Forum Replies Created
-
AuthorPosts
-
Bugs
Participant“There is a great irony on this board to me. Many of you are genuinely pissed off that people viewed homes as financial instruments and drove the prices up through speculation. However, when you look at housing all you want to focus on is the price and buying at the bottom. ”
Is that another way of suggesting Rich should change the nature of this forum away from that of being the econo-almanac? Should we not still consider the current pricing structure to be horribly overpriced in relation to all reasonable measures of value?
It seems to me that this forum has thrived precisely because it represents to many of us a haven from the rampant emotionalism that contributed to these excesses. There are plenty of websites that promote the joys of owning home and hearth, but only a few that put that sentiment on the (way) back burner.
There’s nothing wrong with a person who decides they need those benefits more than they need the money, but there is a problem with people who want to have it both ways – they want to make the “wrong” choice from the financial perspective and at the same time be called financially wise for doing it. Pick one, pick the other, we really don’t care; just don’t try and have it both ways because that doesn’t work here.
FTR, I’m holding rather than selling, and from an occupational standpoint I make more money when lots of people are buying RE. It’s in my personal interests for everyone to think that now is a great time to buy real estate. However, I don’t allow my personal priorities to interfere with my rational thinking or my professional work. That’s how you can tell that while I do have problems, having a significant amount of confirmation bias isn’t one of them.
ParticipantWhat you really want to be careful about out there is infrastructure, particularly water and sewer. A parcel in the city can be located directly across the street from a finished subdivision and still not have access to water and sewer.
ParticipantWhat you really want to be careful about out there is infrastructure, particularly water and sewer. A parcel in the city can be located directly across the street from a finished subdivision and still not have access to water and sewer.
ParticipantRustico,
It is true that my viewpoint does tend to exclude warm and fuzzy, and equally true that warm and fuzzy is a primary factor for a lot of people. There are some people who thrive on home improvement projects. My comments were strictly in terms of cost vs. value, and assuming the use of professionals to perform all the design and labor.
———-
lido,If a property owner does do an addition their home would be subject to reassessment. A new assessed value may only increase by the “cost” of the addition but it most likely won’t be the same. Still, an original assessment at $200k + a $100k addition is a lot less than a $600k purchase price.
ParticipantRustico,
It is true that my viewpoint does tend to exclude warm and fuzzy, and equally true that warm and fuzzy is a primary factor for a lot of people. There are some people who thrive on home improvement projects. My comments were strictly in terms of cost vs. value, and assuming the use of professionals to perform all the design and labor.
———-
lido,If a property owner does do an addition their home would be subject to reassessment. A new assessed value may only increase by the “cost” of the addition but it most likely won’t be the same. Still, an original assessment at $200k + a $100k addition is a lot less than a $600k purchase price.
ParticipantI’d tell you not to do it.
I’m an appraiser and I’ve seen lots of properties with additions over the years. From a valuation standpoint, there is a point of diminishing returns. Unless many of the homes around yours’ have such additions it’s very rare for an addition to add enough value to completely cover the costs. There are a few exceptions, but in those exceptions it tends to be the site that makes it worthwhile – the primary example being oceanfront neighborhoods.
The other thing to consider is the stress that’s involved with such projects. Over the years I’ve seen a lot of divorces brought on by remodel, addition and spec home projects. Many people can’t handle having their lives turned upside down for 6 months or more, and these projects seldom get finished on time or within budget.
Not only that, but these projects seldom turn out as well as originally envisioned.
If you want the bigger/better house I’d recommend going and getting what you want. That way you know exactly what you’re going to end up with. Lots easier and (usually) lots cheaper.
ParticipantI’d tell you not to do it.
I’m an appraiser and I’ve seen lots of properties with additions over the years. From a valuation standpoint, there is a point of diminishing returns. Unless many of the homes around yours’ have such additions it’s very rare for an addition to add enough value to completely cover the costs. There are a few exceptions, but in those exceptions it tends to be the site that makes it worthwhile – the primary example being oceanfront neighborhoods.
The other thing to consider is the stress that’s involved with such projects. Over the years I’ve seen a lot of divorces brought on by remodel, addition and spec home projects. Many people can’t handle having their lives turned upside down for 6 months or more, and these projects seldom get finished on time or within budget.
