patrick.net

My plan is to save few years and find job where I can work from home and do some travel and buy a place in south Florida to be closer to Latin America and the Caribbean. Much cheaper than overpriced California.

Austinhousingbubble says

"...[S]tudies suggest that having children can have a negative impact on happiness.

Reminds me of a great quote from a movie:
"I can feel it like cancer, getting bigger and bigger like the blob! One day it'll rip me open, and it'll be there in my life, ready to rob me of every bit of fun I deserve to have!"

We've decided it's the responsible thing to do to *not* have kids because we could not afford to raise them, since we only make a paltry 150k combined income and can't even afford to buy a house for stability.

We barely even go out to dinner anymore, let alone more than a neighboring town for vacations, and still scarcely have money for iPhones and coconut water.

I am with you. We are in a similar situation but started actively looking for a house last August 2011. We have been periodically monitoring housing prices and the latest Real estate scam-of-the- day and have learned LOTS. We are presently using about 12 different Buyers agents and about 5-6 listing agents. We compare the statements ( usually lies) between them and try to understand ALL the ways they cheat.

We have only a few rules, and rule number one:
RUN don't walk away as fast as possible THE VERY FIRST TIME you are lied to by any agents. I NEVER give them a second chance and there are NO EXCUSES ALLOWED. They give many lame reasons for "not knowing" what we know that they know. Yes we test them through other buyers and compare notes in the same way they have "multiple higher offers ---all cash" Interesting how their tales change as they tailor remarks to how much they think they can get from you! Some of them hate us for knowing their games but who cares. Most of them are losers and wannabe con artists who just got caught. They will try to figure out anew way to NOT get caught. All they have to do is tell the truth and stop trying to cheat others.

Rule number TWO- NEVER EVER BID AGAINST YOURSELF. IF you get a response higher multiple offers, DON'T BITE THE BAIT. Its a suckers ploy and don't fall for it. If its true, who cares?... there are MILLIONS of better houses unsold and millions more going through the foreclosure process. Besides...look at all the extra money your are saving by NOT BEING UPSIDE DOWN. UNIFORMLY with FEW exceptions....every single house we have made an offer on that was not "highest and best"...ie the buyers paid too much for it like during the peak of the bubble--- 99% are UPSIDE DOWN in just the past year.

We have a NEW STRATEGY that is evolving. Here is a hint. As of TODAY, you can still build a custom house THAT MEETS ALL of your requirements, that is larger and better at LOWER PRICES than these old cracker box dumps that are on the market today!

I will keep you informed as we progress. Here are the keys- look for pissed off architects tired of the developer-builder-sales agent conspiracy to keep prices high. We found a few. Also we found HONEST general contractors and sub contractors who are EXCELLENT craft-persons and are willing to work for an honest down to earth wage in TODAYS economy. We are prepared to pay cash for a job well done and on time. We also found a few sales agent-BROKERS who KNOW ALL THE TRICKS and have access to all the latest "marketing games"...they go to the same "marketing" meetings where they are learn about new ways to lie for a commission.

By working the various specialists you will learn who is naughty and a liar---usually when mouth is open and who is a real human--non liar.

SO we now have OUR own insiders who verify the painful experiences we have. NOTHING about this is "EASY" or simple...the system is set up ANTI-EASY, anti-simple for HONEST BUYERS. Don't give up. Ask me private message about the latest "doubletalk" you hear and I can confirm my knowldge of it, or you might have learned a new scam I have not run into... yet.

