Next Shoe Drops in May….

[Raybyrnes]

4plexowner

Tend to agree that the project on garnet is poor choice. As for spell check not relly worth my time for this type of blog. I am not drafting a memo to a corporation and refuse to start treating it as such.

Another point here is that 10 years ago your same arguments would have prevented the construction of San Elijo Hills, 4 S Ranch, Del Sur. Well they were built and people are paying 700K a pop. In 10 or 20 years we will see new area rebuilt. Prices then will probably be a whole lot higher then they are today.

[kicksavedave]

“People who are leaving San Diego are from the lower income status. ”

Simply not true, and not supported by any data or facts. My wife and I make about $180K between us – that’s nearly 3 times the median houshold income. We’re leaving (hope to come back some day) because we don’t want to spend $4500/mo on a 1300 sq/ft shack in dumptown, when we can spend $1900/mo on a 3000 sq ft house in a great neighborhood. Sure, a bank might lend us that money, but it’s a bad investment. If some day it comes back down to earth, we’ll be back. If not, then we left at the right time.

And we’re not alone, I have at least three families in identical situations at my company alone, who are contemplating the same escape. Nurses, engineers, programmers… professionals who make good incomes, can’t buy schzitt here. They are leaving in droves.

[Bugs]

“Another point here is that 10 years ago your same arguments would have prevented the construction of San Elijo Hills, 4 S Ranch, Del Sur. Well they were built and people are paying 700K a pop. In 10 or 20 years we will see new area rebuilt. Prices then will probably be a whole lot higher then they are today.”

If you’re talking 10 or 20 years, that’s a lot different than talking about the next 2-7 years. A person who can take advantage of the opportunities in the near term AND in the long term will probably do better than someone who has to wait for the long term to break even.

Dollars in the near term have a greater value than the same amount in future dollars.

This ain’t 1997, and it’s going to be a while before 1997 comes around again. You might want to keep in mind that people who bought in 1989 didn’t come back into the black until 1998 or so. In the interim, they were mostly in a losing position, even if they never had to book those losses through a sale.

This brings up another point; just because a lot of the 2004-2006 buyers haven’t sold yet doesn’t mean their assets haven’t lost them money – they just haven’t realized their losses by booking them as a sale.

[JWM in SD]

I’m in the same situation kicksavedave. My wife and I make just over 200k combined with a child on the way. No way am I going to fund some SoCal douchebag’s retirement/lottery ticket just because they got here first. If that means that SD ends up a place where the only habitable/safe area is in LaJolla, and the rest can go the illegals who serve them, then so be it. The idiots who leveraged up like Raybyrnes are not getting my money. I’ll take it elsewhere and see how they fare from a distance. I’ve got time and I’ve got cash. No Debt. What do the FBs have except a mountain of debt and a stucco box?

[JWM in SD]

Oh, and another thing Raybyrnes. You refied a year ago eh? Isn’t it time for another one by now??? Why not, you can plow it into the stock market again and see how it does. Why not refi again there Raybyrnes?? Why not??? It’s only debt right? I’m sure you can get some appraiser to hit right numbers can’t you?

I don’t care how much equity you have from being in the right place at the right time. Don’t mistake luck for prowess…that can be dangerous.

[Raybyrnes]

Wasn’t really luck JWM and to be fair it was not my property. It was my Dad’s. I looked at his house and saw a fully paid off mortgage, a run up in home price and a decelerating growth rate. Therefore the equity was dead money. I also knew that even if I was wrong the loans could be paid back in full with other investments and the monthly payments were a drop in the bucket. Therefore it wasn’t that risky a move. My father was never going to lose his home even if the value of the investment went to zero. Additionally this created a nice deduction. The challenge now is how to unravel the profits without triggering AMT. This is proving to be a challenge.

You are right debt is not an issue in my book provided I can find somthing that provides a better rate of return. This means being mindful of my debt service ratio. 0% credit cards are a pretty good option when you are earning 6 % in a money market accoun. Therefore if you do not accept them you are paying the different in lost opportunity cost. 3% student loans are a good bet whe you can arbitrage this. 5% fixed rate loans on 30 year mortgages where lenders will allow you to make interest only payments and the governemtn provides you with a tax deduction. This requires a little bit more work, a small amount of risk but I would hardly call this being lucky. It sort of seems like shooting a lay up. It is the easyy money. I just think it’s worth taking the time to pick it up. Other people prefere to watch Law and Order.

[Raybyrnes]

Last point of note. I’d be shocked if in 20 years a home in San Diego is not going to provide a better rate of return than 90% of the rest of the country. Go ahead and find a 3000 squae foot place in South Dakota and tell me who is better off in the long run. Additionally you have to do something with cash. It hasn’t typically shown to be a good investment over the long term. So keep your cash and if it helps you sleep well at night great. But don’t wake up bitter in the mourning when you find people who are half as smart and make half as much but had the courage to buy and accumulate assets that you were unwilling to take a risk on.

[latesummer2008]

BACK to our REGULAR PROGRAM? Seems to be a little debate going on. It is always good to at least consider, the other side of an argument. However, lets move on, shall we?
Anyone else getting the feeling that $$$ that was going into Real Estate is now fueling the next asset class (STOCKS). And if this is the case, the NEXT BUBBLE? Getting bubblicious around here for me….. Can’t we even pop the first one before we blow up another one? How many times can people get burned and not realize what is going on?

Frikin salespeople, sending sheep out to slaughter…AGAIN

http://westsideremeltdown.blogspot.com

[The-Shoveler]

Nor_LA-Temcu-SD-Guy

I am of the school (now days anyway, got burned bad in 2000 like a lot of people) that if there is not a significate advantage there is no reason to go throwing your money into an investment (getting close to 6% in Fed insured CD’s) .

IMO there is not a good reason to invest in RE or Stocks at the moment.

Just waiting !!

[Raybyrnes]

Could move what you have into California Tax Free Muni Bonds and start a new series of cash flows into index mutual funds. If you have enough cash The American Funds has a pretty good Mutual Fund for this. Need to have cash to avoid the sales charge.

Over the long term cash has not proven to be a great investment. But it can help you sleep at night. Personally I feel that if I am getting 5 % but the market is yielding 15% I feel as though I am losing 10% no different than if my actual portfolio had dropped by the same amount.

[The-Shoveler]

Nor_LA-Temcu-SD-Guy

Yea I sold the qqqq’s in January of 2006 at 43 and change,
Now it is at 46 and change (WoooHooo!!), No thanks, I am waiting for a real advantage here. Interest rates may go up I think.

Well good luck to you anyway.

[latesummer2008]

Where Does the Money Go Next? INMHO, money is transferring now from Housing to the Stock Market (Next BUBBLE). Then where? Tulips?

http://westsideremeltdown.blogspot.com

[The-Shoveler]

Nor_LA-Temcu-SD-Guy

Private equity buyouts , The Pension plans will be left holding the bag I think.

JMO,

[latesummer2008]

Unfortunately True. Too big and bulky to react fast. Average Joe takes the brunt of it. Must be the “American Way”. Kinda like the “American Dream” of homeowner(debtor)ship.

http://westsideremeltdown.blogspot.com

[latesummer2008]

Where Are April Numbers? Must be bad, because the spinmiesters won’t release them yet. Look for sales volume and price per square foot to drop YEAR OVER YEAR. Median and Month to Month numbers, are next to meaningless. We’ll probably have to dig beyond the numbers released, as usual. 1/3 of the selling season is over already (March & April). I would love to see that aggregate number measured YEAR OVER YEAR. Anybody have that?

http://westsideremeltdown.blogspot.com

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