patrick.net

Sweeb,

You are exactly correct. I noticed bitched a lot when I did not have the money to own in 07. I bitched more in 08 when prices went down but not enough to where I could buy. In 09 and 10 I bitched because prices were moving up and getting away from me. In 11 and 12 prices dropped again. They were far below rental parity, and I made a huge down payment on a place and now pay $800 or so less out of pocket each month than I would renting a place that is worse than what I own (but also the most I would ever pay for rent). As it turns out that is a 6 percent tax free return on my down payment.

I don't bitch anymore, and as a result I see the ridiculous bitching much more.

Swebb,

So true. People want a decent house in a decent neighborhood with decent schools. The fact is that there is a fixed supply in these neighborhoods. As more and more people want to move into these neighborhoods, the wealthier folks start to push out the less wealthy folks.

Here in the Bay Area, the folks that cannot afford Palo Alto would have to settle for Mountain View. Cannot afford Mountain View? Well, you'd have to buy in Sunnyvale, Santa Clara or San Jose.

Of course, there will be bitterness with the folks that got priced out of their preferred neighborhoods.

No. It's not an issue of affordability. I can afford to buy, I just feel the value is not there. People are still overpaying and stretching themselves financially, so it is hard to compete with people who behave irrationally (in my opinion).

Granted, I am in unique situation where I enjoy a rental that offers exceptionally good value at a cost of 15% of my monthly net income. Impossible to recreate by buying in my area.

I wasn't able to afford for 11 years while waited the bubble out.
Eventually it became an affordability issue, and that's why I bought.
I could have squeezed another 20-40K out of the market before I bought. But with the BS going on from Washington to NAR, to City officials doing all they could to re-inflate the market. Wasn't worth the head ache of watching, griping and worrying about what the market was or wasn't doing between the time I bought to where I would have liked it. My sanity was worth that extra 40K. And I consider it the best 40K I ever spent.

I've kept an eye on the market, and to be honest. In the 2 1/2 years since I made the contract on this house. I haven't seen one house, that I wished I had held out for.

Mine is closer to uncle mat. I could get a house in my market, but I don't see the value. I also don't think I am an angry bear. I am more of an incredulous bear. Look at what people are doing? I wonder what they are thinking. Me? I don't think I will do that.

What do you mean by afford-the monthly payment or the whole enchiliada??

I don't think I'm a housing bear; maybe more of a rebelling against the branded "American Dream" type.

Sure, I have enough cash to purchase a house by simply writing a check; but that's not appealing to me. Why be tied down to one place when there is so much to do, and so many places to see? Why be a slave to the home as the owner, when I can be the master as a renter?

No shoveling snow in the winter, or cutting grass in the spring and summer; raking leaves in the fall is nonexistent, and maintenance is just a phone call away for any problems. No more long commutes to work; just a mere 3 miles down the road, and I'm in walking distance to grocery stores, retail shops, restaurants, and bars. Any future problems, and it's 30 days notice and I'm gone to somewhere more suited to my liking.

Whether a property appreciates a little, or doesn't, or loses value is inconsequential to me. I have other avenues for "investments".

E-man says

Bought 5 more in 2011 and 2012. Just closed one last week. Should close another one in the next two weeks, and one more in 3-4 weeks. As of now, some of the properties have appreciated almost 100%. That's a boatload of money for properties in the Bay Area.

Wow, your shit don't stink.

People would take you more seriously if you actually responded to the original post rather than trying to convince folks that you are the smartest guy in the room.

Good question, and it's probably a valid hypothesis for some.

It is frustrating for folks in the Bay Area who got the right degree(s) from the right schools and work for a prestigious tech firm - - - only to have a substantially lower standard of living than their slacker high school buddies with 2 year associates degrees who have ho-hum jobs in flyover states.

I wouldn't consider myself a super-negative bear. But maybe that's because I could afford to buy a $1M+ house on the peninsula. Between moving for work, paying for advanced degrees, and the bubble a few years ago, the timing has never been good. And I have a pretty sweet rental deal right now.

I think many of the bears are technical types who look at current prices from a macro standpoint as being economically unhealthy. For example, the vast transfer of wealth from younger generations to Baby Boomers; the fact the typing up a crapload of money in residential housing is counterproductive to long term economic growth because that money isn't available for more productive pursuits; how society has been rewarding bad behavior with bank bailouts tied to silly residential real estate speculation, etc.

