Margin for error?

[an]

[quote=jpinpb]
AN – I understood what Brian was saying. If there is a bidding frenzy, then tough to say bottom. When I tried to sell my house in the early ’90’s in Carmel Valley, I had it listed for the same price I bought it just a few years earlier. No offers for a year!!

I was lucky enough to be able to ride it out. The coast is not getting any offers b/c they’re still listed at 2005 prices, from what I can see. If there were down to 2002 prices, there probably would be a bidding frenzy. And so it wouldn’t be bottom then. The only thing close to 2002 pricing is in The Plaza in PB. Condos are the weakest link and a sign of things to come.

We are far from bottom. That said, I’d be tempted to get something if it were at least close to rents. I qualify this. I have no intention of putting 20% down. I will do an FHA 3%. I did 20% down before and learned. I’ll keep the 20% on stand by in case of emergency.[/quote]
That makes no sense. Where would you consider the bottom to be then? If you list it for 1980 price, I’m sure you’ll get a massive bidding war. Would you consider 1980 price to be well below the “bottom”? You just confirm what I’m saying, if you list your house at price well above the bottom, you won’t get any offer. But if you list it near, at or below the bottom, you’ll get a bidding war. Looking back, we all can say bottom of the last cycle was around 1996-1997. If you would have listed your house in the early 90s at 96-97 price, you would have gotten a bidding war too. But you were trying to sell it at peak price, that’s why you didn’t get any offer.

[NotCranky]

CAR,

I know some people feel that losing a job is a big threat to managing a mortgage realtively comfortably. Not sure anyone should buy under this situation. I also don’t think this risk, at a very high level, constitutes living within ones means. Sometimes the buyers parents “guarantee” this risk.

Some depreciation is a much more acceptable risk with the thought that it could just be a paper loss. I just always got around it by buying what I could likely keep one way or another without a job. Who wants to be under the stress of depleting some type of “survival” reserves paying for a house? Makes sense to avoid that. It makes me wonder how the ‘downward spiral’ believers are going to deal with this. Because at some point one has to draw the line or pay cash.

Moving out seems like acceptable risk mitigation but then you have to find being a landlord acceptable too.If I had to move out but still had a decent rental, I would consider that a success.(It never happened involuntarily). Single people might have it easier in this regard…They can get roomates if their personality allows for it. I have met many people who calmed their buyers remorse, with the idea of a roomate to help in tough times.

I don’t relate to relocating because of a job loss, but I understand many people do need to think about this.

Brian1
I am not sure there is a bottom where listings are universally unwanted. In fact, I tend to doubt that scenario ever comes.Maybe that is not what is meant? In the bubble there was practically no such thing as an unwanted house and now there is. I consider that a huge sign of improvement.

[NotCranky]

CAR,

I know some people feel that losing a job is a big threat to managing a mortgage realtively comfortably. Not sure anyone should buy under this situation. I also don’t think this risk, at a very high level, constitutes living within ones means. Sometimes the buyers parents “guarantee” this risk.

Some depreciation is a much more acceptable risk with the thought that it could just be a paper loss. I just always got around it by buying what I could likely keep one way or another without a job. Who wants to be under the stress of depleting some type of “survival” reserves paying for a house? Makes sense to avoid that. It makes me wonder how the ‘downward spiral’ believers are going to deal with this. Because at some point one has to draw the line or pay cash.

Moving out seems like acceptable risk mitigation but then you have to find being a landlord acceptable too.If I had to move out but still had a decent rental, I would consider that a success.(It never happened involuntarily). Single people might have it easier in this regard…They can get roomates if their personality allows for it. I have met many people who calmed their buyers remorse, with the idea of a roomate to help in tough times.

I don’t relate to relocating because of a job loss, but I understand many people do need to think about this.

Brian1
I am not sure there is a bottom where listings are universally unwanted. In fact, I tend to doubt that scenario ever comes.Maybe that is not what is meant? In the bubble there was practically no such thing as an unwanted house and now there is. I consider that a huge sign of improvement.

[NotCranky]

CAR,

I know some people feel that losing a job is a big threat to managing a mortgage realtively comfortably. Not sure anyone should buy under this situation. I also don’t think this risk, at a very high level, constitutes living within ones means. Sometimes the buyers parents “guarantee” this risk.

