Most Reliable Housing Forecast?

[powayseller]

jg, I made a 530% profit on the downpayment money invested in my house in just under 6 years.

Thanks for the question about my website. I can see you are very anxious, and I appreciate that and hope you will like it.

The question in this thread was who is a good market timer, and I tookt he liberty of excluding myself and real estate bloggers. Yes, Roubini is excluded too.

I’ve posted many many times, that I missed out on participating in the greatest real estate boom in recent history. I did not know about exotic lending or real estate cycles. I didn’t know I could buy 5 rental properties with no money down. I didn’t know neg-am loans existed. I had no clue about stated income. I’d been scared off by family members who said real estate is a messy investment, filled with deadbeat tenants, expensive repairs, a lot of oversight, and small profits. So I put real estate into a back burner and invested only in the equities market. Consequently, I missed on the real estate and gold booms.

I’ve also repeatedly thanked Rich (and my brother) for showing me there was a bubble. I think many times people who spot a bubble decline to participate in it, and thus miss out on the profits. Like I did not catch the Dow wave, because I thought it was overvalued. So my brother and Rich did not buy real estate in this boom, because they saw the bubble. Dean Baker warned of a bubble for many years, while it was still going higher and higher. None of us understood at the time that there would be plenty of time to get out, that real estate is very sticky on the way down. We are all learning.

I was just talking to EH, a 50-something real estate investor at the gym, who doesn’t want to sell any of his San Diego rentals, because they are paid off and he makes money on the cash flow. He doesn’t need the money. I asked him why he doesn’t cash out, and he said, “then what would I do with my money?” He told me he earned 11% annual over the past 20 years in his real estate deals, made 16% last year in 2nd deed trusts, and 11% last year in his stock market portfolio. He bought his house with money he made in the dot com bubble, because he cashed out every time the stock doubled. His secret he says is discipline and a system: he buys one house ever year, regardless of the market. History has been kind to his approach. He’s a real nice guy, and even if his properties drop in half, he’ll still make money on the rental stream. Now he’s buying commercial builder loans, subordinated to banks.

[admin]

So my brother and Rich did not buy real estate in this boom, because they saw the bubble.

Once again, this is wrong. Despite your earlier protestation, this is not what was in the WSJ article (which was itself very light on facts, to put it kindly) and it’s not true. Please stop repeating it. I won’t ask again.

[Dino]

I just received a voice mail from someone at Moodyseconomy.com. I contacted them because they were quoted in Fortune Mag regarding their 2007 Housing Market Monitor. They rate US cities in regards to house-price imbalances and provide housing market projections for 2007 for the top 100 US metropolitan areas. Interestingly, 6 of the top 10 cities for the largest drops in home prices will occur in California, according to them. Oddly enough, San Diego was not one of them.

The voice mail indicated that this is the first year Moody’s has put together such a report. I was hoping to find something a little more black and white. I’m sure there is something out there that has projected housing figures each year. Then, a report can be created to see how accurate the projections were. Similar information can be tracked pretty easily with securities, but I haven’t been able to find much on housing.

[powayseller]

Rich, did you purchase any real estate in San Diego during this housing boom? I find it very odd that someone blogging about housing for 2 years keeps their own housing purchases such a secret, and gets defensive when very politely questioned about it. According to you, I am wrong, wrong, wrong, and not speaking the truth, but what is the truth?

I’ve been one of your greatest champions, and complimented you more times than I can even remember; it’s all there in the archives of piggington. It’s perfectly fair for me, or anyone else on piggington or a Voice of San Diego reader to ask you about your own real estate investing history. For you to get defensive about it is just mind boggling.

So in response to your comment that I am wrong, I ask you “wrong about what?” I won’t ask again.

[sdcellar]

powayseller– Rich doesn’t need me to defend him, but he has no reason to a) defend himself in the first place and b) respond to your request for personal information. You also know that it’s difficult for him to repond now based on regulatory restrictions. How about not biting the hand that feeds you?

You have been asked to stop speculating and refuse to. You are simply being rude now. Please stop.

[admin]

Rich, could you please inform us whether you purchased any real estate in San Diego during this housing boom? You keep saying I am wrong, but have not offered up anything else. Your past posts note that you’ve been a renter (according to the Voice of San Diego in Hillcrest) since you moved here, but kept your Texas home which you are renting out. If this is incorrect, please say so. I won’t ask again.

Everything you said in the above post is correct. This is not the same as my “never having bought during the boom” as you alleged in your earlier posts. I owned San Diego property before moving to Austin and for some of the time I was living in Austin. It was a very profitable investment and to say that I never bought or profited during the boom is categorically incorrect. To clarify something else, I recently sold my Austin house, also at a nice profit.

I’m sorry for my reaction, but after the way the WSJ article misrepresented the situation I am a little sensitive to people talking about my personal financial matters, especially when they don’t have the facts right. I am sharing this information to set the record straight, not to condone further discussion of what I consider to be my own private business.

[admin]

PS – regarding your second post, which you posted while I was writing the last one. Unlike many forum posters I do not feel comfortable divulging my personal financial situation on a public forum. I specifically think it’s a bit crass to talk about profits one has made in the markets.

