patrick.net

I regret only not buying more AAPL shares in 1999.

I love investing with 20/20 hindsight. I make so much money doing it.

clambo says

I regret only not buying more AAPL shares in 1999.

This. Housing is mostly an inflated asset with a huge downside over hanging it. APPLE makes the Macbook and iPhone.

I suppose this is more of a two part question, less about regret but what was learned from that 13 year period.

If one would have bought a 500k house with 20% down @ 7% in 1999 with a 15 year mortgage, one would now have almost 400k in principal + 100k downpayment + 150k appreciation - 250k interest - 75k prop taxes -100k maint/ins = 225k Also there would be only prop 13 capped taxes + maint for the rest of their life.

100k in NASDAQ would be about 115k now.
100k in DOW would be about 120k now.
100k in AAPL would be about 20M

Other than buying AAPL, buying the house in 1999 would have been a good financial decision. I'm curious what metricslas Patrick used to determine it wasn't the right time to buy in 1999 and if those metrics have been adjusted in hindsight now in 2012?

For example if the 3x income or annual rent / purchase price = 3% metrics didn't work out for in 1999 have they been revised?

Considering I was 26, freshly laid off from my first job out of college, and paid $28k per year when I was working, there's nothing available to regret.

Now ask the proper question...if I regret buying 5 years later when I was making 3x that much, but houses had also multiplied in price by 3x.

The answer is that I sure don't regret not buying, but a whole slew of coworkers sure do.

i bought in 01 and paid a 30% premium over the 1999 price. It still doubled so I sold that crappy 3/2 in 06 to a zero down chump - who I think is probably squating and/or got a sweet loan mod.

RE is WIN-WIN (unless you are dumb enought to put a dp into it or remodel or dont pull out massive heloc $ before defaulting).

We learned only dummies put large down payment down. I know you might think 'thats the smart way to buy' well history proves its NOT - the opposite is true.

PockyClipsNow says

i bought in 01 and paid a 30% premium over the 1999 price. It still doubled so I sold that crappy 3/2 in 06 to a zero down chump - who I think is probably squating and/or got a sweet loan mod.

yep in SFBA between 1996 to end of 1999 prices doubled and doubled again post 2000.. Crazy stuff..

zesta says

buying the house in 1999 would have been a good financial decision. I'm curious what metricslas Patrick used to determine it wasn't the right time to buy in 1999

1999 wasnt a good year unless you were given free money...

Free money from overpriced stock of recent IPOs like Ariba. Of course those that bought the shares suffered 90% loss on their stock.

Today, somehow overvalued stock (bubble) in Silicon valley are the norm to fuel higher home prices (bubble)... That was supposed to happen with the FaceBook IPO.. by now it should be around $200-300/share headed to $500/share by year end.

http://www.paloaltoonline.com/news_features/real_estate/fall2000/2000_09_22.lowmarkt.php

Publication Date: Wednesday, Sept. 20, 2000 & Friday, Sept. 22, 2000

Breaking into the market
Yes, Virginia, it is possible to buy a first home in this area--if you're willing to make compromises

by Jocelyn Dong

So you're looking to buy your first home in Silicon Valley. How do you get into the market?

"Stock options," says real estate agent Chuck Atwell dryly. "Being a multi-millionaire."

He's speaking only partly tongue in cheek, of course. Atwell, who specializes in the Mountain View housing market, is familiar with today's real-estate maxim that those who have the most money win. But first-time homebuyers who haven't cashed in on the high-tech boom can take heart. While $2.5 million properties grab newspaper headlines, more modest deals can still be had for a half-million dollars or less.

Another real estate truism comes into play, however; it's all about the location. "Finding any single (family) home under $300,000 in Silicon Valley is very, very difficult," says Marcy Moyer, a real estate agent with Alain Pinel in Palo Alto. "There are still some homes in Sunnyvale between $400,000-450,000. For that same price in Mountain View, you get a fixer upper."

Atwell is even more frank. For $500,000 in Mountain View, he notes, buyers get "a property that should be torn down on a 4,000-square-foot lot, in an industrial/high-density area."

Those that didn't buy in 1999 will be sorry because home values will skyrocket starting tomorrow. ROFLMAO

APOCALYPSEFUCK is Shostakovich says

The nice lady from NAR told me in 2008 that I had to buy immediately because my investment would double by 2009, GUARANTEED!

na! Suzanne researched it carved a vagina on your head and made you a bitch...

http://www.hPIxrzmatq0

thomas.wong1986 says

1999 wasnt a good year unless you were given free money...

Why do you say that? According to the graph you posted, prices in San Jose/SF were at about 325 in 1999 and are at about 575 in 2011. Looks like you would made some money.

haha that annotated version of suzanne researched it is AWSOME!

Ladies: Marry a fatguy with $$$!!! Then youre set.

zesta says

Why do you say that? According to the graph you posted, prices in San Jose/SF were at about 325 in 1999 and are at about 575 in 2011. Looks like you would made some money.

Homes that were $250K went to $500K by end of 1999. Thats what you saw at ground level!

Some homes around my block went straight up to $1M .. I bought my home in early 90s when prices were much more decent.

dodgerfanjohn says

Considering I was 26, freshly laid off from my first job out of college, and paid $28k per year when I was working, there's nothing available to regret.

Now ask the proper question...if I regret buying 5 years later when I was making 3x that much, but houses had also multiplied in price by 3x.

The answer is that I sure don't regret not buying, but a whole slew of coworkers sure do.

If you didn't have the opportunity to buy in 1999, then obviously you'd have no regret.

IMO, having a paid off home is an important part of a retirement plan. If you don't, you'd either have a lot of $$$ in the bank and a rent-controlled unit OR be willing to move to a more inexpensive location.

