Still feeling roudy after some good friday night bar hopping? I think you over generalize by inferring that all bubble blobs are visited by disenchanted people. The population who post here are not all just waiting for the best time to buy (which would include me). They are also realtors who have an interest in knowing the pulse of the market, and recent sellers who did make a killing and are offering their experiences. The people who dominate in these forums are rather smart in the area of real estate economics–sour pussies they are not. I think you’re feeling insecure about someting and need to go on an attack. My guess is that you’re resenting the fact that buyers are not buying into your “real estate always goes up” mentality and you’re about to lose money, so it may be you who is the bitter one (1).
(2) You’re not being very coherent here. People make purchasing decisions based on what their needs and abilities at the time–no one can control interest rates, and in most cases you can’t time your decisions on it. You appear to argue that ARMs are a bad idea. Yes, most people say the same thing, especially in light of the fact that people foolishly gave up their 5 or 5.25 fixed loans for teaser rates that would reset in a rising interest rate market. But this forum is not populated by people commisserating on their ARM loans–in fact they’re probably more focused on either selling their homes or fixing their finances, not blogging.
(3) I am assuming you’re talking about down payment. Appreciation is relative to the purchase price, not the down payment. Other than PMI avoidance, you make a larger down payment so the bank charges you less interest, and that you have more cushion to keep yourself from going upside down on a loan.
(4) True, you can’t predict bottoms in advance, but you can know that you’ve already past it (with various degrees of certainty) and can still make decisions accordingly.
You seem to hold people who take financial risks in high esteem and look down on people who really work hard for the money and thus don’t have the disposable income to gamble with. Risky behavior in the stock market, on average, loses money.
In general, I think you’re stuck on the delusion of grandiousity in that “this market can do no harm” and “prices are high simply because they are.” I believe all markets have cycles. The fundamentals support this also: the population isn’t changing (except for immigrants from the south who aren’t participating much anyway), and incomes aren’t either. The market you see started from extra cash floating around (investors moving away from the stock market, and low interest rates), and was continued by panicky buyers afraid of being left out of the game. What happened next is that the 1. cycle naturally ended 2. interest rates went up and 3. way too much supply as a result of builders building too many houses and people leaving San Diego. This is a perfect storm that is causing more hurt for people who bought recently than the ones who sat out. The people who sat out and rented instead aren’t putting their families in financial jeopardy, so you may want to think through your pompous criticism of this class of people.
The mistake made in this market has not been buyers being too chicken, but rather the other way around: buyers borrowing money they could not repay.
Yes, there is fear in the market. And like a shark you smell blood and go in for a kill because it satisfies your juvenile ego. If you think having balls and partaking in a risky market is a noble thing, then someday your luck will run out, and it will be the careful planners who will be able to retire in comfort while you are standing in line for your next social security check.
