[bob2007]

bayparkwatcher,

Each situation has its own requirements, but I see an awful lot of people put off selling when they think they should because of taxes. Later, their tax problem goes away because their investments decline. It doesn’t have to be an all or nothing. Sell half.

[bob2007]

As for personal wealth, I think it’s important to take note of how much of that wealth is in the form of RE money or Stock money that is subject to catastrophic losses. Our region has not created that many businesses that are not related to RE or directly benefitted from RE equity.

Hi Bugs,

I find that I agree with most of your posts, but my experience with you last comments is a bit different. I am involved with many business groups here in town, and very few have their money tied to RE at this time. Again, “at this time”. I know this is not a large cross section, but it does include about 200 people. They made their wealth outside of RE, and sold off the RE assets in 2004, 2005.

There is a LOT of money in other investments that can be moved to RE if a 50% price drop occurred in LJ. Yes, the stock market can have problems, but the investments are diverse. If the price of LJ properties drops like jg says, then those looking for a primary residence are going to be up against investors again as the rent proposition gets better.

On the issue of sdr, I have found his posts useful, and have never felt like he was trolling or forcing BS on the group in any way.

Bob

[bob2007]

Kev374,

The people who have “way too much money” bought their homes long time ago and don’t contribute to new demand. They are not in the market to buy new homes. It’s completely irrelevant.

Speaking from experience, many of these people move up or sideways, regardless of the market. The buy/sell takes place under the same market conditions.

[bob2007]

Speaker,

I can understand being angry at high prices, but enjoying the attempts of people trying to make a living is cruel. All realtors are not evil. Your anger at the sign is an indication of a problem with your own situation. Being bitter will only make the wait for prices to come down seem longer. I think SDA’s comments were in-line with the mentality of this thread. The useful information was that the sign existed and a few observations. Most of your comments were whining about the sign, pleeeease stop.

[bob2007]

Divorce is never a good situation. From your comments it appears that not only are you happy when people lose their homes, you are equally happy when families fall apart.

[bob2007]

I do not think the market will plunge 50% like many on this list, and I did buy a house this year. Disclaimer: it was right for my situation, not in general, and I am not telling anyone on this to buy!

I would still recommend you do not buy for the following reasons:

1. You need a time frame of at least 7 years, probably 10. If you are leaving in 2-3 years, you will incur a loss.

2. You definitely want to get familiar with the area, especially the traffic patterns and neighborhood demographics. I would rent for at least another year. Make some friends at work, check out some neighborhoods.

Don’t be in a rush to buy anything. Prices are not headed up, and neither are interest rates in the near term.

[bob2007]

There are about a dozen people on this list that have shown great insight into the market (most much smarter than myself), and have been consistent. Both sd realtors are in that group, and neither has taken a bullish approach from the posts I have read. Thank you both for your contributions.

I have been accused of being in the RE business, but have no connections other than owning a couple of properties.

[bob2007]

I would stay with them – despite the problem you had, they are one of the easier banks to deal with. They also tend to have the best rates.

[bob2007]

davelj,

It looks like you have numbers to back up your position, but could that only account for the direct employees of the auto companies? I grew up in detroit. Some people worked directly for an auto company, but the majority worked for suppliers to the automotive companies. Again, I have not looked up current stats, but more than half the families I knew were employed by automotive suppliers. 12% sounds about right for direct employees. Having lived in detroit and san diego, my opinion is that the automotive hit in detroit would be more severe than the aerospace hit san diego took in the early 90’s.

I also know bloomfield hills quite well. 130k is a very low price, even back in the 80’s. I’m not sure where that guy lived, but it was common for home prices to be well above 1M.

[bob2007]

Kev374, your credibility is taking a big hit. I don’t like Bush, but he didn’t cause the housing problem. If you are counting on any government to fix problems like these you are in for a world of frustration.

I’m going to paint a big target on myself now, and maybe lose credibility with many here. I used to think the H1B visa were bad, but have come to a different viewpoint. I saw an interview with Bill Gates, and although I have no love for Microsoft, I think he is correct in that if we do not allow outside talent into this country we will lose our competitive edge. He has so much money now that I don’t think he is saying this for the benefit of Microsoft.

Big corps will win this battle regardless. If they can’t hire here, they open facilities outside the US which helps no one here. You can’t crate an artificially high resource, whether it be housing or salary.

Ok, let the beatings begin!

===========================
Bush has supported cuts in Educational funding, increase of the H1b cap to satisfy his corporate cronies and provide them with an endless supply of cheap 3rd world labor, mindlessly emptied our coffers on this idiotic war and printed money to create this whole bubble fiasco! Shame on the Bush administration!!!!! They have FAILED all of us.
===========================

[bob2007]

Big Dog,

I didn’t say it wasn’t needed, I was pointing out that focusing only on housing prices was bad.

I do not think it is a good idea to have your house paid off – all your money is now in RE. If you believe this list, then you should have a low interest rate (mine is 5.125%) and have the cash in other investments to diversify. That is my position now. If you subscribe to the 50% decline, then you are about to lose 50% of your money.

[bob2007]

I agree with sdr. I was in my house 13 years. When I moved it was still in the same area – just a few miles away.

[bob2007]

Hi Mark,

Definitely frustrating. Being smart with our money should provide a much bigger advantage.

[bob2007]

This brings up a point I think some people on this list are missing. If the housing market drops 50% from todays values, they seem to think they can then buy a house and life will be good. The problem is that if housing and automotive go down at the same time, they and the people the care about may be in for a very rough ride. Unemployment can become a problem, and it would be ironic if tighter lending standards present a problem for some people here to get a loan. People should be careful what they wish for, everything is interconnected. This isn’t “winning the superbowl” as I saw someone post. This is only half-time. The final score may not turn out the way you expect.

[bob2007]

Maybe some can afford the higher payments (possible at a high ratio of 38%), and invest the 300k in other areas to reduce the dependency on real estate. Interest bearing accounts alone are in the 5% range, providing $1,250 per month. This would provide a lot of staying power.

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