patrick.net

Though the curve does not explain properties being listed for weeks before selling. And, more importantly, the fact that investors are not showing up to the bidding.

I hear realtors calling this a "dumb money" real estate market.

Having said that ... folks. I don't wanna sound as if I knew the future.

I'm just a potential buyer with a very good sense of humor wishing that prices go down (which i do not know if it's gonna happen or not). Pls, folks, do not take my comments personal. (and for those of you thinking of getting competitive in this market, please do not take me seriously, just let me know before you decide to foreclose :-) )

CMY says

It's the simplicity that bothers me. Have they figured in that rents do not always increase annually, and that homes do not appreciate 10% per year?

Furthermore, the statistical probability of X, Y or Z issues appearing (sewer failure, new roof, fire) with 10k homes is off the charts

How much they paid for the homes is a big question mark right?

Without knowing how much they were able to buy the homes for, how can you even begin evaluating how successful they will be?

zesta says

How much they paid for the homes is a big question mark right?

http://www.colonyamerican.com/ + http://www.trulia.com/

Work backwards from there (I sampled around ten, all of which lead me to the 5-7 year payoff).

If you're feeling lazy, just average it out. 100k seems to be the sweet spot.

Then there's always the whole "Wall Street screwing the working class" angle and its potential for some ugly publicity or worse.

Seems like an easy target for some enterprising "community organizers" or Occupy groups.

Like this just posted today:

http://oak.lc/H6Ni4

Dude hates him some $12 sandwiches.

Folks, seriously. If you look at los altos, cupertino and sunnyvale, you will start seeing some properties, occupied by nobody, that are on sale. Some of them, curiously, by exactly the same agent/investor.

I may be (admittedly) wrong about this, but if they are investors, this could be the start of a sales wave, and the end of the investors bubble that took bay area good school district prices 20% above 2008's peak.

As I said. I think i'm just going to give up on my search temporarily until the market starts crashing. (it's still too hot, and am starting to feel confident the market is about to crash.).

What do you think? do you think the bay area's good school district real estate market is about to crash?

Not true at all my friend.

The bay area is it's 4th bubble now, and counting.

1st bubble: early 90s. Crash: early 90s.
2nd bubble: late 90s. Crash: early 2000s.
3rd bubble: mid 2000s. Crash: late 2000s.

With low growth and more volatility, bubbles and crashes are more likely to happen more often.

There is one thing in which real estate agents are true: The bay area is different. It bubbles and crashes more than a drug addict with an engineering degree earning 250K a year :-) (with a drug addict lawyer wife, that earns another 250K a year :-) )

Dude!,

Thanks for the graph. However, the 90s was worse than what I thought!.

With a 7 year decrease in nominal prices of say 10%. And with yearly inflation at 2-4% yearly, we are talking of 24% to 38% decrease in real value of housing.

The 2000s was steep, but with shorter duration. I guess you do not live in the bay area, but I do remember asking prices dropping 30% in the bad school districts. Jus the same as in 2008 - 2009.

So, yes, your graph looks like the chinese stock market, no question about it. But with tons of bear markets. So, my friend, crashes happen, and they do happen often when there is tons of dumb money piling up into businesses in which they are not experts.

Having said that, I would still give it a 30% chance that this is not the crash. We may need to wait fur another recession. (and please, now, do not tell me that recessions do not happen often. At that point, I will just stop replying).

FunnyBayAreaBuyer says

With a 7 year decrease in nominal prices of say 10%. And with yearly
inflation at 2-4% yearly, we are talking of 24% to 38% decrease in real value of
housing.

The posted Case Shiller chart is inflation indexed isn't it? So nominal prices weren't down 10% over 7 years.

Cool. Makes sense.

So, in summary, a 10% decrease in real home values during 7 years.
With 5-7% real interest rates that came down to 2-4% real interest rates.

It still looks like an aweful time in the housing market.

Meaning. Waiting when things look like a bubble is not a bad thing at all.

So, I think waiting in 1990 would have been a good idea. Waiting in 2000 would have been a good idea. Waiting in 2007 would have been a good idea.

And, waiting in 2013 would have been ---blank---- a idea.

Anybody willing to fill in the blank?

FunnyBayAreaBuyer says

Anybody willing to fill in the blank?

