FLU is a funny guy. He’s resigned himself to having overpaid for his house; but he seems like a guy who would shop and shop before buying his new HDTV, car, carpet, hiring a baby-sitter, or whatever.
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yes, that is the asian irony…My blood makes me squander pennies while missing out on the bigger dollars 🙂
Actually. Out decision was pretty planned.
Buy a SFH and dump two attached homes in two different high cost CA locations prior to marriage.
Neither of us wanted to be landlords right after marriage, tax free cap gains, and a SFH was still 25% less than two..Haggling with the seller who fell out of escrow twice $60k down from his asking was just icing on the cake…..
I guess completely cashing out in RE and just renting would have been an option….But some observations.
…5 years later rather than living in my home, I would have the option to purchase my neighbor’s down the street which just closed about the same purchase price what we paid in early 2004
….Or I have the option to get into a bidding frenzy with those REO’s in CV right now. I forget how many there are….
….5 years later, I’d still like to see a CV average comp in 2600-2800sqft significantly lower than 03-04 pricing…Let’s knock off $100k…How many 2600-2800sqft listings are there that is $700k or lower listings in Torrey Hills, Carmel Country Highland, or old part of CV NOT along 56?
….Also, 60 months * $3k in rent. That isn’t an insignificant amount of money. It’s not like you have no cost by not purchasing (compared to buying a TV where you simply can choose to not spend)… You aren’t living for free (unless you happen to be a squatter or someone that took out a mortgage and refuses to pay moratorium after moratorium).
Yes yes, if we put that “extra money” in investments, it would have earned 10%…Oh really? Did most people earn 10%+ consistently between 2004-2009?
….The bonus question is (which I don’t haven an answer for)….How long do people think it will take for 2600-2800sqft SFH in CV to reach say $650k or lower? And what will interest rates be then? Are these government interventions (which are surely not going to stop a price decline) going to continue to cause a slow trickle versus a steep drop like so many of us (inclusive) are hoping so that we can get back into the RE game? Is inflation going to eat into our savings? Is the average investment for the average person going to outperform inflation? Is there a point when a sustained slow trickle price decline plus a slow uptick in interest rates plus eventual inflation will be a wash compared to slightly “overpaying” up front?
By all means, I’m not advocating buying right now..Personally I think it’s a terrible time to buy in most higher priced areas especially if you’ve been waiting since 2003/04/05…Prices haven’t fallen far and fast yet, you already waited 4-5 years. If you enter now, you’re paying almost as much as you did back in 2003/04(not 05)…which is still inflated… and on top of that you also spend the past 4-5 years renting. Sit it out. Wait for the government’s insanity to stop. Hopefully, when the dust settles, home prices are more reasonable in these higher cost areas. I’m not touching RE for some time until a lot of these government muckery subsides.
As far as why I penny pinch..Well, got to do it somewhere…Otherwise, I’ll end up like so many broke americans.