So yes...we have an architect-Engineer and are building a 2800 sq ft house- single story HVAC all the goodies---enviro designed -certified - all latest materials and techniques for under $75/sq ft. Actually, it is much less than this ($ 20 - 55/sq ft) but I don't want to drive the realtards crazy. Oh yes and it has 24 new PV solar panels with micro inverters that are highest quality and lowest prices. Not bad especially
when we see CERTIFIED CRAP "houses" asking $200/sq ft---most are termite and mold traps.

investor90 says

So yes...we have an architect-Engineer and are building a 2800 sq ft house- single story HVAC all the goodies---enviro designed -certified - all latest materials and techniques for under $75/sq ft. Actually, it is much less than this ($ 20 - 55/sq ft) but I don't want to drive the realtards crazy. Oh yes and it has 24 new PV solar panels with micro inverters that are highest quality and lowest prices. Not bad especially
when we see CERTIFIED CRAP "houses" asking $200/sq ft---most are termite and mold traps.

Well done. Do your cost include built-in kitchen cabinets and counters, bathrooms, smart-home capabilities, home theater ready,

"Well done. Do your cost include built-in kitchen cabinets and counters, bathrooms, smart-home capabilities, home theater ready".

Partially. We have two home theaters today in our rental- (I put them in and I use optical connectivity on 16 channels). The kitchen cabinets are custom REAL WOOD ( no laminates or plastic---anywhere) and they are less than $10,000, The THREE FULL BATHROOMS are custom and three times larger than typical. The structure is wired for network connectivity including CAT6 and Fiber. The smarthome capability is obvious. In addition, all exterior walls are structural-load bearing so we ( or any later owner) can easily rearrange the interior walls to suit purposes ( they are moveable INTERIOR walls). The plumbing uses a whole house reverse osmosis system and uses PEX indoors and Copper piping outdoors, a manifold in the utility cabinet provides and mixes hot water for each terminal outlet throughout the house. Each fixture has TWO full length incoming lines RED=HOT and Blue= Cold.

The house is RAISED on a foundation and 4 car garage is on a slab for low cost maintenance and utility access. The house is net-zero energy, not counting the PV panels. It is oriented on the lot to maximize solar energy use. The panels are designed for on-Grid use and at peak efficiency produces 4-5x the highest amount electric power we have ever used in our rental house. In order to qualify for the federal and state rebates and tax incentives, we had to place our houses on three incoming electric meters ( yes, that's a legal loophole that allows us to receive the maximum value for our day energy contribution) The house can be a net negative user over many months of the year. It is designed to produce a net surplus of energy but we won't know until the results of annual audits have been completed. We are not including an electric charging station for our plug in hybrid.

What about the two extra meters? They are used for our home vegetable garden. The house sits on two acres and has supplemental--AC mains - to power a water well. The only grass is eaten by goats, and we will have our own chicken coop for eggs. No roosters -- BTW.

The only future add on is a natural gas electric generator which will autostart if the Ac mains drop. We also plan to install a large natural gas powered commercial freezer for our attached storage area.

I almost forgot. The main area of the structure uses Truss roof construction. The attached storage area uses a flat roof design and has two purposes. The primary is to provide a flat elevated space for the PV solar panels and the secondary use is an elevated patio-deck entertaining area. The panels are protected from NE wind gusts.

Investor90,

Thank you for taking the time to explain your project. Was thinking of building a 3,000 sqft single story SFH on a 10,000 sqft plot. Made some enquiries, noted that the current price of land is about $100-$110 per sqft and building cost about $200-$250. So very impressed that you can do it for $75 per sqft. Just thinking, costs are prohibitive, probably won't get started unless the "RE would decline thesis" come true or may be get out of the golden state.

investor90 says

all latest materials and techniques for under $75/sq ft. Actually, it is much less than this ($ 20 - 55/sq ft) but I don't want to drive the realtards crazy.

And pigs fly by your window every night too? $20-55 sq ft.. haha..I'd love to see your receipts/labor bills and a picture of your "home" when it's finished.

Actually the ACTUAL cost is less. This price includes oak cabinets- NO MDF.

