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ParticipantI wouldn’t say I’m defending Mr. Gin or that I’m some sort of fan because I’m not. I’ve made comments about his comments and his connections here on this forum before.
All I was doing was pointing out the distinction between what amount to opinions and the facts he’s quoting to support them. I happen to think the phrase “liar” is pretty strong for the type of advocacy he’s pursuing. It’s just like when we casually bandy about comments about the market having already declined 10% and 15%. A bull would have no problems finding statistics to contradict that claim – would that entitle them to call the people expressing that opinion “liars”? Of course not.
This all goes back to that civility thing I always whine about. This isn’t a political campaign where the ends justify the means. We’re not here to convert the world to the one true religion upon pain of death. We’re here because we’re trying to figure this out and we’re trying to find the optimum path for ourselves. Toward that end we seek information. I’d like to think we are a question in search of an answer, not a conclusion in search of validation.
If we want to have a serious discussion and solicit information from a wide range of sources it’s not helpful to get into the habit of mistaking the individual for the message. If we’re bugged about the comments we should address those comments and the facts in support for or against them directly.
I don’t agree with the guy, but I’m smart enough to recognize that I don’t know as much as I’d like to know and there is a possibility that he has a couple pearls of information that I might be able to use to my benefit. If I keep an open mind he might accidentally drop one of those pearls in front of me. If I totally blow him off I would miss that opportunity.
I believe that it is possible to have a disagreement with someone without taking it personally or making it personal. I don’t always make it but I always try.
ParticipantDepends on your definition of “long haul”. Assuming the dollar doesn’t get Canadianized, over the next 5 years I’d totally bet against prices coming back to this level. Over the next 10 years I might not.
I refer you back to the last downcycle. From peak to trough to the same peak (+25% over the long term price trendline) took 11 years. Look at the graphs: 1991 – 1997; 1997 – 2002; and that peak was 1/3 of what this peak is relative to the long term trend.
In other words, after adjusting the prices for inflation, it took 11 years for a buyer in 1991 to break even on that purchase. That’s pretty sobering because if this cycle does what every other cycle has done so far it would probably take a lot longer than 11 years – the distortion is 3 times worse this time.
ParticipantA lot of things you’re complaining about are his stated opinions – kinda hard to know about him being dishonest with his own opinions. Of the others, I don’t see any errors in his facts.
I strongly disagree with him but I wouldn’t go so far as to say he’s lying.
Besides, there’s no getting away from the data. Alls he can do at this point is try to spin it and hope the sheeple will take him at his word. As for the rest of us, the trend will prove itself in its own good time.
BTW, $40,000 losses are bad (REALLY bad), but there are people here in SD who have already lost a lot more than that.
ParticipantHis wife does sell a lot of high-dollar homes in the Encinitas area, which is also where they live. There was s tory a while back that the chopper pilot/traffic reporter for one of the news stations quit for a while to try his hand at selling real estate. However, he’s back on the air now so maybe that didn’t work out for him.
ParticipantIt’s a two-headed coin, and for the fools it doesn’t much make any difference which side comes up. The problem with the devaluated dollar scenario is that everyone will get hurt by it, even those who were not so foolish as to let themselves get overextended. An outright price correction is much more fair because it zeroes in on the weak.
ParticipantFunny the subject of Murrieta/Temecula should come up. I just got done appraising an industrial building in Murrieta. What struck me was the amount of industrial development happening on the west side of the freeway and the amount of vacancy. Even more striking is that of the units being rented or purchased, most of those businesses are either related to real estate,furniture and home improvements; or motorsports. Both of those segments of our economy are very vulnerable to the effects of the real estate market decline.
Those units will all get rented out eventually and there will be employment out there, but the big question is whether it will be the type of employment that will support homeownership.
And yes, the outlying areas always get hurt worse than the areas closer to employment.
ParticipantThe things that are going for you are that you bought well and basically can’t get hurt off of your original position. You apparently were smart enough not to pull a lot of cash out at the refi and you’re on track to own your home – no matter what – in 11 more years. Your mortgage payment + taxes + insurance costs are probably a little higher than if you were to pay rent on that house, but not by much.
