patrick.net

Call it Crazy, of course they did not have those loans 40 years ago, I just wanted to compare apples with apples. And right, people stay only for an average of 5-7 years, then sell their home for a profit and repeat the same thing again (or let it go back to the bank, or keep it as rental, or sell to break even, or sell with a loss). Also no renter ever stays in the same house for 50 years. I just wrote a maths example to compare cost of renting to cost of buying. If you want to live exactly by my maths example than just keep the house as a rental when you move out.

WAR, it is whatever you want to believe. For me, it's whatever the facts say.

In terms of inflation: yes, inflation is higher than house price appreciation. Wages are going down. Think about this (numbers here are just examples) Inflation 3%, Wages down 2%, house price up 1%. All three numbers make things worse for the home BUYER. No matter if inflation is higher than home appreciation. Yes, homes did not inflate as fast as most other things, but when you consider that wages are flat or declining means it is less affordable to buy a house today than it was a year ago. On national average. Of course every individual situation is different. Less affordable means to me pretty much the same as more expensive. The price has gone up more than the income that pays for it.

Ok WAR, we can see that Santa Clara County went down. Can you post the same type of graph for all 3143 counties in this country? Or do you believe just like Paul Ryan that because one area in the country has over 10% unemployment all other areas in the entire country must be the same?

Actually it's just the small area of Sunnyvale that's heading south. Santa Clara County seems to be edging higher towards $600k since 2009. More like flat or slightly going up rather than down...

War says

DO NOT buy housing now. Tell everyone.

You might actually be right. If you are looking for a bargain it's too late.

http://www.ocregister.com/articles/orange-374368-county-price.html

Well duh, pretty much everywhere on planet earth is down from late 2007. The 2010 mini peak was due to the homebuyer tax credit and everything else seems pretty seasonal and flat since mid 2008. Another useless chart. But hey, spread the word. That's fewer people my daughter will have to compete with when she's ready to buy.

CashWillCrash says

Or do you believe just like Paul Ryan that because one area in the country has over 10% unemployment all other areas in the entire country must be the same?

Now, do we see who the Three Stooges'esk didactics are in this thead?

CashWillCrash says

PockyClipsNow will then sell his house to YOUR kids for $3,000,000.00

Please, this has now gone off into the bizarre to me.

Bigsby says

Yes, you are missing something.

I am not missing a damn thing, especially when it comes to the all to obvious didactic game. It appears to me like this is what for you? Act II or III for you? While the other two are on to Act IV or V?

I see a three-ring circus going on in this thread. What do some people think this is the political thread now? Where it's all too famous for the same sad tactics?

Reader says

I am not missing a damn thing, especially when it comes to the all to obvious didactic game. It appears to me like this is what for you? Act II or III for you? While the other two are on to Act IV or V?

I see a three-ring circus going on in this thread. What do some people think this is the political thread now? Where it's all too famous for the same sad tactics?

Same old same old from you Reader. You completely miss what people are saying (or totally misrepresent it for your own purposes), and then cry like a little baby over it if people respond. Just try reading people's posts before you fly off on one of your little rants.

dublin hillz says

For someone to say that rents are falling "irrespective of location" should put them on a 3 strikes and you are out list. This sort of lunacy is not conducive to learning or debate.

The potential rental income of your recent purchase is falling. How is that for being specific. ;)

RentingForHalfTheCost says

I think it is though.

You think right now is the peak of a bubble?? What leads you to that conclusion?

Reader says

"Your time is limited, so don't waste it living someone else's life. Don't be trapped by dogma - which is living with the results of other people's thinking. Don't let the noise of other's opinions drown out your own inner voice. And most important, have the courage to follow your heart and intuition. They somehow already know what you truly want to become. Everything else is secondary."

Steve Jobs

I agree 100%.

Jobs was a jerk and a nut. I know many people that worked there during his cry-baby rampages. Insults and degrading people were a common affair. If you like that type of management then he is your man. Not my cup of tea. Apple got lucky with pushing the right buttons with the music and phone industries. Having Job's antics steering the ship made it work, but there were probably much better management styles that would have gotten to the same point. I like the iPhone, but don't necessary like Jobs or people like him. Job's is not much different than Armstong, and if you are reading the news you are seeing that whole mess unraveling and the underbelly of the man everyone thought of as a hero coming down.

