patrick.net

According to my observations, Jack is not a housing bull. He appears to quite pessimistic about the future of the housing market.

Who is the housing bull you are talking about?

Observer,

According to my observations, Jack is not a housing bull. He appears to quite pessimistic about the future of the housing market.

Actually I think most RE bears would be bulls if pricing was more realistic.
Being a bull or bear, doesn't make you right or wrong as it just reflects the value you perceive. Prudent investors would try to buy below value, and ideally sell at a price higher than value.

"Actually I think most RE bears would be bulls if pricing was more realistic."

Exactly! This has been more than simply a bull market. 20% growth year after year is a bull market on sterrhoids.

According to my observations, Jack is not a housing bull. He appears to quite pessimistic about the future of the housing market.

Welcome back, Fake P!

I wonder why Fake P has remained an observer for so long. We need you!

Do you really know that this is Fake P?

Unless someone took over his computer. :)

Mr. Right

Where do you stand on the market? Sometimes you seem bullish and then others you seem to take a bearish view. Is your view primarily dependant on the location? Just curious.

Mr Right,
This is the only factor of todays housing market that concerns me.

All I can say is "Like lambs to the slaughter".

I wonder if Fake P stayed away because he felt we were pummeling him (or attempting to) too much.

Dream House

Location, overlooking the beach, near to cafes and surrounded by trees but still close to the city. Good schools, nice community and nice weather. Mild in winter and warm in summer. This sound suspiciously like Bronte Beach in Sydney, Aus:)

House style, open living room that is spacious (not into multiple living areas, I'd prefer one large loft type space) with an open kitchen - modern, large and with all the mod cons. 4 bedrooms and a separate inlaw room for relatives. A flat backyard that you can see from the living room. Around 3000 sq feet. Asian fusion styling - clean, fairly minimal but comfortable with personality, fairly modern with lots of nice light.

Cost: $800,000 seems about fair.

I wonder if Fake P stayed away because he felt we were pummeling him (or attempting to) too much.

I like Fake P, even though he does not like me. I am being sincere. Of course, I like everyone here.

Peter P

Sometimes I wonder if you're too nice for your own good. ;)

On Kentucky; a friend decided to pack it in from the BA and move to Kentucky around 1-2 years ago. He bought a huge lovely old homestead for his family for a great price and made the big move. Unfortunately the work was boring (he is very smart and works in IT), the people not as stimulating (and he grew up around here so knew what to expect), the religious fanatics a little hard to take and the racoons impossible to evict once they took up residency. They came back after losing a lot of their savings.

Not all beer and skittles.

Fake P,
Careful, when people are nice to you they generally want something. ;)

Careful, when people are nice to you they generally want something.

Exactly, I want him to be nice and to make comments. ;)

Jack

I've always thought your predictions were reasonable. I'm not sure how well more desireable areas would withstand a massive crash (which I sincerely home doesn't occur) but I do think your intangible argument has merit. Some areas are just going to do better because they are better.

I hope doesn't occur.... geez.

That last typo could be called a Freudian slip couldn't it? ;)

I’m not sure how well more desireable areas would withstand a massive crash (which I sincerely home doesn’t occur) but I do think your intangible argument has merit.

Prime locations are usually the last to fall and the first to go up. However, they can still be volatile at times. They are part housing, part asset, and part collectible.

Exactly, I want him to be nice and to make comments.

But he should already know that he is among friends here.

That one was better than when I was commenting about Peter P’s “vertical neighbors” post, and I said “What other kink are there?” (I meant to type “kind”)

I remember reading that post and thinking "what does that mean?" I think I'm glad to know it was a typo. :)

Interesting point. If the “bubble” has started bursting won’t we see folks jumping in and buying these reduce price houses first? Thus artificially inflating the median house price, and giving ammo for the bulls to show prices just keep on going up

I'm not sure, the speculators seem to buy en masse and then sell en masse. I don't know if enough buyers will jump in if the market seems too shaky.

Jack, I thought you imply that not having vertical neighbors is a "kinky" idea.

This is where Peter P usually says “but once the psychology changes, people will wait for the price to come down even further” …

That's actually what I think is going to happen. And if the stock market happens to rally at the same time, you'll start hearing people say "I wouldn't put my money in RE, stocks are a way better investment." Just as the reverse is true now.

