Does anyone follow Mission/Fashion Valley condo sales?

[SD Realtor]

Interest rates will increase sharply in the future.

The conundrum that every person with money has right now is should I spend my money or not? My answer would be yes I would spend money now to buy tangible assets however I would try to finance them at low rates as well.

You once more are making a mistake of me telling you to buy. I don’t do that. Just because I have bought does not mean you should buy. I am in a position to do so and have taken advantage of that. I am also preserving cash to take advantage of what will be extraordinary opportunities when interest rates to go high.

Make no mistake about it that when rates to go high, and they will someday, that prices will decrease, perhaps sharply. Show me a post where I have not maintained that thought. However you cannot also have a very high interest rate environment without accompanying costs for pretty much everything. High gas, high energy, high fuel, high rent, high food, high water, high everything prices… So your cash pile will suffer somewhat. However I do think keeping a cash pile is a good thing… personally I will be getting bonds when that happens. however the rentals will still be there, and even though they will be devalued, they will still be a fantastic income generator due to the fixed financing.

The best time to buy varies for everyone. It depends on their goals, finances and mostly personal situation. More often then not people are driven to buy because of pressure from one or the other spouse and because they want to start a family. Single people like you don’t have that problem. It is not a particularly good reason to buy but it is the way things work. Anyone who is going to buy better damn well know that interest rate shock is in our future. Well it has been in our future for how long? A decade? Will it happen this year, next year? next decade? I don’t know… however anyone that buys obviously should have a strategy that will cope with it.

[akbarpunjabi]

I will admit like any area I do find deals that pop up that pencil out. What a huge pain it is to be a landlord and deal with HOA’s and tenants for the few $$$’s and the hopes of appreciation. The deals that pop up are very shady, like the agents only sent in a buddys clients offer to the bank. Pending or Contingent in 1 day under current closed comps pricing.

[SD Realtor]

akbar try considering rental stock in a complex like Mission Valley Plaza. Buying in overpriced newer complexes is how you lose money. Yes ridiculously overpriced stuff will depreciate. More common rental stock in older 70’s and 80’s complexes in Mission Valley has already moved up.

[akbarpunjabi]

Enjoy the HOA increases and special assessments, they will gobble up any chance of profits really fast in the older ones.

[SD Realtor]

Try to understand something once more okay? The argument is not for profits or not in the older ones, the argument is what will prices be for that type of rental stock. You maintain it will be down by 10%, I say it will be up a year from now for that particular stock.

Personally I find it hard to justify buying rental stock in San Diego, I would be purchasing out of state.

[markmax33]

[quote=SD Realtor]akbar try considering rental stock in a complex like Mission Valley Plaza. Buying in overpriced newer complexes is how you lose money. Yes ridiculously overpriced stuff will depreciate. More common rental stock in older 70’s and 80’s complexes in Mission Valley has already moved up.[/quote]

I haven’t seen you talk about the supply glut. Remember in a market it is supply and demand. In 1989 at the end of the savings and loan scandal the GOV set up the RTC to liquidate the bad assets from the market. If you believe in GOV intervention and look at history the most damaging thing to the housing market has not occurred yet in this market. Do you remember the prices of condos during the RTC sales in 89 or 90, whenever it was? I have been told there were lots of condos near the beach selling for $10k each for cash. The market must liquidate or it can never get fixed.

There are tons of bank owned properties that the banks won’t liquidate yet and they haven’t been processing many foreclosures in the past 2 years because of the robo-signing scandal.

If your pride yourself on predictions you have to look at what history has done in the past and project it will happen again.

[SD Realtor]

Yes I remember the RTC liquidation quite well. There were those people who took advantage of them and there was the overwhelming majority of people who stayed on the sidelines and were scared.

There were also those who predicted there would be a solution similar to the RTC for our current bubble. This would have been fantastic… It should be intuitive to figure out why that didn’t happen.

See the main problem here is a somewhat innocent belief in how this all works. Try to understand, it is not a free market anymore. It stopped being a free market long ago. Those in control of the market have cornered themselves and the only way to keep a lid on it is to continue to manipulate it, subsidize it, and massage it for years if not decades until it can inflate its way back to the true value of the asset.

Like you, I do not believe that will happen. The big pop will happen when the bond market realizes that we will default on our debt and the charade will come falling down on everyone. I don’t know when that will happen but I do think it will. Unlike you I believe there is opportunity, there is ALWAYS opportunity. I don’t believe in waiting for it, but rather trying to build up so I can act when it comes.

Again, read what I said, not what you want to put in my mouth. I think rental opportunities are fantastic right now for cash flow… in San Diego? no. In other states yes? It doesn’t work for everyone though. There is no easy path to make money, to many people think there is.

My background is in engineering and logically the things that you say should happen should happen. What you fail to see is that there are much stronger forces in place that have not let it happen and they have only entrenched themselves further.

I still stand by my prediction for pricing for various types of property. Try to understand that is independent of whether you or jameswen or anyone else should buy.

