patrick.net

Quit your whining and wait.

Move out of those trendy, blown-dry metros and move your family to Victor Valley, where the real men collect their mail.

Buy now or be priced out forever?

Buy, buy, buy, housing only goes up. If anyone else tells you differently, ask any realtor if now is a good time to buy. After all, a realtor would never lie to you about housing.

SFBA (at least the RBA) poses the same problem. In 2010, prices were coming down from incredible to merely unreasonable. I waited patiently for the bubble to finish bursting, and hoped to buy an old place that hadn't been flipped. (I refuse to pay extra for flippers' faux "improvements".) Then Bubbles Ben began blowing his bellows, reflating and now setting new records. I put in an offer on a condemned place, officially condemned, on a tiny patch of land, but somebody else bought it for $1 million. IDK what to say, except I look outside the SFBA for places that haven't gone totally insane.

JodyChunder says

Victor Valley, where the real men collect their mail.

Alas, the real men are surrounded by closet case pretenders and their scared wives, who elect the worst government imaginable. I'm not moving to a Knight district, no matter how cheap. Reading Bop69's comments makes me realize why so many people in those areas own guns: if I had neighbors like him, I'd want an AK too. I see postbubblesuccess bragging that his house has gone up to a level that makes me laugh. Around here, people could dig enough change out of their sofas to buy his house and paint it twice, and he can't even spell, but he brags as if he were a genius. The issue is how to find a place that's reasonably priced, but where the neighbors aren't complete assholes. (Sorry JodyChunder, I like you, but your neighbors are both intolerable and intolerant, in equal measure. It's a testament to your strength that you can stand them, but I can't.)

We shall see. The fat lady hasn't sung yet. I refuse to buy a 800k shack that I can buy for 250-300k elsewhere. The pay difference really isn't that much anymore. You may get 10-20k less a year, but that is not worth 400k more in house prices. I don't own and that gives me freedom to move and I am seriously looking at other opportunities. Perhaps now that I am finally settling down and am ready for kids-it might be good to move.

The prices in certain areas of Orange County really didnt drop much. In fact, there are several areas where prices are significantly higher now than 2006 bubble prices. If OP is looking in these areas, would it make sense to buy as Carolyn C suggests? Im glad it worked out well for you Carolyn, but your scathing rant about the OP is rather rude especially since he did nothing to offend you and ignorant especially since you do not know or understand his situation.

The funny thing is that no one knows exactly what will happen in real estate, yet you seem to believe you know what is going to happen. If so, perhaps you should be buying a few more, looking to sell at a profit in the next couple years...

lostand confused says

Perhaps now that I am finally settling down and am ready for kids-it might be good to move.

stay out of S. Cali and you should be fine... haha

robertoaribas says

Did the OP read a bunch of post on here a couple years ago, that were so 100% certain home prices would fall a great deal more?

didnt it in arizona?

In three months.

Meccos says

The prices in certain areas of Orange County really didnt drop much. In fact, there are several areas where prices are significantly higher now than 2006 bubble prices.

Same for Norcal. Borrowing $1M at 6% interest rate is the same as borrowing $2M at 3%. For high network clients, they can borrow $1M at 1.25% from Interactive Brokers, or 2.2% at Charles Schwab.

EastCoastBubbleBoy says

I will say this - as interest rates rise, prices will most likely go up (paradoxical I know) but personally, I am expecting a black swan event to put a slowdown on our tepid growth, and another recession occurring sometime in the next six to eighteen months. Will prices crash? Probably not. Will they stop going up 30% per year - let's hope so. I can't see how they'd sustain the momentum in a downturn.

I expect prices to flatten out over the next few years also, but it all depends on the value of money.

Your problem is you are holding cash, which is a dying commodity. If you held quality stocks then it wouldn't matter over that same period then it wouldn't matter. Your 20% downpayment would actually get you more home.

Carolyn C says

In three months.

If you'd listened to me, you would have bought investment properties in Victor Valley that you'd be up 24% on today -- and your sad, taxed Californy dollars go a helluva lot further out here where I am.

I know. I should have acted sooner. Trust me, I keep kicking myself every time I go on Redfin.

Hmm, it looks more and more like a bubble.

lostand confused says

Hmm, it looks more and more like a bubble.

In some areas (SF Bay Area) it definitely is, but the question is always can the bubble outlast you, or will you outlast the bubble?

