Today I was entertaining myself by reading old articles captured by the search engines and archived for all to see. I was reading articles quoting people caught up in the bubble buying frenzy and their rationalization for their purchases.
Here was one of my favorites. It's from the Union Tribune, August 16, 2005:
Brian Yui of HouseRebate.com said his clients are motivated to buy because he can help arrange zero-down-payment loans and cash rebates.
Randall Smith, 43, did just that in June, when he bought a 30-year-old, 1,500-square-foot Mira Mesa townhouse for $413,500. The seller kicked in $7,000 in closing costs and Yui rebated $1,000.
"It's costing us roughly twice what we were renting," Smith said.
However, he and his wife are sharing expenses with his 23-year-old son and his wife, who occupy a ground-floor bedroom. Smith's 15-year-old daughter also lives in the home.
"I think things are crazy, insane, the prices out there," said Smith, a preschool owner. "But I don't think the bubble's going to burst."
He said he plans to stay in the home for 10 years or longer and expects it will sell for $1 million by then.
"If in 10 years I have a half-million in equity, that's not too bad, that's pretty good," he said. "The reason I bought was I realized even with the expensive housing market in San Diego, renting is insane because it's just money down the drain."
So, basically, he believed that a 1,500 sq. ft. TOWNHOUSE in Mira Mesa was going to be worth $1,000,000 in 10 years (or so). IN MIRA MESA!!! What's even more funny is that he thought that was "not too bad", as though that was the low end of some larger range! I moved to SD from the Midwest 13 years ago, but I'd finally be driven back if it came to that.
Anyway, I feel bad that these people won't all "win the lottery" on their homes like they had planned, but found some enjoyment at the wild expectations so many people had.
Feel free to add any quotes from articles of buyers past and imagine their cartoon faces with dollar sign eyeballs as I do (or, don't if that's a little creepy for you).
I used to play tennis with a guy who owns a 2/2 condo about a mile from the beach. He complained mightily about the traffic (it was on a major thoroughfare) but told me proudly last year that it had quadrupled in value in ten years and now was worth $900K, and he was going to hold onto it for at least two more years, because it would appreciate by another $500K in that time.
So – his two bedroom crap box on a well-trafficked street would be worth $1.4 million. Just before he made this pronouncement, he told me the entire complex had had a special assessment of $32K per unit for roofing and window replacement. But, what is $32K, when your profit will be over a million in just two short years?
I no longer play tennis with him because his comments were so annoying (constantly bragging about how smart he was re: money) but I finally pulled a Zillow on his address.
The condo today is valued at $638K. Last year, when he said it was worth $900K, it was worth $700K.
Thank God for Zillow. He was a crappy tennis player too.
This quote isnt from an article but from a co-worker who bought a 430K 2 bed condo in Rancho Bernardo about six months ago. I repeatedly told the guy to hold off but it was no use. He listened to his realtor and got the place. A few days later he struts over to my desk and tells me –
“yep, it was expensive but I’ll let it go up another 100k or so and sell it in six months.”
Now that is the classic Joe clueless that is out buying real estate right now. Now the poor guy is working every weekend just to try and pay the interest only payments on his loan.
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