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September 5, 2007 at 4:36 PM in reply to: cannot wait anymore, buying a condo now instead of a house at 4S Ranch, and wait to buy a bigger house later? #83495
cyphire
ParticipantActually she wanted me to pay cash for it… That’s why I said NO! She rents on the outskirts of Newport Beach for about 2K / month (I pay it) and told me her real estate friend said that she is just throwing money away – it is such a good deal at 640K…
I went semi-berserk! My own mom, agreeing with the Real Estate establishment! LOL… Anyway I explained the economics to her and told her to keep renting for a couple of years…. As cooprider14 just said – it is gonna get hugely worse…
ParticipantWow ex-sd I am in awe!!! I am jealous of my neighbor who sold his house for 2.5 in 2005. I sold mine in 2006 (Dec) for just over 2M (his should have been at least 200K more than mine anyway), and the current houses are going to sell for 1.8-2.0 this year (if any sell – it’s not looking good).
Olivenhain is dead… Really, really dead. My Realtor is in terrible shape and can’t believe how dead it is. The funny thing is Amy, that the homes for sale have been on the market for close to a year and still show a days on market of 1-50 days. The new homes which were for sale in the 2M’s are now in the 1.6’s-1.8’s and they still don’t have buyers. My neighbor has dropped his price by 300K and still can’t get a buyer for less than I paid, we sold because I didn’t want to sit on the house and commute for a year.
It is awesome there (other than the traffic and the water bills)… But in a downturn it will suffer much worse than many places. Execs are always moving in and out there. But there aren’t any buyers. So anyway – the bubble has JUST STARTED to burst. It will take 5 years at least to deflate (I think much worse) and very few people will be jumping in to Olivenhain. 2002 prices aren’t even on my radar – I think that we will see those this winter and that will not even start the ball rolling south.
September 4, 2007 at 11:11 AM in reply to: cannot wait anymore, buying a condo now instead of a house at 4S Ranch, and wait to buy a bigger house later? #83285ParticipantAsiannautica – I’m not sure that your comment:
“Why would a wife nag for a house? So she can decorate. How much does home decoration costs? It’s not cheap.”
What if she just want a home to raise a family for the next 30 years? Some people don’t care too much about making a buck as much as have a place to call their own. If everyone is really that $ conscious, then we all would see a major crash by now since everyone would sell their house in 2005.… is necessarily true. Though I agree with much else of what you state. First of all – most people don’t raise a family for 30 years. My parents bought their final home together when I was 9 and sold it when I was 21… 12 years is a pretty good number – especially with the current trends in lifestyles, etc.
Everyone isn’t looking to buy at the dead bottom, and while I agree wholeheartedly that most people want a place to call their own – the illiquidity of the housing market demands that only suckers consider buying right now. The current market is in free-fall, but a slow free-fall, as most properties which would want to sell aren’t even on the market. The buyers aren’t there (other than the suckers) and it is only the summer/fall of 2007! Housing has only started to be on the national agenda. We don’t HAVE a recession right now, the stock market is still holding up.
What will happen (should happen) when (and of course IF!!!!) we start losing jobs, the market tanks, liquidity of credit goes away (starting already)…. It could make the mid 80’s and the 70’s look like a prosperity seminar!
400% increases in some properties since the late 90’s… Where they should be about 50% (or less!). I don’t blame women, and my wife knows what the score it – I’m so glad I don’t have to fight that fight – but neither one of us is happy not owning a home right now (we sold in Dec 06). But of course it would be foolish to buy.
One thing I read recently…. 40% of ALL job growth in California, I think since ’96 has been related to real estate. These jobs are dropping by the thousands and our bubble is only starting to get underway. The economy is dependent on consumer spending, and these consumers are less likely to spend. As to the dentist want-to-be note that many dentists do lots of cosmetic procedures and these non-necessary items will go by the wayside for many people, people will neglect their teeth (people don’t spend money on dentists when they lose their jobs or have a tight money situation)… I’m not saying that dentists will go away, but the industry (like most others) will have a large amount of the profit margin removed.
A recession means that everyone cuts back and most areas are hit… Some very hard, some less hard. Even commodities which are a safe haven in a recession are tough now because of Ethenol, Wheat demand internationally, etc.
Things are going to get MUCH, MUCH worse and the same people on this board who really didn’t imagine this day will not imagine what I am proposing right now…. Wait till this time next year.
ParticipantLol and great article hipmatt.