Thousands of these are built, and more are being built every day. The labor costs are very low since we found that cash works better than promises to pay "some day" when the general contractor feels like it....or if there is any money left after gambling new cars and booze. That's what the WORKERS tell us. They are EXTREMELY loyal since they aren't accustomed to getting paid on time. No apprentices are allowed on the job, and we do hire union labor for the appropriate trade. There are no middlemen...and double talkers. That's why houses INITIALLY sell at 3-10 times the actual cost of building.

1sfrenter says

If you are waiting to buy, how long do you expect to wait?

you should get your financial calculator and work on deciding what is your budget, your monthly affordability, how much money you have and how much of that willing to put down.

with that budget in mind you will know which zip codes you could afford, then start going to open houses, so you can get a feel about the house that would make you happy.

if you want so much to buy your house, and you are able to find your dream house, once you start living in it, your mind will change to proud owner, and you will not be so concerned about falling prices, even if you lose equity after you moved in.

make sure you stay in your budget, and comfortable paying mortage, with enough money left for savings and weekends enjoyment/your lifestyle.

if you start and do your homework, you will find it, at least you will be one of the few buyers in the market(less competition)

chip_designer says

if you start and do your homework, you will find it,

and just to add a few more lines, I know some friends who bought at the peak 2005-2007, but since they can pay, they did not panic or walk away.

People who walked away, are those who bought as investments, and therefore wanted to cut their losses.

and those people who feel stuck or withdrawn, are those that were too greedy, wanting the big house no matter what, using whatever financial means was possible at that time.

I already waited, then bought and sold within ten years time, realized housing is not affordable when my wages are not going up tandem with everything else. Well, you have to jump jobs to get paid more, well that makes buying a mute point. I wanted a smaller home, but heck, even the property taxes on those are still going up, and I can rent for two-three times the cost of the average property tax bill.

everything says

I already waited, then bought and sold within ten years time

Renting works perfectly for you.

Buying house is not for everyone.

If you have to jump jobs, you can forget buying, because first of all, the wells fargoS bankS will not even look at you in these days.

unless the bank are one of those crooked ones who are only after making a comission out of you.

investor90 says

We are presently using about 12 different Buyers agents and about 5-6 listing agents. We compare the statements ( usually lies) between them

Yes we test them through other buyers and compare notes

someone reading your suggestion
will need a lot of patient and time to keep track of multiple agents, and compare each other docs

selling professionals be it insurance, car, retail, house, contractor, they all want to make a living , and naturally they will coat the information to their advantage. You called this is "lying"

if you never make a statement to your advantage, then you are a saint.

people get to know agents thru referrals from friends, or if how they feel comfortable with the info they get from one.

any agent will work with you. You are their boss, after all their comission is still in your pocket, you can ask any info from them, and if everything you ask, and they give it you in a timely manner, you found a good agent.

But the homework, your budgeting, is your sole responsibility.

"... and naturally they will coat the information to their advantage. You called this is "lying"..." "Coating" information is when you tell someone an OPINION based with no definitions required or assumed. Lying can be by COmission or Omission. Everyone can make an error. BUT WHEN an agent affirmatively states that the particular property in question has MULTIPLE HIGHER OFFERS and the property OWNER states that they have NEVER SEEN ANY offer, we have a little cognitive dissonance that I DEFINE AS LYING...especially if it is substantially the same lie used over and over again to unfairly (and probably illegal) attempt to deceive the buyer AND seller to the attempted financial advantage of the agent. I know BROKERS who brag about this practice... NO government agency cares. To enforces the law requires tenacity and diligence and caring about consumers. I am looking for those qualities, and they appear absent.

I'm looking in the other south bay (Los Angeles beach cities). I'll probably wait until about this time next year to evaluate the climate. I'm concerned that there is a lot of "propping up" going on in the economy for the elections. I don't know if we'll be able to see which way things are going by next Spring, but I'll re-evaluate then.

At this point, it seems like homes in my area are losing value (using Zillow with a big grain of salt), on average, more than I'm paying each month in rent.

I think the big influx of buyers right now are after fools gold.

