Submitted by DaCounselor on August 18, 2008 – 1:13pm.
My original post was in response to CA Renter’s (an admitted bear since 2001) post regarding being early is not necessarily being wrong. I disagree for the reasons I have already stated.
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Actually, homes in our old neighborhood (92057) are already below 2001 prices.
Even though I thought 2001 was a cycle top (for the regular housing cycle…NOT considering the influence of the credit bubble), we still held on and sold in 2004 when houses were selling within hours with multiple offers. The market cooled immediately after that, and prices topped out another $75K more than what we sold for — though sales took many weeks/months to sell.
We effectively “gave up” $75K by not hitting the exact top, but that wasn’t my intention in the first place. We wanted to move to a bigger house in a better neighborhood, but didn’t want to pay an inflated price.
In the meantime, we have been renting a nice 4/2 SFH in a very nice part of North County for $2,100/mo. (less than what we would have paid on a smaller house in a worse area if bought in 2004).
We made a 239% return on the sale of our house and **pocketed it.** That’s the difference between someone who held on and a bubble-sitter. We actually have the money and have made more by shorting the homebuilders, lending agencies, retailers, banks, ratings agencies, etc. on the way down. Those who held on in our old neighborhood have lost every bit of “equity” gained since 2001, and most of them are HELOC’d well beyond what they can afford…because they believed the hype.