The things that are going against your are…basically nothing. You know what you have and it ain’t bad. You don’t know for sure if you’ll be able to get into a similar situation by the time this cycle plays out because you don’t know (none of us do) if it will really turn out as badly as we think it might turn out.
One more thing – your alternate investment, whatever it might be, will also involve some risk. It is not unheard of for people to roll that dice and lose. Then where would you be? Even if you can successfully time the market when you re-enter it and pay basically the same price to get back in, what are the chances you’ll get such a great interest rate in the next 10 years?
Only you can know if your situation is working for you right now, but if it is working then why mess with it?
ParticipantYou can argue that it’s worth the stretch when the market’s on it’s way up because there’s some profit to be made. To the extent that people become aware that the market is levelling off and declining in some areas that stretch no longer makes sense.
ParticipantThese are probably hard money lenders, which are regulated by the state rather than the federal government. When they do their job right the investor’s risks are a little higher but not excessively so; and the returns are pretty good. The maximum 50% Loan to Value (LTV) ratios and higher interest rates on those loans are pretty common.
Where the potential problem may be here is that the “V” part of the LTVs are critical to the security of the investments. If the original appraisals are overstated or the market is declining to the point that it’s increasing the LTV then it also increases the investor’s risks. For that reason these hard money lenders need a good appraisal more than even the biggest banks.
If these lenders are engaged in a ponzi-type operation that would also cause these kinds of problems. From the article it looks as if both problems are occurring.
ParticipantPeace,
Your comments are duly noted and I agree with what you’re saying. Again, I’d like to point out that my intent here was to discourage the voyeur factor, which was already acknowledged by one participant in this thread. I’m in no way advocating we not watch out for our neighbors’ interests even when we’re in a position to do so.
It’s just like when we were throwing names and complete addresses up in a couple of the previous threads and people were making comments about the individuals. I doubt that anyone had a malicious intent in that, they probably just hadn’t thought it all the way through. The discussion that followed that was intended to get people to consider that line of discussion in a different light. It may not seem this way, but I was just offering additional input, not trying to exercise the jackboot of censorship.
ParticipantI wasn’t trying to imply you didn’t know what you or your broker were doing and if it seems like I was then I apologize. My question was limited to trying to ascertain the reasonableness of the appraisal. We don’t often get to verify reasonableness of an appraisal with a subsequent and unrelated sale on the same property. It’s an appraisal geek line of inquiry, and I’m making it because I’m a geek.
Anyways, with a bidding war there was obviously a supply/demand inbalance in that equation somewhere. Was your final price was in excess of your listing price?
Edit: At the time of the appraisal did you or your broker know that the shopping center was coming to town?
ParticipantI’m hoping that market increased by at least 25% during the interim, then. There would normally be a higher margin for error for something like that, but it shouldn’t have been that high unless that market was exploding. Either that, or your buyer was an idiot, which we should not tend to assume.
ParticipantAhh, come on.
The reason most of us participate in these forums is to expand our understanding of our world. By expressing our different opinions we influence each other and in turn are influenced by what we take in from each other. I know that I have been influenced by the opinions expressed by everyone here, including those with whom I may disagree.
I don’t see anything wrong with raising a question or issue as long as we’re willing to discuss it in civil terms. It’s when we push the boundaries of civil behavior that the conversations veer off into unreasonable tangents. I think if we applied the “shopping cart” rule to our comments we’d never have some of the emotional dustups that seem to crop up here.
I highly doubt that PS saw her line of reasoning in the light that I cast it in my comments. For all I know she still may not see it that way. That’s okay because this here’s America. What I do know is that my opinion on the subject has been influenced by our discussion just as I hope has happened for others. To that extent I’m glad she brought the subject up. I’d even say that if it wasn’t her, it would have eventually been someone else.
ParticipantSorry, I wasn’t replying to your post so much as adding to it. Now that sellers and agents are at more of a disadvantage it’s very easy for some people to start pushing the limits of civility, that’s all.
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