patrick.net

>Don’t you already OWN a house?

Technically, no (mom does and I should inherit that unless Medicare liens the hell out of it).

Proud renter since 1986, LOL. Going to Japan straight out of college kinda took me out of the game, alas.

Coming back in 2000 right into the teeth of the dotcom bubble I wasn't prepared financially or knowledgematically to buy.

Shoulda bought in 2001 in retrospect, right when interest rates were still over 7%. You could get a very nice 2/2 condo in the good part of Mountain View for $350K back then, right when AAPL was down and GOOG hadn't made their move yet.

Part of the problem was I had a pretty good deal with a friend renting for $700/mo, didn't want my housing expense to jump from that to half my pay.

sybrib says

Fortress Neighborhood enclaves are priced mainly by the purchasing power of wealthy foreigners /immigrants

While they are one source, I think the enclaves will also preserve their value by keeping their shit together while the borderline areas become much worse living spaces. This unravelling will serve to reduce the supply of competing offerings.

But all bets are off if they actually start boosting taxes back to Clinton levels or worse.

Ah, who am I kidding. We're going for the Brasil model of 5% enclave class and 30% middle and 65% favela.

Troy, you're a renter renting SFH or condo w/ roommate who is paying $700/mo? Is that right?

And a question for you. When will you buy your own? When certain conditions met your expectation? or do you have certain things in mind or have your eyes on?

Troy says

>Don’t you already OWN a house?
Technically, no (mom does and I should inherit that unless Medicare liens the hell out of it).
Proud renter since 1986, LOL. Going to Japan straight out of college kinda took me out of the game, alas.
Coming back in 2000 right into the teeth of the dotcom bubble I wasn’t prepared financially or knowledgematically to buy.
Shoulda bought in 2001 in retrospect, right when interest rates were still over 7%. You could get a very nice 2/2 condo in the good part of Mountain View for $350K back then, right when AAPL was down and GOOG hadn’t made their move yet.
Part of the problem was I had a pretty good deal with a friend renting for $700/mo, didn’t want my housing expense to jump from that to half my pay.

Guess that raises the question, then: If it's such a great time to buy, and such a great hedge against inflation, why haven't you bought?

seaside says

who is paying $700/mo?

That was 2000-2004. Pretty sweet deal.

I haven't bought for several reasons.

Foremost, being semi-retired / self-employed I can't commit to a hefty mortgage payment now.

Also not entirely committed to staying here in the states much longer. Going back to Japan or trying my luck in Canada or some other socialist hellhole like Germany is kinda attractive.

I think the fix is in & there's going to be increasing pressures towards outright economic collapse here; the 2012 election going the wrong way wouldn't surprise me, bringing us another 4-8 years of creative destruction to round out the decade.

But if I could afford to commit to a mortgage, I wouldn't mind getting a nice place that I wouldn't mind getting "stucco" in -- a doomstead in Bellingham, Santa Cruz mountains, Sierras, or the nice part of Fresno.

Chances are we'll bumble through the next 20 years with prices doubled like what happened in the 70s. Prices TRIPLED between 1974 and 1994. If the PTB can get that amount of inflation going, and if this inflation pushes up wages or just pushes down homeprices, dunno, but betting against the Fed -- probably the most powerful single entity on the planet -- is generally a losing bet.

In those zips as soon as prices go down you'll be outbid by someone with more money than you.

xenogear3 says

while (1)
{
x = monthly payment if buy the house;
y = monthly pay check;
if (y > x)
{
buy the house;
smile;
break;
}

Poor error handling in that one: what if y is only 1 dollar greater than x? What if y suddenly goes to zero? What if x increases?

I prefer x = total monthly cost of owning assuming 7 years, the average actual length of ownership; y = cost of renting the same thing. It still may be too high for your salary, but at least you'll save money each month compared to the alternative.

Troy says

seaside says

who is paying $700/mo?

