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I Was Thinking to Myself This Could Be Heaven or This Could Be Hell


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2005 Oct 31, 1:59pm   72,095 views  451 comments

by matt_walsh   ➕follow (0)   💰tip   ignore  

Two years after signing a lease with a landlord who intended to never sell, he is selling.

I have to choose whether to buy this 3 bdr / 1.5ba, 1450 sq ft house in San Carlos for $888k or rent elsewhere. Here's my analysis...

I would put down $250k, financing $638k. At ~6.125%, my P&I comes out to $3,877. Property tax is around $928 for a total of $4805.

But I can deduct the mortgage interest of $3256. CA + Federal tax is 42%...so I save $1368 (and I already itemize, so it's not as if I lose the standard deduction). That brings me down to $3437.

Then comes something I can't calculate properly...I'd like to deduct the property tax, but I think I'm again in AMT hell this year...maybe someone can help. If I could deduct property tax, it would save my another $390 a month, bringing me down to $3047. Let's go with this for now.

Now if I think that the house won't lose value, I can look at it this way...of the P&I, $620 goes to principal. So that means my 'down the toilet' money comes out to $2427 a month. Renting anywhere on the peninsula in a comparable house is this much or maybe a bit more.

And at this point I'd say 'why not?', except for one thing...the opportunity cost on the $250k downpayment. Even with, say 5% after taxes, that's $1000 a month. Or put another way, if I rent for $2500 / mo, I really only pay $1500.

So then, let's assume I keep the house for 6 years and have to pay a 6% realtor commission. If I figure 5% savings rate, comparable rent of $2500 and $1054 opty cost on my $250k downpayment, it tells me that the house will need to sell for $1,076,000 to break even, or go up by roughly 21% (3.5% per year). If I assume no AMT deduction, I'll need to sell for $1,111,000 - required appreciation of 4.1% a year.

For fun, let's say that the proposed tax change limiting CA mortgage deductions to ~$350k comes into play. It actually makes less of a difference than you would think, at least for me. One one hand, my interest deduction goes down from $1368 to $750. But I can then deduct my state tax. Net, break even sales price becomes $1,130,000; appreciation of 27% or 4.5% a year.

Or, put another way, if the house does not go up in value, it will cost me around $260,000. If it dropped a mere 20%, it would cost me around $420,000.

I'm left with one (financial) reason to buy...inflation. Does anyone see an inflation scenario that makes this make sense to do?

Can you guys check my math?

#housing

« First        Comments 420 - 451 of 451        Search these comments

420   Peter P   2005 Nov 7, 6:28am  

sushi

I mean real estate.

421   Jamie   2005 Nov 7, 6:48am  

"Allah, Jaimie & SQT: the best thing to do is just talk exclusively about real estate, economics and related topics. Resist the urge!"

Actually, related topics includes the topic of women in the workplace/stay-at-home parents, which was the original debate I had with allah. Women in the workplace influences economics, stay-at-home parents influence the ability to buy real estate (or not) and so on.

Which is why there is usually a lot of leniency in moderation. Stifled conversations can lead to a lifeless blog. Or you'll just have one group of newbies after another visiting the blog and reinventing the wheel. I think most of us stick around because we enjoy the debates and conversations, but many of us have been here long enough that we're tired of kicking the dead horse of the housing bubble. (Maybe we need to leave :-))

But seriously, I certainly want to respect the wishes of the majority, and if that means we never mention anything that is not very directly real estate related, I'm okay with that. I just think we may need to revisit the rules, so to speak, and see what the majority agrees upon.

422   Peter P   2005 Nov 7, 6:49am  

But seriously, I certainly want to respect the wishes of the majority, and if that means we never mention anything that is not very directly real estate related, I’m okay with that. I just think we may need to revisit the rules, so to speak, and see what the majority agrees upon.

I think it is okay so long as the topic is within 6-degree of sushi.

423   Allah   2005 Nov 7, 6:51am  

Allah, Jaimie & SQT: the best thing to do is just talk exclusively about real estate, economics and related topics. Resist the urge!