Do you get it yet?

[akbarpunjabi]

Ok, what I mean is I predict rents go down, prices go down, HOA’s go up. The OP’s friend will not miss anything but a pain in the ass by waiting a year.

[Coronita]

SDR,

Give it up trying to explain things. I think the majority of the people that have already taken advantage of this RE implosion have already left this board. the remainder of the folks are ubber-bears still waiting for that 80%+ discount in La Jolla, and will think of every possible reason/excuse not to (nothing wrong with that really, quite entertaining)…And for the remainder of the people, life goes on.

Analysis to paralysis…. You know the old saying

B.S. = Bull shit
M.S. = More shit
P.H.D. = Piled higher and deeper.

[SD Realtor]

I hear you FLU.

[sdduuuude]

[quote=jameswenn]
At the end of the day, he’s a “realtor”.[/quote]

You know, jameswenn, this comment is so far out of line, I can’t believe how stupid it is.

If you have a reasonable financial/economic argument, make one. If not, shut up.

[scaredyclassic]

I still don’t think it’s a good idea to have savings in cash, I still stick with savings in cef, gdx and energy shares.

I’m also not persuaded that interest rate jumps will lower prices.

Have you seen the article in Harpers this month on mers litigation.

Kind of another example of power and status quo.

As my wife reminds me, without her I’d probably still be living in a filthy hole having skipped law school and eating microwave stuff.

She makes a valid point. Sill, the filthy nest sounds cozy sometimes.

[scaredyclassic]

At the beginning of the day, he’s a seismologist. Midday, a dealer in rare books. But at the end of the day he’s a realtor.

We are too specialized nowadays.

[SD Realtor]

As my wife reminds me, without her I’d probably still be living in a filthy hole having skipped law school and eating microwave stuff.

She makes a valid point. Sill, the filthy nest sounds cozy sometimes.

****************************

Yes that is true for me as well scaredy… Our wives do make us better… however the real question is do we really want to be better?

[markmax33]

[quote=SD Realtor]Yes I remember the RTC liquidation quite well. There were those people who took advantage of them and there was the overwhelming majority of people who stayed on the sidelines and were scared.

There were also those who predicted there would be a solution similar to the RTC for our current bubble. This would have been fantastic… It should be intuitive to figure out why that didn’t happen.

See the main problem here is a somewhat innocent belief in how this all works. Try to understand, it is not a free market anymore. It stopped being a free market long ago. Those in control of the market have cornered themselves and the only way to keep a lid on it is to continue to manipulate it, subsidize it, and massage it for years if not decades until it can inflate its way back to the true value of the asset.

Like you, I do not believe that will happen. The big pop will happen when the bond market realizes that we will default on our debt and the charade will come falling down on everyone. I don’t know when that will happen but I do think it will. Unlike you I believe there is opportunity, there is ALWAYS opportunity. I don’t believe in waiting for it, but rather trying to build up so I can act when it comes.

Again, read what I said, not what you want to put in my mouth. I think rental opportunities are fantastic right now for cash flow… in San Diego? no. In other states yes? It doesn’t work for everyone though. There is no easy path to make money, to many people think there is.

My background is in engineering and logically the things that you say should happen should happen. What you fail to see is that there are much stronger forces in place that have not let it happen and they have only entrenched themselves further.

I still stand by my prediction for pricing for various types of property. Try to understand that is independent of whether you or jameswen or anyone else should buy.

Do you get it yet?[/quote]

I don’t agree with the “it would have been fantastic”. It can still happen is my point. We aren’t in a healthy market and I see the fed trying to inflate the currency to catch up to home prices but it still doesn’t rule out the GOV taking over all the assets and having a fire sale. We are not in a significantly less free market than we were in 1989 if that’s what you are implying. It is not as free, agreed, but it doesn’t mean the GOV won’t step in. Look at what happenned with the automakers in 2008. They got bailed out through cash for clunkers, abnormally low interest rates and TARP funds. Don’t think that just because the GOV hasn’t done it to the housing sector yet that it won’t. There is a significant supply overhang especially in SD. This leveling off of the market due to GOV intervention is only temporary. I also don’t rule out a new administration starting to play hard ball with the banks and telling them to liquidate and stop looking for handouts.

I also think it is kind of ridiculous for any consumer to look to a real estate agent for advice in the housing market. I think it is unproffesional for a Real Estate Agent to provide advice whether you predicted the collapse or not. You don’t go to the barber everyday and ask him if you think you need a haircut. There is no other industry where the sales agent is looked to as an economist to predict that industry’s economic future. I think this should be one of the lessons learned from the bubble. The consumer was being fed false information from all angles in his life and now all of those people point to the consumer as evil. It’s even worse in Real Estate because the sales agent/economist stands to make $10,000+. I’m not just calling you out SDR, I’m calling them all out.

P.S. I am not single and I am in the demographic to buy and I am probably not going to buy any time soon.

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