Wow! You really touched a nerve! 3 pages of responses in one day. I can’t even read them all. But I have to say, never take advice from someone then blame them when the advice turns out to be bad. Make your own decisions, and take responsibility for them.
The truth is that you have a lot of things right. There are a lot of posts that are absurd in “the sky is falling” arena. I take those with a grain of salt though. Or I assume that there is some sarcastic humor behind them.
“People all say wait a year or two to buy. I have heard this since 2000 and its 2007…”
No one is more surprised about the how long and how high the current rise has lasted than “intelligent” investors. However, you are right that no one has a crystal ball so everyone gets blindsided at some point. Keep in mind though, the argument that “it hasn’t happened yet” seldom lasts long.
“The bottom line is if you can afford the home, buy it, else move somewhere else or lower your expectations.”
This brings up the topic of affordability. Most, yes most, people who have bought homes in the past 5 years cannot truly afford them. Yes they can afford the minimum payments based on their ARM, interest-only, or neg-am loans, but once those loans reset, these folks generally have two options, re-finance or sell. For more and more of these home buyers, the refinancing option is no longer available. This leaves them in the must-sell category. Don’t you think that’s bound to bring prices down? I buy the idea that it’s just a slow process.
“Now I don’t own and can’t afford anything in this city anymore. I make a great income which still puts me into a shitty situation with San Diego real estate. I am not going to buy only because I can’t afford it.”
Ultimately this is the key. Doesn’t that tell you something? Only a very few (like 1%) can truly afford the homes that are selling in the decent neighborhoods. But that hasn’t stopped people from buying. I’m feeling the same way as you. I make a great salary, but I can’t truly afford even a $500K home much less a $750k home. Yeah sure, I can qualify for some ridiculous ARM loan, and make the first few years payments, but that’s not the same as truly being able to afford it. That is irresponsible, and I won’t do that to my family. We are doing just fine in our rented house.
How many other people do you think are in the same position? How many of those do you think pulled the trigger in the past 5 years assuming that they would be able to refinance and use their equity to make up the difference? How many of those do you think will instead end up in trouble in the next 3-5 years? My guess is quite a few, but yes that’s just a guess. The evidence is strong enough though to make me believe that these situations will cause prices to come down dramatically, even if it’s not quickly.
Most of what I read here, is not anger, but disgust. Disgust at people who say they are willing to take the risk, but blame everyone else when the deal goes bad.