RentingForHalfTheCost says

dublin hillz says

For someone to say that rents are falling "irrespective of location" should put them on a 3 strikes and you are out list. This sort of lunacy is not conducive to learning or debate.

The potential rental income of your recent purchase is falling. How is that for being specific. ;)

There's probably a greater chance of hell freezing over before I would consider renting out my pad to someone. That being said, how can potential rental income of any property in bay area be falling considering the rental market insanity here? My relative just told me yesterday that a 425 sq condo in S.F is going for close to $2500. For whatever reason, people are willing to spend asinine amounts on rents here and it's getting worse.

dublin hillz says

My relative just told me yesterday that a 425 sq condo in S.F is going for close to $2500.

Funny, my dog's friend's master's wife just told me that she visited a few rentals and couldn't decide. She made the mistake of giving out here cell phone and it never stopped ringing from owners trying to land her as a tenant. One owner was willing to give her 3 months free rent and also do her clothes wash and folding for a full year.

Love this hearsay stuff. ;)

tatupu70 says

RentingForHalfTheCost says

I think it is though.

You think right now is the peak of a bubble?? What leads you to that conclusion?

Hmm

Jobs, debt, deficit, Jobs, debt, deficit, Jobs, debt, deficit.

Do you even realize how bad it is to owe 16 trillion dollars! Sit back and think about it for a second. If you started counting in millions, one a second, it would take you half a year to reach it. By that time you might as well tack on another trillion. We are somewhere where we have never been. No one has an answer to the problem. Why? Because the answer is hard to take. We are living above our means, anything virtual is at risk of evaporating before our eyes. It will take more than inflation, wars, productivity improvements, effective government to save us.

Here is my reasoning. Lets say we start to do the right things. Lets say we eventually get to having a government surplus in 10 years or so. Yes, that is what we need to tackle the debt problem. We have been there before you know. We have had a surplus. However, what happens then? Everyone starts screaming that we need to spend the money on programs and forget the debt. No one gives a rats ass about tomorrows problem. That is just human near sighted thinking. Unless you care, which no one seems to, you are going to waist the surplus on building bridges to nowhere, paying people more for less, growing government, etc.

Fast forward to the next down cycling and BOOM we start the debt pattern again. How do you think we got to 16 trillion! Tie government wages to the deficit and it'll disappear in a heartbeat. It is so silly it is laughable.

The small 20-30% adjustment on home values will be easy to take considering when we actually start the process to get serious. I suspect the first stage will be the 2013 tax season. When people see how much they owe it will blow their mind. Good luck to all.

Believe or Not - rent is falling.
My rental unit dropped $100/mo. since I renewed my lease a month ago.

RentingForHalfTheCost says

Do you even realize how bad it is to owe 16 trillion dollars!

Right on. That's why they are going to come right out and say it on Fox News! We implemented Mark to Market accounting so the banks can ignore their losses and continue on as Zombie banks. Doing their silly short sale tricks, waiting for a tomorrow that may never come, Fannie will continue to market high priced garbage to the unwitting, etc.

CashWillCrash says

Yeah, they're down but $600k still buys you a pathetic piece of trailer in the bay area.

LOL, maybe someone should check out the Phoenix rental thread.

I've been paying the same rent for 2 years. First time in California since 1987 the landlord hasn't even raised the 3% yearly allowance for Los Angeles County.

Maybe a pattern here?

Looks like people here are finding it amazing when their rent wasn't increased in 2-5 years. It's like having a 2 year ARM or 5 year ARM. Interest Only, never payoff. Ever considered a fixed rate mortgage? Same payment for life? You can get a mortgage right now for free (inflation adjusted).

CashWillCrash says

Looks like people here are finding it amazing when their rent wasn't increased in 2-5 years. It's like having a 2 year ARM or 5 year ARM. Interest Only, never payoff. Ever considered a fixed rate mortgage? Same payment for life? You can get a mortgage right now for free (inflation adjusted).

exactly. if an IO loan = renting then why the hell would you rent? the payments are less on the IO loan. Just buy a newer home or newly remodeled home if you dont have $ to fix things or unable to swing a hammer or mow a lawn.

