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September 28, 2007 at 9:39 AM #86227September 28, 2007 at 10:21 AM #86233ocrenterParticipant
the Chinese are coming…
the Chinese are coming…
the Chinese are coming…good grief.
what proportion of your average Asian buyer in SoCal are really foreign buyers using $RMB, Won, Yen, or $NT?
the vast majority of your “Chinese invasion” is really Asian Americans with their American jobs getting paid $US dollar. The drive to live in good school districts, the drive to outcompeting fellow Korean or fellow Taiwanese or fellow Chinese, and the desire to live in areas with lots of Asian food choices cause the clustering that you see there in Diamond Bar/Rowland heights/HH.
And in general there is a strong desire for homeownership, so you will get a lot of Asian buyers still ignoring the bubble and jumping in. They will pay for their mistake. Just like everybody else that have caught the falling knife. It’ll just occur SLOWER. But fall they will.
and for the record, renting does sux, but it beats losing $200k in equity in 1-2 years!
September 28, 2007 at 10:40 AM #86238greensdParticipantCan’t set up your home theater system? Wow, that must really suck… And don’t you hate it when you can’t get to your Rolls because of the huge piles of money in your garage?
September 28, 2007 at 11:01 AM #86239socratttParticipantIs this what America has come to? A man in his 50’s complaining that he rents a nice house, which I highly doubt is a POS if it is listed at $1mil. Granted it may not be a mansion, but chances are suffering with $2million in the bank isn’t that tough.
If he could only empathize with the younger generation who have to walk away from their homes because the banks were smart enough to lend money to a human with a heartbeat.
I rent an incredible home for $2,600/month. I don’t pay for the gardener, the pool cleaner or anything that breaks in the home. There are benefits to being a renter and these are just a few. I guess if you had to the weigh the option of losing $100K+/- (could be much more depending on the value of your home) on a home or suffering in a rental while the market runs it’s course, I would have to pick the latter.
If you want to see how tough life can really be traveling 1 hour south to your local Mexican pub and strike up a conversation. We got it so good in this country you don’t even know. This collapse is part of many cycles that have to occur to make this world go round.
September 28, 2007 at 11:16 AM #86240DanielParticipantCashman,
The moral of your story (if there is one) is “never rent a house that you wouldn’t buy”. I’m very happy with my rental, and I would buy the house I live in if I felt that the price was right. Anyone who intends to live in a cookie-cutter tract home (like me) should easily find an equivalent rental. But if your preferences are very specific, then renting is probably a bad idea. OK, it may save you money, but you give up quality of life for that. I’ll say it again: never rent something you wouldn’t buy.
PS: of course, the comment above applies to those who rent by choice (like you). Those who rent because they can’t possibly afford to buy don’t have this luxury.
September 28, 2007 at 11:18 AM #86241lendingbubblecontinuesParticipantsocrattt-
I agree. Only an utter fool would be complaining about renting while sitting on a 2 million dollar wad of cash generated by the sales of (presumably) multiple homes over his lifetime. Can’t see the forest for the trees…
September 28, 2007 at 11:36 AM #86243jeemanParticipantSomething smells fishy….$200k in interest on $2mil? That’s a 10% interest rate. Which bank gives you this???
Jeeman
September 28, 2007 at 11:49 AM #86246socratttParticipantJeeman, Just to clarify at 5% a year x 2 years equals $200K.
September 28, 2007 at 11:50 AM #86247jeemanParticipantOk, I stand corrected as I didn’t realize that it was over 2 years. 🙂
Jeeman
September 28, 2007 at 11:55 AM #86248Diego MamaniParticipantCashman: Renting rocks!
I see two serious problems with your situation, at least one of which you brought upon yourself:(1) You are waiting for prices to drop. Now, don’t get me wrong, we do know that RE prices are dropping and will continue to drop. However, this is a very slow process! I know my clothes dryer takes close to 45 minutes, yet I don’t sit in front of it waiting for the clothes to dry! I go and do something else in the meantime. Waiting for RE cycles to bottom out is like watching plants grow. No wonder you’re desperate. When you rented, you should have planned on doing so for at least 4 years, if not longer. The fact that you haven’t unpacked completely after 2 years tells me that you naively thought that prices would correct in only 6 months. It could take 6 years my friend! (Look at the last down cycle: 1989/90 to 1996.)