Fine....but if anyone can find something that I said is sexist anywhere on this thread, I will buy them a house (non-bubble areas only!). ;-) .

424   Allah   2005 Nov 7, 7:13am  

The market goes up, the market goes down. That is not opinion but a simple statement of fact. It’s just the way of the world. So how do you know when to buy or sell?

Buy when it's down, sell when it's up.

Fundamentals. It’s all about You, Inc. How much do you have coming in? How much do you have going out? It’s what you do with the money you keep that in the end will determine your wealth.

Very true....and you will keep more if you buy after the bubble....don't forget, the aftermath of this bubble can leave you bankrupt should you buy now!

This is why real estate is a long term investment. You have to ride the waves, the crests and the troughs. But in the end, after 30 years of values wavering, going up and down, you’ll own a piece of property that will almost surely be worth more than you paid for it. The same is true for the stock market. Unless you’re willing to weather the storm and ride out the waves, don’t invest.

As far as the Stock market is concerned, it is when to buy and when to sell that makes you rich....if it wasn't, people would have held onto their Stock when it was crashing since it will go back up again...eventually! I don't look at a house as an investment at all......... but one thing I know for sure is that when property is so unnatually high in price, it is not a good time to buy. Buying right now is a good way of transferring a significant portion (if not all) of you wealth to a greedy seller. I want to buy a house I can afford without being a slave to my mortgage and have a lower standard of living. I also don't want to be trapped in my house because I am upside down on my mortgage...Who knows what the future holds... I may have to move.

Buy a house to live in it. Buy the house you like. Buy the house you want. Pay for it and live in it. Build equity, minimize expenses and invest your profits in income-generating assets. Play to win, or don’t play at all.

Exactly.... I will do this when it is a good time to buy and I suggest everyone else follows. Right now, any house I could afford is an ugly POS house I would be ashamed to live in and call my own. Some people seem to not mind spending a fortune on a dump I wouldn't want to be caught dead in...but to each there own I guess.

425   Jamie   2005 Nov 7, 8:08am  

LOL, SQT, thank you, thank you, thank you. I was too lazy to go dig up all that previous crap. And here's what I have to say about the sexism on the current thread, allah:

I TRULY want to drop this, but you did ask... Yours is often a covert sexism. You take a vaguely condescending tone at times, and when you discuss issues pertaining to women, you have a tendancy to reveal without ever saying it directly that you consider women lesser than men. I don't think you *consciously* believe women are lesser--but it comes out nonetheless in the way you say some things.

Let me say this: it's all in the subtext. For instance, earlier in this thread you talked about television, and it's pretty clear you do not consider watching it a worthwhile pursuit, and then you only gave examples of females in your life who watch it. The implication then becomes (especially given the history of your comments as SQT listed) that women are the ones who waste their time on empty-headed pursuits.

Later in this thread you said something about how we're still "going on" about this. And you used that little eye-rolling emoticon. Given the history of your comments, this comes off sounding like you mean we're the raving females getting hysterical over nothing. Next thing you know the claws will come out and there will be fur flying everywhere (this is an inherently sexist image, which I'm sure you will disagree with).

I know I'm wasting my breath with all this. I hate making accusations of sexism, and in most cases I always give people the benefit of the doubt. I think we should agree to disagree, but then you go and make this challenge statement daring anyone to find sexism in your comments. Did you have to go there? Couldn't we just have left crappy enough alone?

And one final thing that's covertly sexist in your comments: the very fact that you assume I'm getting all emotional and making a big deal over nothing. I'm trying to engage in an intellectual debate, but instead I get these dismissive comments from you, as if you're saying that since I'm a woman, I'm not capable of having level-headed debates...when that's exactly what I'm trying to do.

426   matt_walsh   2005 Nov 7, 8:29am  

(on gender issues) vive le difference.

But let it 'vive' somewhere else.

427   matt_walsh   2005 Nov 7, 8:37am  

newsfreak: Wife likes the house, absolutely adores the neighborhood. She would stay forever. House basically functions 100%...and I've lived here 2 years, long enough to know. The heater is brand new, the roof is in good shape, inspector says it's pretty darn clean, but the windows are leaky (air).