This site is about the economics of the housing market, not about me. My personal transactions are irrelevant to the topic at hand. And writing about the market doesn’t oblige me to put any of my private info into the public domain.

As I recall I was not “politely asked” anything. You posted an incorrect assumption as fact. When I asked you to stop, you re-posted it. When I asked you to stop again, you asked that I “offer up” more personal information rather than respecting my wishes.

All that said, I apologize for reacting so violently and I do appreciate your compliments. I over-reacted because I am really angry about the way that WSJ spun things and left out pertinent facts to make me look bad, and right now I am overly sensitive about further misrepresentation of my personal info.

I have now clarified the situation, despite my discomfort with publicly sharing this kind of stuff, and hopefully that puts things to rest.

sdcellar thanks for being sensitive to the regulatory shackles. This is being posted as an anonymous “admin” and there is no name attached. I am hoping that’s allowed.

[powayseller]

Your answer leaves me somewhat unsatisified. You are a public persona in real estate blogging, but your own real estate history is a private matter? What is a “nice profit” and a “very profitable investment”? Percent returns do not violate your privacy at all, only dollar amounts would do so. Is 1% or 3% a year a nice profit? It’s tax free, so it well could be.

Whether your returns were 3% per year or more, doesn’t really change my respect for your work. piggington.com is the best housing bubble blog out there. Hopefully mine will be as good as yours.

I and others have been quite candid about our own investments, but you have chosen to keep yours all private. We should have asked you long ago about your own real estate investing. I was too afraid of insulting you, and didn’t know how you would handle this. Maybe others, like sdcellar, were afraid they’d be booted off the forums, LOL?

[sdcellar]

PS– Now you’re just being obnoxious. The new year is here, so you’re free from any tax concerns or whatever the excuse was, so announce your site the world and be annoying there.

Rich really did try to be incredibly gracious with regard to your request and you still just don’t get it. I’ve never enjoyed the way you attack posters here and I especially detest watching you do it to the very person who runs this site.

As far as how proud you are of your “public” pronouncements of your personal financials, that is your choice and you are welcome to it. But for the record, I think you’re full of crap on a lot of it anyway.

Oh, and before you start another “attack the post” thread, you might want to look in the mirror first.

[admin]

You are now doing that thing you do where you stop listening to the person you are arguing with.

I will repeat, one last time:

1. I consider my personal financial matters to be irrelevant to the topic of this site, which is the economics of the SD housing market.
2. Unlike you, I do not feel compelled to discuss my personal financial matters on a public forum.
3. I specifically think it’s a little crass to brag about investment gains on a public forum.

This would make perfect sense to anyone with any sense of decorum, but apparently not to you.

So now what you’ve done is to imply that because I won’t give you a specific percentage gain, that must mean my gains were 3% or even 1% per year. So you are effectively badgering me into revealing my personal info by implying something false, lest people believe I gained 3% per year.

So having been backed into a corner by your complete lack of propriety or respect, here are my returns:

– I sold my San Diego property for ~60% more than my purchase price, holding period 2 years
– I sold my Austin property for ~30% more than my purchase price, holding period 4 years

Those are from memory but pretty close.

For some reason you think that because you compliment someone one day, that makes it ok to insult that person the next day. That’s not how it works.

[bub]

OK powayseller I’m taking the gloves off!

I know Rich does not need me or anyone else to defend what he discloses but enough is enough.

I’ve never met you but I have the mental image of a God damn Pit Bull! You just won’t let it go. Well I have to believe I speak for others when I say STFU!

I personally feel I owe Rich for the greatest financial windfall I’ll probably ever see in my lifetime. It’s because of this site and his incredible insight that I sold
my pos condo for a ridiculous amount of money near the top.

And you know what it didn’t make a damn bit of difference whether Rich was a real estate tycoon or a data nerd.

Thank You Rich again for all the time and effort you have put into Professor Piggington’s Econo-Almanac for the Landed Poor. Love that name!

[IONEGARM]

I agree with SDCellar 100%.

[admin]

sdcellar and others, thanks for the support…

[(former)FormerSanDiegan]

The initial admin response was more than enough to back-up the claim. The badgering for more info is ridiculous and adds zero information and insight to the situation.

So … PS made a measly 530% profit on her downpayment for the home she held for 6 years. That pales in comparison to the 1100 % profit on the downpayment for the property I bought in 2000 and sold in 2005. That’s on top of the 1300% I made on the property I bought in 1996 and sold in 2001.

Niener, niener, neiner !

[powayseller]

FSD, nicely done on the return, poorly done on the definition of measly.

Now you know why I didn’t ask Rich about his real estate investment before. I knew he would get defensive. If he had just answered the question, instead of being defensive and saying I was wrong, wrong, wrong, I doubt the other guys would have been upset. But boys, instead of being upset with me for asking the question, ask yourselves why you wouldn’t want to know? What makes you so uncomfortable with my question?

For me, it simply doesn’t matter what his returns are. I will read his posts whether his returns are 3% or 500% annually. What does matter to me very much, is that he has the integrity and courage to be open about this, and not hide behind “privacy”. So I, one of his biggest supporters, am sorely disappointed. I guess that is *my* problem.

[Author]

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