Some depreciation is a much more acceptable risk with the thought that it could just be a paper loss. I just always got around it by buying what I could likely keep one way or another without a job. Who wants to be under the stress of depleting some type of “survival” reserves paying for a house? Makes sense to avoid that. It makes me wonder how the ‘downward spiral’ believers are going to deal with this. Because at some point one has to draw the line or pay cash.

Moving out seems like acceptable risk mitigation but then you have to find being a landlord acceptable too.If I had to move out but still had a decent rental, I would consider that a success.(It never happened involuntarily). Single people might have it easier in this regard…They can get roomates if their personality allows for it. I have met many people who calmed their buyers remorse, with the idea of a roomate to help in tough times.

I don’t relate to relocating because of a job loss, but I understand many people do need to think about this.

Brian1
I am not sure there is a bottom where listings are universally unwanted. In fact, I tend to doubt that scenario ever comes.Maybe that is not what is meant? In the bubble there was practically no such thing as an unwanted house and now there is. I consider that a huge sign of improvement.

[NotCranky]

CAR,

I know some people feel that losing a job is a big threat to managing a mortgage realtively comfortably. Not sure anyone should buy under this situation. I also don’t think this risk, at a very high level, constitutes living within ones means. Sometimes the buyers parents “guarantee” this risk.

Some depreciation is a much more acceptable risk with the thought that it could just be a paper loss. I just always got around it by buying what I could likely keep one way or another without a job. Who wants to be under the stress of depleting some type of “survival” reserves paying for a house? Makes sense to avoid that. It makes me wonder how the ‘downward spiral’ believers are going to deal with this. Because at some point one has to draw the line or pay cash.

Moving out seems like acceptable risk mitigation but then you have to find being a landlord acceptable too.If I had to move out but still had a decent rental, I would consider that a success.(It never happened involuntarily). Single people might have it easier in this regard…They can get roomates if their personality allows for it. I have met many people who calmed their buyers remorse, with the idea of a roomate to help in tough times.

I don’t relate to relocating because of a job loss, but I understand many people do need to think about this.

Brian1
I am not sure there is a bottom where listings are universally unwanted. In fact, I tend to doubt that scenario ever comes.Maybe that is not what is meant? In the bubble there was practically no such thing as an unwanted house and now there is. I consider that a huge sign of improvement.

[NotCranky]

CAR,

I know some people feel that losing a job is a big threat to managing a mortgage realtively comfortably. Not sure anyone should buy under this situation. I also don’t think this risk, at a very high level, constitutes living within ones means. Sometimes the buyers parents “guarantee” this risk.

Some depreciation is a much more acceptable risk with the thought that it could just be a paper loss. I just always got around it by buying what I could likely keep one way or another without a job. Who wants to be under the stress of depleting some type of “survival” reserves paying for a house? Makes sense to avoid that. It makes me wonder how the ‘downward spiral’ believers are going to deal with this. Because at some point one has to draw the line or pay cash.

Moving out seems like acceptable risk mitigation but then you have to find being a landlord acceptable too.If I had to move out but still had a decent rental, I would consider that a success.(It never happened involuntarily). Single people might have it easier in this regard…They can get roomates if their personality allows for it. I have met many people who calmed their buyers remorse, with the idea of a roomate to help in tough times.

I don’t relate to relocating because of a job loss, but I understand many people do need to think about this.

Brian1
I am not sure there is a bottom where listings are universally unwanted. In fact, I tend to doubt that scenario ever comes.Maybe that is not what is meant? In the bubble there was practically no such thing as an unwanted house and now there is. I consider that a huge sign of improvement.

[Coronita]

[quote=briansd1]

FLU is a funny guy. He’s resigned himself to having overpaid for his house; but he seems like a guy who would shop and shop before buying his new HDTV, car, carpet, hiring a baby-sitter, or whatever.
[/quote]

yes, that is the asian irony…My blood makes me squander pennies while missing out on the bigger dollars 🙂

Actually. Out decision was pretty planned.
Buy a SFH and dump two attached homes in two different high cost CA locations prior to marriage.
Neither of us wanted to be landlords right after marriage, tax free cap gains, and a SFH was still 25% less than two..Haggling with the seller who fell out of escrow twice $60k down from his asking was just icing on the cake…..

