[CA renter]

Agree with TG.

If you are in a comfortable position to buy, and find a wonderful house that you can live in for the rest of your life, have at it!

However…consider that rents might go down, neighborhoods might deteriorate further, the economy could collapse, etc.

If you are looking at 2X annual income, and have a nice cash cushion (minimum 6-12 months, AFTER all purchasing costs), and you have a relatively safe job or highly-desired job skills, you could certainly consider buying when buying is cheaper than reasonable rents, IMHO.

Good luck with whatever you choose to do! 🙂

[CA renter]

Oops!!

Also have to make a correction on the return on sale of house. It was 339%, not 229%.

[CA renter]

Oops!!

Also have to make a correction on the return on sale of house. It was 339%, not 229%.

[CA renter]

Oops!!

Also have to make a correction on the return on sale of house. It was 339%, not 229%.

[CA renter]

Oops!!

Also have to make a correction on the return on sale of house. It was 339%, not 229%.

[CA renter]

Oops!!

Also have to make a correction on the return on sale of house. It was 339%, not 229%.

[CA renter]

FSD,

I agree that 2001-2004 was like dollars raining down on anyone who sold a house. My contention is that the gains during that time were due to a credit bubble, not a normal housing cycle.

Our home price doubled between 1998 and 2001, and was already becoming unaffordable to people who were buying/living there. The fact that prices are already down to that level (and still falling!?!?) shows that we were probably at a top in 2001.

BTW, people who owned in 92057 and other “starter” neighborhoods were able to cash-out hundreds of thousands of dollars which were used to buy up the ladder. IMHO, this “downpayment” money is what’s keeping the mid-higher tier homes from showing the same stress as what’s found in the lower-end markets.

People who “bought-up” during the bubble could still HELOC or cash-out refi over the past few years (equity from prior sales), just to hang on a little bit longer until “the market gets better.”

As people are no longer able to bring $200K-$500K in for down-payments, the mid-upper tiers will begin to see the same kind of stress as seen in the lower-end areas, IMHO.

I DO NOT think “it’s different here.” People were stretching and getting into toxic loans all along the housing spectrum.

See Jim’s Klinge’s post about Jenae and the million-dollar sales that were bought using 100% loans and promptly defaulted on. These sales were used as comps for all the other sales (many of which also saw 100% loans or neg-am products).

We are nowhere near then end of this credit contraction, and probably have many years before we reach “bottom,” IMHO.

[CA renter]

FSD,

I agree that 2001-2004 was like dollars raining down on anyone who sold a house. My contention is that the gains during that time were due to a credit bubble, not a normal housing cycle.

Our home price doubled between 1998 and 2001, and was already becoming unaffordable to people who were buying/living there. The fact that prices are already down to that level (and still falling!?!?) shows that we were probably at a top in 2001.

BTW, people who owned in 92057 and other “starter” neighborhoods were able to cash-out hundreds of thousands of dollars which were used to buy up the ladder. IMHO, this “downpayment” money is what’s keeping the mid-higher tier homes from showing the same stress as what’s found in the lower-end markets.

People who “bought-up” during the bubble could still HELOC or cash-out refi over the past few years (equity from prior sales), just to hang on a little bit longer until “the market gets better.”

As people are no longer able to bring $200K-$500K in for down-payments, the mid-upper tiers will begin to see the same kind of stress as seen in the lower-end areas, IMHO.

I DO NOT think “it’s different here.” People were stretching and getting into toxic loans all along the housing spectrum.

See Jim’s Klinge’s post about Jenae and the million-dollar sales that were bought using 100% loans and promptly defaulted on. These sales were used as comps for all the other sales (many of which also saw 100% loans or neg-am products).

We are nowhere near then end of this credit contraction, and probably have many years before we reach “bottom,” IMHO.

[CA renter]

FSD,

I agree that 2001-2004 was like dollars raining down on anyone who sold a house. My contention is that the gains during that time were due to a credit bubble, not a normal housing cycle.

Our home price doubled between 1998 and 2001, and was already becoming unaffordable to people who were buying/living there. The fact that prices are already down to that level (and still falling!?!?) shows that we were probably at a top in 2001.

BTW, people who owned in 92057 and other “starter” neighborhoods were able to cash-out hundreds of thousands of dollars which were used to buy up the ladder. IMHO, this “downpayment” money is what’s keeping the mid-higher tier homes from showing the same stress as what’s found in the lower-end markets.