Now if you have bad credit, and no down payment, unstable/low paid job you probably wont get a loan - if that is the case just move in with mom and dad til they die (an excellent plan on paper- or find a fat a girl to support you - lonely fat girls are a major untapped natural resource in this country).

Thanks for the lonely fat girl tip. No need for it at the moment, but you never know where life takes you....

PockyClipsNow, that's true, if you are broke, got no stable job, and / or messed up your credit you can only rent. That's actually the case for ALL of my tenants. None of them choose to rent, ALL of them were forced to rent. Some of them were previously staying with family members but got kicked out... ouch! Must suck if you don't have a house.

40 $Billion$ a month can't go on forever...

40 $Billion$ a month is not real money, just numbers on paper. My computer could do it almost forever....

Yup says

I can hear the cries now.

Karmic paybacks are a bitch. I have been looking at 'bank shit' overpriced listings for years. My friends tease me 'You? a republican?' LOL

I am prepared to lose 300k if rates rise, prices tank, and I end up facing a 7% mortgage payment (oh the horror). If that happens and I cant get a loan mod, then after squatting for free for 2-7 years I will buy a better home at the new '50% disount' and actually be better off in a nicer house, with a lower tax rate.

Meanwhile I will not be renting anymore.

Renting has the advantage that you know for sure from the beginning that you will loose 100% of your payments while buying has some uncertainties attached to it... you either loose it all like the renter or you might make a million bucks. Or you cash-out refinance and do a strategic default (= legal bank robbery w/o jail time).

I can't tell Yup from War or Darrell.

Are you guys the same people?

Yeah the cash-out refi then default is now 100% legal along with tax forgiveness (this will be extended past 2012 - just watch!)

I loved renting when prices were tanking. (made me feel smart!)
Renting when prices are rising and you have high net worth, stable job, good credit makes zero sense. My #1 item to do financially was 'stop paying rent'.

I could have bought a 1 bedroom condo for cash. But those are overpriced now. The most bang for your buck are properties over 800k or even over 1m. There will no joe 6 pack zero down FHA slobs to bid against you. Not too many people can swing a 20% on a big purchase (but they are out there!).

Let Patrick do an IP check to see if War=YUP=Darrell

RentingForHalfTheCost says

Hmm
Jobs, debt, deficit, Jobs, debt, deficit, Jobs, debt, deficit.

Serious question. Do you really believe that these issues will be solved in your lifetime? And if not, are you willing to rent forever?

I ask because similar sentiments were raised about the unsustainability of our trajectory after the great depression, WWI debt, the long depression, & the massive debt incurred in the war of 1812. Yet all those people are now dead.

Just because something is unsustainable (which it is) does not mean that it is imminent. In the year 301, Emperor Diocletian made a number of questionable decisions regarding the sustainability of the Roman Empire which his detractors said merely kicked the can down the road. It was over 1,150 years later when the empire finally imploded, and his detractors were finally vindicated...

Who cares how much he put down? It's all about positive cash flow. All he said was he is doing ok if rents cut in half. He will still be able to pay all his expenses. Of course he doesn't have to make his down payment again. Maybe he bought some cash too with no mortgage payments?

War, how do you know he's not telling the truth? Are you his accountant?

CashWillCrash says

Looks like people here are finding it amazing when their rent wasn't increased in 2-5 years. It's like having a 2 year ARM or 5 year ARM. Interest Only, never payoff. Ever considered a fixed rate mortgage? Same payment for life? You can get a mortgage right now for free (inflation adjusted).

Except your property taxes always go up, and your equity goes down. Not to mention you are stuck in the same dreary shit-hole dwelling and stuck to the same job. Nice try.

I would like to hear 'how to become rich by renting' because I just dont see that. Ever.

How to become rich in real estate? its pretty common even considering the recent downturn/turmoil.

CashWillCrash says

40 $Billion$ a month is not real money, just numbers on paper. My computer could do it almost forever....

Until the creditors came and unplugged it at least. ;)