428   HARM   2005 Nov 7, 9:23am  

HIGGINS:
Women are irrational, that's all there is to that!
There heads are full of cotton, hay, and rags!
They're nothing but exasperating, irritating,
vacillating, calculating, agitating,
Maddening and infuriating hags!
[To Pickering]
Pickering, why can't a woman be more like a man?

PICKERING:
Hmm?

HIGGINS:
Yes...
Why can't a woman be more like a man?
Men are so honest, so thoroughly square;
Eternally noble, historic'ly fair;
Who, when you win, will always give your back a pat.
Well, why can't a woman be like that?
Why does ev'ryone do what the others do?
Can't a woman learn to use her head?
Why do they do ev'rything their mothers do?
Why don't they grow up- well, like their father instead?
Why can't a woman take after a man?
Men are so pleasant, so easy to please;
Whenever you are with them, you're always at ease.
Would you be slighted if I didn't speak for hours?

PICKERING:
Of course not!

HIGGINS:
Would you be livid if I had a drink or two?

PICKERING:
Nonsense.

HIGGINS:
Would you be wounded if I never sent you flowers?

PICKERING:
Never.

HIGGINS:
Well, why can't a woman be like you?

429   HARM   2005 Nov 7, 9:29am  

And for the ladies....

62 reasons why cucumbers are better than men (R) from Jokeindex.com:

1. The average cucumber is at least six inches long.
2. Cucumbers stay hard for a week.
3. A cucumber won't tell you size don't count.
4. Cucumbers don't get TOO excited.
5. A cucumber never suffers from performance anxiety.
6. Cucumbers are easy to pick up.
7. You can fondle cucumbers in a supermarket... and you know how firm it is before you take it home.
8. Cucumbers can get away any weekend.
9. With a cucumber you can get a single room and ... you won't have to check in as 'Mrs. Cucumber'.
10. A cucumber will always respect you in the morning.
11. If you can go to the movie with a cucumber and see the movie at a drive in you can stay in the front seat.
12. A cucumber can always wait until you get home.
13. A cucumber won't eat all the popcorn.
14. A cucumber won't drag you out to a John Wayne Film Festival.
15. A cucumber won't ask: 'Am I first?'
16. Cucumbers don't care whether you're a virgin.
17. Cucumbers won't tell other cucumbers you're a virgin.
18. Cucumbers won't tell anyone you're not a virgin.
19. With cucumbers, you don't have to be a virgin more than once.
20. Cucumbers won't write your name and number on men's room wall.
21. Cucumbers don't have sex hang-ups.
22. Cucumbers won't ask: 'Am I the best', 'How was it?' 'Did you come?', 'How many times?'
23. Cucumbers aren't jealous of your gynecologist, ski instructor or hair dresser.
24. Cucumbers won't ask about your last lover or speculate about your next one.
25. A cucumber will never make a scene because there are other cucumbers in the refrigerator.
26. A cucumber won't mind hiding in the refrigerator when your mother comes over.
27. No matter how old you are you can always get a fresh cucumber.
28. You can dish a cucumber up for dinner to your Brother-in law
& Sister, after fucking it.
29. Cucumbers can handle rejection.
30. A cucumber won't pout if you have a headache.
31. A cucumber won't care what time of the month it is.
32. A cucumber never wants to get it on when your nails are wet.
33. A cucumber won't give it up for lent.
34. With a cucumber, you never have to say you're sorry.
35. Cucumbers won't leave whisker burns, fall asleep on your chest or drool on the pillow.
36. A cucumber will never give you a hickey.
37. Cucumbers can stay up ALL night and you won't have to sleep
in the wet spot.
38. A cucumber won't work your crossword in ink.
39. A cucumber isn't allergic to your cat.
40. Cucumbers never answer your phone or borrow your car.
41. A cucumber won't eat all your food or drink all your liquor.
42. A cucumber doesn't turn your bathroom into a library.
43. Cucumbers won't go through your medicine chest.
44. A cucumber doesn't use your toothbrush, roll-on or hairspray.
45. Cucumbers won't leave dirty shorts on the floor.
46. A cucumber never forgets to flush the toilet.
47. A cucumber doesn't flush the toilet while you're in the shower.
48. With a cucumber, the toilet seat is always the way you left it.
49. Cucumbers don't compare you to a centerfold.
50. Cucumbers won't tell you they liked you better with long hair.
51. A cucumber will never leave you for another man, another woman or another cucumber.
52. You will always know where your cucumber has been.
53. A cucumber never has to call 'the wife'.
54. Cucumbers won't tell you a vasectomy will ruin it for them.
55. You can have as many cucumbers as you can handle.
56. You only eat cucumbers when you feel like it.
57. You don't have to wait for halftime to talk to your cucumber.
58. A cucumber won't leave town on New Years Eve.
59. Cucumbers never want to take you home to mom.
60. Cucumbers never expect you to have little cucumbers.
61. It's easy to drop a cucumber.
62. A cucumber will never contest a divorce, demand a property settlement or seek custody of anything.