I'm single, so it's easy enough to wait, although getting damned old.

Melissa. I agree with you the big influx of buyers right now are after fools gold. I been on the side lines for 7 yrs .I been looking around no hurry to buy I sold in 2005 if I would have brought I would have loss money I am enjoing renting and will see how things work out I ok whatever happens in the housing market . I will just move around and see new places I AM OLD:) 60 And owned a few houses so I'm ok . I see new homes that I feel our over priced imho and I feel I won't get out as rates rise so I'm not buying. Only fools rush in .:) imho

noodlesphilly says

Only fools rush in .:) imho

+100000000000

Armchair economist comments re housing prices in the SF Bay Area. . . .

Prices have definitely dropped over the past few years, but the price of a single family home on the peninsula is still waaaay out of whack with income. Some will argue "that's the way it's always been", but I'd like to see some historical affordability data to back that up.

The question I like to ask is "How many residents of cities like Palo Alto could afford mortgage and property tax payments on their current home at current market prices and assessed values assuming they had 20% down?" My guess is less than half based on median family incomes for those cities. So you have to ask yourself where will the tens of thousands of 1% earners who can afford to buy these houses come from when baby boomers start to downsize or die?

It's possible Bay Area prices might drop substantially over the next 2-3 years if pent up foreclosures / short sales kick in, and/or potential sellers realize that prices aren't recovering any time soon and they decide to cut losses and move on. Higher interest rates might have an effect too.

If prices don't drop substantially over the next 2-3 years, the local market could be looking at a very prolonged decline. I just don't see enough high end job creation to soak up downsizing/dying baby boomer inventory long term.

I make $200-260k/year and rent a small house in a very nice neighborhood mid-peninsula for $2100/month including utilities. I have more than $150k set aside for a downpayment and auto-deposit $2k/month into a separate investment account, which is the difference between my rent and a mortgage payment. So I'm in a pretty good position to buy if the rent vs. buy math starts making more sense within the next couple of years. That being said, if the prolonged decline scenario looks to be more likely, I will probably move to a more affordable locale if suitable employment opportunities arise.

ducsingle5313 says

Prices have definitely dropped over the past few years, but the price of a single family home on the peninsula is still waaaay out of whack with income. Some will argue "that's the way it's always been",

but I'd like to see some historical affordability data to back that up.

http://housingcorrection.com/medianpricechart/CaseShillerAbsoluteVsMHICensus.htm

http:/s.redfin.com/t5/Bay-Area/santa-clara-affordability-1988-2011/td-p/229664

ducsingle5313 says

So you have to ask yourself where will the tens of thousands of 1% earners who can afford to buy these houses come from

This is a question I've pondered a bit myself. I am interested in Manhattan Beach (MB), although I don't think I'll end up there. Prices near the beach have dropped 10%, maybe 15% over all. The whole town has averaged closer to 25% drop. A friend who has a RE license told me not long ago that he's shocked at how many people keep coming who have the means to buy $2M+ houses. He thought they would have dried up by now, but they keep coming in droves. MB is a very desirable area; top schools, low crime, good commute for many, awesome beach weather, etc.

It seems that places like this are small enough, desirable enough, that they'll never exhaust the supply of 1%ers. There are $10M+ homes on the strand that sit idle most of the year. The owner comes with the family for a month or two here and there and the rest of the time they sit empty.

ducsingle5313 says

So you have to ask yourself where will the tens of thousands of 1% earners who can afford to buy these houses come from when baby boomers start to downsize or die?

Did you consider those lucky high tech youths? Those working for FaceBook, Zynga, Apple, Google, Instagram, groupon, etc. Many could be like noodlephilly buy a few houses for rental income.

Did you consider those lucky high tech youths? Those working for FaceBook, Zynga, Apple, Google, Instagram, groupon, etc. Many could be like noodlephilly buy a few houses for rental income.

