San Diego Housing Bubble News and Analysis

Alright... Don't hate the messenger here...But I'm curious....

For some of you folks, taking a look at the 201k's, stock investments, etc, you're seeing some red. For some it's a lot of red.

I'm just curious. How many folks financially would be about better off if they either bought their primary homes with a inflated price versus held out in their investments?

I would hope folks be frank about this. Because I'm quite curious. It just seems like some folks waited are waiting for that 40% correction in RE, while their 401k/investments have cratered. I'm wondering if anyone has run the numbers yet as to which one would have been better: taking the money out of the investments for a downpayment and purchasing in 2004 ish or not....

Of course, several of you are in cash positions, so that's good.

Sold all my RE in early 2007. Been cash ever since, except for about 20% in gold and a few grand in the market for entertainment. This storm has legs that will probably extend into 2011 or 2012. I may actually jump in and flip a few low-end places early next year if I get the right deals on them. Cant believe I just wrote that.

It's not just losing the house down-payment and house equity that hurts.

It's the month after month, for 30 years debt servicing that will kill most folks who overpaid.

No matter how much equity or non-equity you have in your house, if you miss a few mortgage payments, the game is over.

A whole lot of folks -- 27% of homeowners with mortgages in CA are now in negative equity positions -- overpaid for their houses and lost money in their 401Ks

Even if they don't lose their houses and somehow make it, they are a whole lot poorer for their bad real estate decisions.

Generally folks don't leverage the holy heck out of their 401K or their brokerage investments.

I got lucky on both fronts...

Bought the house I grew up in, from my dad, before the peak of the bubble. (2003) (And got the sweet prop 13 tax rate)... House is now worth about what I paid. No regrets on the house - it's a good house for my family.

I got scared about the market and moved my non-401k money to cash in Jan/Feb. Moved 1/2 of my 401k to cash at that point. Moved the last of it to cash in August... I'm down in my 401k - but not nearly as bad as most of my coworkers. (16% hit still hurts, though.)

In this case - being scared about what I was seeing was good. Now comes the tough part - figuring out when to get back in, and what to invest in.

I doubt that there is a way to justify buying a house in 2004.

I think it is hard to calculate the result (but anyways, I didn't buy a house in 2004). What's your answer FLU?

And also...., to the Great Ronald Reagan....

(just a Palin figure of speech for adding something)

.... the majority of people who bought at the peak did not put anything down. So they only have their good credit to lose for a few years.

If the preponderance of the population's credit is shot (as is the credit of all the banks'), it's it no big deal anymore and becomes the norm.

Remember, the lenders grade on a curve. Responsible Piggs kill the curve for everyone else. Good thing there aren't too many of us. ;)

Still renting and cheaply compared to others I guess, although it doesn't seem cheap to me. Pulled 1/2 of my 401K out of stocks a little over a year ago (almost exactly at the peak) wish I had put it all into cash/bonds. So I guess I consider myself lucky. Now if interest rates go down while I wait for the RE bottom (and if I stay employed), I will really be blessed.

Left all of my money in my 201k. Don't know how much I've lost but 40-50% wouldn't be unreasonable. Since we had no good options and a douchebag of an administrator, I just eat the loss and make it up in my IRA's.

I've been short now since early 07, and see no reason to go long. Contrary to Rich's paper, I do not see that the market as well priced for long term returns.

Josh

Unless our foreign creditors decide we're just not worth the risk.

Poll: How many of you would have been better of getting punched in the throat vs. kicked in the nuts?

I think it would have been better for me to have bought a bigger house. Honestly... Though you can't really take out a retirement account before you retire without stiff taxes and penalty.

My property has come down about 250k. It doesn't bother me and I want prices to come down more. If I had a 401k that did the same thing I think I would be kinda sad. I see a lot of homeowners with 401k's and they were happy until recently. Maybe just because the shock is more sudden and screws up more plans.

By all means protect the gonads and larynx.