patrick.net

Raw says

lostand confused says

Yeah, I remember during the peak of the bubble, when Alberto Ramirez, a strawberry picker making 14k a year, qualified for and bought a house in Hollister for 720k.

I mean a house in Hollister, CA for 720k ??!! The guy was only making 14k a year and some dumb bank gave him a 720k mortgage. Of course us tax payers probably bailed out that dumb bank and the executives are probably still flying around in corporate jets with huge bonuses, while asking the normal folks to work harder and stop being so entitled.

Granted that was pretty stupid. It is not happening now.

Really? 3.5% down is smart? 96.5% owing for crying out loud. I bet some of that 3.5% is also suspicious but realtors will not say anything. Gotta pay for that Mercedes this month.

It is. These assholes are getting a SECOND LOAN for the 3.5%.

I don't envision prices falling in any meaningful way in bay area any time soon. The moment of truth was in the rental market from 2009-2012. If the economy truly stank at the high end, then the rents should have plummeted. At least, they should have been flat. However, the luxury apartment complexes such as archstone raised rents easily 30% in that time period. This revealed that there is still money in this area and plenty of it for that matter. It is that same demographic that is now trying to purchase home although their barrier to entry has gotten more difficult (harder to save for downpayment as a result of rising rents.)

RentingForHalfTheCost says

The majority of people in this country have forgotten what having principles means. You never overpay for anything, there is a fair market price for things.

Do you share the same outrage for apartment complexes that fleece people?

lostand confused says

I never understand why some people who have a visceral hatred of CA, continue to stay here. Life is too short.

We have been invaded by New Yorkers and Bostonians with their own ideas of what
California should be. Its no wonder they are treating areas as a "Fortress" very similar to what we know of the East Coast...high priced 'special' areas of the elite.

Now you know why California is being destroyed and Natives are moving out...

dublin hillz says

RentingForHalfTheCost says

The majority of people in this country have forgotten what having principles means. You never overpay for anything, there is a fair market price for things.

Do you share the same outrage for apartment complexes that fleece people?

There is an easy fix for that. Move.

Darrell In Phoenix says

Exactly.
But if you have a massive, crushing mortgage payment on a rapidly depreciating house? You're doomed

Not exactly. You can stop paying the mortgage and live rent free for what-three years??

dublin hillz says

Do you share the same outrage for apartment complexes that fleece people?

It's not any worse than rent paid on borrowed money, a.k.a. interest.

Both rent and mortgage interest (plus property taxes, insurance, and maintenance) are money "down the drain" paid to "the man."

freak80 says

dublin hillz says

Do you share the same outrage for apartment complexes that fleece people?

It's not any worse than rent paid on borrowed money, a.k.a. interest.

Both rent and mortgage interest (plus property taxes, insurance, and maintenance) are money "down the drain" paid to "the man."

Yes, they are both money down the drain, but the interest on a fixed rate loan goes down every month while in the long term, rent is projected to go up at the rate of inflation to be modest. Since inflation is rougly 3.1% per year, we can make a reasonable educated guess that in 24 years, the rent will double. This inverse relationship between rent and mortgage interest in the long run gets seriously magnified. Personally, I think it is a mistake to always consider the cost of renting vs owning in year 1 and leave it at that. This analysis should be done over the remaining lifetime of each person.

dublin hillz says

Personally, I think it is a mistake to always consider the cost of renting vs owning in year 1 and leave it at that. This analysis should be done over the remaining lifetime of each person.

You make a good point. For people with secure jobs in stable industries, who plan to "stay put" for many years that should be done.

But people tend to move around a lot. Especially in "high tech" high-risk careers. The transaction costs of buying/selling houses is significant. Realtors need their 6%. If you move every 5 years, those costs will eat you alive!