Is it all just schadenfreude?

[blahblahblah]

You know, I’ve been a bubble believer for a long time, sold my condo in 2005 and now I rent a house. I read these forums constantly but I’m starting to wonder what my motivation is for all of this? Is it a desire to see these no-talent ass-clowns in their Hummer H2s and BMWs get smacked down and have to move back in with mommy and daddy? Is it repressed anger at the business majors I went to college with who partied every night while I suffered silently over programming projects in the computer lab? My dad was always angry at the people in our neighborhood that drove nicer cars and went on and on about how they couldn’t really afford it. He died young, stressed out, and was still jealous and bitter at everyone around him. Should I just quit reading these damn forums and get on with my life? Wouldn’t it be healthier? Why should I care if someone wastes their money on suicide loans and BMWs? It really doesn’t affect me. Has anyone else thought about this?

[JES]

I believe the answer to all of your questions is yes!

[(former)FormerSanDiegan]

Yes

(but it’s addictive … also can’t stop drinking coffee)

[zeropointzero]

It’s not the “schadenfreude” for me …. I take no pleasure in people in possible bad financial straits, no matter what their story or motivation.

For me, it’s just that the changing of momentum in the real estate market is interesting to watch. Seeing how the confluence of group psycology, economic optimism, boosterism and “creative financing” drove prices up has been interesting as heck — and watching these same forces in reverse is also going to be awfully interesting as well.

As a homeowner myself, I hope it doesn’t get too bloody.

[Anonymous]

Concho, I think I totally understand where you’re coming from, and I’ve had similar concerns myself. Why can’t I just happily skip along with the no-talent ass-clowns, as those within the herd reinforce their commonly held belief that it is rational for an asset to increase in double-digit percentages, every year in perpetuity. What steams me though is that we will be asked to bail these punks out, be it through the indirect societal costs of bankruptcies, or (god forbid) through additional governmental incentives that artificially reduce the costs of home ownership. Oh well, you just gotta believe what you think is right, and act accordingly. No sense trying to do anything else, it just wouldn’t work in the long run.

[theplayers]

I believe people come here for different reasons. I, like you, sold a home here in SD at the height of the market and am now renting, waiting for the right time to buy in again. Visiting this site and others keeps me informed as to what is going on in the housing market. I also learn more about the economy, investing and finances, which helps me decide where to put my savings.

I would guess that many others made the decision to sell their homes and realize once-in-a-lifetime profits because of information they found here and on other blogs. Buying a home is one of the biggest financial decisions people will make in their lives, and my philosphy is to do the research before buying or selling.

I can’t believe how many people make the decision to buy a home without doing any research, without understanding the terms of their loan, without even thinking about what they’re doing. This has been especially evident over the last several years here in SD, as people got caught up in the mania – but that’s what a bubble is, people make decisions based on emotion, not on rational analysis.

I suppose there are people who are bitter, jealous and angry. That’s their choice. The saying “drinking the poison and hoping someone else dies” comes to mind. If someone is bitter, jealous, or angry, it’s about them, not about the person or persons they are jealous or angry with. It’s just misplaced and wasted energy, IMO.

Do I want to see people’s lives get wiped out? No, and I won’t take any joy in it. But they made choices too, choices that many other people chose not to make. I will feel joyful and rewarded when my patience pays off, and the decision to sell at the peak turns out to be the right one. Will I feel bad if I were to buy a home from someone who was wiped out and took a big loss on their home? Of course I would feel bad for them and their situation, but not about buying their home at the best price possible. I will be making a choice and taking a risk too, the risk that the house could continue to fall in value.

Only you know why you read “these damn forums”…

[contentrenter]

I echo the point about wanting to stay informed. I sold in April ’05, I’m renting, and I’m trying to gather information. I’m hoping that when there is a good deal out there I’ll be able to recognize it.

As for the bloodbath that may or may not be brewing, the potential is terrifying to me. I had an opportunity to speak to the CEO of the county and asked if there was a Plan B if property taxes drop significantly, to pay for schools, mental health care, basic infrastructure, etc. He said, “No”, but he didn’t treat me like it was a crazy question, which is both comforting (he’s not stupid) and unsettling (he’s not stupid, but there’s no contingency plan). As previous posts point out, the government is a huge employer in San Diego, and many city/county/state services are stretched to the limit already. A budget decrease of any amount could have far reaching consequences. I’m not necessarily predicting lay-offs; my concern is what will happen to the already-poor, children, sick, and mentally ill during a bad economic downturn. And forget about luxuries like libraries and pools and working street lamps.