Clearly you know you nothing about the Phoenix RE market.

:-) Is that guy in the truck you 5 years after you bought your house ? :-)

FunnyBayAreaBuyer says

:-) Is that guy in the truck you 5 years after you bought your house ? :-)

Five years? Shit.. thanks to my amazing powers of perception I've completely ignored hedge funds buying massive quantities of homes in my area and declared myself a success in less than two!

Now if you'll excuse me, I've gotta go spend ten of my (worthless) hours fixing a leak in one of my shithole properties that will be circling the drain once those hedge funds decide to bail en masse. So long, morons!

It ultimately comes down to price to income ratio, or further refined to the ratio of monthly home cost (Principal, Income, Taxes, Insurance, and Upkeep) to household monthly net income.

Follow that trend along with others like price to rent ratio.

http://www.numbeo.com/property-investment/gmaps_rankings.jsp?indexToShow=getHousePriceToIncomeRatio&year=2013

So you're one of those that bought in the 90s :-). Congrats!!

To have done so well in the market, you have to admit, you loose your temper waaaay too soon :-).

So, to the point. Having the next 10 years as a target: Is it now a good time to buy? (you are be comfortable with probabilities, right?) Do you give it 10% that is a good time to buy, 30%, 50%, 90%?

Most probability professors will tell you: "never take seriously people that come up with any of the following two numbers: 100%, 0%".

Wanna give it another shot? (and 99.9% will probably not be taken seriously either :-) )

Wow. Pretty confident for sure.

Everybody agrees?

FunnyBayAreaBuyer says

Everybody agrees?

When the 30 year fixed mortgage rate rises about 5.25% then I say I do not agree.

FunnyBayAreaBuyer says

So you're one of those that bought in the 90s :-). Congrats!!

To have done so well in the market, you have to admit, you loose your temper waaaay too soon :-).

So, to the point. Having the next 10 years as a target: Is it now a good time to buy? (you are be comfortable with probabilities, right?) Do you give it 10% that is a good time to buy, 30%, 50%, 90%?

Now is an okay time to buy in my opinion. In the next 1-3 months might be a slightly better time to buy. I would give it a 60%-70% chance that now is a good time to buy. 2009-2011 was a great time to buy.

FunnyBayAreaBuyer says

Investors are really dumping them out in the bay area, folks.

Look for sunnyvale in mlslistings. You will see much more supply than what you used to see just a few months a go. And even in good school districts.

From 80 listings down to 20 listings is an 75% decrease. From 20 to 60 listings is a 200% increase. From that point of view, yes the supply has increased a lot. However, the normalized number of listings is closer to 150 homes.

robertoaribas says

random sentence generator, set to MORON level.

Look it Bob, if you have a point, or something to say, you should try to make a cohesive argument.

David Losh says

If I were a renter I would be looking to cut my expenses for housing, and invest my money in something profitable.

Except most renters also want to live in a nice apartment in a nice area.

robertoaribas says

David, I found posts of you on Seattle blogs, over two years ago;

Again you are out of touch with the market place by relying on a Case Shiller sense of euphoria.

Seattle is the metro area, but not all of the surrounding areas went up in price. They did go down, the same as they did in Atlanta, Cleveland, Detroit, and most of the rest of the country.

You are myopic, but it's good you are looking for more education, I see you are considering selling a property, and you should capture your gains while you can.

I'm always right. It's one of the most infuriating things about me.

David Losh says

I'm always right. It's one of the most infuriating things about me.

lol--so you wanted to lose money on that condo in Atlanta then? That was you "being right"?

tatupu70 says

That was you "being right"?

We were right to sell, yes. It would have been stupid to hold on to a worthless property. We were lucky, I mean lucky, some sucker took it off our hands.

Do you know anything about Atlanta, or the market place there?

David Losh says

tatupu70 says

That was you "being right"?

We were right to sell, yes. It would have been stupid to hold on to a worthless property. We were lucky, I mean lucky, some sucker took it off our hands.

Do you know anything about Atlanta, or the market place there?

Did you just recently upgrade the house cleaning website? Whoever did it, it looks pretty nice now, like the retro theme. I remember browsing it months ago and thought it was pretty horrible from a tech design standpoint ;)

David Losh says

We were right to sell, yes. It would have been stupid to hold on to a
worthless property. We were lucky, I mean lucky, some sucker took it off our
hands.