430   Allah   2005 Nov 7, 11:04am  

Thanks Bubblesitter... I am a bit old fashioned, but not sexist at all.... I guess I got that from my Father.

QT you should be a script writer....you have such an imagination to turn stuff that isn't sexist at all into something that is! Maybe you should re-write "desperate housewives" ...I'm sure it would actually be good and I'd probably even start to watch it myself!

First of all you said in this thread:

I was simply commenting on allah’s continued sexism.

I asked you to show me in this thread
where the continued sexism is.

You go back to several OTHER threads to dig up stuff that isn't sexist, but you can make it sound like it is....but theres nothing in THIS thread that you can even make sound sexist can you? The reason I bring this up is that you saying continued sexism when I obvioulsy didn't say anything sexist, means that you were on the prowl just waiting to attack me just because you THINK I am being disrespectful to your friend Jamie. Nice of you to take the time to go through all the threads and fish up stuff that you can TRY to make sound sexist....believe me, if I felt it wasn't a waste of my time, I could copy and paste some of the stuff YOU said which would certainly make you look less rosey, but I have far too much respect for you to do that.

If a woman works she is characterized as overly ambitious and the reason society has gone to hell in a hand basket.

Where did this come from??????? I said there is nothing wrong with Women having ambition.... In fact, I think it is great that they do what they want to do as long as they are happy. I am refering to Women who have kids and would rather put the kids in daycare 5 days a week instead of raising them, themselves.....does that make me a sexist? ...because if it does, than I am!

NOT ONE MENTION OF THE HUSBAND’S ROLE IN THE DECISION TO PUT THE CHILD IN DAYCARE. Nor do you mention the fact that a lot of men out there insist the wife work.

The decision to put the kids in daycare is a mutual decision... just like all others....if I didn't mention something, ask...and BTW I was defending the Woman who cared enough about her children that she would do something so selfless as to give up her career to take care of the kids and make a warm home for her family by saying the Woman should not be resented for not working...other than housework, which is very much work itself.....again, if that makes me a sexist...then I am, you got me!


And lets look at your portayal of the women who are crack whores and prostitutes who throw the kids in daycare. Is there no responsibility on the male shoulders that helped father these kids?

I never said they weren't responsible, I was just quoting what my GF at the time was saying about some of the kids parents...... I guess she is a sexist too.


All I get from your posts is constant blame on the women.

I don't know where you get this from....Anybody? (beside Jack, QT and Jamie)


It’s interesting how the men in our society get a free ride here and no blame at all.

Uh oh.....sounds like a sexist statement to me...What do you think guys?

If a woman dares to disagree with you, out comes the insulting comment “put away the claws” — would you say that to a man who disagree’s with you?

I get this image in my head of Jamie (Women do sometimes have long painted nails) wanting to scratch my eyes out..... Men don't have long nails (I hope not) so I'd probably say "put away the gloves" or something like that....Does that make me a sexist?