It's amusing that the original post decries the negative bear's emotional reaction to high prices in a highly emotional way (e.g., "who the fuck cares if these people are so wrong for getting into an overpriced home"). You are both doing the exact same thing from opposite perspectives.

swebb says

the thing is, the strong feelings these people have is evidence that owning a home is worth more than just the rent replacement value to some people (including the big bears)...so, pony up or shut up...Again, if you didn't really care and were confident in your position, you'd just rent...but-you-really-want-that-house-so-bad-that-you-have-to make-up-reasons-why-the-market-is-broken...

First, there is the question of whether it is the pot or the kettle that is black. Strong feelings abound on both sides, but the value buyers bring more compelling analyses and data, no doubt about it.

Second, we are all in the middle of the Great Recession, which was directly caused by (EDIT: add greedy sellers) greedy and imprudent buyers, sleazy agents and criminal banksters. So yeah, people who are anti-bubble have LOTS of GOOD (and moral) reasons for being anti-bubble. I see no reason to assign them questionable motives, nor to question their financial status.

ducsingle5313 says

It's amusing that the original post decries the negative bear's emotional reaction to high prices in a highly emotional way (e.g., "who the fuck cares if these people are so wrong for getting into an overpriced home"). You are both doing the exact same thing from opposite perspectives.

Good point, I hadn't realized that. I think there is a difference, though. They are strongly complaining about how the prices are high because so many people are making irrational decisions (overpaying for a house) which prices them out. Often they have some list of arguments about why a house isn't worth more than the rental replacement value (transaction costs on the buy and sell side, high taxes, maintenance, etc), but at the same time are really frustrated and angry because they can't afford the house...What I'm pointing out is that the frustration comes from them wanting the house for some other reason beyond a place to live...they want to be a homeowner, and rational or not, that drives up prices. It is their very desire (mirrored on other people) to own a home for reasons other than the practical ones that makes the home more valuable to others...And their very desire to own the home for reasons other than practical is what makes them so pissed off. You can't have it both ways.

The thing I'm bitching about is that I have to read posts like that so often. It's tiring.

swebb says

The thing I'm bitching about is that I have to read posts like that so often. It's tiring.

This isn't intended as a snarky response - - - isn't there an "ignore" feature that could filter those folks?

John Bailo says

Buying a house is like getting married. The "married people" (Owners) tell the single people (Renters) how great it is and then go home and fight.

I like this analogy, but I would expand it a little differently.

The married people (owners) tell the single people (renters) how great it is. But half of the married people wind up cheating on their spouses, and half the marriages end in divorce.

The single people (renters) tell the married people (owners) how great it is to have a swinging single lifestyle. But half the single people are lonely and wish they were married.

Happiness probably lies somewhere in between.

donjumpsuit says

because property should be accessible to all

Property has never been, and will never be, accessible to all - - - absent a major plague wiping out a vast percentage of the human population.

ducsingle5313 says

donjumpsuit says

because property should be accessible to all

Property has never been, and will never be, accessible to all - - - absent a major plague wiping out a vast percentage of the human population.

There's a difference to property not being accessible to a strawberry picker vs. not accessible to a mid-career white collar professional.

Call it Crazy says

When I look at the big picture of the economy with the US economy, unemployment rate, the number of people who continue to be added to the food stamp rolls and the general business environment, I doesn't make me think I have to move urgently to be a debt slave to the bank. It's nice to be totally debt free with a bunch of money in the bank.

I agree its nice having money in the bank - except knowing the purchasing power of that money is evaporating.

We recently went through the biggest housing bubble ever witnessed in America, so expect some people to be a bit jaded about housing. I couldn't afford to buy a house outright here, but I could easily get a loan and afford a mortgage. I won't because I don't like to leverage, although I see how some people have made it work wonders for them, it is also a huge gamble that you can lose your shirt on if the market flips. I am happy doing things my way and have no problems with housing bulls.

ducsingle5313 says

This isn't intended as a snarky response - - - isn't there an "ignore" feature that could filter those folks?

Yes, and I use it judiciously...A lot of the folks that I'm referring to, though, have input that is worthwhile sometimes, so I don't really want to ban them. I guess at the end of the day I'm just bitching.