(2) You are renting from a FB who can’t wait to unload the house and hence has it listed for sale at a ridiculously high price. I’ve been renting for a little over 2 years too, but my landlord is a retired gentleman who also owns his primary residence and has no intention to sell the house where I live. You have to put up with realtors and looky-loos. No wonder you are desperate! I suggest doing the following: move to a house without that problem (like mine), OR, offer the landlord to pay him extra $x per month in exchange for taking his house off the market for another year or two. Tell him that RE will boom after 2010 and that he would be a fool to sell now for $900K or $1M when he can get $2M in the next boom. (I’m half joking here, but you get my point).
Good luck, and invest your cash wisely. Do a Google search for David Swensen for ideas on diversification.
September 28, 2007 at 12:01 PM #86249cashmanParticipantjeeman, that’s two years of interest at 5% per year. Too the rest of you, thanks for your insights. Please don’t look down on me because I was smart enough to save money during my lifetime and have comfortable options now. I am not a compaliner, but rather a doer. And it just frustrates me lately that I can’t “do” as planned because of a stubborn housing market that refuses to go down (in my area). And by the way, I drive a Jeep, not a Rolls.
September 28, 2007 at 2:13 PM #86266cyphireParticipantHey Cashman, I have an exact opposite experience than you do. I sold my house in 2006 (December) for 2M. I sold for just over what I paid for it 2 years before. My neighbors told me I was nuts to dump it for less than 2.25, but I wasn’t going to jerk around letting people come see my house for a year while it got worse and worse to sell a home.
Here it is 10 months later. The home I am renting is pretty expensive (over 6,500), but it includes gardening, pool maint, and of course all repairs, etc. You may think I’m crazy for spending this kind of money, but the carrying charges (including lost interest on the part not financed, the water, electricity, etc.) were probably about 14K per month. That coupled with the future loss of asset value, made it a no brainer to move. We also had a reason to move, I wanted to be closer to my kids school to avoid an almost 1 hour commute.
This house has built in speakers, a pool, a casita (I just moved my office in there and am saving 1600 / month on office rent for a really nice workspace), and a tiki bar (outdoor entertaining). The location is awesome and the best part is that I am paying 6,700 for a house that is worth 2.6 Million – if they could sell!!! (They can’t at that price). Do you know what 2.6 Million costs to carry? Plus the 100K+ that the house is currently losing in value right now? I am the HAPPIEST GUY ON the planet!
Your problem is that you are renting a piece of crap. As a previous poster said, you are renting a sub 1M property in an urban, major market. What do you expect? My cousins are in real estate (Malibu) and rent places to people for 10-75K PER MONTH! You get what you pay for, but since it is California and we have hit the top of the market, you are getting a severely better deal by renting.
My house is 3,600 feet, has a pool, balconys looking at the ocean, stereos, ect, all remodeled, brand new kitchen with 40 feet of granite counter space, and most importantly, I don’t own it!
My last comment is – whats the deal with your landlord showing the house? Something is fishy. There were a bunch of landlords who couldn’t sell their homes, so they would rent them and leave them on the market (secretly). I stood very clear of those deals. I took a 1 year lease, with a second year option at the same rent. My landlord can’t come over (other than by himself if he needed to see that the place was being taken care of), and he certainly can’t show the property (until 2 months before I give notice)! That is a standard clause in the lease.
It sounds like you haven’t really considered your living arrangements, I am paying a lot of rent, but basically am (even after subtracting the tax benefit I would have had for owning) way ahead 4-5K per month. Now if I felt that the market was going to be soft, but then go gangbusters again, I would be foolish, but only a mad man would think that we are going to have a quick recovery. I think that 5 years from now this place will be sub 2M (or possibly much lower – mid 1.6M if we have a brutal recession), and I wouldn’t mind saving a MILLION dollars over 5 years and buy it then… Meanwhile – don’t be stingy on rent, you are getting double or triple your money back in not losing equity – like your poor landlord!!!!
Just my opinion…. Chilling out in style in La Jolla with all my money in the bank!!!
September 28, 2007 at 10:16 PM #86311JWM in SDParticipantOh yeah, cry me a river there cashman. What kind of freaking windbag are you?
Please spare us your non-sense in the future you pompous D-Bag.
September 29, 2007 at 8:18 AM #86325greensdParticipantPlease don’t look down on me because I was smart enough to save money during my lifetime and have comfortable options now.
I’m not looking down on you because you make more sitting on your ass than most people can bring home with two jobs. I’m not even looking down on you for your need to brag about that fact on the Internet. I’m looking down on you for putting your boasts in the form of a complaint about your lifestyle, when you know full well that you live better than the vast majority of people in SoCal, let alone the world. Besides, if you really were “smart” and a “doer”, the state of the housing market wouldn’t matter — you’d have no problem thinking of something to do with $2mil besides buy houses and wait for the market to go up.
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