I guess completely cashing out in RE and just renting would have been an option….But some observations.

…5 years later rather than living in my home, I would have the option to purchase my neighbor’s down the street which just closed about the same purchase price what we paid in early 2004

….Or I have the option to get into a bidding frenzy with those REO’s in CV right now. I forget how many there are….

….5 years later, I’d still like to see a CV average comp in 2600-2800sqft significantly lower than 03-04 pricing…Let’s knock off $100k…How many 2600-2800sqft listings are there that is $700k or lower listings in Torrey Hills, Carmel Country Highland, or old part of CV NOT along 56?

….Also, 60 months * $3k in rent. That isn’t an insignificant amount of money. It’s not like you have no cost by not purchasing (compared to buying a TV where you simply can choose to not spend)… You aren’t living for free (unless you happen to be a squatter or someone that took out a mortgage and refuses to pay moratorium after moratorium).
Yes yes, if we put that “extra money” in investments, it would have earned 10%…Oh really? Did most people earn 10%+ consistently between 2004-2009?

….The bonus question is (which I don’t haven an answer for)….How long do people think it will take for 2600-2800sqft SFH in CV to reach say $650k or lower? And what will interest rates be then? Are these government interventions (which are surely not going to stop a price decline) going to continue to cause a slow trickle versus a steep drop like so many of us (inclusive) are hoping so that we can get back into the RE game? Is inflation going to eat into our savings? Is the average investment for the average person going to outperform inflation? Is there a point when a sustained slow trickle price decline plus a slow uptick in interest rates plus eventual inflation will be a wash compared to slightly “overpaying” up front?

By all means, I’m not advocating buying right now..Personally I think it’s a terrible time to buy in most higher priced areas especially if you’ve been waiting since 2003/04/05…Prices haven’t fallen far and fast yet, you already waited 4-5 years. If you enter now, you’re paying almost as much as you did back in 2003/04(not 05)…which is still inflated… and on top of that you also spend the past 4-5 years renting. Sit it out. Wait for the government’s insanity to stop. Hopefully, when the dust settles, home prices are more reasonable in these higher cost areas. I’m not touching RE for some time until a lot of these government muckery subsides.

As far as why I penny pinch..Well, got to do it somewhere…Otherwise, I’ll end up like so many broke americans.

[Coronita]

[quote=briansd1]

FLU is a funny guy. He’s resigned himself to having overpaid for his house; but he seems like a guy who would shop and shop before buying his new HDTV, car, carpet, hiring a baby-sitter, or whatever.
[/quote]

yes, that is the asian irony…My blood makes me squander pennies while missing out on the bigger dollars 🙂

Actually. Out decision was pretty planned.
Buy a SFH and dump two attached homes in two different high cost CA locations prior to marriage.
Neither of us wanted to be landlords right after marriage, tax free cap gains, and a SFH was still 25% less than two..Haggling with the seller who fell out of escrow twice $60k down from his asking was just icing on the cake…..

I guess completely cashing out in RE and just renting would have been an option….But some observations.

…5 years later rather than living in my home, I would have the option to purchase my neighbor’s down the street which just closed about the same purchase price what we paid in early 2004

….Or I have the option to get into a bidding frenzy with those REO’s in CV right now. I forget how many there are….

….5 years later, I’d still like to see a CV average comp in 2600-2800sqft significantly lower than 03-04 pricing…Let’s knock off $100k…How many 2600-2800sqft listings are there that is $700k or lower listings in Torrey Hills, Carmel Country Highland, or old part of CV NOT along 56?

….Also, 60 months * $3k in rent. That isn’t an insignificant amount of money. It’s not like you have no cost by not purchasing (compared to buying a TV where you simply can choose to not spend)… You aren’t living for free (unless you happen to be a squatter or someone that took out a mortgage and refuses to pay moratorium after moratorium).
Yes yes, if we put that “extra money” in investments, it would have earned 10%…Oh really? Did most people earn 10%+ consistently between 2004-2009?

