[cashman]

I sympathize with you beachlover, as I have been bashed in a recent post here by JWM for simply voicing my frustrations as a renter. Seems like many of the people here (not all) rejoice in people’s misery and gloat when market conditions prove them right. And some feel offended by someone like me who was fortunate enough to sell and put their money in cash. I’ve learned in life that the little people are bothered and inwardly jealous of other peoples’ success, while the smart ones ask questions and learn from their accomplishments. Got a feeling you’re in the latter group.

[cashman]

jeeman, that’s two years of interest at 5% per year. Too the rest of you, thanks for your insights. Please don’t look down on me because I was smart enough to save money during my lifetime and have comfortable options now. I am not a compaliner, but rather a doer. And it just frustrates me lately that I can’t “do” as planned because of a stubborn housing market that refuses to go down (in my area). And by the way, I drive a Jeep, not a Rolls.

[cashman]

bsrsharma, I am tied to the LA area by my business, mostly. I own a diagnostic ultrasound repair business that I started 23 years ago. I think I can squeeze a few more years out of it, so my central location in Diamond Bar is ideal for commuting to all points, south, east, north and west. Over the past 27 years that I have lived here, I have seen this once small suburb evolve into a full blown incorporated city, and the mix of people shift to predominately Asian, with a good smattering of Indian. I’m not implying that any of this evolution is bad, but I have witnessed firsthand the effects of foreign money. Someone commented how that Chinese immigrants couldn’t easily buy here. Nonsense. I live in a gate guarded neighborhood of multi-million dollar homes, and much of the sales here are by Chinese nationals. Many of the realtors here are Chinese, and they advertise heavily in Shanghai, Taiwan and Hong Kong. In fact, the person that bought my home a couple of years ago was a single lady from China, who’s a pharmaceutical representative for an American company in China. She paid mostly cash, financed less than a mil. I am worried that with the continuing bubbles of many foreign markets, and the aggressive easing of the Fed, we may be in for many years of flat, not declining, markets in the more desirable areas where these foreign nationals want to buy, such as the better neighborhoods of LA. In real terms, adjusted for inflation, which could seriously pick up in the near future, prices might be slightly adjusting downward, making investment attractive to foreign money. But in nominal terms, they could stay flat, making it a nightmare for us patient renters and savers hoping to buy in at lower prices.

[cashman]

Fearful, it’s just against my grain to spend any more than I have to on rent. Yes, I could afford $5K a month and get a really cool pad, but to me, that’s wasteful, and insane! I have run the numbers, factoring in opportunity costs and so forth, and at around $300K, buying equals renting at my current rent. Remember, I’m currently renting a house listed for $1M, and it’s a real POS. Can you imagine what $300K buys? A crappy 2 bd. condo, that’s what. I need to stay in this area for my business, or else I would have bought something around Temecula/Murrieta, where the bargains seem to be for now. It just seems like if this housing decline, that has yet to come to my area, drags on for many years, eventually I could have bought something with all the rent money I will spend over those years. Let’s see, 5 yrs. of rent at $32K per year equals $160K. 10 yrs. equals $320K! I think you’ll agree with me that there is something to be said for owning your own home. Right now, it only makes sense for a $300K home, which doesn’t buy you much, sadly. I agree with you, when I log into my online accounts, I feel better….for a while.

[cashman]

Bugs, I like your prose. Let the army of ants come. I’m ready. But you say not to be concerned about the influence of the Chinese as there aren’t enough of them. Aren’t there over a billion of them? True, they don’t all have money, but I’m reading that ordinary housewiives are investing in the stock markets over there and making a killing. The Chiinese people I see here im my neighborhood are heavily armed—-with cash.

[cashman]

I’ll third the motion. I’ve paid cash for everything, including houses for the last 20 years. I really believe in the motto “In God we trust, all others pay cash”.

[cashman]

Bsrsharma, the point I’m trying to make is that around $100 per sq. ft. is a realistic floor where I builders can’t go much lower and still stay in business. And that’s assuming the land is also reasonably priced, such as in Lake Elsinore. I know that area has a bad reputation, but the homes I’m talking about are east of the i-15, not on the lake side. Everything is new and nice around there.

[cashman]

$100 a sq. ft. right here in So. Cal. As I posted a couple of days ago, I went through models by Lennar in Lake Elsinore for about $107 a ft. That’s without negotiating, and including many upgrades that other builders charge for. I don’t see how builders can go much lower in So. Cal. with costs of materials, labor, etc. and still make some profit. I also looked in Denver about four months ago and found prices for the most part in the $110-130 a ft. range. Still, pretty reasonable compared to here. And the unfinished basements are a real bonus. Can anyone say “Home Theater” to the max?

[cashman]

Bugs, I have the same thoughts that you have that people would prefer to live in the suburbs rather than in an urban setting, but a few weeks ago I read this article in the LA times real estate section about how in the latest survey, the majority of gen y and some gen x ers prefer to live in an urban setting, close to their work, in multi-family units, such as condos or lofts, where they are close to their friends. They want to literally be able to walk out of their front door, go have dinner, mix with friends and maybe take some form of mass transit to work. It just blew me away. So when my son, who’s going to be starting school in LA soon, suggested looking at lofts, I decided I’d better at least have an open mind.

[cashman]

To answer some of your questions, I am not concerned about schools as my kids are all grown up. I am currently renting in Diamond Bar, $2700 a month for 3000 ft. The area is nice, but the house is junk. I am semi-retired, work out of my home, so I can move anywhere, within reasonable distance to LA and OC. The prices of these new homes in Elsinore are the lowest anywhere I’ve seen in So. Cal. for the footage. Lennar includes standard many upgrades, such as granite kitchens, stainless appliances including refer, complete yard fencing, etc. Seems like at close to $100 a ft, I don’t know how the builders can go much lower. I have looked in Murrieta, but prices are higher and it’s further down the freeway. I would prefer to be closer to LA than further (for my work). Again, $100 a ft. for nice and new is awfully tempting.

[cashman]

mgub, I have to disagree with you here. In the last housing downturn of the 90’s, I saw premium properties in Balboa Island (part of Newport Beach) sell for 50 percent off their peak prices of 1989-1990. I was amazed. I’m sure it can, and will happen again.

[cashman]

mgub, I have to disagree with you here. In the last housing downturn of the 90’s, I saw premium properties in Balboa Island (part of Newport Beach) sell for 50 percent off their peak prices of 1989-1990. I was amazed. I’m sure it can, and will happen again.

[cashman]

mgub, I have to disagree with you here. In the last housing downturn of the 90’s, I saw premium properties in Balboa Island (part of Newport Beach) sell for 50 percent off their peak prices of 1989-1990. I was amazed. I’m sure it can, and will happen again.

[cashman]

I’ve never used Everbank, but I don’t like the facy their advertised 6.01% teaser rate is only temporary and goes down to 5% after the initial term.

[cashman]

I’ve never used Everbank, but I don’t like the facy their advertised 6.01% teaser rate is only temporary and goes down to 5% after the initial term.

[Author]

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