[capeman]

Spring of 2009 would likely be much better. I too am starting a family with a little one coming early next year. I would love to move into a nice 3000 sq footer and have plenty of room for family. Thing is that whole area price-wise is likely to go into the toilet in the near term. I don’t feel like throwing away my child’s college money for some nice digs when I can keep the college money and get the same nice digs a year later. I rent a place that is a little too small now for our needs but we’re willing to suffer now so as to not hand money to the homebuilders who will happily hand me over a depreciating asset in return (houses are not supposed to be!) and walk away with a smile on their faces. My hard earned money is worth more than that. Good luck to you if you choose to buy. That takes some serious pelotas at this point with the housing market going boom and the foreclosures flooding in.

cheers,

chris

[capeman]

Spring of 2009 would likely be much better. I too am starting a family with a little one coming early next year. I would love to move into a nice 3000 sq footer and have plenty of room for family. Thing is that whole area price-wise is likely to go into the toilet in the near term. I don’t feel like throwing away my child’s college money for some nice digs when I can keep the college money and get the same nice digs a year later. I rent a place that is a little too small now for our needs but we’re willing to suffer now so as to not hand money to the homebuilders who will happily hand me over a depreciating asset in return (houses are not supposed to be!) and walk away with a smile on their faces. My hard earned money is worth more than that. Good luck to you if you choose to buy. That takes some serious pelotas at this point with the housing market going boom and the foreclosures flooding in.

cheers,

chris

[capeman]

So, assuming a price of $250/sqft. you get a price of $250K for a 1000 sqft. unit. Using traditional financing (20% down, 7% 30 yr fixed) you'll get a total monthly payment (excluding principal) of about $1,800/month including taxes, HOAs, etc. In other words, at $250K most of these units will actually cash flow pretty well.

 

You're assuming that in the next year rates on a 30 yr fixed are still going to be 7% or south… Take a look at how the MBS bond market is unwinding and the possible outcome of 1.4T dollars in bonds getting marked to market. Real interest rates are likely to nearly double in the next 12-18 months and with that goes south the prices on all housing. Downtown doesn't have the business it needs to support people wanting to live down there. On the front page of the UT yesterday it stated how California job growth has now officially stalled. We're near or currently in a recession and I don't think that will bode well for all the high end restaurants/$30 cover clubs that have sprouted up recently downtown. Business down there isn't doing as well as it has been in the last few years of hayday. Less business leads to fewer businesses which leads to less desirability to live there. Couple this with a recession and possibly double rates on the mortgage and you've got massive depreciation and roughly equivalent mortgage payments to rental payments. Just watch and be patient. I could eat my hat on this prediction but I’m willing to sit with money in my pocket to wait and see. In the end I will have a great deal or at least still have the money in my pocket.

cheers,

chris

[capeman]

So, assuming a price of $250/sqft. you get a price of $250K for a 1000 sqft. unit. Using traditional financing (20% down, 7% 30 yr fixed) you'll get a total monthly payment (excluding principal) of about $1,800/month including taxes, HOAs, etc. In other words, at $250K most of these units will actually cash flow pretty well.

 

You're assuming that in the next year rates on a 30 yr fixed are still going to be 7% or south… Take a look at how the MBS bond market is unwinding and the possible outcome of 1.4T dollars in bonds getting marked to market. Real interest rates are likely to nearly double in the next 12-18 months and with that goes south the prices on all housing. Downtown doesn't have the business it needs to support people wanting to live down there. On the front page of the UT yesterday it stated how California job growth has now officially stalled. We're near or currently in a recession and I don't think that will bode well for all the high end restaurants/$30 cover clubs that have sprouted up recently downtown. Business down there isn't doing as well as it has been in the last few years of hayday. Less business leads to fewer businesses which leads to less desirability to live there. Couple this with a recession and possibly double rates on the mortgage and you've got massive depreciation and roughly equivalent mortgage payments to rental payments. Just watch and be patient. I could eat my hat on this prediction but I’m willing to sit with money in my pocket to wait and see. In the end I will have a great deal or at least still have the money in my pocket.

cheers,

chris

[capeman]

$250 or less per sqft…

and I’m seriously considering it. That’s about what they should be if not less.