….The bonus question is (which I don’t haven an answer for)….How long do people think it will take for 2600-2800sqft SFH in CV to reach say $650k or lower? And what will interest rates be then? Are these government interventions (which are surely not going to stop a price decline) going to continue to cause a slow trickle versus a steep drop like so many of us (inclusive) are hoping so that we can get back into the RE game? Is inflation going to eat into our savings? Is the average investment for the average person going to outperform inflation? Is there a point when a sustained slow trickle price decline plus a slow uptick in interest rates plus eventual inflation will be a wash compared to slightly “overpaying” up front?

By all means, I’m not advocating buying right now..Personally I think it’s a terrible time to buy in most higher priced areas especially if you’ve been waiting since 2003/04/05…Prices haven’t fallen far and fast yet, you already waited 4-5 years. If you enter now, you’re paying almost as much as you did back in 2003/04(not 05)…which is still inflated… and on top of that you also spend the past 4-5 years renting. Sit it out. Wait for the government’s insanity to stop. Hopefully, when the dust settles, home prices are more reasonable in these higher cost areas. I’m not touching RE for some time until a lot of these government muckery subsides.

As far as why I penny pinch..Well, got to do it somewhere…Otherwise, I’ll end up like so many broke americans.

[Coronita]

[quote=briansd1]

FLU is a funny guy. He’s resigned himself to having overpaid for his house; but he seems like a guy who would shop and shop before buying his new HDTV, car, carpet, hiring a baby-sitter, or whatever.
[/quote]

yes, that is the asian irony…My blood makes me squander pennies while missing out on the bigger dollars 🙂

Actually. Out decision was pretty planned.
Buy a SFH and dump two attached homes in two different high cost CA locations prior to marriage.
Neither of us wanted to be landlords right after marriage, tax free cap gains, and a SFH was still 25% less than two..Haggling with the seller who fell out of escrow twice $60k down from his asking was just icing on the cake…..

I guess completely cashing out in RE and just renting would have been an option….But some observations.

…5 years later rather than living in my home, I would have the option to purchase my neighbor’s down the street which just closed about the same purchase price what we paid in early 2004

….Or I have the option to get into a bidding frenzy with those REO’s in CV right now. I forget how many there are….

….5 years later, I’d still like to see a CV average comp in 2600-2800sqft significantly lower than 03-04 pricing…Let’s knock off $100k…How many 2600-2800sqft listings are there that is $700k or lower listings in Torrey Hills, Carmel Country Highland, or old part of CV NOT along 56?

….Also, 60 months * $3k in rent. That isn’t an insignificant amount of money. It’s not like you have no cost by not purchasing (compared to buying a TV where you simply can choose to not spend)… You aren’t living for free (unless you happen to be a squatter or someone that took out a mortgage and refuses to pay moratorium after moratorium).
Yes yes, if we put that “extra money” in investments, it would have earned 10%…Oh really? Did most people earn 10%+ consistently between 2004-2009?

….The bonus question is (which I don’t haven an answer for)….How long do people think it will take for 2600-2800sqft SFH in CV to reach say $650k or lower? And what will interest rates be then? Are these government interventions (which are surely not going to stop a price decline) going to continue to cause a slow trickle versus a steep drop like so many of us (inclusive) are hoping so that we can get back into the RE game? Is inflation going to eat into our savings? Is the average investment for the average person going to outperform inflation? Is there a point when a sustained slow trickle price decline plus a slow uptick in interest rates plus eventual inflation will be a wash compared to slightly “overpaying” up front?

By all means, I’m not advocating buying right now..Personally I think it’s a terrible time to buy in most higher priced areas especially if you’ve been waiting since 2003/04/05…Prices haven’t fallen far and fast yet, you already waited 4-5 years. If you enter now, you’re paying almost as much as you did back in 2003/04(not 05)…which is still inflated… and on top of that you also spend the past 4-5 years renting. Sit it out. Wait for the government’s insanity to stop. Hopefully, when the dust settles, home prices are more reasonable in these higher cost areas. I’m not touching RE for some time until a lot of these government muckery subsides.

As far as why I penny pinch..Well, got to do it somewhere…Otherwise, I’ll end up like so many broke americans.

