[Coronita]

[quote=spdrun]
And remember that not every market is as infested with hot money as NYC and SFBA.[/quote]

And the title of this topic here was “San Francisco 2.0 housing bubble documentary”. Apparently, you cared enough to respond and bring up about 3% down homes, which for the purpose of this discussion here has almost nothing to do with purchases in the submarket discussed here in this topic.

[Coronita]

[quote=spdrun]Millenials can’t get loans that easily. And — OOPS! — looks like Fannie Mae is bleeding again. So much for those 3% down loans for everyone. Mel the Skell is begging Congress for a bailout. Something a GOP Congress isn’t likely to want to give to Obama’s stooge…

http://www.marketwatch.com/story/fannie-freddie-may-need-to-tap-treasury-fhfa-director-says-2015-11-03

Note that I’m usually liberal, but I don’t think that your average Joe is cut out to own a home, or a dog shack for that matter.[/quote]

The problem with your narrative is that you aren’t going to find too many people doing a 3% down loan in Silicon Valley for a SFH that runs around $1million, in the same way you probably won’t find too many people doing a 3% loan in LJ,RSF,DelMar,etc,etc,etc. Wrong type of real estate sub-market to be talking about 3% down loans…Try again.

[Coronita]

[quote=Jazzman]^^^I think you’ve given very good reasons for why things could go pear-shaped, but your conclusion seems more influenced by lost hope.[/quote]

And I think you will be wrong (again). But we’ll see. I’m not doubting there will be a correction, but you folks thinking of a massive correction I think will be disappointed (again), in as much some of you were trying to second guess the RE correction here in San Diego and thinking that the best coastal parts of SD would fall 30-40% during the RE meltdown, despite prices had already gone down 20-25% in those parts of town. Wrong there too. I find it funny you guys are so convinced of a doomsday scenario, it’s almost comical. Do you really think there won’t be some intervention if things start to do south (again)?

‘Lost hope?’ I don’t personally care either way, because personally my cost basis there is so low and I don’t care since I don’t plan on selling, ever.

[Coronita]

You guys keep trying to rationalize and irrational market that is based on IPO/stock option wealth known in that area, more so than what mortgage interest makes a huge difference.

There’s a shitload of money flowing through the Valley, and that’s an understatement. There’s a lot of people moving there, still, and young tech people will always gravitate to that area, trying to hit the big one there. Supply of housing there is constrained, because there really isn’t that many new places to add more homes… What does supply and demand tell you in this situation? Silly valley real estate is less impacted by mortgage interest rates, and more impacted by the valuation of the “Yo!” app. Bluntly put, “poor” people rent there, and slightly less poor people depend on mortgages. My 25 year old cousin banked $1.2 million by selling his LinkedIn stock recently. He’s like a system admin. And I think that’s totally fvcking cool. Because, unless he’s an financial idiot, he did pretty well for a techie, that doesn’t have a masters, phd, mba, MD, or law degree. He’s set.

Unless you’ve lived there and have experienced how quickly some people’s fortunate can change, you just won’t understand. What is “hot” in creating millionaires there might come and go, but just as fast as something falls out of fashion, something usually starts up and replaces it a few years later. Naturally, there is a washing out/weeding out process in that eventually people who haven’t made it move out, and/or a down cycle forces them out, but those boom bust cycles do create a demand for (1) people want want to be there to catch the next craze, and (2) a select few people who have made it an can actually afford to live there.

Just ask around here in San Diego. Despite, how insanely expensive things are, you do have plenty of people from San Diego relocating back to the bay area simply because Apple or Google or Facebook threw them a pretty big bone. Ask some of the qualcomm folks that moved there, even before the layoff. Ask some of my old broadcom colleagues that did the same thing.

Is it insane and completely irrational, yeah probably. Will prices correct there, probably. Will it significantly decline, probably not. Why are you guys trying to predict when the insanity will stop? Have we not learned that as rational as we would like think things should work, the shit doesn’t always work that way. Unless the tech scene changes such that Silly Valley is no longer the tech hub, this area won’t ever stop being an expensive place to live. It would be like expecting Del Mar /LJ will correct 30-40%+, which let’s face it, those you that were expecting that to happen were pretty much wrong about that too…Come on, let’s be realistic.

[Coronita]

Well, that went off the deep end….Anyone got any good Yo Mama jokes?

“Yo mama so stupid, she won’t play Candy Crush because she’s afraid for her diabetes..”

“Yo mama so stupid, that when the questionaire asked about her sex, she put M, F, and sometimes Wednesday.”