People who “bought-up” during the bubble could still HELOC or cash-out refi over the past few years (equity from prior sales), just to hang on a little bit longer until “the market gets better.”

As people are no longer able to bring $200K-$500K in for down-payments, the mid-upper tiers will begin to see the same kind of stress as seen in the lower-end areas, IMHO.

I DO NOT think “it’s different here.” People were stretching and getting into toxic loans all along the housing spectrum.

See Jim’s Klinge’s post about Jenae and the million-dollar sales that were bought using 100% loans and promptly defaulted on. These sales were used as comps for all the other sales (many of which also saw 100% loans or neg-am products).

We are nowhere near then end of this credit contraction, and probably have many years before we reach “bottom,” IMHO.

[CA renter]

FSD,

I agree that 2001-2004 was like dollars raining down on anyone who sold a house. My contention is that the gains during that time were due to a credit bubble, not a normal housing cycle.

Our home price doubled between 1998 and 2001, and was already becoming unaffordable to people who were buying/living there. The fact that prices are already down to that level (and still falling!?!?) shows that we were probably at a top in 2001.

BTW, people who owned in 92057 and other “starter” neighborhoods were able to cash-out hundreds of thousands of dollars which were used to buy up the ladder. IMHO, this “downpayment” money is what’s keeping the mid-higher tier homes from showing the same stress as what’s found in the lower-end markets.

People who “bought-up” during the bubble could still HELOC or cash-out refi over the past few years (equity from prior sales), just to hang on a little bit longer until “the market gets better.”

As people are no longer able to bring $200K-$500K in for down-payments, the mid-upper tiers will begin to see the same kind of stress as seen in the lower-end areas, IMHO.

I DO NOT think “it’s different here.” People were stretching and getting into toxic loans all along the housing spectrum.

See Jim’s Klinge’s post about Jenae and the million-dollar sales that were bought using 100% loans and promptly defaulted on. These sales were used as comps for all the other sales (many of which also saw 100% loans or neg-am products).

We are nowhere near then end of this credit contraction, and probably have many years before we reach “bottom,” IMHO.

[CA renter]

FSD,

I agree that 2001-2004 was like dollars raining down on anyone who sold a house. My contention is that the gains during that time were due to a credit bubble, not a normal housing cycle.

Our home price doubled between 1998 and 2001, and was already becoming unaffordable to people who were buying/living there. The fact that prices are already down to that level (and still falling!?!?) shows that we were probably at a top in 2001.

BTW, people who owned in 92057 and other “starter” neighborhoods were able to cash-out hundreds of thousands of dollars which were used to buy up the ladder. IMHO, this “downpayment” money is what’s keeping the mid-higher tier homes from showing the same stress as what’s found in the lower-end markets.

People who “bought-up” during the bubble could still HELOC or cash-out refi over the past few years (equity from prior sales), just to hang on a little bit longer until “the market gets better.”

As people are no longer able to bring $200K-$500K in for down-payments, the mid-upper tiers will begin to see the same kind of stress as seen in the lower-end areas, IMHO.

I DO NOT think “it’s different here.” People were stretching and getting into toxic loans all along the housing spectrum.

See Jim’s Klinge’s post about Jenae and the million-dollar sales that were bought using 100% loans and promptly defaulted on. These sales were used as comps for all the other sales (many of which also saw 100% loans or neg-am products).

We are nowhere near then end of this credit contraction, and probably have many years before we reach “bottom,” IMHO.

[CA renter]

Submitted by DaCounselor on August 18, 2008 – 1:13pm.

My original post was in response to CA Renter’s (an admitted bear since 2001) post regarding being early is not necessarily being wrong. I disagree for the reasons I have already stated.
——————-

Actually, homes in our old neighborhood (92057) are already below 2001 prices.

Even though I thought 2001 was a cycle top (for the regular housing cycle…NOT considering the influence of the credit bubble), we still held on and sold in 2004 when houses were selling within hours with multiple offers. The market cooled immediately after that, and prices topped out another $75K more than what we sold for — though sales took many weeks/months to sell.

We effectively “gave up” $75K by not hitting the exact top, but that wasn’t my intention in the first place. We wanted to move to a bigger house in a better neighborhood, but didn’t want to pay an inflated price.

In the meantime, we have been renting a nice 4/2 SFH in a very nice part of North County for $2,100/mo. (less than what we would have paid on a smaller house in a worse area if bought in 2004).

