patrick.net

Fake P,

Thanks for trying, but it looks like this Troll is indestructible.

"Thanks for trying, but it looks like this Troll is indestructible."

Is it that difficult to ignore some comments? I can certainly ignore my inner voice which says, "eat more food".

Fake P, do you actually have a problem with me? :)

I have access to MLS (loaded on my computer from a friend) and have not seen prices dropping nor inventory really much different from a year ago. I feel paralized with what I should do and frustrated with trying to predict the market.

LeCas,

Since you've been lurking for a while, then you probably already know what I'm going to say, but here goes anyway:

--If you're buying long-term (not "investment" property/flipping)
--If you're NOT currently overstretching to make your mortgage payments
--If you did NOT get a NAAVLP(tm) which is in danger of adjusting upward by a large % in the near future
--If you can accept (psychologically/financially) the likelihood of losing some of your current "paper equity" assuming you have to relocate (again) in the next few years

...then enjoy your house and don't worry about it.

@HARM:

All my exact thoughts are belong to you.

Chewbacca,
prat

Prat -

Right back at'cha, bro!

LeCas,

It's tough fighting the herd mentality, but Keep the Faith! Remember, NAAVLP(tm) Kool-Aid = The Dark Side

Show her the Dinkytown Buy vs. Rent calculator: tinyurl.com/dfccg

All,

We're well past the "magic 200" threshhold, so time for new thread:
"Right Said Fed"

LeCas: If the majority of a whole generation gets priced out of homeownership then the subsequent generations will also be unable to pay. So who will the sellers sell to? Who will pay the prices for the houses?

This idea that nobody will be able to afford a house is as old as housing markets. I remember being told this in the 1970s and 1980s. The problem is always temporary.

Housing prices will peak in some places very soon. Others will peak later. Usually it takes about two years for every cyclical market to reach its peak. I believe that the fundamentals are such that this cycle will spread its peaks over only one year, maybe 18 months. Then prices will decline until 2009.

Jack: We will never have 100% of the population owning their own home. Some people will just never get there. But on average the market reverts toward the mean. Prices decline and incomes rise. This has happened over and over. It will happen again.

However, some areas are not for starter home buyers, and never will be.

I would not stretch at all right now. Prices should be lower or comparable in a few years. Why stretch now?

Style, spending and anti-style

Well that was a scintillating last post if I do say so myself - sorry hit enter accidentally. This is a great thread, I'm only just trawling through it all.

When I was in Sydney earlier this year I actually got really sick of how glam and cool everyone was. It was pretty boring as everyone was the same. I used to be the worst perpetrator of style, but a dose of having a child and living in the 'burbs seems to have worked some magic. I now see a lot of this spending as mindless waste. It is interesting tracking fashion though as it moves through the slick glam to the anti-fashionista statements where brands are pretty uncool now, but even the anti-brands cost a fortune.

The thing that is worrisome and makes the forces of anti-thrift pertinent is that companies spend an absolute fortune on working out the spending triggers. There was a great show called 'The persauders' - did anyone see it? It talked about specialists that worked with companies to find the prime motivators to get people to buy their goods. A conglomerate of luxury good companies had apparently used these techniques with amazing results. So, although I think people do need to get a clue and save some money it is hard when you are surrounded by trends and enough people and legitimate companies pushing the same message that you might not realize it's not a good thing to do. It seems 'normal'.

We are very near the top of the market cycle.

Does it make sense to buy now? That depends on your circumstances including your purpose or needs, where you are, your time horizons, and your finances. There is no single right answer for everybody.

I do not believe we will have a major decline in prices, so buying now or waiting a few years will probably make very little difference.

I personally don't want to buy but my husband hates the idea of renting and we can't stay in our current house. I'm actually hoping he does get a job in LA and I can convince him to rent for a while to let us look around. Then the market will be so depressing we won't buy for a long time (this has been going on for the last two years so it's likely it will continue). I think this is called a subversive wife maneuver:)

Jack - we own. Unfortunately it's a modest 3brm in the East Bay that if it were on the other side of the bay would be worth twice as much. That's what makes house hunting somewhat depressing. I find it hard to buy something if I don't feel that I'm getting some value for my money. It's just not logical and annoys me.

I sound like Spock. I don't think logic exists in financial markets anymore.

Oh and Scotty from Star Trek died today! Sad.

Jack, no Star Trek love? Society is crumbling around me...

On a side note, I was thinking about why I was so drawn to this blog when it's not something I would normally do. For me the housing bubble subject, while a little interesting is really a front. I like the fact that people on this blog (for the most part) are polite, caring and amusing. It's good to see, as the speed we all move at nowadays seems to circumvent the niceties of life.

Jack - you are an artist? Tell us more. I'm curious what others on this list do as well.

Jack - property taxes? Are you trying to get me to go to bed...I think it's working.

L:eCAS, don't be a piggy. Oink oink.

