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E-man says

Call it Crazy says

Until the fundamental conditions needed to own a house change, the overall direction of house prices is DOWN!!

If this is your believe, are you currently shorting the homebuilder and the bank stocks? What stocks are you shorting? I'd love to know. Thanks in advance.

eman,
shorting is speculating, "gambling", not investing. To be "investing" for when prices going down, whether its houses or some other asset, is being totally liquid in money or cash equivalent. you are welcome.

bmwman91 says

So, I focus on enjoying my life and the fact that I am financially secure with zero debt to my name.

this is what i've done myself. i've spent way too much time analyzing and following the bay area market and finally came to the conclusion that it's just not rational.

now if i can only convince myself to stop looking entirely, it's almost like a bad accident, you don't want to look but can't help yourself.

THere is a new show called 'doomsday preppers' and I watched a few - some people are preparing for TEOTWAKI due to currency collapse and/or hyperinflation. Its a great show!

http://channel.nationalgeographic.com/channel/doomsday-preppers/

If you arent planning for cannibal anarchy you will have two choices: become a scavenging cannibal or get eaten by one.

Fun stuff!

ih8alameda says

this is what i've done myself. i've spent way too much time analyzing and following the bay area market and finally came to the conclusion that it's just not rational.

now if i can only convince myself to stop looking entirely, it's almost like a bad accident, you don't want to look but can't help yourself.

I hear you. Keeping tabs is hard to stop doing...for one it is like watching a train wreck happen. Second, there's this nagging glimmer of hope that maybe it WILL be rational someday...hope is a bitch lol. The rational part of my brain already knows that it will likely always be irrational here! But yeah, looking at it objectively & seeing that there is no reason to give credence to the FEAR associated with not buying, and that that fear is a deliberate sales tactic, makes life ever so much more pleasant. It hit me a while ago that I don't want a house: I want a large garage/workshop and a big listening room with no attached walls for my speakers.

The easiest way to deal with the unhappiness that comes from wanting something...is to STOP WANTING IT! Sure, it sounds contrived and silly, but it really is the secret to keeping sane & happy in our consumerist society.

CL says

There were 100s of thousands of consumers added to the pool of purchasers, due to easy credit and low underwriting standards.

Homeownership is at multi-year lows. Thus, once can deduce that many of these low tier purchasers have already been weeded out. Going forward the impact of high risk / low credit borrowers should be minimal.

What does it mean when the following conditions occur:

-Rents are falling.
-Purchase prices are rising. Drastically. Pretty sure I don't need to justify this one. Should be accepted fact at the moment.
-New build is going up in significant amounts, but won't be complete for 1-2 more years. Will be a mix of rentals and sales.

This is currently happening in DTLA...funny how there were news articles left and right in the short time frame(1 to 1 1/2 years) that featured rising rents, but now that rents are falling(by as much as 10-20% based on recent list prices), mums the word.

However, you don't need news articles and you don't need to take my word for it. Thanks to craigslists map feature, you can search to your hearts content.

And in fact, I almost missed a unit at $1250/mo...a price level I've never seen outside one poorly located, poorly maintained building. I had set the minimum rent at $1400 and was finding so many units at that level that I figured I better lower it to $1200!

dodgerfanjohn says

This is currently happening in DTLA...funny how there were news articles left and right in the short time frame

DTLA is the poster boy for a speculative investment. Investors bought RE there hoping the revitalization trend continues. I'm skeptical that it'll turn out the way some people are anticipating, especially with the Farmer's Field hiccup, but I can see the potential.

IF (and that's a big IF) it realizes that potential, rents and prices will skyrocket. Until then, people will be able to rent out for much less than the cost of buying. Kudos for those taking advantage of it. It's a great place to live if you're young and single.

dodgerfanjohn says

However, you don't need news articles and you don't need to take my word for it. Thanks to craigslists map feature, you can search to your hearts content.

http://patrick.net/?p=1219721

Mark D says

dodgerfanjohn says

However, you don't need news articles and you don't need to take my word for it. Thanks to craigslists map feature, you can search to your hearts content.

http://patrick.net/?p=1219721

LOL that was awesome!

zesta says

dodgerfanjohn says

This is currently happening in DTLA...funny how there were news articles left and right in the short time frame

DTLA is the poster boy for a speculative investment. Investors bought RE there hoping the revitalization trend continues. I'm skeptical that it'll turn out the way some people are anticipating, especially with the Farmer's Field hiccup, but I can see the potential.

IF (and that's a big IF) it realizes that potential, rents and prices will skyrocket. Until then, people will be able to rent out for much less than the cost of buying. Kudos for those taking advantage of it. It's a great place to live if you're young and single.

Whats funny is Roberto Aribas claimed in a past post that no investor ever bought a property soley because they thought it would appreciate.

I had posted that I was confused because I knew investors were buying units in DTLA that either they were renting at a loss or NOT RENTING AT ALL!!!!!!

Yet, confusingly...thats exactly what is happening. I wonder how many of these mom and pop investors factored in declining rents?

dodgerfanjohn says

Whats funny is Roberto Aribas claimed in a past post that no investor ever bought a property soley because they thought it would appreciate.

Well, I can't speak for Roberto Aribas, but obviously anybody speaking in absolute terms will be wrong sometime.

Some people invest in stocks for slow and steady returns, others try to hit for the cycle. In my opinion, investing in DTLA condos is like trying to buy a lottery ticket, a loser more often than not. On the other hand I know of an investment group that purchased a couple lots a decade ago that is very unprofitable as a parking lot, but is going to end up being a 'winning lotto ticket' whenever they sell.

Ironman says

1sfrenter says

I sure am gonna be pissed off if I waited 12 years for the bubble to pop and then missed the bottom by 6 months.

I don't think we've seen the true bottom. I believe what's going on is a quick Spring bounce that happens every year. When Summer gets here, prices will continue their downward trend.

Why??? until the job situation gets better and unemployment "truly" drops (not the fake numbers put out by the BLS), it takes a solid job to buy a house. Don't think the ones on unemployment will be eligible for a mortgage.

Plus, you have the boat loads of houses underwater, these people are truly "stuck"... until their houses rise in value or they pay off a big chunk of principal, they ain't going anywhere or moving up to their next larger home.

If the financial situation melts down in this country, then all bets are off....

Sit tight, you'll be able to get a deal shortly......

So much for "shortly" - its 4 years later and prices have absolutely exploded in SF where 1st renter lived. He was 4 months removed from the best market in over a decade, and the advice was sit tight and wait for something that never came.

Its not the only place - only the place that !strenter lived which you told him to wait because we haven't seen the true bottom - so much for that nugget of wisdom.

Ironman says

I don't think we've seen the true bottom. I believe what's going on is a quick Spring bounce that happens every year.

2012... good call dumbass!