[capeman]

$250 or less per sqft…

and I’m seriously considering it. That’s about what they should be if not less.

[capeman]

I think it’s the mentality of it. People bought homes they could not afford over the last few years. From that they pulled money to buy big mini-vans (they’re not SUVs unless they have 4WD and 90% do not) and plasma TVs that they don’t need because everyone else did. Funny thing is that with the expected lifespan of Plasma and American made big mini-vans they will probably go out about the same time their mortgages reset and they lose their home. The irony of, want everything and in the end have nothing, will come to pass for a lot of people who were just trying to keep up with society’s view of a desirable life.

[capeman]

I think it’s the mentality of it. People bought homes they could not afford over the last few years. From that they pulled money to buy big mini-vans (they’re not SUVs unless they have 4WD and 90% do not) and plasma TVs that they don’t need because everyone else did. Funny thing is that with the expected lifespan of Plasma and American made big mini-vans they will probably go out about the same time their mortgages reset and they lose their home. The irony of, want everything and in the end have nothing, will come to pass for a lot of people who were just trying to keep up with society’s view of a desirable life.

[capeman]

Ummmm… because the system is not cost-effective or reasonable. Adding profit margins and bottom line growth requirements adds more unneeded cost. Get the government footing the entire bill and the whole system will change to be cost-effective, guaranteed. Make the system and the government answerable to all (including the RICH) for the service and the service will improve drastically on their behalf. You won’t see the politicians allowing their base to die off due to poor healthcare service. Makes perfect sense to me. Privatization in the case of healthcare has only served to gain profits for corporations and investors. It has not added to the level of service or the value of individual medical professionals. With that in mind I’m very curious to have seen what the outcome would have been if Social Security ended up privatized. I believe it would have ended up being a high stakes poker game with the rich sharks running off with all of the workingman’s pension loot in a heavily manipulated equity market.

cheers,

chris

[capeman]

Ummmm… because the system is not cost-effective or reasonable. Adding profit margins and bottom line growth requirements adds more unneeded cost. Get the government footing the entire bill and the whole system will change to be cost-effective, guaranteed. Make the system and the government answerable to all (including the RICH) for the service and the service will improve drastically on their behalf. You won’t see the politicians allowing their base to die off due to poor healthcare service. Makes perfect sense to me. Privatization in the case of healthcare has only served to gain profits for corporations and investors. It has not added to the level of service or the value of individual medical professionals. With that in mind I’m very curious to have seen what the outcome would have been if Social Security ended up privatized. I believe it would have ended up being a high stakes poker game with the rich sharks running off with all of the workingman’s pension loot in a heavily manipulated equity market.

cheers,

chris

[capeman]

It is my belief that the biggest problem with American health care is that so much money is spent on treating symptoms, but so little is spent on treating causes. This subject was touched on in the movie "Supersize me".

You are right on with that one! I've been on both ends of the argument. I've been heavily involved on R&D for the next gen of Type II Diabetes TREATMENTS that are starting to hit the market. They are spectacular drugs that I am very proud of as they will improve the QOL for 10s of millions of people. Fact of the matter is that with proper diet and exercise you could CURE ~90% or greater Type II patients thereby saving the medical system upwards of 100bil per year on everything associated with treatment of the disease. The real figures are probably much higher than that.