In the last few weeks my mom has wanted to buy a condo (great deal! Only 640K, was 740K! I told her NO… She knows real estate is having problems, but the average person doesn’t really know what we know is going on, doesn’t care, or is afraid to look at the reality – after all this is their home we are talking about…
More to come
Participant2004? LOL!
I sold my house in December 2006 for about what I paid for it in August 2004. My neighbors told me I sold too low. There are now equivalent homes in my neighborhood with a sticker of under 2004 by 5%. That is their asking price!
Olivenhain.
p.s. The homes are on the market for over 6-8 months. And of course they only show that they just went on the market!!!
I am amazed at the fraud in real estate sales… Pure – absolute – lying – fraud!
p.p.s. Don’t forget that the actual selling price does NOT reflect all the givebacks, closing cost reimbursements, and other fees / giveaways that homeowners are forking over to sell their homes. It also doesn’t reflect the actual price received after the commission is paid.
ParticipantFriend of mine has a friend who is really excited, she bought a house which had gone up to about 900K in 2005 for 640K. Current sales prices in her neighborhood were 740K. Has no intention of living there…. She bought it for an investment! It’s a neighborhood in La Costa – older homes – can get about 2,800/ month rental.
I’m figuring that she will be negative by $2,500 / month on this ‘investment’. I guess she hopes that she will sell it for a million next year (after the bubble stuff goes away!)…
There are still suckers out there… There are still folks who can’t do math but can sign their name!
September 3, 2007 at 10:25 AM in reply to: cannot wait anymore, buying a condo now instead of a house at 4S Ranch, and wait to buy a bigger house later? #83113ParticipantIt is somewhat insane to buy now….
Homes are illiquid… You have no idea what the prices will fall to.
The thing that lots of people out there just don’t get is that a real estate bubble takes a long time to unwind. I think that the posters in this forum do understand that.
WTB you seem to feel that prices are somewhat stable, only could go down by 10%. You also don’t seem to realize what prices have done. They have gone up by 300% in some areas (more actually). All while inflation was at 2-3 percent (or less). Some posters feel that 2004 pricing is current. What about 2002? 2000? 1998? Economics are a freaky subject. But cycles happen, and they happen in CA much more than the rest of the nation.
It will take a lot of time for the bubble to deflate. There have to be as many buyers as sellers, and there aren’t. So the buyers will push pricing down. The new homes will push pricing down. The loss of jobs and economic news will push pricing down.
One thing however, the stock market is not illiquid. It could tumble. This is much more likely than going up dramatically. Companies can start firing and reining in expenses. Home prices will drop like stones (if anyone can find a buyer).
Amazing that you would consider purchasing at a time of huge supply after a market that has gone orbital. From your previous posts I am pretty sure that you are not financially secure. Can you put down 50%? Are you willing to lose that much money? If your home is worth 40% less in 5 years how upside down will you be?
Just wondering.
September 2, 2007 at 12:35 PM in reply to: cannot wait anymore, buying a condo now instead of a house at 4S Ranch, and wait to buy a bigger house later? #83022ParticipantWTB – only one caller (LOL) mentioned selling expenses…
Don’t forget that you are already underwater due to the future cost of selling the condo. (4% – 5% – 6% – 7%???)
There is a hidden cost to owning (or not so hidden) one that directly impacts most couples because of a wifes need to nest… If you own this condo you will probably make changes / decorate. Window treatments alone can cost thousands of dollars. My wife chimed in on this one: She said that the same reason driving your wife to want the 4S Ranch house will be the reason that she will want to put her own stamp on the condo – a condo which probably you will not end up keeping.
Anyway – a rental will automatically stop you from spending money on it – a purchase will require you to start ‘doing things’.
Your analysis of the 10% depreciation is, in my opinion, not reasonable. You should always be conservative in these these decisions for 2 reasons. Always push for the worst case scenario in budgeting and you are moving to a much more illiquid asset class. (Renting is very liquid, owning a house/condo isn’t).
To the large screaming masses which are telling you to grow balls – nuts to them! I agree with much of what SD Realtor is saying. A good marriage is about compromise and there are WAY too many variables associated with your life and lifestyle. Your wife might be much less concerned with your economic situation than with the social situation. Many people (men and women) would like the perceived social advantage of putting down roots and owning. I don’t think, in my opinion, that buying a condo is really a social ladder, welcome to the neighborhood, keeping up with the Jones’ thing. There are reasons to buy (but not now with the much larger issue of economic suicide) for long term neighbors, children’s schools, having a permanent home base, etc.