Oh, and of course there is the materialistic former-girlfriend. There is no way you were not implying this as typical of most women.

No...If I did, I would have mentioned several others, but I didn't did I?


I guarantee I am not the only woman here who finds this sexist. But I doubt I’ll get the house. The opinion of all the women in surely going to be cancelled out by your male opinion.

"male opinion" ....again, sounds like sexist to me...Doesn't it guys?

431   Allah   2005 Nov 7, 11:12am  

Jack...................................Shut up!

432   Allah   2005 Nov 7, 11:18am  

Well sorry for being a Man...I should have been a Cucumber!

433   Allah   2005 Nov 7, 11:21am  

here comes a gender based slander now…..

No...that was already done before.

It’s interesting how the men in our society get a free ride here and no blame at all. -QT

434   Allah   2005 Nov 7, 11:42am  

Well, in closing..... I love Women,.... I have never..ever been called a sexist by anyone in my entire life. I know alot of Women and they think very highly of me....I have even been told that I am a ladies Man (by a Woman) . I really think you have mistaken an old fashioned guy for someone who is sexist. I have known some guys who are REALLY sexists that if you had known them, you would really understand what I'm trying to say. If you nit-pick at anything anyone says, you can take what they say as sexist when they really are not. I am not a psychiatrist, but I can say that maybe there is just a little sexist in all of us Men and Women....There is however a threshold at which point would make one a true sexist and I know that neither of us are...I hope you agree.

I'm sorry we had to have this argument, but I hope it did some good. I think you are a wonderful person and I am happy you are here on this blog. Have a good night :)

435   Allah   2005 Nov 7, 11:56am  

I do think the cat claws comment WAS totally sexist by the way. Guys that say that kind of stuff usually are jerks, basically. I am not saying you are a jerk. But they seem to be, so you should consider where the cat claw comment got learned perhaps…. And who else you heard say it. What were they like?

Jack....I never heard the cat claws comment before, I made it up spur of the moment. I don't think it was sexist at all...neither does my wife. Like I said, I got the image of a Woman trying to scratch my eyes out....this happened once before whe I was young, I was joking around with a Girlfriend and we got into an argument and she slashed my face with her nails. Two lines in my face that stayed with me for nearly 2 months. She did it by accident and she was so sorry afterwards, but ever since then I always was looking out to make sure it didn't ever happen again.

436   HARM   2005 Nov 7, 11:59am  

Here's my 2 cents...

All kidding aside, I agree that gender issues (especially in the context of housing - affordability, gender bias, DINKs & affordability, etc.) is fair game for this blog. As newsfreak said, "We learn by talking thru the issues."

However, when the tone becomes snide and/or peppered with insulting references ("claws", etc.) whether or not it's intentional, this is where the debate can become personal and go downhill very quickly. Man or woman, no one likes to feel slighted. Maybe it's just time to take a temporary breather, reassess and cool off. I'd like to see the debate continue, but on a less personal level.

437   HARM   2005 Nov 7, 12:15pm  

Ok, I can't resist one more joke:

"I have even been told that I am a ladies Man"

I get this image in my head of Allah standing there like the Tim Meadows/SNL "Ladies Man" character in his bachelor pad with a bottle of Curvosier workin' his moves on the babes... :mrgreen:

438   Jamie   2005 Nov 7, 1:19pm  

"get this image in my head of Jamie (Women do sometimes have long painted nails) wanting to scratch my eyes out….. "

I don't have long nails, nor are they painted. Just for the record. :-) Tell me what I said to evoke this raving-female-slashing-with-long-sharp-nails image. Or is that just the image you get whenever a woman argues with you?

Oh, but wait, you've also compared me to an explosive chemical that has to be handled with great care (in a previous thread). So after I slash you with my freakishly long nails, then I explode? Is that how it goes?

LOL!

439   matt_walsh   2005 Nov 7, 2:17pm  

Clearly, trying to mute things out of the discussion that have nothing to do with RE is like sweeping back the waves. It has only multiplied and worsened.

