patrick.net

@MP: What can we say? You're just plain dead wrong about the demographics of the Bay Area, and of mortgagees.

I believe you are exactly what you say you are. You remind me of several people I have worked with in the last five years. You're a smart kid, and you know a lot of things, but you have a very very false understanding of the population outside of your condo complex, or your walk to work.

Live the dream while you can, dream the life while you can. But don't pretend that your reality can be extrapolated out into real life.

a favorite quote from the days of USENET...

"I've found it pays to be very, very, sure I'm correct before getting condescending."

Apply to affected areas.

Nervous in Oakland:

You nailed it with your post! I've added a few observations of my own

if they cannot afford to buy, how and why are they buying

1) Fear "buy now--before it's too late" Peer pressure from their circle too.
2) Weak lending standards. Let's see--IO/ARM/Neg-am. And this isn't a small fraction of today's mortgages either!
3) Low interest rates--Interest rates designed for flippers, plus the above. Think people will get stung? I do.
4) Stupidity --they do little or no research, and ignore obvious warning signs. What they consider a "great investment" could become a huge liability? Impossible, you say!
5) etc, etc, etc. Their little social club looks down on renting, so they miss out on a great savings opportunity during a rental glut.

...or, if you prefer, from Bend it Like Beckham (I only saw the previews, I swear!):

Shtop Embarasshin' yo'shelf!

MP, about the time you develop a larger awareness of your surroundings, you might pick up on exactly how banal your self-impressedness is to other (putative) adults.

@Jack: sorry, that was not directed at you at all. It was he-who-shall-not-be-named.

"...I still have a lot of work to do before i can balance some of your doomsday thoughts out, but i think over time, I will be able to make a difference.

Well, MP--thanks for the offer; we wouldn't know what to do without you. ;)
Next time I need to gloat publicly over my Primeâ„¢ location, I'll choose you as my spokesman.

It will be interesting to see if MP will ever show his face again here when prices do correct.

If things do drop, even in Primeâ„¢ locations, I doubt the cheerleaders will ever own up. If they survive the carnage, they'll downplay their losses, just like the dot-bomb. I think it's what keeps the bubble cycle going: cheerleading->denial, repeat. That is, until they're all bankrupt.

MP is most certainly a housing bull (horns ‘n all).

I don't think MP is a housing bull. I think he thinks he is. After all he is not looking to buy more houses right now is he? How do you think he will react IF (and I am not saying they will) Marina prices fall.

If , when, housing falls, then we will see who the real bulls are because they will buy buy buy!

(Not investment or reality advice)

quesera,

putative Great word. I had to look that one up to see what kind of adult I was. :-)

Whew! MP *does* make one tired with all the nonsensical talk. I feel like we can relax now. And no (to Nervous), I do not advocate that we pity him. *He* had become very obvious and wasn't worth any more energy. But very hard to ignore when you know you can prove your point to/with him. He's enjoying his "tapas" now with his gf.

Is it time for another topic yet? (picture a Garfield smiley face)

BayQT~

MP,
Tell them you want to raise rents to $3000 / month.

They will obviously complain, but in the process they will try to negotiate and will probably tell you their price point.......

How much increase do you think is enough so that they won’t want to move? I like them as tenants, but i want to maximize my assets.

What do you guys think?

Well, MP, as I have said earlier, it is very important to have good tenants even if it means slightly lower rent.

I would keep the rent, but negotiate to have them chip in for certain value-adding home improvement (perhaps some new kitchen parts, new bath fixtures, etc.). They may have something in mind anyway and it can be a win-win. When they become more attached to the place, they will likely to be good long-term tenants.

To us renters,
When your landlord tries to raise the rents, tell them you have been looking and have found cheaper rents and have been offered free rental periods as a teaser.

They may call your bluff, but hey, doesn't hurt trying because they might even drop the rent.

MP,

Antitroll.. i’d call my tenant’s bluff.. or perhaps instead of raising it by $100.. just by $50 to make them feel that got something.. and then have them sign a one year contract.

MarinaPrime

Problem is , what if they aren't bluffing. You know, petrol is going up, costs more to ... (insert winge here).

Maybe they don't want to live prime anymore.

I agree having better tenants for slightly less rent is better than nightmare tenants at any rent. Call me opportunistic, i guess.

Nightmare tenants are more than nightmares... remember Pacific Heights...

i’d call my tenant’s bluff.. or perhaps instead of raising it by $100.. just by $50 to make them feel that got something.. and then have them sign a one year contract.

Well, a good tenants usually will not resort to bluffing if the raise is justified. On the other hand, do not ever let your tenants know that you are going to "raise just enough so that they will not move". It is understood but it is not something to be advertised.

Jack, are you still up for the party?

Question?

When people sell RE to sit on the side lines, are people renting prime or finding economical rents to save money for the shakeout?

General question for people.

My deadline for selling the place is June, 2008.. when i get sell without paying taxes up to 250K. It’s kinda tricky for me.. cuz if i lock them in long.. .my tax free window may pass.

How about a call option for them to buy in Feb 2008? If the market drops they can walk so they will be fine. You do not think the market is going to move too much anyway so it does not hurt you. Win-win?

Yes, of course.

How about other? Party? How about September? (Not a crash party. Not a party crash.)

Forgot...