WTB… If you do buy, you possibly couldn’t pick a worse time… Correction… This is a better time then last year, but it’s a much worse time compared to the future. Even an optimist would agree that whatever prices you are seeing now, for the the next year or so, you will always find something better. Problem with a bubble is that on the starting downward trend no one looks at the future. You think that the price for the condo is good in relation to a recent past. But its a terrible bargain compared to where the market should go.
ParticipantDoes back on Market mean that it had been a pending, but it fell out of escrow? Or is it a home which had been listed, was not sold, was withdrawn, and then went back on?
ParticipantFirst of all – the percentage claims you are talking about are, as usual, vastly underreporting what is actually going on. Median prices mean NOTHING. When the cheaper houses no longer can sell (the people who buy the less expensive houses get the crisis first) – only the more expensive homes sell. The most expensive homes always sell, irregardless of what is happening in the market. These factors push up the median price.
The orphan homes (all the homes which have some flaws) – do not sell at all. Only desirable (usually) homes still sell in this marketplace and they aren’t being given away.
The New York city prices have only just started to go down – they were getting more and more expensive correlating to the huge profits being made on wall street.
The most important aspect of the whole lying with statistics deal is that it is not measuring the homes being withdrawn from the market because the market is saturated – and it also proves that we are on a precipice. We have NOT YET experienced a downturn in the economy due to the consumer credit crisis which will follow the liquidity crisis. When the economy sours from real estate and credit the home sales will go down.
Also the vast numbers of adjustables haven’t even reset yet. They will – other than bail outs by the government. Look at today’s new york times.
ParticipantFirst of all – the percentage claims you are talking about are, as usual, vastly underreporting what is actually going on. Median prices mean NOTHING. When the cheaper houses no longer can sell (the people who buy the less expensive houses get the crisis first) – only the more expensive homes sell. The most expensive homes always sell, irregardless of what is happening in the market. These factors push up the median price.
The orphan homes (all the homes which have some flaws) – do not sell at all. Only desirable (usually) homes still sell in this marketplace and they aren’t being given away.
The New York city prices have only just started to go down – they were getting more and more expensive correlating to the huge profits being made on wall street.
The most important aspect of the whole lying with statistics deal is that it is not measuring the homes being withdrawn from the market because the market is saturated – and it also proves that we are on a precipice. We have NOT YET experienced a downturn in the economy due to the consumer credit crisis which will follow the liquidity crisis. When the economy sours from real estate and credit the home sales will go down.
Also the vast numbers of adjustables haven’t even reset yet. They will – other than bail outs by the government. Look at today’s new york times.
ParticipantFirst of all – the percentage claims you are talking about are, as usual, vastly underreporting what is actually going on. Median prices mean NOTHING. When the cheaper houses no longer can sell (the people who buy the less expensive houses get the crisis first) – only the more expensive homes sell. The most expensive homes always sell, irregardless of what is happening in the market. These factors push up the median price.
The orphan homes (all the homes which have some flaws) – do not sell at all. Only desirable (usually) homes still sell in this marketplace and they aren’t being given away.
The New York city prices have only just started to go down – they were getting more and more expensive correlating to the huge profits being made on wall street.
The most important aspect of the whole lying with statistics deal is that it is not measuring the homes being withdrawn from the market because the market is saturated – and it also proves that we are on a precipice. We have NOT YET experienced a downturn in the economy due to the consumer credit crisis which will follow the liquidity crisis. When the economy sours from real estate and credit the home sales will go down.
Also the vast numbers of adjustables haven’t even reset yet. They will – other than bail outs by the government. Look at today’s new york times.
ParticipantWow thats funny…. I actually quit. Cold turkey about 4 months ago. I have 3 accounts – my son pushes me toward giving him my horded gold…. I have a 63 hunter. (He has a 70 mage with an epic mount (LOL)… But it’s not good for him either!
I have an InFocus 1080p projector… Needs a new bulb for about 500$… and my new home has nowhere to use it…
ParticipantWow thats funny…. I actually quit. Cold turkey about 4 months ago. I have 3 accounts – my son pushes me toward giving him my horded gold…. I have a 63 hunter. (He has a 70 mage with an epic mount (LOL)… But it’s not good for him either!
I have an InFocus 1080p projector… Needs a new bulb for about 500$… and my new home has nowhere to use it…
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