Not only that, but these projects seldom turn out as well as originally envisioned.
If you want the bigger/better house I’d recommend going and getting what you want. That way you know exactly what you’re going to end up with. Lots easier and (usually) lots cheaper.
ParticipantCashman,
Two things….
Firstly, your rent is not “wasted”, nor did you receive nothing in return for it. You’d have still spent at least that amount on your housing no matter how you slice it. The big question here is how much extra would you have spent on your mortgage and what returns would you have gotten in exchange for the investment value of the equity that you had accrued prior to pulling out? Now balance those returns with how much risk tolerance you had for the entire amount of your equity. If you were up by $300,000 and you spent another $25,000 in additional mortgage payments to “earn” another $50,000 on top of that I don’t know that the risks involved would have been worth it to you. I interpret your handle (Cashman) to convey a healthy amount of conservatism with respect to your investments.Secondly, if you pulled your Diamond Bar trigger in part as a result of following SD-centric Pigginton’s then I’m afraid you may have acted a little premature. But that’s all hindsight right now. Just as the people who didn’t pull out of the Riverside markets while they were still up have to put those decisions behind them and move forward from this point I think you should also be looking forward. And I think you are looking forward.
You did avoid losing any of your equity – you should be quite pleased with that. You are now lamenting some lost opportunity, but so what? Coulda-shoulda-woulda doesn’t count; what you keep is the only thing that really counts. You’ll live to ride the next cycle and when it comes your position will be better than ever.
ParticipantCashman,
Two things….
Firstly, your rent is not “wasted”, nor did you receive nothing in return for it. You’d have still spent at least that amount on your housing no matter how you slice it. The big question here is how much extra would you have spent on your mortgage and what returns would you have gotten in exchange for the investment value of the equity that you had accrued prior to pulling out? Now balance those returns with how much risk tolerance you had for the entire amount of your equity. If you were up by $300,000 and you spent another $25,000 in additional mortgage payments to “earn” another $50,000 on top of that I don’t know that the risks involved would have been worth it to you. I interpret your handle (Cashman) to convey a healthy amount of conservatism with respect to your investments.Secondly, if you pulled your Diamond Bar trigger in part as a result of following SD-centric Pigginton’s then I’m afraid you may have acted a little premature. But that’s all hindsight right now. Just as the people who didn’t pull out of the Riverside markets while they were still up have to put those decisions behind them and move forward from this point I think you should also be looking forward. And I think you are looking forward.
You did avoid losing any of your equity – you should be quite pleased with that. You are now lamenting some lost opportunity, but so what? Coulda-shoulda-woulda doesn’t count; what you keep is the only thing that really counts. You’ll live to ride the next cycle and when it comes your position will be better than ever.
ParticipantCashman,
We’ve said many times that LA County isn’t on the same clock as San Diego is. We are not part of your region, except by connection via Riverside County.
You should be seeing the wave coming towards your area from the east. Its going to take awhile and I still wouldn’t say it’s just around the corner.
And when that wave does come to town it’s not going to produce 20% decreases in a year nor is it going to be finished in 18 months; it’s going to be more like 10% -12% a year for several years.
ParticipantCashman,
We’ve said many times that LA County isn’t on the same clock as San Diego is. We are not part of your region, except by connection via Riverside County.
You should be seeing the wave coming towards your area from the east. Its going to take awhile and I still wouldn’t say it’s just around the corner.
And when that wave does come to town it’s not going to produce 20% decreases in a year nor is it going to be finished in 18 months; it’s going to be more like 10% -12% a year for several years.
ParticipantAt best, the median is a lagging indicator during a dynamic market. By the time the median starts racking up big decreases the market might actually be turning around in some areas in preparation for the next cycle.
On a house-to-house basis most of the market segments in SoCal are showing declines at this point.
ParticipantAt best, the median is a lagging indicator during a dynamic market. By the time the median starts racking up big decreases the market might actually be turning around in some areas in preparation for the next cycle.
On a house-to-house basis most of the market segments in SoCal are showing declines at this point.
July 27, 2007 at 4:42 PM in reply to: While not a perfect solution, the best way to avoid foreclosure . . . #68198ParticipantA lot of people will allow everything else to go before they let the house go. I think a lot of people who lose their homes do so because they literally have no other optiions.
-
AuthorPosts