My 3 neighbors are chasing the market down

[JES]

Great to see I’m not alone. Selling a home, moving a family into a rental and waiting for prices to crash is an emotionally trying experience. As is the alternative we’re considering of leaving the area altogether. In our situation, the prospect of falling prices has driven many of our major life decisions this past year, and yet we are unable to have intelligent conversations about it with our closest relatives. When the market was climbing the topic couldn’t be avoided and the mantra was “you gotta get in the game.” Everyone celebrated when we bought our first house, brought us flowers and gifts and we even threw a party. When we sold I actually spotted a few tears, and the consensus was that we would never be able to get back in the market again. A few relatives have voiced support, but overall it has been a very solemn affair to say the least.

[sdduuuude]

Interesting info, powayseller.

Unlikely you will be able to convince them of the truth, though you are dead-on. Reminds me of an old saying:

“Never teach a pig to sing. It doesn’t work and it annoys the pig.”

[Anonymous]

People who bought late, paid too much and still own have a vested interest in properties not falling too far and are in full-blown denial with a big dollop of wishful thinking thrown in for good measure.

When I tell them my father and I bailed out of all of our holdings in Long Beach in Summer, 2004 they look at me and shake their heads at my “stupidity”. Then I tell them that we purchased all of those individual condos and own-your-owns in the mid-late 90’s in cash for prices ranging from $26,900 to to $45,900. After telling them what we sold those properties for and reminding them that we owned them outright, I push the knife in a little further by telling them that my partner and I rent a cute little 2 bdrm, 1 bath 1920’s bungalow for $890 a month plus utilities. I then twist the knife when I add that we’ll be ready to swoop in the next time values plunge and buy cheap all over again. Finally I ask them how my $890 a month rent payment compares with their monthly expenses.

That wistful look on their faces tells it all.

[an]

Will they rehire 500-550 people that they just lay off or is there a chance that they’ll rehire 500-550 new people? It seems kind of strange to me that they’re laying off then rehire.

[balasr]

I have seen this happen at a company I used to work. They gave layoff notices and *then* decided who to keep, to fullfil existing contractual obligations. This was in MD. In MD, if you lay-off more than > X% of your work-force (forget what X is), you have to give 2 months advance notice. So if it’s a large number and they just want to fullfil existing obligations, the trick is to give 2 months notice and the start to figure out who is abssolutely required. That buys them some time. May be that’s not the case here, but it’s probably something similar.

[Chrispy]

They may also rehire some of them back as independent contractors instead of employees… that way they can avoid paying for health insurance, 401K, etc. etc. Happened to a few people I knew who worked at Stellcom…. which became Vitek… which became CalAmp…

Sometimes it’s a good thing to get let go!

[powayseller]

A friend told me that the number of parents asking for payment plans for the kids’ Poway school bus passes went from 100 to 400 in the last year. The parents, esp. on the west side of I-15, complain about the high mortgages. Some parents live in a 3-generation house, and get spending money from their own parents. This friend told me he has seen this housing cycle really hit families hard. He remembers all the foreclosures around Poway the last 2 cycles. The more expensive neighborhoods were full of foreclosures…

If I have a conversation, I typically tell people I am 100% certain their house will be worth 50% less in 3 years. This accomplishes two goals: 1) I can be really annoying by pretending to know something with 100% certainty, and 2) I like to shake things up by being contrarian. (The above was just a joke, but I think some of you think I am truly like this, hahahahahahaha). Honestly, I just say, “We sold our house because we believe prices will drop in half.”

[an]

So let say everybody went job hunting and found jobs. Then you’re told Nokia will be hiring you back, would you stay back or would you still leave? I definitely wouldn’t be sticking around.
In regards to to the 401k’s, that does suck.

[vcguy_10]

Perrychase is a wise man.

PSeller–Yes, they may have to sell for below $400K in ’07, or they may decide not to sell at all and “wait for the market to recover”. I really hope you’re not getting a “that nosy lady!” reputation in your neighborhood!

[vcguy_10]

So imagine 500 people who know they have lost their job, are forced to show up for several months, in order to eventually collect their severance

C’mon dude… they are not “forced,” nobody is. They get to collect their salary for those months, and then a fat severance check at the end. If they are lucky enough to get a new job offer in the interim, they can always ask the new employer to either wait for the Nokia release date, or a signing bonus to match the size of the expected severance check.

I cringe when I hear journalists say that someone is being “forced” to do something. It sounds like a poor device to make a story easier to sell.

[contraman]

Just my opinion here for everyone, I, like alot of you, sold my real estate holdings this past year and dodged the proverbial bullet. I broke even on the properties financially but the stress and sleepless nights that I had for three months were not fun at all.

I will be fortunate on one hand in a about two years to be able to purchase a home the sane way with a lot of savings for reserves and a substantial down payment.

The flip side of this coin is that there are people out there, family members, and friends, that will get badly hurt in this market both financially and mentally over the next few years.

They made a poor decision and will pay dearly for it. I think it right and mature not to glory over the misfortune that will be coming to them but rather try to support them through this downturn.

We would expect the same from them if we made poor decisions for whatever reason and were living through the consequences.

I don't think it was right for people to brag to renters about all the money they made in the hay day and I don't think it now justifies us in a more fortunate position to spite them as homeowner's who are caught in the downturn here.

We should give them sound and sober advice if they ask it of us, and that is all we can do….

Let's face it recessions affect everyone in one way or another.  

Sincerely, Contraman

[davelj]

You’re a better man that I am, Contraman. You’re right, of course. But when I recall the looks of indignation I got when I sold my place two years ago, and subsequent pedantic prognostications that SD real estate was a no-lose proposition regardless of price, I’m filled with visions of future schadenfreude. I know a few acquaintances and friends of friends who are in real trouble right now. But I don’t have any family or close personal friends who indulged in this recent mania. So, as to the rest I say, “Screw ’em.” As my father liked to say, “Experience is life’s greatest teacher but her tuition is very expensive.” Well, the next few semesters are going to be a doozy.

[sdduuuude]

Experience is that which you get just after you needed it.

[powayseller]

vcguy, you are so sweet to be concerned about my reputation:) Thank you. I did not tell any of them what I thought their home was worth, but I gave realtor #3 an earful!

(This realtor guy was kind of deceitful; he arrived to the agent open house at the same time I did, and left when the owner returned home, 15 min. later, and then had the balls to tell her, “Our agent tour went well and is just winding down”. She had left the house for one hour for the supposed agent tour. What a joke!)

[waiting hawk]

I am with the guys that said screw em. In 2004 I was sayin, “who are these idiots buying homes”?

PS that realtor is horrible. I hope you told him off good. My realtor btw is a RENTER. Funny huh?

My website tracking Temecula and South Riverside County

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