As a professional, I’ve watched fellow county employees who make half of what I make leverage themselves like you wouldn’t believe to buy that second or third condo. I’m afraid they are going to be completely wiped out. And my peer colleagues, who earn more money, are almost as bad: off the top of my head, I know four over 100k earners in my office who think their IO loans are a great deal, even though their rates are resetting soon and they’re not paying down any extra principle.

I HOPE I’m wrong. But for me, this whole thing is as compelling as a horror movie. I think I know what’s going to happen, and I don’t want to watch, but I can’t seem to turn away. It’s fascinating and terrifying at the same time.

[bubba99]

I have considered these other motivations, but don’t think they are the only candidates. I think information is a stronger posiiblility. The desire to make a good financial decision. I knew the market was headed for a correction, but I am not sure I would have had the conviction to sell last March if I was not able to gain the insights of others who were also studying the market.

Ultimately I want to buy another house and am as interested in when I should buy as I was in when to sell. The boat is already getting too small.

[PerryChase]

I’m here because the psychology is more fun to watch than the fundamentals. As the professor pointed out if there was no sentiment, there wouldn’t be any cycles. We need downturns and bankruptcies to clean up the market — that just how capitalism works.

I find it amazing that few remember the downturn of the 1990’s. I’m not old but I remember like it was yesterday.

[sunsetbeachguy]

These people did impact many of us.

We are choosing to rent rather than own.

I am capable of buying in today’s market, I am just not that stupid (generally speaking, some buyers may do just fine with purchasing at the height of the bubble).

People make choices and then the choices make the people.

If a particular FB does their financial business quietly and I don’t become aware of or get impacted by their financial situation, who cares.

However, for the number of smug comments, people interviewed in the paper and people who advertise their housing bubble wealth, I will quietly and anonymously enjoy their flameout.

Nothing personal, sometimes you are the hunter and other times you are the hunted.

It could also be my strict Christian upbringinging and the emphasis on shame and guilt to get people to behave. Society needs every tool in the toolbox including more shame and guilt to get people to behave civilly.

I am not deprived or jealous and I rather relish the idea of a nice car. Particularly if you compare a Subaru Legacy GT with an Audi A4 and a BMW 3 series.

The Subaru is 5-15K less expensive, is faster, handles similiarly and has the same finish quality. Plus the look of shock on the BMW, Audi and other owners when you smoke ’em is priceless.

I guess I am just a sneaky Beta male, which in most species, including humans, are more successful than alpha males with much lower risk.

[Anonymous]

“Why should I care if someone wastes their money on suicide loans and BMWs? It really doesn’t affect me. Has anyone else thought about this?”

I read here and on other sites because I plan to buy a place to live in at some point in the future, when it makes sense to do so here in SD again. I nearly bought in 2003/2004 and I feel very lucky now that I didn’t.

Overall, I cannot laugh at the magnitude of this bubble, nor can I laugh at the massive number of people who will be affected directly and indirectly by the likely economic downturn looming ahead. The collateral damage from this bubble could be nasty, judging from the numbers of jobs that are dependent on residential housing and MEW. Both the innocent and the guilty will be hurting if things get really bad. My job would be secure and I’m happily renting for now, but I don’t feel as though I can sit back and be smug about it. Nobody really knows how something of this size will play out.

I’m surprised at how quickly the sentiment in the media toward housing has changed in the past few months! Some days there is just too much news to be able to read it all, compared to 2 years ago.

And yes, there are some individuals out there who I do laugh at. Two guys I know have extracted all the equity from their houses in an attempt to keep up appearances. One of these self-styled aristocrats has now been forced into living in a mobile home behind his kid’s house. Very elegant. The other is eating ramen noodles while trying to make payments on his max-HELOCed house, (that won’t sell or rent for anywhere near what he owes) Mercedes, and the new house he purchased with a suicide loan. I expect him to go into foreclosure soon.