HARM. An English major? Criminy! Nice AG translation.

Zephyr, nice tag, all wind. I don't know where you get your numbers from, but, far as I have read, we "manufacture" in the sense that we still assemble parts that are brought in from elsewhere, but we don't manufacture from the ground up like we used to.

As for houses, we differ. I marvel at how crappy modern construction is. I think construction was at it's best in the 60s and 70s. The houses don't have major defects, and they weren't popping em out like a big McMansion machine outta Dr. Seuss.

My sister bought a 700k house, huge, new, 2 years ago. 1 year later, there's about 1/2 " of settling under the baseboard trim. The A/C system is ineffective, and the place just seems thin to me. Oh well, just my take. I'll take a 1970 colonial over a 2000 colonial with the huge difference in price.

Escaped: The manufacturing info came from an article in the Wall Street Journal this week.

Most houses in most decades have been fine. However, during the boom years during the 1970s and 1980s an unusually large volume of houses were disastrously defective. Everybody was suing everyone else about it. It was a zoo.

Oh and Scotty from Star Trek died today! Sad.

Oh no! I love Scotty.

I feel i know people here better than the ones I see every day.

This is why I suggest a party. :)

So far, only you and gabby have "replied".

I'm more than happy to come to a BA party...I have a nice rented house with a back yard!

I’m more than happy to come to a BA party…I have a nice rented house with a back yard

Cool

I wouldnt mind another ally either so that the bubbleheads dont gang up on me!

Convince Fake P.

Peter, it's a long drive for me, but if you make the party on a weekend and give me some advance warning, I'll try to be there. Btw, I like the idea of having it when we start seeing some negative price numbers in the BA.

Fake, I *dare* you to come and meet your nemesis, Darth Bubblehead!

So, Peter P, when something unpleasant happened to you, try not to ask others why, ask yourself first…:p

I am clueless. Please enlighten me.

HARM, where do you live again?

Fake P is most definitely invited. He is certainly not my Nemesis. (After Star Trak 10, that word has very bad PR)

Still don't know why he thinks that I am his nemesis though. I am rather moderate, no?

Paul_from_Oz, banks cannot lose right now because there is still liquidity in the MBS market. However, there are signs that the liquidity of the MBS market may be drying up. In that case, banks will be forced to hold the loans and they *will* care.

When this happens, it will be more difficult to get loans, the property market will be more depressed, and the MBS market may further dry up.

Suddenly, liquidity is not there when it is needed the most. But liquidity is always not there when it is needed. All participating elements in the market right now are both causes and effects. When homes are appreciating, they keep reinforcing themselves. When house prices are flat or falling, these elements will race to take themselves apart.

I am not an expert. Please feel free to poke holes in my theory.

Peter, I'm from Alhambra (7 miles east of downtown L.A.).

RE: Fake P. I think he *likes* being your nemesis, Peter. Don't spoil it for him ;-) .

Peter, I’m from Alhambra (7 miles east of downtown L.A.).

That is a LONG drive. Do you happen to operate small aircrafts?

Fake P. I think he *likes* being your nemesis, Peter.

Too bad. I actually like him. ;)

Hmm... a Jedi that refuses assistance and holds grudges... an open-minded dark-side that embraces differences...

We are in a mirror universe?

"Yes, a Jedi's strength flows from the Force. But beware of the dark side. Anger, fear, aggression; the dark side of the Force are they. Easily they flow, quick to join you in a fight. If once you start down the dark path, forever will it dominate your destiny, consume you it will, as it did Obi-Wan's apprentice."

--Yoda

That is a LONG drive. Do you happen to operate small aircrafts?

For the opportunity to meet my online friends, but a small price to pay!

For the opportunity to meet my online friends, but a small price to pay!

Perhaps we should have a Lost Vegas retreat instead. Then everybody's drive is no longer than that to the nearest airport. ;)

Nothing if not ambitious Peter P. Even seen the movie "Go"?

I see some bizarre twisted story unveiling if Vegas is introduced. And I'm not saying that's a negative by any means:) Sure I'll sign up if this is going to be the blog reality show.

Even seen the movie “Go”?

I actually have!

I see some bizarre twisted story unveiling if Vegas is introduced.

Perhaps you will win the jackpot and decide to buy a bigger house anyway? ;)

I rather admired Veritas's candor. He at least sees the unyielding temptations and knows from where they come (like he, I do believe
we are programmed ... commercials and advertisement are the most
subtle forms of mind control ... they try to influence or change the brand
that you buy ... if they weren't successful, advertising dollars would be
negligble by corporations, which is not the case).

The next step on his financial progress is to not feed these temptations.
You are what feeds you.

It may be "just me" but I think Marina is a confirmed troll. It is hard to say whether a market is going up or not when there is a divergence between median/average price and volume. This divergence is certainly not good news for those who think that the sky is the limit.