From the other end I was on my way to getting Type II myself and already had elevated cholesterol and was overweight by about 40 lbs. By hitting a medical supported and very straighforward diet not even including exercise my cholesterol was down to well into normal levels with no trace of being on my way to Type II within a month. On top of that I was down 25lbs in a month and a half. It is a very easy thing to make yourself healthier and therefore not as dependent on the system if you want to make it happen. The thing is that doctors don't tell you about that kind of cure as they tend to not get the kind of kickbacks from the diet company that they do from the Pharmas. They also know that most people don't want to hear that they are unhealthy and don't really want to change the status quo. Those people end up reliant on the system and drain the system for those who have to pay the high premiums and never use it because they are healthy. I would say with high confidence that if it was only the government forking out the >100bil a year they would drastically change the healthcare and education system to prevent those type of escalating losses. That is a win-win.

 

cheers,

chris

[capeman]

It is my belief that the biggest problem with American health care is that so much money is spent on treating symptoms, but so little is spent on treating causes. This subject was touched on in the movie "Supersize me".

You are right on with that one! I've been on both ends of the argument. I've been heavily involved on R&D for the next gen of Type II Diabetes TREATMENTS that are starting to hit the market. They are spectacular drugs that I am very proud of as they will improve the QOL for 10s of millions of people. Fact of the matter is that with proper diet and exercise you could CURE ~90% or greater Type II patients thereby saving the medical system upwards of 100bil per year on everything associated with treatment of the disease. The real figures are probably much higher than that.

From the other end I was on my way to getting Type II myself and already had elevated cholesterol and was overweight by about 40 lbs. By hitting a medical supported and very straighforward diet not even including exercise my cholesterol was down to well into normal levels with no trace of being on my way to Type II within a month. On top of that I was down 25lbs in a month and a half. It is a very easy thing to make yourself healthier and therefore not as dependent on the system if you want to make it happen. The thing is that doctors don't tell you about that kind of cure as they tend to not get the kind of kickbacks from the diet company that they do from the Pharmas. They also know that most people don't want to hear that they are unhealthy and don't really want to change the status quo. Those people end up reliant on the system and drain the system for those who have to pay the high premiums and never use it because they are healthy. I would say with high confidence that if it was only the government forking out the >100bil a year they would drastically change the healthcare and education system to prevent those type of escalating losses. That is a win-win.

 

cheers,

chris

[capeman]

Dude you forgot the nearly 8% sales tax we in California spend on nearly everything that we buy…. also on top of that the even higher tax on gasoline that also has sales tax on top of it… and don’t forget the property tax!! We are paying >50% taxes in California and we don’t get health care. Instead we send a half to one trillion bucks to rebuild a country we ALSO PAID TO BLOW UP and give them free health care. Don’t forget we also give free health care to all of those who would cross our border illegally (even those who may intend to blow us to hell). Love it!!

All I have to say about that movie is that it was very well done. It is extremely left and those who say he manipulates the facts are absolutely right. Let’s look at everything else we hear about it from the Conservative Right… all totally f-ing manipulated to the point of making Hitler’s propaganda look like a Jehovah’s Witness mailer. You have to take both sides of the story whip them together, see what makes sense and see who is to benefit more from their story being sold. I would have to say I’d support MM on that. All he gets is ticket sales and possible systemic change. Those of you who claim they won’t watch the movie based on how he manipulates facts… I would say you should lay off the TV… that is about as Right and manipulated as it gets. Come up with a better argument for why someone is wrong or at least have some legit examples of the said manipulation. You ultimately have the right to watch what you want and spend money on what you’d like. It’s a free country just don’t hide behind unproven excuses. That just makes you sound like a Rush Limbaugh groupie.

I work in Biotech/Pharma and I believe that they are greatly to blame for this as well. High priced drugs are a bane to the system and HMOs are in bed with them on the pricing and passing on as much as possible to the insured doesn’t put pressure on keeping costs down. I would bet more than the lunch money on the fact that if the Govt. was paying for all the drugs and services that you would see broad reform and pricing pressure on the Pharmas since the govt. doesn’t tend to want to pay extra for anything. The only problem is the politicians have taken two ladies (Pharma and HMOs) to bed with them and both have a lot of sugar to offer. We taxpayers try to get into the bed but the ladies have more sugar to give than we do and to be sadly honest the ladies seem to be better to look at in the morning. Until that changes people will continue to be allowed to die quietly while those of us who have healthcare feel safe and cozy with only our co-pays, deductibles and premiums being vacuumed out of our wallets… on top of 50% tax.