I laugh at the stupidity of this sort of thing, but in the back of my mind I know that there are millions of people out there who have done exactly the same things to land themselves in the same degree of trouble. Ugh.

[ybc]

Concho,

Good questions! Sometimes I wonder too. A lot of content is repetitive, and I think that we read them over and over again to seek confirmation. (yes, we’re all subject to confirmation bias). It comforts us. I think that people here generally do welcome opposite view if that view comes with good data support. But the majority of people here believe in a housing bubble, and it shows. By constantly coming here, we’re seeking confirmation and comradeship – because beliving in a housing bubble is still a minority view in the broader context.

From time to time, you really get stuff that you won’t get otherwise — what realtors / mortgage bankers are seeing in real time, examples that people put forward (housing prices, employment, etc). So I enjoy reading these. Occassionally, you get a link to a good piece of research work – if you enjoy reading research.

I try to skim the content, and read only the part that’s interesting.

[powayseller]

For me, it started out as a confirmation of my decision to sell. Now it is fascination with behavioral finance, education from professionals in business and real estate fields, and a place I can do what I love: study, write, and read about the economy.

[carlislematthew]

I was with you all the way until you said:

As a professional, I’ve watched fellow county employees who make half of what I make leverage themselves like you wouldn’t believe to buy that second or third condo.

..and then you lost me. Second or third condo? That’s just plain greed. They wanted to believe that this would be their future, their “get quick scheme” and they let the greed take over.

[LookoutBelow]

SunsetBeach Guy cracks me up. Enjoying the spoils of wealth and or success from hard work has NOTHING to do with financial sense. Nobody cares what car YOU drive or what you paid for it. Nobody ever said “Gee, If had any smarts, I’d drive a Subaru instead of this shoddy new 600SL Benz” Its all about having the financial wherewithall to enjoy the absolute finest of something. They dont even see your cheap Subaru when they go past you.

As far as your ending statement about Alpha Males and beta Males….well, theres no comparison, my friend.

A small example of many to wit:

Beta Males satisfy themselves with the fat chicks cuz they’re safe and they dont require anything special in their mates, they’re just glad their getting some attention from any type of male. Plus beta males dont grab the primal attention of the female of any species, just like your Subaru and fake rolex your probably wearing. Your much too smart to spend 20G’s on a damned watch …right ? Well surprise ! Your opinion doesnt count, not to the real achievers in this world. They dont drive Ferrari’s and such to impress the likes of you. beta males are the hangers on in a society, achieving and accomplishing nothing substantial and pretty much are what the current political administration refers to as a “Useless Eater”. Safe, comfortable, boring.

While your at home rubbing the safe fat girlfriend’s smelly feet, the Alpha males take home the Prom Queen and eats beta males for lunch snacks. Not many though, cuz they taste like crap.
A book has never been written about a beta male yet…If it were written, nobody would buy it, because who cares what he does ? He doesnt count. One of lifes placeholders..much like the ZERO.
beta males never take a chance, never live a life worth living. beta males are the mouses of a society, scurrying around eating the scraps and leftovers of the do-ers. Constantly scared of their own shadows and skampering to their dark, safety spots under a rock anytime an Alpha Males shows his presence. Being a beta male is NOT every mothers dream for their son. It certainly isnt their fathers. Indeed. Have a twinkie son. That was a nightmarish statement you made there. I hope you were only joking.If not, you should go home kick your father in the crotch.Hard.

Rant over…Now back to the original Shadenfruende question. Reading this forum does NOT make you a pervert or a jealous sadist anymore than traders religiously read the Wall Street Journal. They’re not always looking for good news. Proper planning leads to proper investing. All people who’ve purchased a house was an adult, an adult is responsible for his or her own decisions, end of story. If he used a suicide loan or Neg. Am mortgage, thats his business. If something can be learned from a possible bubble burst BEFORE it bursts, then thats shrewd detective work,have a cigar! its not sadistic pleasure. People do what they do, its not your fault. You do what YOU do, and YES it IS your fault if you screw it up.
Charity starts at home. Take care of yourself and arming yourself with BOTH sides of every story BEFORE you leap into something like a 30 yr. mortgage is your duty to yourself and your family.

[Author]

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