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rocket science.
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September 13, 2006 at 1:06 PM #35176September 13, 2006 at 4:39 PM #35237
JES
ParticipantIt’s also fun when extended family get involved and look down on you for ‘selling out.’ That pressure alone was almost enough to keep me from selling. But I did anyway and since the sale have felt more isolated, even though we are being proven right by the market. All sorts of emotions come into play. The perception that family develop that you don’t manage your finances well enough to be able to afford a house, for starters. Never mind the fact that everyone else in the family has ARMS, and one I know of paid 200k for a house now worth 700k, and somehow now has no equity at all. Owning a home goes beyond pure financial matters and speaks to your worth as a man by God! The American dream with a white picket fence!
We often talk about forclosures, but even those who aren’t that deep in trouble can find themselves financialy screwed. EG: Three relatives above, all make approx 90k-120k/year. One paid 650 for a home worth 650. Another paid 1 million, now worth 950 (2 months later), and the last paid 470, now worth 725 or so. All three have used equity loans, and all three have staked much of their financial future on the belief that the market will go up, level, or go down only a little. If it crashes, they’ll be living on raman noodles and mowing their own lawns!
And they question my judgement? There’s a huge paradigm shift that needs to take place here and it’s slowly happening. You no longer ‘have to get in before it’s too late,’ and it doesn’t ‘just keep going up.’ I sold for 750k in March and in my mind everything above 450k or so was pure ‘speculative equity’ and not justifyable by any economic formula. I needed to grab that equity before it was too late, like a 40 year old virgin at the end of a hot date.
The sad thing is that people out there actually believe current prices reached their peaks because of supply and demand, rising incomes, low interest rates and because we have nice weather. Not only did they fail to pay attention in economics, but they obviously didn’t even sign up for psychology. The game is over folks. If you haven’t cashed in your lottery ticket or decided not to go for the million yet, enjoy the ride. May this crash be a peaceful one and bring you much wisdom so that you don’t sacrifice your family future in such a foolish way again. Call me when your home is down 40% and I might bail you out, but meanwhile I’m busy fully funding my children’s college plans, fully funding my Roth IRA for two years for my wife and I, and planning to go to the Midwest and buy a house with cash, never to have a mortgage again. I’m using the rest to buy warm clothes!
September 13, 2006 at 9:14 PM #35286anxvariety
ParticipantU R TEH SUCK!
September 14, 2006 at 9:55 AM #35307ParticipantThat’s classic vrudny!
I chalk alot of this up to the differences between people and their approach to things. For example, I like to analyze things and am continually adjusting my opinion about issues like the real estate market, the economy, political issues and everything else based on new information that I take in through research and intuition. Because of this, I usually find that I am ahead of the trends and have a good sense of what is happening at any moment in time, which gives me a better ability to predict the near term future.
In stark contrast, I have a friend who is an entrepreneur and owns a moderately sucessful business. He is optimistic to a fault and disregards any information that does not support his preconveived beliefs about his business being sucessful. He is strong willed and pushes ahead without an inkling of doubt that he will succeed. Interestingly, he is also overleveraged on his house and still believes that it will only keep going up. He is now advising me to buy again! Another friend of mine is extremely religious and has even tied his multi level marketing business into his religious beliefs. God is willing him to succeed, and if he merely believes, it will surely happen. He too has closed his mind to new information, advice and trends and pushes ahead even though he has made no money in 7+ years of business. He can’t quit because Amway and Quickstar have brainwashed him into thinking he would be letting down God. On the surface, these two friends sure exude confidence and poise, but I can’t help marvel at how false it is.
Ironically, it’s these two friends who put the most pressue on me not to sell and who would look down on me the most now that we have cashed out. Similar to your relative, I respect them, but also respectfully disagree with their overconfidence, criticism and closed minded approach to everything. They get away with it because on the surface it always appears that all is well even when the business is failing and the home equity is stretched to the limit.
September 14, 2006 at 10:12 AM #35312Chrispy
ParticipantSpeaking of religion – a friend of mine recently got an email with the header, “Great Mortgage Interest Rates for Christians.”
Wow – guess I need not apply. I knew mortgage companies are desperate for business, but to appeal to someone’s religious beliefs? Sounds unethical if not illegal.
September 14, 2006 at 12:01 PM #35332ParticipantI saw an ad in the WS Journal today that caught my attention. It was a huge financial ad for Lutheran Thrivant Financial for Lutherans or something like that. What caught my eye was the name. They actually appeared to be excluding non-Lutherans by using the phrase ‘for Lutherans.’ I’m curious if that was their intention, and perhaps they only take Lutheran clients? If they are open to anyone I found this to be very bad marketing!
September 14, 2006 at 12:02 PM #35333ParticipantDuplicate
September 14, 2006 at 2:25 PM #35368ParticipantCan you imagine if a big lender, such as Bank of America, had ads that stated “5% Mortgage Loans for Catholics Only?” They’d have the ACLU on them in a heartbeat.
September 14, 2006 at 2:37 PM #35373heavyd
ParticipantThrivent is a non-profit fraternal organization with about US$70bn in assets under management — not BofA, but not small potatoes, either. As a non-profit it can legally extend benefits to the groups it was founded to help. This is no different from a parochial school offering parishioners a break on tuition, or unions offering members’ kids scholarships. Nothing illegal about it…as long as it retains its non-profit status. They are BIG in the midwest…not much of a presence out here. DH
January 19, 2008 at 3:16 PM #138817bsrsharma
ParticipantHow we cashed in before the housing crash
Friends thought he was nuts when a Times reporter sold his home and started to rent in 2005. But for him, the warning signs were just too hard to miss.