That was 2000-2004. Pretty sweet deal.
I haven’t bought for several reasons.
Foremost, being semi-retired / self-employed I can’t commit to a hefty mortgage payment now.
Also not entirely committed to staying here in the states much longer. Going back to Japan or trying my luck in Canada or some other socialist hellhole like Germany is kinda attractive.
I think the fix is in & there’s going to be increasing pressures towards outright economic collapse here; the 2012 election going the wrong way wouldn’t surprise me, bringing us another 4-8 years of creative destruction to round out the decade.
But if I could afford to commit to a mortgage, I wouldn’t mind getting a nice place that I wouldn’t mind getting “stucco” in — a doomstead in Bellingham, Santa Cruz mountains, Sierras, or the nice part of Fresno.
Chances are we’ll bumble through the next 20 years with prices doubled like what happened in the 70s. Prices TRIPLED between 1974 and 1994. If the PTB can get that amount of inflation going, and if this inflation pushes up wages or just pushes down homeprices, dunno, but betting against the Fed — probably the most powerful single entity on the planet — is generally a losing bet.

So there will be an economic collapse, but home prices will triple? Interesting theory.

A local radio station plays clips from comedians every hour; the other day's was a guy bitching about being approached by a man with a sign that said, "I'm broke. Need $$." The comedian said, "he's not broke. He's EVEN. He should man up and get about $20,000 into debt, then we'll talk."

funny stuff.

Nomograph says

I didn’t know there was a nice part of Fresno.

: )

As a low-cost base to do my work it wouldn't be bad.

I kinda regret not being able to buy this place:

last year before it sold for $375,000.

http://www.zillow.com/homedetails/2117-W-San-Jose-Ave-Fresno-CA-93711/18707515_zpid/

While it zillows for $350,000 now (its pre-bubble valuation) the difference between $350,000 and $375,000 is about $100/mo starting out and over the life of the loan the TCO difference works out to ~$2/day.

E-man says

It’s right by Japan Town in Downtown San Jose. Sounds like a good fit for you

Trying to stay away from that side of town . . . not the best place for the Doomstead . . .

Wow. Love the old BBC clips they are awesome.

http://www.zillow.com/homedetails/2117-W-San-Jose-Ave-Fresno-CA-93711/18707515_zpid/

That is a nice house.
I thought everything in San Jose costs $800k+.

Is this a safe location?

Edit: It is San Jose Ave. but not in San Jose :)
This explains why it is so cheap.

Those were classic BBC clips, thanks for sharing!

xenogear3 says

http://www.zillow.com/homedetails/2117-W-San-Jose-Ave-Fresno-CA-93711/18707515_zpid/

That is a nice house.
I thought everything in San Jose costs $800k+.
Is this a safe location?
Edit: It is San Jose Ave. but not in San Jose
This explains why it is so cheap.

LOL! somehow peoples view that higher prices secure a safer neighborhood is dreadfully been skewed post 9/11.

Anyway, a couple homes from your above address a +3600 sq ft home is sold for $300K..a very good deal. And certainly $300K is more inline with incomes even for SV.

http://www.zillow.com/homedetails/2145-W-San-Jose-Ave-Fresno-CA-93711/18707517_zpid/

Price History
Date Description Price % Chg $/sqft Source
11/19/2009 Sold $300,000 -14.3% $80 Public Record .
10/11/2009 Listing removed * $349,900 -- $93 foreclosure.com
09/17/2009 Price change * $349,900 -5.2% $93 foreclosure.com
09/04/2009 Listed for sale * $369,000 -- $98 foreclosure.com
04/10/2009 Listing removed * $369,000 -- $98 foreclosure.com
04/07/2009 Price change * $369,000 -7.5% $98 foreclosure.com
03/06/2009 Price change * $398,900 -5.0% $106 foreclosure.com
02/07/2009 Price change * $419,900 -4.4% $112 foreclosure.com
01/10/2009 Price change * $439,000 -2.4% $117 foreclosure.com
12/13/2008 Price change * $449,900 -6.3% $120 foreclosure.com
11/05/2008 Price change * $479,900 -4.0% $128 foreclosure.com
09/27/2008 Listed for sale * $499,900 -33.3% $133 foreclosure.com
04/28/2006 Sold $750,000 42.9% $200
06/30/2004 Sold $525,000 90.9% $140 Public Record
01/09/2002 Sold $275,000 -- $73 Public Record

I looked into this. They wanted to put $150k repairs into a $450k house that my builder friend said should be torn down (it would be better and cheaper). When speaking to the proposed contractor, I asked if I could make changes, like "I don't want to put $20k into a kitchen that I plan on ripping out to expand the house". No dice.