[Coronita]

[quote=briansd1]

FLU is a funny guy. He’s resigned himself to having overpaid for his house; but he seems like a guy who would shop and shop before buying his new HDTV, car, carpet, hiring a baby-sitter, or whatever.
[/quote]

yes, that is the asian irony…My blood makes me squander pennies while missing out on the bigger dollars 🙂

Actually. Out decision was pretty planned.
Buy a SFH and dump two attached homes in two different high cost CA locations prior to marriage.
Neither of us wanted to be landlords right after marriage, tax free cap gains, and a SFH was still 25% less than two..Haggling with the seller who fell out of escrow twice $60k down from his asking was just icing on the cake…..

I guess completely cashing out in RE and just renting would have been an option….But some observations.

…5 years later rather than living in my home, I would have the option to purchase my neighbor’s down the street which just closed about the same purchase price what we paid in early 2004

….Or I have the option to get into a bidding frenzy with those REO’s in CV right now. I forget how many there are….

….5 years later, I’d still like to see a CV average comp in 2600-2800sqft significantly lower than 03-04 pricing…Let’s knock off $100k…How many 2600-2800sqft listings are there that is $700k or lower listings in Torrey Hills, Carmel Country Highland, or old part of CV NOT along 56?

….Also, 60 months * $3k in rent. That isn’t an insignificant amount of money. It’s not like you have no cost by not purchasing (compared to buying a TV where you simply can choose to not spend)… You aren’t living for free (unless you happen to be a squatter or someone that took out a mortgage and refuses to pay moratorium after moratorium).
Yes yes, if we put that “extra money” in investments, it would have earned 10%…Oh really? Did most people earn 10%+ consistently between 2004-2009?

….The bonus question is (which I don’t haven an answer for)….How long do people think it will take for 2600-2800sqft SFH in CV to reach say $650k or lower? And what will interest rates be then? Are these government interventions (which are surely not going to stop a price decline) going to continue to cause a slow trickle versus a steep drop like so many of us (inclusive) are hoping so that we can get back into the RE game? Is inflation going to eat into our savings? Is the average investment for the average person going to outperform inflation? Is there a point when a sustained slow trickle price decline plus a slow uptick in interest rates plus eventual inflation will be a wash compared to slightly “overpaying” up front?

By all means, I’m not advocating buying right now..Personally I think it’s a terrible time to buy in most higher priced areas especially if you’ve been waiting since 2003/04/05…Prices haven’t fallen far and fast yet, you already waited 4-5 years. If you enter now, you’re paying almost as much as you did back in 2003/04(not 05)…which is still inflated… and on top of that you also spend the past 4-5 years renting. Sit it out. Wait for the government’s insanity to stop. Hopefully, when the dust settles, home prices are more reasonable in these higher cost areas. I’m not touching RE for some time until a lot of these government muckery subsides.

As far as why I penny pinch..Well, got to do it somewhere…Otherwise, I’ll end up like so many broke americans.

[Coronita]

[quote=briansd1]

FLU is a funny guy. He’s resigned himself to having overpaid for his house; but he seems like a guy who would shop and shop before buying his new HDTV, car, carpet, hiring a baby-sitter, or whatever.
[/quote]

yes, that is the asian irony…My blood makes me squander pennies while missing out on the bigger dollars 🙂

Actually. Out decision was pretty planned.
Buy a SFH and dump two attached homes in two different high cost CA locations prior to marriage.
Neither of us wanted to be landlords right after marriage, tax free cap gains, and a SFH was still 25% less than two..Haggling with the seller who fell out of escrow twice $60k down from his asking was just icing on the cake…..

I guess completely cashing out in RE and just renting would have been an option….But some observations.

…5 years later rather than living in my home, I would have the option to purchase my neighbor’s down the street which just closed about the same purchase price what we paid in early 2004

….Or I have the option to get into a bidding frenzy with those REO’s in CV right now. I forget how many there are….

….5 years later, I’d still like to see a CV average comp in 2600-2800sqft significantly lower than 03-04 pricing…Let’s knock off $100k…How many 2600-2800sqft listings are there that is $700k or lower listings in Torrey Hills, Carmel Country Highland, or old part of CV NOT along 56?