(NOT INVESTMENT ADVICE)

That last post didnt make any sense to me.( How about other? Party?)

If you are just saying how about Sept rather than Oct, that would be fine for me.

We can definitely have party in Sep. We do not need to wait for it to crash, do we? We can also have multiple get togethers too! (to accommodate people from different areas) :)

Well, for a call option to work.. we need to agree upon a strike price. I doubt they will agree to a price of $875-$925,000.. which is where i think the condo will go to in the next 2.5 years from around $775-$825K now… i.e. 5%-7% increase per year.

The strike price can also be indexed to some measures (e.g. 110% of SF median price). You can price the options into the rent as well. Of course, it takes a lot of talking... but it is very possible to arrive at something that both parties want.

(Your tenants are probably intelligent people and they are probably aware of the tax window anyway.)

Yes, and different choices of company also.

Let's see who is in the Bay Area "Chapter"...

MarinaPrime
Jack
Peter P
...

:-D

Of course we will have choices of company... don't worry, Jack. ;)

What this Jack vs. MP debate really comes down to is whether there will ever be a judgment day.

In MP's world, there never will be, so why save or worry? Everybody makes or will soon make $180-360k. Although every statistic I've seen (and every issue of the Economist) says that wages have stagnated due to cheap Chinese/Indian labor aribtrage, somehow this is all nay-saying by negative people who don't think with their heart. In MP's world, then it makes sense to stop thinking and love the bubble! Blow money on Porsches, $1M homes and so on because the party will never end, it will just get better. Want proof? Well if people couldn't afford the houses, they wouldn't buy them. Hey, I know ___ rich people. Got to go now, time to have my $500 chef's kitchen dinner. Think positive!

In Jack's (and probably my world) there is an end to the party and we want people to know about it. Our economy has been propped up by cheap money, and 2% of our 3.4% GDP is estimated to be RE-related. Oil prices are starting to cast gloom over everyone save hybrid car salesmen, and it's doubtful they'll come down much given worldwide demand. Greenspan is clearly trying to slow down the party with rate hikes, but (again, read the Economist) China's enormous dollar apetite means that China increasingly controls financial markets. All along our country has been jettisoning every long term capability (engineering, manufacturing, research, education) it can for short term profits it can make by shipping and Wal-Mart'ing wealth other nations create. We basically count on the fact that the rest of the world doesn't want us piggies to get sick because they rely on us to eat their slop. Not exactly a position of strength.

Given the latter, someone explain to me where all these sustainable $180-360k Si Valley jobs are going to come from. I'll give you biotech - but it's as fragile as tech. Explain to me how, EVEN IF rates stay indefinitely low, how even $180k salaried individuals are going to buy houses 5 years from now when 10% price growth doubles them again. How many people are saving up for that day? I just don't see it, and maybe, as Emporer Palpatine said, this is the price I pay for my lack of vision. Course he shortly went down the tubes.

Dont forget to invite Kurt S (I dont know if he wants to go though) I just know that Kurt S lives near me.

Of course--as long as it's at a Primeâ„¢ location, heh. ;)

Of course–as long as it’s at a Prime™ location, heh.

How about MP's house? (Hisplace, not the condo.) Then we could finally see what he's been incessantly bragging about --assuming it really exists, of course :mrgreen: . That'd be worth the 400-mile slog alone!

It’s quite possible, likely even, that there is not a single sentence of useful information amongst all of that verbage.

Huh? :roll:

Btw, Jack --loved the new acronym!
I'm adding it to the Bubble glossary thread, for posterity.

I have one request. When someone (MP at this time) starts to run the thread with a bunch of nonsensical BS couldn't we just ignore the comments? I left for a few hours and noticed that the thread had just exploded with activity, but most of it was directed at the most attention hungry poster I have yet seen. Remember, negative attention is still attention and that's what attention seekers are looking for. Let's disappoint them. Please.

SactoQT-

As I said I will ingore the troll from now on. You have my word on it.

Cool. :cool:

SQT-

I break my zen-like silence waiting for the inevitable 50% correction by next Wednesday to say...

*DING*

ooommmmmmmmmmmm...

Cheers,
prat

Prat

*sniff*

miss you :cry:

As the price goes up the price of modern life goes up. its not just about the gas station.

Just want to note that most of these extra money goes directly overseas, especially fundamentalist countries like Saudi Arabia. It is more like taxation by a foreign entity.

Prat, how is golf?

Are you up for the party?

SactoQt, will you join us?

It is more like taxation by a foreign entity.

Here in Oz, the government gets a fair chunk of the price at the bowser.
Does the FED GOV get excise or anything like that in US?

SactoQt, will you join us?

Depends on the husband/babysitting factor. I can try.

Depends on the husband/babysitting factor. I can try.

Spouses are always welcomed. We will try to accommodate everyone as much as possible. Or... we can have the party at your house... ;)

Just kidding.

Or… we can have the party at your house…
I can barely get people to drive in from downtown Sac. The BA would be a neat trick.

I just looked at my post, and I'm not sure it even makes sense. I guess I'm getting tired.

Here in Oz, the government gets a fair chunk of the price at the bowser. Does the FED GOV get excise or anything like that in US?

It varies, but state + federal taxes comprise about 30% of the price of gas in the U.S. (more in CA due to byzantine regulations & anti-pollution seasonal formula changes): tinyurl.com/387rj