He said the most important thing is to say what you do, do what you say. So if the bid says "install 20x20 linoleum", they will check for that. He also mentioned that repairs have to be done in a set timeframe, which makes any changes to the project almost impossible.

In the end we walked on this house - just wasn't worth the price.

It depends on where and what segment of the market.

Lower end housing certainly may continue to increase in certain areas, though the thought of mid-high end homes going up in pretty much any area is downright laughable.

Mid-high will continue to slide.

RayAmerica says

higher interest rates always lead to an increase in real estate prices. LOL

And apparently, lower ones do as well!!!!

These 3 plots clearly show a delayed correlation between the asking and selling prices,
and the prediction that ongoing increase of asking prices strongly predicts higher selling prices few months down the road appears well-established.
The question remains, though, to what extent BOTH these trends show the price of SAME properties (aka Case-Shiller) rather than an effect of changing mix of offered or sold properties, such as the shift of deals to better neighborhoods (e.g., due to foreclosure and short sale activity going upmarket).

Asking prices here in the Inland Empire are dropping, on average 5% from 6 months ago. The list of homes for sale is growing and homes are staying on the market much longer than they were 6 months ago.

justme says

Here’s the deal: The housing market is and has been on Government+Fed life support ever since 2007. Any price increase is dependent on still further “heroics” from Government+Fed in concert.

Does government interference somehow create a strong correlation between asking prices and selling prices 3 months later? That wouldn't have been there? Because I don't see what the point is otherwise...

Uh, sorry, Mr. Lawrence Quackenyun, but your data is noisy. We're all proud of you that you discovered Redfin, but those are charts of the individual CITIES, not the regions. A much better source is Housing Tracker, which tracks asking prices for REGIONS. And if you had bothered to look there, you would have seen that asking prices are in fact going DOWN for all the areas you referenced.

http://www.housingtracker.net/asking-prices/los-angeles-california/

http://www.housingtracker.net/asking-prices/san-diego-california/

http://www.housingtracker.net/asking-prices/san-francisco-california/

http://www.housingtracker.net/asking-prices/san-jose-california/

So now that we've established that you're dead wrong, I don't suppose you'll admit that the CONVERSE is true, that falling asking prices precede falling sales prices? No, I didn't think so.

all i see are red lines (sold $/sqft) heading down or flat; and we're not even in the softest months for sales.

prices will continue to crater this christmas/january.

yay.

robertoaribas says

Sales are down, prices are down, who cares if listing prices on average are going up for a couple of months?

But they AREN'T even going up. See my previous post.

Danix ---

Changes are permitted while in the 203k process. This happens all the time, which is why there is a form called the Change Order form. This form allows for changes to the originally approved contractor proposal.

The shorter term, the info and or observation seems correct, BUT still in five years, much lower prices all of Ca. IMHO

Terrible time to buy in California. I wouldn't buy now. I'd wait for at least two more years before buying.

justme says

Personally I don’t think either one of these types of ASKING prices are good predictors of selling prices. We shall see.

No, probably not. Sales volume is a pretty good leading indicator. Asking prices? I'm skeptical.

"Semi-fast food Chipotle-style Asian"

I'm sorry, but exactly what is that?

Liz Pendens says

“Semi-fast food Chipotle-style Asian”
I’m sorry, but exactly what is that?

pei wei?

Running a regression on the delta is more reliable than eyeballing the chart to see what you are looking for. Also, if you are trying to correlate data that (per your hypothesis) has a phase delay, plotting the rate-of-change of that difference will show the pattern more clearly.