We made a 239% return on the sale of our house and **pocketed it.** That’s the difference between someone who held on and a bubble-sitter. We actually have the money and have made more by shorting the homebuilders, lending agencies, retailers, banks, ratings agencies, etc. on the way down. Those who held on in our old neighborhood have lost every bit of “equity” gained since 2001, and most of them are HELOC’d well beyond what they can afford…because they believed the hype.

No regrets on our part, whatsoever.

[CA renter]

Submitted by DaCounselor on August 18, 2008 – 1:13pm.

My original post was in response to CA Renter’s (an admitted bear since 2001) post regarding being early is not necessarily being wrong. I disagree for the reasons I have already stated.
——————-

Actually, homes in our old neighborhood (92057) are already below 2001 prices.

Even though I thought 2001 was a cycle top (for the regular housing cycle…NOT considering the influence of the credit bubble), we still held on and sold in 2004 when houses were selling within hours with multiple offers. The market cooled immediately after that, and prices topped out another $75K more than what we sold for — though sales took many weeks/months to sell.

We effectively “gave up” $75K by not hitting the exact top, but that wasn’t my intention in the first place. We wanted to move to a bigger house in a better neighborhood, but didn’t want to pay an inflated price.

In the meantime, we have been renting a nice 4/2 SFH in a very nice part of North County for $2,100/mo. (less than what we would have paid on a smaller house in a worse area if bought in 2004).

We made a 239% return on the sale of our house and **pocketed it.** That’s the difference between someone who held on and a bubble-sitter. We actually have the money and have made more by shorting the homebuilders, lending agencies, retailers, banks, ratings agencies, etc. on the way down. Those who held on in our old neighborhood have lost every bit of “equity” gained since 2001, and most of them are HELOC’d well beyond what they can afford…because they believed the hype.

No regrets on our part, whatsoever.

[CA renter]

Submitted by DaCounselor on August 18, 2008 – 1:13pm.

My original post was in response to CA Renter’s (an admitted bear since 2001) post regarding being early is not necessarily being wrong. I disagree for the reasons I have already stated.
——————-

Actually, homes in our old neighborhood (92057) are already below 2001 prices.

Even though I thought 2001 was a cycle top (for the regular housing cycle…NOT considering the influence of the credit bubble), we still held on and sold in 2004 when houses were selling within hours with multiple offers. The market cooled immediately after that, and prices topped out another $75K more than what we sold for — though sales took many weeks/months to sell.

We effectively “gave up” $75K by not hitting the exact top, but that wasn’t my intention in the first place. We wanted to move to a bigger house in a better neighborhood, but didn’t want to pay an inflated price.

In the meantime, we have been renting a nice 4/2 SFH in a very nice part of North County for $2,100/mo. (less than what we would have paid on a smaller house in a worse area if bought in 2004).

We made a 239% return on the sale of our house and **pocketed it.** That’s the difference between someone who held on and a bubble-sitter. We actually have the money and have made more by shorting the homebuilders, lending agencies, retailers, banks, ratings agencies, etc. on the way down. Those who held on in our old neighborhood have lost every bit of “equity” gained since 2001, and most of them are HELOC’d well beyond what they can afford…because they believed the hype.

No regrets on our part, whatsoever.

[CA renter]

Submitted by DaCounselor on August 18, 2008 – 1:13pm.

My original post was in response to CA Renter’s (an admitted bear since 2001) post regarding being early is not necessarily being wrong. I disagree for the reasons I have already stated.
——————-

Actually, homes in our old neighborhood (92057) are already below 2001 prices.

Even though I thought 2001 was a cycle top (for the regular housing cycle…NOT considering the influence of the credit bubble), we still held on and sold in 2004 when houses were selling within hours with multiple offers. The market cooled immediately after that, and prices topped out another $75K more than what we sold for — though sales took many weeks/months to sell.

We effectively “gave up” $75K by not hitting the exact top, but that wasn’t my intention in the first place. We wanted to move to a bigger house in a better neighborhood, but didn’t want to pay an inflated price.

In the meantime, we have been renting a nice 4/2 SFH in a very nice part of North County for $2,100/mo. (less than what we would have paid on a smaller house in a worse area if bought in 2004).

We made a 239% return on the sale of our house and **pocketed it.** That’s the difference between someone who held on and a bubble-sitter. We actually have the money and have made more by shorting the homebuilders, lending agencies, retailers, banks, ratings agencies, etc. on the way down. Those who held on in our old neighborhood have lost every bit of “equity” gained since 2001, and most of them are HELOC’d well beyond what they can afford…because they believed the hype.

No regrets on our part, whatsoever.

[Author]

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