JFP says

lostand confused says

Hmm, it looks more and more like a bubble.

In some areas (SF Bay Area) it definitely is, but the question is always can the bubble outlast you, or will you outlast the bubble?

Unlike stocks , we can always move!!

RentingForHalfTheCost says

Your problem is you are holding cash, which is a dying commodity. If you held quality stocks then it wouldn't matter over that same period then it wouldn't matter. Your 20% downpayment would actually get you more home.

This makes no sense. Let's say you were going to buy a house for $1 million and had a 20% down payment of $200,000. If the house went up 10% over the last year it now costs $1.1 million. If you held quality stocks that went up 10% your down payment is now $220,000. Your new loan increased by $80,000. If my math is correct you would have needed to earn a 50% stock market return on your down payment just to break even and have the same loan amount.

Funny, the only thing I drink once in a great while is wine coolers. I never graduated to wine, and hate the taste of beer. As a matter of fact, I have a low tolerance to any chemicals. Way to call them Mark D. Is that D for Dum........?

YOY prices have been up for 13 months. I think it's safe to say at this point you missed the bottom. If you want to buy a house, then buy one. What's done is done. No sense beating yourself up over it.

I was going to buy in 2011 borrowing from retirement and put 3% down was afraid of the risk. A family member died in 2012 and I was not paying attention for a while. Bad timing.... Thank you all for your advice. In my mid 40s .... Will save and rent.

This concludes the meeting of the mutual masturbation society. Drive safely.

scott777 says

I was going to buy in 2011 borrowing from retirement and put 3% down was afraid of the risk

Probably just as well, then. That doesn't sound like it was really a great plan.

Homeboy says

YOY prices have been up for 13 months. I think it's safe to say at this point you missed the bottom. If you want to buy a house, then buy one. What's done is done. No sense beating yourself up over it.

This reminds me of the saying...."the bottom is always in the rearview mirror."

Homeboy says

scott777 says

I was going to buy in 2011 borrowing from retirement and put 3% down was afraid of the risk

Probably just as well, then. That doesn't sound like it was really a great plan.

I agree with this Scott. Man, you're not saving fast enough. Maybe it's time to marry up if you're single. You know, blink, blink.

E-man says

This reminds me of the saying...."the bottom is always in the rearview mirror."

Well, not really. I think he could have figured out prices were going up sooner, but like he said, there was a death in the family so he wasn't really focused on it. I'm just saying there's no reason to beat yourself up about it. There will be other opportunities.

Lets go with, housing follows inflation. People spend the same amount per month on housing, offers change and how much they can afford due to rates changes, but it all comes down to monthly payments.

Right now, we're probably getting back on track to following inflation. Housing isn't really a killer deal any more, but it's also still towards the bottom of the cycle. We're basically in year 1 of the boom, so you could easily buy still and know you're getting in at a price that won't be seen again (due to inflation).

There are good times to buy, better times to buy and not so great times to buy. We're still in the good times. It's not a "deal" anymore, but it's also not over priced.

My answer is "never buy and never retire, because the bottom is not in your rear view mirror. The young people who the baby boom is counting on funding their retirement have no leverage at all by which to eliminate their debt or cost of living."

Mandy Lifeboats says

scott777 says

We waited now home prices are up 30%....what now?

In Las Vegas, prices are skyrocketing and the rent is too damn high. In Vegas, you can't win ;-)

I bought in Vegas in Jan 13. The same home as mine a block away just sold for 100k more and that backs onto a highway. Vegas is an absolute paradise and after owning in the UK,Florida, Texas and SoCal this is by far the best area I have ever lived in and even if I won the Lottery wild horses would not drag me back to California.

There's a definite "buy now or be priced out forever" thing going on here. It's particularly bad in SoCal where inventory is barely there and buyers must compete with investors, foreigners with cash who want an anchor house, and other buyers. I'd say that unless you have a ton of cash or an insider connection, you won't even win a bid on a house here.

If the value is acceptable to you based on rent/buy comparison, then buy. If not, continue renting. No one can time the market perfectly, and no one on this blog or anywhere has timed anything perfectly.

This could be a bull run that won't slow down for years to come, or it could be a big head fake before the next down turn. There are valid reasons for going either way.

In the long run, real estate IMO is a great hedge. Even guys who bought in 2006, if they can hang on long enough, they will eventually come above water.