Do you know anything about Atlanta, or the market place there?

Nope. The point is that if you are always right, I would have thought you would have known NOT to buy it in the first place.

tatupu70 says

I would have thought you would have known NOT to buy it in the first place.

We didn't buy it, my sainted step mother bought it as her personal residence then it went into a trust. Her Coca Cola stock has way out performed the condo.

It makes no difference really to the fact Real Estate doesn't always go up, and that most Real Estate market places have declined, or floundered.

mell says

Whoever did it, it looks pretty nice now, like the retro theme.

Thanks

robertoaribas says

By the way, it is pretty offensive for you to use rosie the riveter as your own personal advertising;

Rosie the Riveter is public domain, number one, and number two is that I really haven't done anything with my business, advertised, promoted, or anything other than our internet presence.

I never contracted for a logo, and the old web site referred to above was a leased site. I was just sitting in my office one day when a person called to offer us a leased house cleaning site developed by the good people at The House Cleaning Alliance.

You should research them Bob, because they are a couple of financial wizards, University educated who worked for Goldman, and Lehman Brothers. They found house cleaning to be better money.

They started the house cleaning company they had, ran it for three years then sold it for $1,000,000, and it is still going.

After the non compete clause ended last year they started another house cleaning company, and from what I gather it does a million dollars worth of business in a little over a year.

Now about Rosie; my buddy did a bronze sculpture of her here, and he was the one who told me about the public domain.

Ours is a woman owned, and operated company, and we will incorporate the theme of Rosie in our new logo, which should be coming soon, with the next website.

She was a native of this area you know, and died just a few short years ago.

robertoaribas says

so somebody other than you made money.... got it!

No, Bob, I make money. I'm just doing my mid year reports, and Geez, Bob, the numbers are looking pretty good.

So, Bob, it seems you just assume things, and we all know what happens when we assume.

Bottom line Bob, it appears lately you are coming around to the thinking of the crowd here, that Real Estate is over as an investment, and you should get out while the getting is good.

A lot of ideas of the future and how society can evolve here.

I find it very, very interesting that there, while there seems to be a strong consensus towards a de-evolution of society, there is still disagreement in the role of housing and land in that de-evolution process.

Should we give it another try?

Give larger differences between the people below and the people above. Given more unfairness, less opportunities, and more accumulation of power in a few:

Is housing a good investment? or a bad investment? (so far i hear strong voices for both)

Investment money doesn't hold in the long terms we are used to discussing with real estate. Don't look for big financial investment to hold on for even months, let alone years. It is fickle to the hour...to the minute. It can and will turn in a heartbeat and sink all of its green teeth into orange juice if it makes more fiscal sense.

It's derivatives people! Mind-bogglingly ridiculously huge sums of fiat based on absolutely nothing. It could disappear in a heartbeat. As the "wealth" goes up in smoke, you could call it deflation all day, but no amount of QE or low interest could possibly make up for it. The big big investment dollars could dump real estate between brunch and lunch. As suddenly as lightning the hordes of cash buyers can turn into ghosts. All the money could be in pork bellies before you can get back from Home Depot with a bag of plumbing supplies. They can go short on their "long" positions in the bat of an eye. This is all speculation, not true demand for housing. Don't bet on the money hanging around for the length of a lease...more like the length of a lunch.

robertoaribas says

david, you are way too stupid to understand anything I do; you've shown that very consistently forever on here.

You never cease to amaze me with your ignorance.

You're a very simple person to understand; you smart, everybody else stupid, who don't buy rental houses.

Live with your mistakes Bob, and leave everybody else alone.

robertoaribas says

says the guy sued by two banks, the IRS, and upside down on his own home

Oh, OK, Bob, as long as you want to keep going down the same path let's go over it again.

Guys like me bother bubbas like you.

You have played by the rules, got a good education that allows you to have that quasi government welfare job of yours, and you are playing it smart.

I am one of the great unwashed masses, stupid, according to you, who makes money the old fashioned way, I earn it.

It bothers you because I've always made more money than you, and can afford to take massive risk.

What I'm doing right now is getting rid of debt, and if you were smart you would be doing the same.

