Comment to SDR on the short sale monitor

[lendingbubblecontinues]

Sorry for being crass.

[PerryChase]

FirtTimeBuyer, Bob2007, I find it surprising that you’ve read this blog for months yet you went ahead and bought. Each person has different reasons for buying or waiting.

If I were you and had bought, and felt comfortable with my purchase, I’d consider it water-under-the-bridge and stop monitoring the market.

You mentioned a lifestyle decision. Why could you not rent a house for less than the carrying cost of a similar house?

No one knows what the future will bring us. I hope all the posters will check-in once in a while in the next few years to share their experiences.

Personally, I’ve owned my house since 1988. I made a lifestyle decision not to sell. But I’m waiting for the right time to buy another house in a more desirable neighborhood — to me (that would be a less desirable neighborhood in most other peoples’ views).

[PerryChase]

What I hope comes out of this thread though is a discussion about the massive disparity between what is happening in the financial markets and what two realtors on this very board are reporting. Ok its happening, now lets figure out why.

I don't think that there's any such disparity.   The lenders have not tightened their practices because the massive losses aren't there — yet.  The mortgage brokers' business model is the origination of loans — no originations means no revenue.  

Sure the market is down.  People can't refinance or sell. But that's not due to fact that it's harder for buyers to get easy money.  

[paranoid]

have you ever heard of “cyclic rally in a secular bear market”? If not, have a look at the stock market index like S&P500 or NASDAQ, between year 2000 and 2003. These cyclic rallys have the purpose to give suckers more chances to get OUT, not IN.

http://stockcharts.com/h-sc/ui?s=SPY&p=D&st=2000-01-01&en=2003-04-01&id=p82864017716

http://stockcharts.com/h-sc/ui?s=QQQQ&p=D&st=2000-01-01&en=2003-04-01&id=p82864017716

[barnaby33]

I totally disagree Perry, lenders have and are tightening their requirements. Sure they are loser than say 10 years ago, but the loan products available even last year are not available to the same people at the same low rates. If you can get a no doc neg-am loan same as before but the rate is 9% instead of 5% then its not really available is it.

Josh

[SD Realtor]

Bob and Firsttimebuyer congratulations on your purchases and for the courage to post. Bob I wonder if the place you are in escrow on is one that I had been looking at….My wife and I had been eyeing a home right near Jerabak on Avenida Magnifica and it just recently went into escrow…

Anyways I think paranoid called it very well. Every single secular cycle be it the stock market or real estate is composed of cyclical trends within it. I think that is what we are experiencing and will continue to for at least a few months. However secular trends last several years so lets see what happens by summer…

Perry your posts made alot of sense…however… I think that there are more potential buyers out there then we all think. I have been renting for awhile now and am moving to my 3rd home because the owner is selling. It really is getting old and our quality of life had suffered because of it. I had submitted a lowball offer to the Scripps property I mentioned above but it was not taken. While I believe the market will continue to display a secular trend over the next several years, my strategy was similar to Bob and Firsttime, put down a large downpayment, finance the rest in a safe mortgage that I can live with. Yes the market may depreciate but I am looking for a home that will serve me for the long run. However the improvement in the quality of life would be worth it. I am not saying renting is a poor quality of life. I think it varies with the individual. Having 2 toddlers, a few dogs, cats, turtles and a live in mother in law, I can say that renting blows. I am really tired of moving and I want to live in a home where I can do things to it to make it mine. I am getting to the point where I think I am making my family suffer because of my own stubborness and that may not be fair.

So yes I will be buying before the market hits bottom and I am sure alot of those who do have the patience to wait a few years will do very well. Again I believe the secular downturn will continue but I very much understand the decisions made by Bob and Firsttime.

[PD]

Hope vs. Data ….. Hmmm….

I dislike renting quite a lot and really want to buy again. However, living on “hope” that the market won’t destroy my equity is a bad way to go. All of the data indicates that the market must go down.

Although I dislike renting a great deal, it makes me feel better to know that my former house has lost about $75,000 in value since we sold it (based on the latest sale there). I could have worked full time since we sold and not been able to save nearly that much. So I guess my “job” right now is just being a renter. 🙂

I do not think we will do this again, however. If the next cycle goes as high as this one, I think we will just make sure we are where we want to be located and stay put. No more renting for me.

[hipmatt]

I rent too, sold in summer 05, and our quality of life has increased. The home we rent is much nicer than one we could afford to buy. The house we are in is an executive home with all the upgrades, its in town, in a safer area, closer to work, my parents and her perents too. There are many other rentals that I believe would suit us well if we needed to move, and it might be an inconvenience to move, but its worth the piece of mind knowing my money is going up in value while many home owners are losing money.

[PerryChase]

SD Realtor, sounds like you have a fun full house. Living with the mother-in-law? You must be a very patient and forgiving man. 🙂 My cousin’s mom lives with their family. At 94, the granma is in perfect health and still zips up and down the stairs. It’s heathly for the elderly to live surrounded by family. Your mother-in-law is lucky to have such a great family.

[sdrealtor]

Josh,
I don’t believe “hope” is such a loaded word. Hope is an individual’s desired outcome of an uncertain situation. The rigor of the analysis really has nothing to do with it. Even though the analysis might point one direction anything can still happen.

To the two new posters I say welcome and congratulations. I love seeing new participants, (particularly bright ones with something to say that write well) enter the fray here as it helps all of us learn more. I hope you have found a home that will serve you and your family well. That is what it is really all about. I wouldnt trade my family’s home for the roughly $100,000 it dropped in market value over the last 18 months. The relationships you build with neighbors that become dear friends, the sense of security you children feel in their home and the enjoyment of kicking back in a comfortable/ familiar place is priceless. I sincerely hope you find the same sense of satisifaction that we have.

BTW, this was a wonderful civil thread and I hope to see more like it. I’ve thrown out more than my share of incivility in the past, particularly toward PS and her earlier extremist viewpoints (which incidentally seem to be headed more toward the middle of the road of late). Here’s to a kinder, gentler SDR.

[sdrealtor]

SD R,
Nice post. It really shows when you writet from the heart. I hope you find the home you are looking for and can get settled in for the Wonder Years with your family.

SDR

[bob2007]

SD Realtor,

My reasons for purchasing are right along your lines of thoughts. I have kids in the 5-7 range, and wanted to have a nice environment before they get too much older. I’ll never get this time back, and if it costs me a bit on the house, then that is a price I am willing to pay. I am _not_ trying to push my decision on other in this list, so lets not start bashing again. The right decision and timing for each person has to do with a lot of factors.

I didn’t make an offer on the house you were interested in, but that is a very nice place. I hope you can find what you are looking for at a great price.

Bob

[bigtrouble]

For me, a house would be a liability. Going through two major layoffs in 5 years time will do that to you. The thing is with layoffs, doesn’t matter how good you are, that job does not exist anymore in this location. And all those people you spent time impressing are out of work too.

There is just no guarantee that your job in San Diego is going to stay in San Diego.

[Reality]

I’m not sure why buying is necessary to provide your kids with a “nice environment”. In this market, you can afford to rent a much nicer home than you can afford to buy.

[sdrealtor]

To each his/her own. If you can afford it and understand the risks you entitled to make your own decisions and live with the results. Bob put it very well when he said the right decision and timing for each person has to do with a lot of factors. I have kids about the same age as Bob. Their favorite place in the entire world is not a toy store, not Target, not the beach, not the park, not a friend’s house, not Coldstone……. it’s their home. When they are away from it for too long they beg to be back in their home, the only home they have and will ever know growing up. There’s alot to be said for that.

[Author]

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