I didn't see this happen during the dot-com heyday, and given what's happened to real estate prices over the past few years, I doubt it will happen now. Even if huge stock option gains filter down to the worker bees at those companies (and they typically don't), I doubt most 20-30 somethings want to be landlords as it's all the hassles of owning a house many times over. And rental property loans are recourse debt, so no free lunch if things go south.

I'm in the same boat as the OP. I've been renting since 1998, and renting a nice house since 2002, but it's getting too small for my growing family. Placing a bid recently showed me that there's a mania in housing on the peninsula right now, and short term, prices are going to increase, since the entire swath of land from about menlo park to sunnyvale is seeing a huge number of bids and lots of overbidding in desirable neighborhoods. I can put over $500k down without sacrificing my retirement savings and my family income qualifies me borrow around $2M if I want to be a debt slave, and it's depressing just how little that much money gets you around here. For $2.5M I could buy 400 median houses in Detroit :)

myob says

...and it's depressing just how little that much money gets you around here.

Yup. Is it any wonder that the rest of the nation considers CA, specifically the SF Bay Area, to be The Land of Fruits & Nuts?

I am going to wait a long F*cking time.

Please correct me if I am wrong. Did this property just sell for $12,482? Yes, that is twelve thousand, four hundred, and eighty two dollars.

It is now on the market for $255,000. That is two hundred, fifty five thousand dollars. oops forgot the property link http://www.redfin.com/CA/North-Hollywood/5604-Rhodes-Ave-91607/unit-304/home/5167637

Um, I didn't see this one either on Redfin.

E-man says

I love talking to older & retired folks. They can provide so much insights about the Silicon Valley in the last 40 years. In short, it was never affordable for an average Joe.

Clearly that was never true statement. IT WAS affordable.. even a on a single salary one could buy a decent home after the 1988 peak. The historical prices as you have seen prove that. Further more, we had a booming industry in the 70s and 80s which many ignored. It wasnt until after 2000 that everyone else notice SV. Than you had this massive bubble explode upwards... say beyond our histical norm.

bmwman91 says

Yup. Is it any wonder that the rest of the nation considers CA, specifically the SF Bay Area, to be The Land of Fruits & Nuts?

The rest of the nation, fruits and nuts, are the ones who migrated to California.. bearly 1 our of 4 Californians are actual natives.. the rest are from Mexico or the North East. Things were very very different here in prior decades..

Charlie dont surf here!

ducsingle5313 says

And rental property loans are recourse debt, so no free lunch if things go south.

You may want to check your fact again.

E-man, you should do the same. Reference California Code of Civil Procedure section 580b. Note the language "of that dwelling occupied, entirely or in part, by the purchaser".

hanera says

Did you consider those lucky high tech youths? Those working for FaceBook, Zynga, Apple, Google, Instagram, groupon, etc. Many could be like noodlephilly buy a few houses for rental income.

Well, Instagram has 13 employees, so I don't think that should be a problem.

Anyway, no matter the company, once it gets big enough the bean counters will come in and move jobs out of the area - or just cut them as new software allows them to. And Facebook, with an expected market cap of $100 billion+ has only 3000 employees. Yes there will be a lot of non-employees that will benefit but not like many are predicting. And let's face it, most who will get rich from Facebook (other than the employees) already own a home.

So, the nice areas of the peninsula will continue to go up. The rest will see more modest gains.

Since the RE crash, so many things have happened with local RE, MERS in some states, recourse in some states, the word is out, many foreclosures, and especially short sales are coming, where I do not know because I don't research it like some of you guys do, it still spells opportunity for the savvy, and knowing and I'm sure many investors are licking their chops with the most recent case-shiller data.

People need to remember, the girl chooses the man here, foreign girls marry the white man because he will let her do whatever she wants.

81 Sun, 22 Apr 2012 at 8:27 am Mail Quote Permalink Like Dislike (2)
hanera says
Helloeeze says
... why do white guys marry Asian women so often?

