patrick.net

I really don't mind straying from exclusively housing related topics. To me, the housing bubble is already established and there's tons of better formatted information about it elsewhere. I come here for discussions about the economic repercussions of the bubble burst, economic survival strategies, and the interesting discussions on whatever.

What drew me to this site are the active participation of some very sharp and interesting people. I'm afraid the collegial atmosphere that existed for the last year or so may be coming to an end, regardless of what we do. The chemistry of what makes a website great is pretty fragile, and it's particularly difficult to maintain without constant supervision. I've seen it happen to Washington Monthly's blog. It was really great for the first 6 months, but then more and more troll went to it and now I hardly ever read it, and I never bother to read the comments.

If this site goes further downhill, I'll probably spend more time participating in Randy H and Brad Delong's websites.

As for buying real estate. I don't even think about buying for the next 5 to 10 years. Renting is not only cheaper, but more economically efficient and has a more economically transparent structure. If I rent, I sign a lease and I know that's how much my rent will be for the remainder of the lease and I know how much it'll cost to break the lease.

That's the sort of flexibility and certainty I'll need to survive the hard economic adjustments I see ahead of us. The next 10 years will be very punishing for any family or individual who is trapped in a high cost and inflexible lifestyle.

doodler,

I agree with you, but $100K bought a lot more than $700K today. Furthermore, the problems of buying 25 years ago was centered on high interest rates, which then proceeded to go down. The prices themselves weren't all that high and taking a percentage loss on the principal is easier.

I'm burnt on this housing insanity.

I'm confident that what goes up must come down.
The salaries and jobs just aren't there to sustain this
kind of BA insanity.

Just when you think prices will stay high forever, just when you're about
to collapse from exhaustion and disbelief...the wave will crash...
BLAM!

It's pure economic physics.

And don't this new market paradigm sh-t. There ain't nothin' new under the sun. A San Jose sh-tbox is all it will ever be. Just that: an SJSB.

"there was panic over getting “in” before rates got even higher!!"

I though buyers had adjustable rate mortgages during that time period.

Lower principals and higher nominal interest rates are very important. Even if they stayed the same, wages would go up. Thus, the mortgage payment and taxes would go down in real terms five or ten years onward. The lower principal means, as I've already mentioned, that selling for a percentage loss is not nearly as huge of a cost as it is nowadays.

Agree that a lot of the irratability is due to our dawning realization that the crash will take a long time.

The market has pretty much been flat for a whole year now. Declines are just around the corner, but MEANINGFUL declines appear to be quite a ways away. I don't know about you, but a 5-10% reduction isn't exactly going to make me run out and start placing bids.

Some of us don't want to wait another 5-10 years just to get a middle class house. The pace of our lives may not coincide with the pace of the market. I know that my eldest will be ready for school in two years, and I want to be out of this apartment by then.

That is what is making me grumpy, anyway. But it's a good thing, too. I have to make decisions instead of simply sitting and waiting for the market to change. It feels good to make a decision and take action. For example, I will be getting my Texas professional license in September. I am excited about looking for a job there. TX will have its share of drawbacks I'm sure, but I am CERTAIN that I can afford a decent house there. Right now, today. And as I begin to make preparations, the day when we will own a house seems to draw closer. That feels good.

Joe Schmoe,

Can you get a decent long term rental in LA at a reasonable price? I know you're concerned about being close to your parents-in-law so maybe a compromise short term solution would make more sense than a move to Texas. If housing is your primary concern with living in California, then I'd urge you to consider staying. Renting is not so bad and lots of kids grow up just fine in apartments and lots of kids in upscale subdivisions get into trouble. Parenting and the right school will matter more.

I'm not pointing this comment towards you, but I do think too many young people here are too eager to buy. Being stuck underwater on an expensive house is a terrible drain on one's life. Renting nowadays doesn't involve sharing walls or living in a bad neighborhood. Overall, I don't understand the need to "own" rather than to rent.