….Also, 60 months * $3k in rent. That isn’t an insignificant amount of money. It’s not like you have no cost by not purchasing (compared to buying a TV where you simply can choose to not spend)… You aren’t living for free (unless you happen to be a squatter or someone that took out a mortgage and refuses to pay moratorium after moratorium).
Yes yes, if we put that “extra money” in investments, it would have earned 10%…Oh really? Did most people earn 10%+ consistently between 2004-2009?

….The bonus question is (which I don’t haven an answer for)….How long do people think it will take for 2600-2800sqft SFH in CV to reach say $650k or lower? And what will interest rates be then? Are these government interventions (which are surely not going to stop a price decline) going to continue to cause a slow trickle versus a steep drop like so many of us (inclusive) are hoping so that we can get back into the RE game? Is inflation going to eat into our savings? Is the average investment for the average person going to outperform inflation? Is there a point when a sustained slow trickle price decline plus a slow uptick in interest rates plus eventual inflation will be a wash compared to slightly “overpaying” up front?

By all means, I’m not advocating buying right now..Personally I think it’s a terrible time to buy in most higher priced areas especially if you’ve been waiting since 2003/04/05…Prices haven’t fallen far and fast yet, you already waited 4-5 years. If you enter now, you’re paying almost as much as you did back in 2003/04(not 05)…which is still inflated… and on top of that you also spend the past 4-5 years renting. Sit it out. Wait for the government’s insanity to stop. Hopefully, when the dust settles, home prices are more reasonable in these higher cost areas. I’m not touching RE for some time until a lot of these government muckery subsides.

As far as why I penny pinch..Well, got to do it somewhere…Otherwise, I’ll end up like so many broke americans.

[an]

[quote=flu]
….The bonus question is (which I don’t haven an answer for)….How long do people think it will take for 2600-2800sqft SFH in CV to reach say $650k or lower? And what will interest rates be then? Are these government interventions (which are surely not going to stop a price decline) going to continue to cause a slow trickle versus a steep drop like so many of us (inclusive) are hoping so that we can get back into the RE game? Is inflation going to eat into our savings? Is the average investment for the average person going to outperform inflation? Is there a point when a sustained slow trickle price decline plus a slow uptick in interest rates plus eventual inflation will be a wash compared to slightly “overpaying” up front?
[/quote]
I hope it’ll be around that price 10 years from now :-).

[an]

[quote=flu]
….The bonus question is (which I don’t haven an answer for)….How long do people think it will take for 2600-2800sqft SFH in CV to reach say $650k or lower? And what will interest rates be then? Are these government interventions (which are surely not going to stop a price decline) going to continue to cause a slow trickle versus a steep drop like so many of us (inclusive) are hoping so that we can get back into the RE game? Is inflation going to eat into our savings? Is the average investment for the average person going to outperform inflation? Is there a point when a sustained slow trickle price decline plus a slow uptick in interest rates plus eventual inflation will be a wash compared to slightly “overpaying” up front?
[/quote]
I hope it’ll be around that price 10 years from now :-).

[an]

[quote=flu]
….The bonus question is (which I don’t haven an answer for)….How long do people think it will take for 2600-2800sqft SFH in CV to reach say $650k or lower? And what will interest rates be then? Are these government interventions (which are surely not going to stop a price decline) going to continue to cause a slow trickle versus a steep drop like so many of us (inclusive) are hoping so that we can get back into the RE game? Is inflation going to eat into our savings? Is the average investment for the average person going to outperform inflation? Is there a point when a sustained slow trickle price decline plus a slow uptick in interest rates plus eventual inflation will be a wash compared to slightly “overpaying” up front?
[/quote]
I hope it’ll be around that price 10 years from now :-).

[an]

[quote=flu]
….The bonus question is (which I don’t haven an answer for)….How long do people think it will take for 2600-2800sqft SFH in CV to reach say $650k or lower? And what will interest rates be then? Are these government interventions (which are surely not going to stop a price decline) going to continue to cause a slow trickle versus a steep drop like so many of us (inclusive) are hoping so that we can get back into the RE game? Is inflation going to eat into our savings? Is the average investment for the average person going to outperform inflation? Is there a point when a sustained slow trickle price decline plus a slow uptick in interest rates plus eventual inflation will be a wash compared to slightly “overpaying” up front?
[/quote]
I hope it’ll be around that price 10 years from now :-).

[Author]

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