“Yo mama so stupid, it took her 2 hours to watch 60 minutes”

[Coronita]

It seems like in silly valley, while there are periods of correction, the correction was nowhere near the appreciation that happened during the boom cycle prior. At least it hasn’t happened so far over the past 3 decades. Maybe some of you might be right this time. Maybe it will be different this time…or maybe not.

[Coronita]

For me i paid down most of my 15year 2.5% loan simply because i didnt think i could finf something stsble above 2.5%. I was thinking of paying the last $98k off early of my 15 year that will be done in 2019. But I am looking at the remaining interest left, which is about $4000 total. That comes out to be at 1.31% apr…So where can I find a 1.5% or higher return that is guaranteed over the next 3 years? Laddered CD?

[Coronita]

The easiest way to figure this out is to figure out how much total interest you have left on your existing loan.

Then you figure out for your new loan, how much total interest you would have paid.

If you have a lot of years on your old loan, in the new loan’s interest rate is not significantly lower, you might end up paying more interest on the new loan versus the old, unless you plan on making additional principal payments during the loan period.

[Coronita]

Silly valley will always have cycles of boom and bust….Unless something drastically changes such that silly valley is no longer the center of high tech, I don’t think this cycle will really change. It will fall, and it will come back….
Check this out.

And the reason is probably because in every tech bust-boom-bust cycle, Silly Valley is the first to go through it. A lot of money flows throw the Valley. Not everyone is able to make it up there (most aren’t). And the ones that usually stay are the ones that have made it (in some shape or form). So it’s a like a gold rush. The majority of the people go their hoping to strike gold, some do, most won’t. But as long as you have that gold rush continuing, you’ll have these cycles.

And unlike other areas, they really are running out of places to build homes in silicon valley. A lot of the old cherry farms and other agricultural places have gradually been replaced by high density housing. So if anything, the land of your house is sitting on is way more valuable than the building itself.

Recently on craiglist, I got someone who asked “I’m interested in renting your place if there’s an option to buy… I said, no I never plan on selling”….

[Coronita]

[quote=teaboy][quote=HLS]Almost every standard mortgage payment is due on the 1st of the month and has a 15 day grace period before a late charge.
If you mail a check, you avoid any extra fees.

Contrary to what many people think, there is no benefit to paying a monthly mortgage payment early in the month. It does not improve your credit score nor does it pay off your loan any faster.

The company you send your payments to is a SERVICER, they don’t own your loan.
Each one has its own rules about paying online and whether or not they charge an additional fee after a certain date in the month.
They CANNOT charge anything extra if you send a check that is received by the 15th.[/quote]

If you have a mortgage rate of 3.5%, a monthly payment of $2500, and you pay on the 15th instead of the 1st, you get charged 3.5% interest on that $2500 for 15 days every month, I believe.
BTW, that would work out to $43.15/year.

tb[/quote]

It doesn’t work that way. If it did, your 30 year mortgage wouldn’t amortize over 30years but longer. So long as you don’t miss the grace period, it doesn’t matter when you pay. There are some programs that claim to reduce your mortgage via a bi weekly payment. But that’s no different if you just made one or two extra principal payments every year. Because when you go on a biweekly payment term, there’s one or two months you make more than two payments per month (as opposed to bimonthly)

[Coronita]

Dish install is done… Cool. I like the sling box….Pretty neat….

[Coronita]

It’s Sunday.

Time Warner showed up at 8am today and finished the internet install. Pretty event-less. So I’m back up with internet pretty quickly.

Dish Network showed up at 8:15am and is working on the dish install, which will take more time.

Ironic that Time Warner charged $15 for internet “installation”, and it didn’t seem that difficult.

Meanwhile, dish network is going to be spending considerable more time, and it’s free installation. Go figure.

[Coronita]

[quote=Jazzman]You need to be on the right side of prices not rates.[/quote]
This isn’t about new purchases. This is about existing home owners.
You just need to be able to afford what you want to buy and make sure you live within your means.

[Coronita]

Why bother hedging against a primary? You still need a place to live.

If you’re not in a hurry to try retire early and reduce your expenses as close to 0, then having a ridiculously low payment 30 year fixed mortgage that is lower than rent prices is already you hedge.

[Coronita]

I love pizza. But for the past 5 company brown-bag lectures that had free lunches, I skipped the free pizzas.

Pizza is bad for so many reasons.
1) Carb overload from the crust
2) Cheese (fat and cholestrol)
3) It goes down too fast and it’s easily to overeat.

I just skip it completely now.

[Author]

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