By Peter Y. Hong, Los Angeles Times Staff Writer
January 20, 2008Our friends said we were crazy. Relatives asked whether we were in financial trouble. But in April 2005, my wife and I bailed out of the American dream. We sold our two-bedroom Pasadena condominium and became renters again. ¶ We got nearly three times what we had paid for the place nine years earlier. It seemed to us like a staggering profit — and a sign that the market had been pumped up beyond reason. ¶ That’s why we decided to rent instead of buying another house right away. We wanted a place with a yard and a third bedroom, but we weren’t willing to pay the sky-high price or take out an exotic mortgage to buy something our income did not justify. ¶ So our plan was to take our profit and wait for prices to return to Earth. The madness had to end, we thought. ¶ For a while, we wondered whether we would prove to be the crazy ones as home values in Southern California overall continued rising through last spring. But a closer inspection of real estate sales data shows that signs of trouble were already appearing when we sold……
January 19, 2008 at 3:16 PM #139030ParticipantHow we cashed in before the housing crash
Friends thought he was nuts when a Times reporter sold his home and started to rent in 2005. But for him, the warning signs were just too hard to miss.
By Peter Y. Hong, Los Angeles Times Staff Writer
January 20, 2008Our friends said we were crazy. Relatives asked whether we were in financial trouble. But in April 2005, my wife and I bailed out of the American dream. We sold our two-bedroom Pasadena condominium and became renters again. ¶ We got nearly three times what we had paid for the place nine years earlier. It seemed to us like a staggering profit — and a sign that the market had been pumped up beyond reason. ¶ That’s why we decided to rent instead of buying another house right away. We wanted a place with a yard and a third bedroom, but we weren’t willing to pay the sky-high price or take out an exotic mortgage to buy something our income did not justify. ¶ So our plan was to take our profit and wait for prices to return to Earth. The madness had to end, we thought. ¶ For a while, we wondered whether we would prove to be the crazy ones as home values in Southern California overall continued rising through last spring. But a closer inspection of real estate sales data shows that signs of trouble were already appearing when we sold……
January 19, 2008 at 3:16 PM #139052ParticipantHow we cashed in before the housing crash
Friends thought he was nuts when a Times reporter sold his home and started to rent in 2005. But for him, the warning signs were just too hard to miss.
By Peter Y. Hong, Los Angeles Times Staff Writer
January 20, 2008Our friends said we were crazy. Relatives asked whether we were in financial trouble. But in April 2005, my wife and I bailed out of the American dream. We sold our two-bedroom Pasadena condominium and became renters again. ¶ We got nearly three times what we had paid for the place nine years earlier. It seemed to us like a staggering profit — and a sign that the market had been pumped up beyond reason. ¶ That’s why we decided to rent instead of buying another house right away. We wanted a place with a yard and a third bedroom, but we weren’t willing to pay the sky-high price or take out an exotic mortgage to buy something our income did not justify. ¶ So our plan was to take our profit and wait for prices to return to Earth. The madness had to end, we thought. ¶ For a while, we wondered whether we would prove to be the crazy ones as home values in Southern California overall continued rising through last spring. But a closer inspection of real estate sales data shows that signs of trouble were already appearing when we sold……
January 19, 2008 at 3:16 PM #139082ParticipantHow we cashed in before the housing crash
Friends thought he was nuts when a Times reporter sold his home and started to rent in 2005. But for him, the warning signs were just too hard to miss.
By Peter Y. Hong, Los Angeles Times Staff Writer
January 20, 2008Our friends said we were crazy. Relatives asked whether we were in financial trouble. But in April 2005, my wife and I bailed out of the American dream. We sold our two-bedroom Pasadena condominium and became renters again. ¶ We got nearly three times what we had paid for the place nine years earlier. It seemed to us like a staggering profit — and a sign that the market had been pumped up beyond reason. ¶ That’s why we decided to rent instead of buying another house right away. We wanted a place with a yard and a third bedroom, but we weren’t willing to pay the sky-high price or take out an exotic mortgage to buy something our income did not justify. ¶ So our plan was to take our profit and wait for prices to return to Earth. The madness had to end, we thought. ¶ For a while, we wondered whether we would prove to be the crazy ones as home values in Southern California overall continued rising through last spring. But a closer inspection of real estate sales data shows that signs of trouble were already appearing when we sold……
January 19, 2008 at 3:16 PM #139127ParticipantHow we cashed in before the housing crash
Friends thought he was nuts when a Times reporter sold his home and started to rent in 2005. But for him, the warning signs were just too hard to miss.
By Peter Y. Hong, Los Angeles Times Staff Writer
January 20, 2008Our friends said we were crazy. Relatives asked whether we were in financial trouble. But in April 2005, my wife and I bailed out of the American dream. We sold our two-bedroom Pasadena condominium and became renters again. ¶ We got nearly three times what we had paid for the place nine years earlier. It seemed to us like a staggering profit — and a sign that the market had been pumped up beyond reason. ¶ That’s why we decided to rent instead of buying another house right away. We wanted a place with a yard and a third bedroom, but we weren’t willing to pay the sky-high price or take out an exotic mortgage to buy something our income did not justify. ¶ So our plan was to take our profit and wait for prices to return to Earth. The madness had to end, we thought. ¶ For a while, we wondered whether we would prove to be the crazy ones as home values in Southern California overall continued rising through last spring. But a closer inspection of real estate sales data shows that signs of trouble were already appearing when we sold……
January 19, 2008 at 11:02 PM #138928bubble_contagion
ParticipantIn 2005 people thought the Housing Bubble was only a t-shirt….
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