Mr. Right

Many 'bears' on this site have said if you plan to stay and can afford the home, then by all means buy. But most of us think that if you have to take out a NAAVLP to stretch your way into a home, then it's not a good bet. We're often accused of being doom and gloom around here, but I think most of us are pretty reasonable. A lot of us just think the market's totally nuts right now.

In the US, financing 80% of the median priced house takes up only 15% of the median household income, up modestly from a year ago but lower than at any time in the previous two decades.

Mr.Right, it is comforting to know that most people will be unharmed by the real estate downturn. However, the "percentages" themselves are insufficient to show the health of the real estate market.

Price discovery always takes place at the margins.

It takes a few over-extended people to bring down the market on low volume.

you may as well just say “this market will crash, so there!”.

Hence Bay Area Housing Crash Continues... ;)

Interesting point. If the “bubble” has started bursting won’t we see folks jumping in and buying these reduce price houses first?

'Going by my gut', that could be a possibility, especially in the early stages of a correction. At the twilight of the dot-bomb, I recall how chaotic NASDAQ became, followed by the death spiral, when the herd stampeded from the market.

Couldn't this happen in housing? Say, a few people start thinking "hey, this is a downturn, I could get ahead by buying now, then the prices decrease further. Meanwhile, the rest of the herd notices how these people got burned, and they run away faster. Inventories rise, a few more stubborn investors finally give up and try to sell, increasing inventory. Somewhere along the line, overleveraged homeowners began to default on their loans. The dot-bomb was a more cataclysmic effect, like an avalanche. Perhaps RE will be more like a snowball, growing in size and gaining speed?

(not "investment" advice)

So, if doomers and gloomers can realize the fallacy of this argument, then they’ll realize the market isn’t in a bubble. At every level, we have dreams.. and if we are priced out of our dream places, then we are essentially shit out of luck.

But I like to pay a certain multiple of rent for a condo... if rent is high enough, I would gladly buy.

This is probalby less relevant... assuming it is available for rent (HAHAHAHA), can you reasonably afford to rent this dream house indefinitely?

MarinaPrime, the observer you agreed with is the Jedi Knight who tried to kill you will a light sabre.

So, if doomers and gloomers can realize the fallacy of this argument, then they’ll realize the market isn’t in a bubble.

Hmm...first off, if I were to ever take you seriously, I'd need to be convinced you even understand the bubble concept, with a knowledge of historical trends, current conditions, proving your argument with clear and concise data. How exactly have you proven "the market isn’t in a bubble"?

Instead, you predict endless gains, drop big numbers and "prime" locations as if we should otherwise think "we are essentially shit out of luck." Hmm...why do I have a problem with this approach?
Not trying to goad you MP; I'm just at a loss...

Another fallacy. These ‘dream homes’ are places to LIVE THE DREAM! These homes are not for rent!

1bedrooms and 2bedrooms are for rent. Anything bigger, makes less and less sense.

I know, I know...

But living the dream has little to do with the housing bubble though... we just need to find a way to get there. :)

Jack, it seems that Fake P is in stealth mode again...

What name this time?

No name. Completely invisible.

You can make more, or want less. Frankly, wanting less is the key to happiness.

This is very true. There is a limit of how much one can make... but want is boundless.

Jack, are you upset that I am try to reconcile with MarinaPrime? I really want to replace confrontation with positive engagement.

I apologize for pointing out that Marina Prime’s posts were deleted because they were rude rather than because they were optimistic. I was trying to defend the actions of the threadmaster, since MP was stating an untruth as to why his posts were deleted.

I was somewhat responsible with that. I kinda regret that after MP toned down in "On a personal note". He did show a nicer side of him. If he is capable of being nice, perhaps we can come to reconcile our differences and do some real discussions.

Jack, do not apologize to me. It was not your fault anyway.

1bedrooms and 2bedrooms are for rent. Anything bigger, makes less and less sense.

Maybe they don't make sense when you don't have a family but otherwise they do. I only pay $975 mo. for a 3b/2b in a very desireable area. And you wouldn't believe how many 4-5bed houses you can get out here. $1600mo will get you at least a nice 3b and in some locations 4. When mortgages are through the roof, it makes a lot of sense for a family to rent until a more reasonable time to buy.

I don’t know, the blog is getting criticized (by MP) for being a “support group”, but it seems like MP is the only one who is getting any therapy!

Jack, his comments will not make this blog a support group if it was not one in the first place, correct? By collective rejecting his criticism we do "risk" making our discussions "look" like therapy, no?

Oh no, I am becoming the resident optimist...