patrick.net

OK so the Dems strike again, it doesn't matter to me anyway, I wasn't counting on getting anything.

Patrick,

I think I got an email from you - which accidentally got deleted. If you have sent an important email, please resend it. Sorry for the trouble.

Folks, I had to paste this here..more of this sh*t is coming in my mailbox every day lately from used house salesmen.

Five Reasons Houses Beat Stocks

Despite what Wall Street wants you to believe, owning a home isn't the same kind of investment as stocks or bonds. What you get is a USE asset that depreciates over time, while it grows in market value. All you have to do is keep the home in good repair to max out your take.

Here are five reasons why you get more for your money with a house than a worthless sock puppet.

Leverage: with stocks, you put in all your money for a little piece of a company. With a house, you put in a little money to get all of the house.

Tax benefits: Uncle Sam knows that owning a home is a pain in the neck, that's why you get subsidies. These are basically government bribes to get you to buy. What other investment can you put in 5 percent of the cost of the asset, reap all the appreciation and pay no capital gains? That's right: live in your home two years, rent it for three, sell it, and pay no tax on capital gains up to 250,000 for singles, $500,000 for married couples. And you're worried about paying too much?
And that's not all - think about the benefits of fixed-rate mortgages, property tax write-offs, interest rate deductions, depreciation. Is this a great country or what?

Control: When you buy stocks, you're paying some CEO 500 times the average worker's salary for results you'd lose your job for. With a home, you have control - what you buy, how much you pay, and where you live. You can improve the value with repairs and updates. Compare that to getting heard at the next shareholders' meeting.

Lifestyle: Do you want to look at a dumpsite or your children playing in their own back yard? With a home, you're purchasing a vantage point for yourself and your family. The neighborhood you want to be in, the size and style home that fits your needs. And the more wisely you choose, the better off you are.

Value: Unlike our little sock puppet friend, your house will seldom become worthless. Barring a catastrophe, your home will retain a major portion of its value, even in the worst of times. So don't freak out about a losing a few percent this year. You'll make it up. Housing has lost value only one year out of the last 35. It's more normal to beat inflation by one to two percent.
Let's get a little perspective here. You lost a greater percentage on the stock market this year than if you owned a house. You lost more on your SUV. And you sure lost more on your iPhone.

And keep this in mind -- when it rains, which would you rather have over your head, a roof or a stock certificate?

Written by Blanche Evans

And keep this in mind — when it rains, which would you rather have over your head, a roof or a stock certificate?

Got to hand it to the man. This was definitely a new bottle for the old wine. Yeah, my rental does not have a roof, so I need to go out and buy a 1M raincoat. Raincoats never lose their value, do they ?

I would agree with these reasons. Just because the timing isn't good right now doesn't change the fact that home ownership has specific advantages over renting during normal times.

I hope to see everyone here eventually own their home. I've never viewed Patrick.net as an anti home ownership site, I've always viewed it as a housing bubble site. There is definitely a difference.

it seems like CA has about half the years being 'good years' to buy RE and the other half the time its bad

Good: 82-87, 93-2003
Bad: 88-92,04-08+

land on a bad a year and it could wipe you out, land on a good year and you will be well positioned for the bad years. if you are lucky in the game of CA -you get to be 'trapped in your house' by prop 13 and cannot move or sell due to fear of prop tax going up tenfold. whata game.

Original link for the 5 reasons piece is here:

http://realtytimes.com/rtpages/20080102_fivereasons.htm

HARM said:
Even so, I take issue with the idea that ZIRP or 1% FF rate was somehow “necessary” or “helps” the economy avoid recessions.

I would in fact argue that ZIRP "hurts" the economy by artificially reducing the cost of capital to the point where it gets misallocated.

Instead, if interest rates are higher, any venture that is careless with capital is more quickly extinguished before it can squander it on unproductive or speculative bets.

I think it's a mistake to view Lockhart at OFHEO as a problem. He may be one of the few responsible parties in this mess - appointed to clean up policy and accounting at the GSEs and that's exactly what he's done.

When it became clear the conforming limits could be raised, he registered his disappointment, yes, but also made it clear anyone thinking the GSEs would become a dumping ground for ailing jumbos will be far more disappointed than he is.

Tanta over at CR says he's a straight shooter. I can't offer much better recommendation than that. The guy's nobody's stooge.

coretexity,

And do you KNOW... what Blanche (the douchebag) Evans can Do with her sock puppet!

"So don't freak out about losing a few percent this year. You'll make it up. Housing has only lost value in one year of the last 35."

And what year would that be Blanche?

"You'll make it up"

And what DECADE would that be Blanche?

Oh and don't worry, no one is "freaking out". They have a new web-site that takes care of all this (it's called "justwalkaway")

Bruce,

I totally agree. I know it's easy to get on the 'GSE's suck bandwagon' but he clearly and forcefully made his position on the matter known well prior to it being passed!

http://www.mercurynews.com/ci_8193840

"I've obviously had to eat my 'soft landing' words," said Leslie Appleton-Young.

It would be wonderfully ironic to buy a house so that you get time to blog on a housing crash site. And if you buy multiple houses you can blog as much as Casey Serin !

Fyi: I moved because my company relo'd me, not because I was disatisfied with my old rental. In fact, in the past 14 years, I've only moved twice. And, I have not rented from a property mismanagement company in that time --only old-fashioned, buy'n'hold private LLs who like quiet, clean tenants with good references. I highly recommend this approach --especially in CA.

Oh, and, yes, Hillary really sucks. Or... perhaps she doesn't ? (Sorry --just *couldn't* resist going there.)

lunarpark,

Of course the Merc had to throw in the usual, line about how the Bay Area is faring much better than the rest of the state. It wouldn't be the Merc without mindless cheerleading, now would it?

Just got a call from an ex-colleague who is semi-retired and does software contract work on the side. The company he was at just canned a bunch of contract workers last Friday, and he also heard of contractors being let go in large numbers in other places in the South Bay.

Given yesterday's news from CSCO, this can't be good news for Silicon Valley high-tech employment numbers - although it probably won't show up in the "un"-employment data because they were on contract.

Remember the thesis about "fortress will crack when dual income tech families lose jobs"? Grab a seat. It is starting.

Hm, an acquintence in the BA is a contract worker. He writes software that's half code, half bugs, backdoors, logic bombs, etc so he is sure to get paid. He admits this freely, with an evil grin.

Now, buying/selling on Ebay is pretty skanky, but the realities of being a software contractor are not any prettier.

Playing a banjo for tips on the street comes off as quite noble by comparison!

Hmm yes yet another good point - since they're contractors and self-employed, they won't show up in the numbers, just like I don't. In fact I saw this mentioned on tickerforums or somewhere, that the self-employed are taking a big hit.

Malcolm 10:26PM - that needs to be written in gold leaf at the top of the page!

I agree 100.0000%

HARM, Randy, Patrick et al:

I'm still up for the blog party Fri 5pm. I trust Patrick has everyone's email address if anything should change.