I received the email with all of SQTs posts (reproduced below) and thought to myself "This is noise. This is bashing. This is flamebait. This is going to lead to a zero-content thread." Of course that is what has happened regardless.

So, by popular demand, here are the bits from SQTs posts you all missed. Enjoy.

Post 1:
Whatever…….. I just thought of you when I stumbled across and thought you’d be interested in reading it thats all. As for “desperate housewives”, I really didn’t know you watched garbage like that.

I'm sure allah never watches garbage. Never makes a fallacious argument. Never takes a cheap shot when he can't think of a rational argument. Nope, always perfect.

Post 2:
And I forgot to say, Desperate Housewives was a reference to how the idea of discrimination against mothers has worked its way into pop culture. Love how you turned it into a way to insult me.

Hey, I love Law and Order, does that qualify as garbage too? Let me guess, if it's on TV it's garbage.

_sigh_

What's a girl to do? I guess I should be cleaning house all day, waxing my husband's shoes, making the perfect meals and when I finally have time to breath my entertainment of choice should only be what my husband allows me to do. Oh and maybe I can contribute to a little housing blog, again, if my husband thinks it's ok.

Post 3
Hmm, tough one. It *could* be garbage since it’s on TV, after all, but traditionally any entertainment whose audience is primarily women is considered garbage. Better yet if it’s created by women, primarily *for* women, it is most DEFINITELY garbage. Trust me, I know.

Yes there are no ideas that spring from the mind of woman that can compete with the brilliance of MAN.

I must hurry and get the ironing done, and bathe the goat. Can't have a smelly goat hanging around.

...

Oh and I almost forgot. I need to make myself look pretty for my MAN. Girl's gotta have priorities you know.

440   Jamie   2005 Nov 7, 2:40pm  

Hey, one of those posts was mine, LOL! I've been censored! And then uncensored!

441   Jamie   2005 Nov 7, 2:45pm  

"also love that what is important enough for the rest of us to discuss has become a “zero content” thread because it isn’t what Matt wants to discuss. "

Yeah, this is interesting.

442   Jamie   2005 Nov 7, 2:54pm  

Can 800+ posts from a smallish group of people really stay on one topic? Sounds like a weird social experiment in the making. :-P Right up Peter P's alley.

443   matt_walsh   2005 Nov 7, 2:55pm  

I give up! My posting censorship days are over!

Though I must say that for someone who champions unrestrictedness, you find it suprisingly easy to express things that I 'need' to do.

You seriously need to lighten up.

...

Your need to work on your tolerance level, or leave the threadmastering to those who aren’t going to be so sensitive.

444   matt_walsh   2005 Nov 7, 3:22pm  

I give up! Again! I can't win either!

At least we can agree that the Lord is good.

445   HARM   2005 Nov 7, 4:14pm  

and a thankless and impossible job that threadmastering is, even in the best of hands, mistakes are made.

Indeed, especially with a pack of wolves named Jack, Jamie, & SQT scrutinizing your every move! C'mon, I'm trying to ENCOURAGE more people to be moderators and you three are driving Matt NUTS!! Ok, so he made a mistake (with good intentions). Sheesh, everyone does on their first thread or two.

Give the man a little credit, ok....? ;-)

446   Allah   2005 Nov 8, 1:17am  

Well.....this thread is shot already, you might as well retitle it in case someone wants to create a script for a new reality show.

I cannot believe your wife doesn’t find that sexist allah. It just hits me at a gut level and evokes all those comments guys make about “cat fights” and such. I also can’t believe you’ve never heard it before because it’s an old one; but I’ll give you the benefit of the doubt on it.

QT you are talking two different situations.... if I was to say this directly to a Woman who has long nails, it would most definetly be personal (smack worthy), something I would never do. I do not know what any of you look like..... I look at this blog as a meeting of the minds, which is a very good thing. The nails comment was just a figure of speech. If I had known how you and Jamie would have reacted to it I would have never said it...... I am sorry if you were offended by it,...it wasn't my intention..... Jack (the instigator) is the one (not "the guys") who brought up the "cat fights" because he loves to start wars.....you know that! But now we are beyond that because you labeled me as a sexist and I resent that....and Jamie when I said you were like nitro, that was also a figure of speech.... meaning that it doesn't take much to piss you off....I'm sure most anyone (besides Jack) will agree with me. Lets just try to get along.... I will think a little more about what I type before I hit the submit button....... I don't like to start wars,.....they waste alot of peoples time.

