patrick.net

sfba got many suckers. Imagine a guy putting $200K downpayment, then buying a home in Dublin for $800K. After that, commuting from dublin to Sunnyvale in company bus every day. I see such folks everyday.

Sure we on this board think that these guys are irrational. But they have different reasons: (a) schools for their kids so that these kids can achieve the american dream; (b) no need to worry about rent increases and other problems associated with renting; (c) in good company with fellow home owners, who provide the psychological support of being a home owner; (d) existence of the next set of fools to buy these properties held by the current rational home owners (or 'fools').

All these reasons hinge on the assumption of producing the next generation of fools. The next gen fools are created by $140K tech jobs and/or by their wives and kids.

myob says

No money is created or destroyed here.

At least not outside the minds of the leveraged. Inside the minds of the leveraged they're rich! Look at all those zeros!

mell says

If that happens

Oh it happens all the time and, in fact, is the norm.

Everybody sorta wants different things and have different criteria in their lives. I don't object commuting from Dublin, only if you work in big companies that provide buses, and you can't quite count on staying in one job forever, or having company bus would be one of criteria for next job. Until public transportation between east bay and the part is bridged, East bay remains less desirable, not to mention, lack of restaurants choices, far away from othe grociery stores if you want to shop beyond Safeway.

In US, credit is too cheap. Ones don't have to save substantially to buy a house. With lower threshold, $300k down for a 1.5M house, higher likelihood to have reckless buyers to drive up the prices. Not to mention those flushed with stock money.

I always wonder, how many think buying $1.xM house is okay, but spending regular $200 on a dinner for two, $200 sweater, or $10k 1-wk vacation is too expensive. Somehow, when it comes to house, people tend to forget the few extra 0s. Sure, leverage ...

raindoctor says

sfba got many suckers. Imagine a guy putting $200K downpayment, then buying a home in Dublin for $800K. After that, commuting from dublin to Sunnyvale in company bus every day. I see such folks everyday.

Sure we on this board think that these guys are irrational. But they have different reasons: (a) schools for their kids so that these kids can achieve the american dream; (b) no need to worry about rent increases and other problems associated with renting; (c) in good company with fellow home owners, who provide the psychological support of being a home owner; (d) existence of the next set of fools to buy these properties held by the current rational home owners (or 'fools').

All these reasons hinge on the assumption of producing the next generation of fools. The next gen fools are created by $140K tech jobs and/or by their wives and kids.