The fact that I live in a country where my life could be in the hand of someone with corporate profit lying in the other hand makes me a little uneasy. The fact that I live in a country where people are allowed to die because they don’t have enough nearly worthless paper in their pocket makes me sick. The fact that there is someone profiting from denying medical coverage to my countrymen and allowing them to die… tells me that if there really is a hell those people are heading down there strapped to the back of ballistic missile.

cheers,

chris

[capeman]

Dude you forgot the nearly 8% sales tax we in California spend on nearly everything that we buy…. also on top of that the even higher tax on gasoline that also has sales tax on top of it… and don’t forget the property tax!! We are paying >50% taxes in California and we don’t get health care. Instead we send a half to one trillion bucks to rebuild a country we ALSO PAID TO BLOW UP and give them free health care. Don’t forget we also give free health care to all of those who would cross our border illegally (even those who may intend to blow us to hell). Love it!!

All I have to say about that movie is that it was very well done. It is extremely left and those who say he manipulates the facts are absolutely right. Let’s look at everything else we hear about it from the Conservative Right… all totally f-ing manipulated to the point of making Hitler’s propaganda look like a Jehovah’s Witness mailer. You have to take both sides of the story whip them together, see what makes sense and see who is to benefit more from their story being sold. I would have to say I’d support MM on that. All he gets is ticket sales and possible systemic change. Those of you who claim they won’t watch the movie based on how he manipulates facts… I would say you should lay off the TV… that is about as Right and manipulated as it gets. Come up with a better argument for why someone is wrong or at least have some legit examples of the said manipulation. You ultimately have the right to watch what you want and spend money on what you’d like. It’s a free country just don’t hide behind unproven excuses. That just makes you sound like a Rush Limbaugh groupie.

I work in Biotech/Pharma and I believe that they are greatly to blame for this as well. High priced drugs are a bane to the system and HMOs are in bed with them on the pricing and passing on as much as possible to the insured doesn’t put pressure on keeping costs down. I would bet more than the lunch money on the fact that if the Govt. was paying for all the drugs and services that you would see broad reform and pricing pressure on the Pharmas since the govt. doesn’t tend to want to pay extra for anything. The only problem is the politicians have taken two ladies (Pharma and HMOs) to bed with them and both have a lot of sugar to offer. We taxpayers try to get into the bed but the ladies have more sugar to give than we do and to be sadly honest the ladies seem to be better to look at in the morning. Until that changes people will continue to be allowed to die quietly while those of us who have healthcare feel safe and cozy with only our co-pays, deductibles and premiums being vacuumed out of our wallets… on top of 50% tax.

The fact that I live in a country where my life could be in the hand of someone with corporate profit lying in the other hand makes me a little uneasy. The fact that I live in a country where people are allowed to die because they don’t have enough nearly worthless paper in their pocket makes me sick. The fact that there is someone profiting from denying medical coverage to my countrymen and allowing them to die… tells me that if there really is a hell those people are heading down there strapped to the back of ballistic missile.

cheers,

chris

[capeman]

You folks are putting too much emphasis on the wrong axis. Plotting Comps. vs. price is what most every market permabull is using as a lame argument. What will define market direction and the extent of the drop is Time vs. Price. That is how the market play will be plotted in the economic history books when this has all played out. People making arguments based on Comps. in a defined short time period are usually just those who are trying to reaffirm themselves that they did not make a bad investment. Remember this expected correction will take time and just like the trough to peak looked on the way up one can expect something similar for the way down.

[Author]

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