In your 20s renting and moving around is a probably good idea since people are trying to find a place to settle down or change careers.

When you approach your 40s/50s and you're looking to buy you should probably either looking at a cash purchase or 15 year loan max. A mortgage payment past retirement doesn't seem like a good idea.

zesta says

When you approach your 40s/50s and you're looking to buy you should probably either looking at a cash purchase or 15 year loan max. A mortgage payment past retirement doesn't seem like a good idea.

That was the same argument you would have heard by realtors during the bubble.. the same buyers today, have huge regrets.

This is why high home prices dont work.. its no wonder many jobs were shipped elsewhere when prices skyrocketed. Result was a price correction and job loss. Well they can forget their 30- or 15- year loan at that point.

thomas.wong1986 says

zesta says

Why do you say that? According to the graph you posted, prices in San Jose/SF were at about 325 in 1999 and are at about 575 in 2011. Looks like you would made some money.

Homes that were $250K went to $500K by end of 1999. Thats what you saw at ground level!

Some homes around my block went straight up to $1M .. I bought my home in early 90s when prices were much more decent.

Wow, even in hindsight knowing that it went up so much after 1999 you'd still consider it a bad buy because of the early 1990s prices?

In hindsight, would you also consider AAPL a bad buy at $25/share at the end of 1999 because it was only $10/share a year earlier?

thomas.wong1986 says

zesta says

When you approach your 40s/50s and you're looking to buy you should probably either looking at a cash purchase or 15 year loan max. A mortgage payment past retirement doesn't seem like a good idea.

That was the same argument you would have heard by realtors during the bubble.. the same buyers today, have huge regrets.

This is why high home prices dont work.. its no wonder many jobs were shipped elsewhere when prices skyrocketed. Result was a price correction and job loss. Well they can forget their 30- or 15- year loan at that point.

Agreed that anybody buying during the bubble years have a huge regret.. I'm just illustrating the fact that buyers of different age ranges should have different levels of risk.

A 25 year old has the luxury of waiting to see if he can get a perfect deal

A 45 year old needs to take retirement into consideration and therefore if the rent/buy ratio is closer should be more likely to pull the trigger.

I'm NOT saying buy when you're 40 no matter what, just trying to get the perfect deal is more appropriate early in life

I regert not being more educated back in 2001.

Tried to qualify for a mortgage through my local credit union.

They literally laughed at me. Little did I know that 1) my student loans (which were substantial back then) showed up on my credit report twice (clerical error) and 2) different banks have different programs / lending standards. I probably could had qualified for a loan to buy a small condo had I just shopped around a bit more.

Almost eleven years later and I still haven’t bought anything. (Despite a few noble attempts)

Even my wife (who I had only just met back then) would have tired harder to shoehorn into a loan back then… knowing what we know now.

zesta says

Wow, even in hindsight knowing that it went up so much after 1999 you'd still consider it a bad buy because of the early 1990s prices?

for many in 1998-2000, it didnt matter, it was from other peoples money.. stock they cashed out at high share valuation/price. Someone else took that loss..

On many levels this was very abnormal compared to decades past.

Since 2000 things around here are not so bright .... you pay a price.

2001 was stricter qualifications. 2003 not strict. 2005 can you move a pinky toe? Ok here's half a million. 2012 can we check your 8 year olds credit too? No? too bad no loan 4 U !

zesta says

In hindsight, would you also consider AAPL a bad buy at $25/share at the end of 1999 because it was only $10/share a year earlier?

Apple is a toy company! talk to me about Semiconductors, Servers, Storage, ERP software. Without the 3 S's, Ipod,pads are paper weights.

Yes, it would be a bad buy.... it was over $75 per share in 2000.
Actually fell 60-70%... so yes you would have lost your shirt.

Thursday, December 7, 2000 - Page updated at 12:00 AM

http://community.seattletimes.nwsource.com/archive/?date=20001207&slug=TT2H2IAQM

Apple stock falls fast, hard
By Cesca Antonelli
Bloomberg News
Cupertino, Calif.--Apple Computer shares rose sixfold in the 2½ years after Chief Executive Steve Jobs returned to the company in September 1997, but they've given up almost all of those gains in the past nine months.

The stock reached a record $75.19 in March before tumbling as low as $14 yesterday, after Jobs said Apple wouldn't meet profit forecasts for the second consecutive quarter and would have a loss in the current quarter, its first in three years. Apple also cut its 2001 sales outlook. By contrast, the shares closed at a split-adjusted $10.75 the day before Jobs was named interim CEO.

thomas.wong1986 says

The stock reached a record $75.19 in March before tumbling as low as $14 yesterday, after Jobs said Apple wouldn't meet profit forecasts for the second consecutive quarter and would have a loss in the current quarter

How they forget so easy! Does anyone else recall this or have you been brainwashed ?

http://finance.yahoo.com/q/hp?s=AAPL&a=08&b=7&c=1999&d=05&e=28&f=2012&g=m&z=66&y=132

AF, I liked you're old picture better.

wthrfrk80 says

AF, I liked you're old picture better.

I like his new name! subtle change, there's a new duck mania around here. duckhead is funny, but if he is the same "prices are cratering" monologue guy, then it's not cool.

thomas.wong1986 says

Some homes around my block went straight up to $1M .. I bought my home in early 90s when prices were much more decent.

How can you be so negative about a home purchase in 1999 and at the same time be positive about your home purchase in the early 90s?

According to your NorCal graph..

In 1987 SF prices were at about 150
In 1991 SF prices were at about 250
In 1995 SF prices were at about 230

By your logic you made a bad financial choice by buying in the early 1990s. Isn't it accurate to say that a person who bought a home in 1987, 1991, 1995, or 1999 and has held it to 2012 probably a good financial decision?