[cashman]

I hate to be a party pooper, but renting has not worked in my favor, yet. I sold my home in Nov.’05 for $1,988,000 at what I believed to be the “peak” back then. I was so happy for the first few months, thinking how smart I was. I was wrong. I kept checking the market from time to time, and to my amazement, property values kept going up in my neighborhood. In fact, only in Feb. of this year did prices start a mild turnarond. My home is worth about $600K more now than when I sold it. I just don’t understand it. My realtor say’s “I told you so”, and continues to boast strong sales in my neighborhood. So not only have I lost $600K in continued appreciation, but my rent for the past year and a half totals almost $50K (at $2700/mo.) So for me it wasn’t such a good deal.

[cashman]

Yes, Obama is about as black as O.J. Simpson. And trust me, when under pressure, the glove won’t fit, either.

[cashman]

I am wondering if much of the way we calculate the fundamentals, such as 3X or 4X income was based on times when interest rates were much higher. For much of my lifetime, except my early childhood, interest rates were between 8-12 percent, probably averaging about 9-10 percent. Is it possible that we have entered a new age of relatively low interest rates which therefore change all the equations? These lower rates have been around now for several years, and it looks like they will stay low or lower for the forseeable future. Perhaps we are witnessing the evolution of the fundamentals themselves.

[cashman]

What a misnomer. I’ve been by “Wolf Creek”, and I can assure you there are no wolves or a creek anywhere in sight. Across the street at the casino is a different story. They have a beautiful rock waterfall with small creek, and the wolves are inside dressed up as blackjack dealers!

[cashman]

I think you’ve got a pretty clear picture from all the above posts. I would like to add that on occasion I work at Edwards as a civilian contractor. I recently stopped at a new housing tract in Rosamond, which is the closest town to Edwards, just west of the base. It was scary. The entire tract was completed, but vacant. These were nice, new homes, 1500 to 2400 sq. ft. There was nobody living in them. I think you can draw your own conclusions about the market around Edwards. Lancaster is a much larger city, but at least a thirty minute drive away. Good luck.

[cashman]

I heard on the radio today that California is expected to add another 15 million residents by the year 2030, of which two thirds will be right here in good ol’ SoCal. I know that’s possible, but is it probable? And if so, wouldn’t that put upward pressure on housing prices, or at the very least keep them from falling very much? People wouldn’t keep moving here if they don’t have jobs or a place to live, would they? Or would they.

[cashman]

Can someone confirm what I heard on news radio, that the DataQuick stats for LA county in Feb. show a seven percent increase in existing home prices from a year ago, putting it at an all time high? This seems ridiculous. I couldn’t believe my ears!

[cashman]

We renters could also be screwed by interest rates dropping to below 5 percent again. That could trigger another wave of buying, coupled with already slightly lower prices, sending prices skyward once again. I fear then that I would forever be priced out of buying a home. Million dollar homes would then be the baseline. Don’t think it couldn’t happen. Did anyone ever imaging that an average house would be 600-700K? If you told me that just five years ago I would have thought you’re crazy. Bottom line, I really fear a drop in mortgage rates and what might happen to prices. I don’t want to be a forever renter.

[cashman]

I hope you’re right, ’cause I’m sick of renting. Late ’08 is doable. But it will really have to start picking up some steam to reach that target date. DataQuick just released data showing peak average price in LA county was last month! Can you believe that? Up 7 percent from a year ago.

[cashman]

Cow_tipping, my advice for a gold fund is UNWPX. It’s diversified into silver, gold, and some other industrial metals. It also pays dividends. It’s got a great track record over the past several years. However, there is one caution flag I have to point out. If the stock market in general crashes, this will probably fall as well, even if gold and silver do better than the overall market. In a dangerous equities environment such as we have today, I wouldn’t invest in this fund just yet. If you want to own precious metals, then trade the ETFs GLD and SLV. They should move in step with the metals, not the general market. When the dust settles with the market, then jump into UNWPX. At that point it will net you more than the ETFs.

[cashman]

Man, I sure hope so. I’m getting impatient waiting for prices to decline. Every week I check zip realty for my watched neighborhoods, and every week the prices don’t seem to budge. This has been going on for months. The same thing has been happening in the stock market until just recently. I hope the market correction is finally underway. I believe that’s necessary to accelerate housing prices on the downside. I’ll stick my neck out and predict that when the dust settles, the Dow will be at 9400, and housing will be down 35 percent on average in SoCal. The housing figures can be skewed by interest rates, so if rates go under 5 percent again for a 30 yr. fixed, then all bets are off. In that case, us renters on the sideliines may be renting for a long time to come.

[cashman]

If you believe recession will be an outcome of this mortgage/housing mess, as I do, then most retailers will suffer this year. I shorted Costco a few days ago just before earnings, and guess what. It dropped immediately after the report. Fell short, just as I expected. I think this will be the trend for a few more quarters, so jump on the train, it’s just leaving the station.

[cashman]

Remember the last downturn cycle. It peaked in 1989, bottomed in 1995. That’s six years. We have a few more to go, unfortunately. Patience is really a virtue.

[cashman]

I don’t think the average couple I painted of Mr. and Mrs. Irvine is that out of line, bigmoneysalsa. A police officer and a school teacher seem pretty average to me. I grew up in Woodland Hills, an LA suburb in the valley similar to OC’s Irvine, and my father was an aerospace engineer and my mother a school teacher. We were very middle class. Certainly Irvine has couples above and below this example, but for the most part, Irvine is a middle class, family oriented city of professional-type couples. I’m certainly not trying to boost Irvine’s image above what it is, but you must admit OC as a whole is considered an affluent area, and housing prices have always supported that perception. Therefore it must be fact.

[cashman]

Especially in the OC. Lots and lots of professional positions, upper management, and of course the two income family is the norm, not the exception. Meet Mr. and Mrs. Irvine: he’s in his mid twenties, working a few years at the OC Sherriff making $70K. She’s teaching at an Irvine middle school making $60K. Add it up, that’s $130K just like that! With mortgages still available at 6 percent or less, seems like there really are people able to buy at todays prices. What happens if rates go down too 5 percent, or less? They have been there before.

[Author]

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