That's what the crash of 2007/2008 meant to me. This is an opportunity to get rid of debt, with a get out of jail free card.

Really Bob, do you think banks are going to look twice at a guy who took advantage of negotiated debt settlement?

No, I'll come out of this with cash in the bank, debt free, and a business that generates income.

robertoaribas says

you are a liar and a scumbag. I'd say the same thing to your face, and you'd walk away because you know it is true.

This kind of sums up your entire line of argument, not just here, but in all the threads.

The same as you have no argument to anything I say, like this:

robertoaribas says

Except, home building is in the doldrums; We aren't building homes at replacement and population growth levels, and haven't for over five years.

You didn't count multi family in that, did you Bob?

Do you really think threats, or insults would work on me?

Now you can pay off your debts in as long of a period as you want Bob, I'll pay my debts now. I'm old Bob, and don't have the time, or inclination to wait out my income to debt ratios.

Does that bother you Bob?

Let's get to the real reason you're so upset Bob. Because I know hundreds of people with a lot less than you were given Bob, who have done so much better than you.

To me you're a guy on welfare. To you I'm a crook.

However Bob, I play by the same rules as everyone else. What I'm doing is legal, and it isn't bankruptcy, which is also a right we all have.

No one in this country has to give any bank a profit. Banks take risks like everyone else, except for people like you Bob.

You can't escape debt. All they can do is lower your credit score. They have to be paid Bob, because debt is a market place like anything else.

You can't escape the IRS Bob. They have to be paid.

So, Bob stop your lying. You have no idea what you are talking about, ever.

Enjoy your free ride, keep your mouth shut, and leave everybody alone Bob.

The people here have always been right, you have been consistently wrong, so just accept it.

people are really passionate in this blog :-)

robertoaribas says

Please, again, tell me how i can be a success like you? defaulting on loans, underwater on my house, and cleaning floors and toilets with my wife in my old age???

I'll tell you for $500.00

I'm going to agree with Roberto. Biochem is going to be huge. Maybe not in this country where we legislate morality so much, but messing with the nano machinery of Life will create fundamental changes in technology and society. Imagine a world where babies are gene resequenced after fertilization to ensure intelligence, perfect bodies, longer lifespans, and elimination of genetic disease. After a few generations, nearly everyone will be smart and beautiful and live a long time. But I think phenotype (racial) differences will remain, because that's based on taste and culture. The world will simply be more interesting in different colors.
How about radical body changes through virus-induced gene resequencing? Want to be a different gender? Here's a shot, and then sleep for a few weeks. Wake up as a beautiful woman. Or man. Or mermaid. Or satyr. Or centaur.
Want a pet unicorn?
Want an elephant as small as a cat?
Want to surf the net with your eyes closed? Biotech will get there, sooner than you think.
How about a mental switch to turn on endorphins? Adrenaline? Simulate orgasm? It's all possible, and sooner than you expect.
How much would people pay for any of this? Market forces would prevail, but the researchers would definitely get paid.

Quigley says

How about radical body changes through virus-induced gene resequencing? Want to be a different gender? Here's a shot, and then sleep for a few weeks. Wake up as a beautiful woman. Or man. Or mermaid. Or satyr. Or centaur.

Or this:

Want a pet unicorn?

Already done:

Want an elephant as small as a cat?

Want the expensive vet bills when the undisclosed problems show up in these novel animals?

Want to surf the net with your eyes closed? Biotech will get there, sooner than you think.

Want the NSA (or worse your crazy ass ex-girlfriend) full access to your mind?

How about a mental switch to turn on endorphins? Adrenaline? Simulate orgasm? It's all possible, and sooner than you expect.

Now illegal drugs have already done this for years. There are also much older already all natural, drug free - make that just plain free - ways to get an actual orgasm.

How much would people pay for any of this? Market forces would prevail, but the researchers would definitely get paid.

Not well:
http://www.bls.gov/ooh/Life-Physical-and-Social-Science/Biochemists-and-biophysicists.htm

($80k MEDIAN pay with a Ph.D. considered as entry level. Mind you that distribution is probably skewed towards the lower end by post-docs)

All fun aside much of what you see as potential is decades away while the burn rate (and risk) to get there is enormous.