And yet hardly any white gals marry Asian men?

I love talking to older & retired folks. They can provide so much insights about the Silicon Valley in the last 40 years. In short, it was never affordable for an average Joe.

E-man, you must be talking to older folks with alzheimer's. Plenty of average, middle class folks were able to purchase homes in Silicon Valley during the 70's and into the 80's.

Older people love to tell younger people how hard the older people had to work, how easy the younger folks have it these days, etc. And because older folks have mostly benefited from the run-up in Bay Area housing prices and Prop 13, they don't spend a lot of time thinking about the long term negative impacts to the younger generations.

For those of us non-average Joes who can afford to buy here, the question is whether we want to contribute to a massive transfer of wealth from Gen X/Y to Baby Boomers. This of course affects family planning (e.g., having kids) and retirement timing.

One action rule. How often do you see lender pursuit judicial foreclosure in CA? :)

E-man, I don't have any data, but that would be a business decision for the lender. A judicial foreclosure on a rental property that is $10k underwater wouldn't be worthwhile. But when the stakes go up, a judicial foreclosure would be more likely. Plus there are lots of unemployed recent law school grads around to do the work at low cost.

But back to my original post, rental property loans are recourse. Whether the lender chooses to go that route is another thing.

everything says

foreign girls marry the white man because he will let her do whatever she wants.

because they can also get greencard for sure.

The asian guys are not as generally interesting to American women because they often lack masculine attributes. This is not genetic, it's imprinted upon them culturally. Of course, the flip side is they aren't obnoxious jerks, so for long term relationships the ladies eventually will gravitate to them.
All of the foreign women I have EVER met in California eventually located a guy to marry so they could stay. This is with just ONE exception since 1982.
Oh I've been introduced to a bunch myself.
I follow the old saw: "why buy the cow when you've got the milk?"
I've been offered cash for the trouble of marrying someone. It was getting pretty profitable but I said no for 1. moral reasons 2. legal liability 3. foolish pride.
I should have taken one up on the offer and bought more AAPL. Darnit.

Question: How come like at least 75% of the posts here talk about the Peninsula? The Bay Area is a huge metro and the Peninsula only takes up a small chunk of it...

Edvard, same thing happened on the Westside Meltdown blog for west Los angeles area. Posts shifted at one point to almost entirely the North of Montana area in Santa Monica. A very small portion of the Westside.

Housing bulls *cough realtor* *cough desperate homedebtors* look for the exception when they gasp for air. Already the LA market has begun crumbling anew(right as we enter the peak selling season no less). The bulls gotta grasp at their few remaining straws in the BA first.

Melissa says

I'm looking in the other south bay (Los Angeles beach cities). I'll probably wait until about this time next year to evaluate the climate. I'm concerned that there is a lot of "propping up" going on in the economy for the elections. I don't know if we'll be able to see which way things are going by next Spring, but I'll re-evaluate then.

At this point, it seems like homes in my area are losing value (using Zillow with a big grain of salt), on average, more than I'm paying each month in rent.

I think the big influx of buyers right now are after fools gold.

I'm single, so it's easy enough to wait, although getting damned old.

Avalon? Are you on the island?

dodgerfanjohn says

Already the LA market has begun crumbling anew

About time. This is a first, a two bedroom two bath in Sherman Oaks for 159k. And, it is not trashed. (High HOA, but we know that.)

http://www.redfin.com/CA/Sherman-Oaks/4501-Cedros-Ave-91403/unit-126/home/4825527

dodgerfanjohn says

Edvard, same thing happened on the Westside Meltdown blog for west Los angeles area. Posts shifted at one point to almost entirely the North of Montana area in Santa Monica. A very small portion of the Westside.

I think it might also be because even though places like the east bay and other areas in the Bay Area are still expensive and for the most part overpriced, they did cool quite a bit. The Peninsula on the other hand is still nutty and I think that draws people's attention.