My recommendation is to partner with someone that has worked in the restaurant business for several years, both as the employee and management side of house. As for the type of food, it really doesn't matter, so long as the area supports it. So an area predominately Chinese or Central American for have a corresponding number of restaurants to support them. It's a brave sole that puts a Italian restaurant in a Central American neighborhood or via-versa. Franchisees are generally more successful, but it may have more to do with the owners being better financed than your typical no name restaurant than any name recognition, food quality or management style. In order to get McDonald's to even talk to you, you have to have 300k in the bank.

native94027 says

Running a regression on the delta is more reliable than eyeballing the chart to see what you are looking for. Also, if you are trying to correlate data that (per your hypothesis) has a phase delay, plotting the rate-of-change of that difference will show the pattern more clearly.

but that would show idioticwordsofgod doesn't know what he's talking about and we can't have that

Those McMansions in the desert were mostly sold to investors.

Sounds like you're seeking a cash poor partner you can exploit. What happened to your outrage over the exploitation of the working class and middle class? I'd like to think successful businesses provide strong incentives and a good working environment - the partner needs a vested interest in the business taking off instead of failing like most do. Try a culinary school - interview top grads, etc.

TechGromit had good advice except I would say that not all franchise opportunities take off. I have in-laws who invested in an urban, hip type coffee franchise in Park City, UT. It didn't die a horrid, epic death....but they closed it eventually. Competition in food service is tough. Still, I'd agree that franchise opportunities are less risky than going out on your own. Way more expensive to start-up, but less risky. Panera Bread wants $7 million in assets, $5 mil of which has to be liquid. Chipotle has got to be similar although I don't know.

If you are going for Chipotle style Asian...I'm assuming you mean Asian with quality organic and local ingredients where possible. Get a chef who can make some crazy good Asian and make it Asian fusion so you aren't just an organic version of Panda Express.

For goodness sake, forget English food. It's great that you may enjoy it but the vast majority of American palates don't seem to enjoy English food - the Brits are getting better but that is mostly b/c they have really embraced other culture's cuisine - like Indian. I had fish and chips once....only because I was in London and it is kind of a standard fare, served in a newspaper cone. It, like most other dishes I have had over there wasn't particularly good. You probably have noticed that there aren't exactly a ton of English or German restaurants...there might be a reason for that. Plus it's fried and not healthy. Subways are thriving these days b/c people are finally making an effort to eat healthier. Long John Silver's isn't around anywhere that I've seen in quite some years. If you go with your passion for English food....get a liquor license and make it an English Pub. Drunk people don't care as much about calories.

You already know you need a good location. I like the idea of something next to an large office building, be it government or corporate. If you are a no-name / no reputation place, office workers might try you just out of boredom from their regular rotation. If your food is quality, maybe you get a following. If you deliver to the office floors, better. Be prepared to lose money for a long time. Chipotle and Subway make money because they is always a line.

Good luck if you explore it further and go for it. It's too risky for me but if I had lots of extra cash I could afford to lose, I could see trying it.

SoCal Renter says

We are not looking at another round of falling prices.

Depends on the macro.

Taxes going up? Prices go down.
Gov't employment cut? Prices go down.
Double dip? Prices go down.
Debt crisis pushing interest rates up? Prices go down.
Civil unemployment gets worse? Prices go down.

We are in Japan Mode now -- QE, ZIRP and massive budget deficits, two things that are being demagogued all to hell now.

http://research.stlouisfed.org/fred2/series/CE16OV

People knock the 70s for stagflation but there were 20M jobs added.
The 80s got a slow start but we saw another 20M thanks to Reagan's Keynesian spending.
The 90s saw personal computers and increasing international trade, another 20M jobs.
The previous decade however, we hit the wall thanks to trying to fake our way with a bubble economy.

Household debt, 1970-2010.

I don't follow the restaurant industry much but I do know casual upscale fastfood restaurants like Panera Bread and Chipotle are taking off. What is the secret to their success?

I think it is a great time to start a restaurant. The choices for location and lease terms are better than ever.

dittomichel says

Sounds like you’re seeking a cash poor partner you can exploit.

I think you view this too negatively. You seek someone with industry experience who you think have a chance to be successful (cooking, management, people, budget, customer service qualities) and you promote them to a position with more responsibility. Obviously giving them shares will give them financial motivatation as well. It's a prospective win-win. Business transactions happen because both party gets what they want.