoenix says

You're lying to the public about housing.

Why are you lying Bibsy?

Here we go again. Go on then 'Darrell the troll', what am I lying about?