447   Allah   2005 Nov 8, 2:01am  

Just not my type!

That's ok...You don't have to say your kidding...I am not a weak person... the truth doesn't hurt me........besides, you remind me of how much I really LOVE my wife.

448   Jamie   2005 Nov 8, 6:01am  

"Or did you think I was really sizing you up as a hot prospect! (sheesh dude!)"

ROFLMAO! Jack, Jack, Jack...I'm glad I'm not the only one so misunderstood by allah.

Allah, thank you for the apology. I believe you do not intend to say anything offensive. I apologize as well for taking some of your comments and joking on them too much.

Your comment about nitro-glycerin/claws was interesting to me, because I have not gotten angry, but you consistently seem to interpret my posts to you as angry.

449   Allah   2005 Nov 8, 7:51am  

ROFLMAO! Jack, Jack, Jack…I’m glad I’m not the only one so misunderstood by allah.

Ofcourse I know he was kidding....he said so twice in his post! :) :) :) (smileys to show my tone) :) :) :). ... I was to, but I didn't use any smileys....sorry :) :) :)

450   matt_walsh   2005 Nov 15, 6:02am  

Swk:

I am with you...I have been looking for a rental as a backup plan to my possible purchase (the topic of this thread). It is REALLY tough to find a nice rental house. Yes, they are out there...but few are nice unless you want to spend $3000-3500 (at which point it is the same as my monthly owning cost).

Of the 3 we found after weeks of looking, 1 was in Menlo Park on the border of a bario, the other was in Palo Alto and had a barely-livable interior, and one was right next to Hwy 101 (constant noise) and train tracks. This is after SCOURING Craig's list, driving all over the place, checking with the wife, etc.

Additionally, at least in Palo Alto, if you want to rent you better have really good credit because every rental we looked at had a line of applicants. Some even have open houses - and they have been packed. Yes, many of them come from houses where the owner is selling...but the point is, there is still a shortage of housing.

It is really too bad that there is not a house-like apartment alternative...something where you are not going to get booted by a selling landlord but which does not share walls/ceilings with other people. Even in that case, a colleague of mine finds himself now getting raped with rent increases.

I will also guarantee you that you will not see mass vacancies of houses on the peninsula. Rat shacks in SJ - different story. But I have seen zero evidence of people buying peninsula houses on spec.

All that said, there are some factors that point to a major downturn. Let's compare today to 1999. In 1999, you could get a 3 Bdr house in SJ for $350,000 all day long. And yet there certainly were more people here, more people with good jobs and more people on the way. Even with higher rates then, it doesn't explain to me why houses are 2x what they were then. If the mortgage tax deduction squeaks through congress, there will be a major meltdown. It is also clear that there is a slowdown - ANY realtor will agree with that...it is indisputable.

So is this seasonal? Are we in for a dip, or a plummet? This is the issue I face. I have failed to find a nice rental. And it is clear that there are plenty of people who are in need of and willing to pay for $2500/month housing. I like my house. I've talked the owners down by $31k. It'll cost me $3200/month vs. $2500+ to rent (+ opportunity costs on the downpayment). And I'd have to move at least 2 more times. As irrational as it sounds, I'm basically prepared to take the risk.

451   matt_walsh   2005 Nov 15, 3:16pm  

Newsfreak: Good point on the piping. It's about $4,000 to have galvanized swapped with copper. It really is only an issue when you're not around for a while. But I really should have the quality checked out first.

Yeah, if I could snap my fingers and move, or had more time to decide clearly I'd sit this out. My consolation is that this is one of the more desirable areas on the peninsula, and so in the long run even with a dip this place will do well.

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