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Diego MamaniParticipant
Perry: I can’t believe you’re long on real estate. Your RE pricing projections make sense to me, especially in real terms (inflation-adjusted dollars, that is). So, when you buy your new house, at a future price that will be lower than today’s, your existing house also will have depreciated. Of course, if you’re saving very aggressively now, your high down payment/equity in your next house will more than offset what you lose in your current house (which has been depreciating since 2005).
January 8, 2007 at 2:08 PM in reply to: Pardee Homes Drops Mello Roos in new development in Moorpark (Ventura) #42964Diego MamaniParticipantGood post Bobby D!
Strictly speaking, the builder is not dropping the M-R. Rather, Pardee is paying for it in one lump sum (instead of the homeowner paying over many years).This is another way of reducing the effective price that is not captured by the data.
Diego MamaniParticipantWhen facing a cliff, being one step ahead is not where you want to be!
Diego MamaniParticipantI’ve been against the misguided invasion of Iraq all along, but let me just point out that inventing words like “terrorified” when attacking Bush will actually make him look better.
I’m terrified at the high prevalence of neologisms in our language.
Diego MamaniParticipantPencil: I think that the NABE (Business EconomiSTS) refers to national prices hitting bottom later in 2007. That may be true. However, bubbly areas like San Diego will probably fall for another couple of years before prices flatten and stay the same for some time.
The above is for nominal prices. In inflation-adjusted terms, we are still far, far from reaching the bottom in San Diego. Buying a house here before 2009 is nuts IMO.
Diego MamaniParticipantARMs have been around for a while, and definitely predate Ford’s presidency. My parents bought their house in South America in early 1974 with a 20-yr ARM. In fact, some have recently commented (here in the USA) that people routinely use ARMs in many foreign countries, and that perhaps fixed rate mortgage homebuyers in the US overpay for the convenience of a fixed payment.
In my parents’ case, the contract stipulated all sorts of ceilings that the variable rate could not exceed in the future. We entered a high-inflation period in the late 70s and early 80s, with nominal interest rates going through the roof, but the impact on our payments was limited thanks to the rate ceilings prescribed in the contract. Thanks to inflation, my parents got a sweet deal on that house…
And 30 years later a got a similar windfall when I cashed out at the peak of the So Cal RE bubble!
January 2, 2007 at 10:59 PM in reply to: Mello Roos – Do builders remove it in a down market? #42576Diego MamaniParticipantAren’t Mello Roos set by local governments? Cities, counties, etc., won’t approve new developments without the M-R to pay for new roads, utilities and schools. I don’t think the builders have a choice. Is there anybody here familiar with a County Assessor office and property taxes?
Diego MamaniParticipant“What is the benefit of this program??”
Good question, PS. The borrower (formerly known as “homeowner”) is already screwed, so his benefit is that he gets the illusion of keeping “his” house a little longer. The people selling this product get to pocket some nice fees, paid by the FB (“Frustrated Borrower”, hey, this is a family forum!). The lender/bank situation is not affected, they get to lose money anyways over a bad loan.
[/sarcasm off]Diego MamaniParticipantEuropeans always wonder why it is so easy in this country for a mentally ill person (like the murderer at the desserts cafe) to get a gun. I wonder if this is a case of random violence, or whether the murderer knew his victim. They are both of about the same age, the dead man was in the military, and perhaps the killer too; after all, this is San Diego.
If it was random, it alll started with the crazy guy simply staring at his victims. A few years back, my (now) wife and I were having lunch at a Souplantation restaurant, when I noticed a young man staring at us in a very obvious way. Other than our, er, good looks, there was no reason for staring like that; perhaps the fact that we are of different ethnicities may had something to do with it.
This went on for a while, and I was getting increasingly annoyed. Eventually I screamed at him “Are you staring at us?!!” After that, he just stopped staring and that was the end of it.
Had it been some armed lunatic like the guy in the news this week, he may have shot me… By the way, it appears that this week’s victim’s wife was of a different ethnicity too, to judge from her name.
Diego MamaniParticipantThe GF is a key concept in Ponzi games (such as the recent speculative run-up in RE prices in So. Cal.) Sometimes the game participant is fully aware that the price he’s paying is ridiculously inflated, but he goes ahead hoping that he’ll be able to unload the property to a GF before the bubble bursts. It’s a gamble of course, as it is always impossible to predict when these things will end.
Most of the time, however, late entrants to the game are completely oblivious to what is going on and are motivated by greed, or fear of “being priced out”.
Diego MamaniParticipantSales history for the same property. The first purchase was from the Irvine Company (builder).
03/1983 $152,500
06/1984 $150,500 (loss!)
10/1988 $255,000 (bubblelicious gain!)
12/1994 $223,000 (loss after 6 years!)
08/2005 $659,000 (ridiculously high bubble price)
10/2006 NOD filedLesson: Don’t be a GF like those who bought in 1988 and 2005 above (the latter put $0 down). Does this history suggest that we should buy in the next year that ends in “4”? (just kidding).
Diego MamaniParticipantPerry, I couldn’t agree more about the need to legalize drugs. The current laws actually encourage crime by making drug dealing so profitable. But as Barnaby says, there are also many other factors driving crime.
I don’t agree about poverty causing crime. As the recent corporate scandals show, crime is caused more by loose morals. The probability of being caught and convicted also affects crime.
I’ve noticed that, at least in developing countries, the poorest people are seldom, if ever, involved in crime, except perhaps for pick pockets and purse snatchers. In Latin America, for example, serious crime is often committed by former cops or people who have or could have a “day” job. Which brings us back to the issue of morals. (By “morals” I’m referring to the Golden Rule: don’t do to others what you don’t want done to you or your loved ones).
Diego MamaniParticipantMixxalot, I’d recommend you take a look at the Freakanomics book. It makes the point that compared to the 1970s, we are doing a better job at jailing criminals, which is one of the reasons cited for the enormous decline in crime rates we saw in the 1990s (another reason is the legalization of induced abortion). Also, if you compare the USA with other industrialized countries, you’ll see that a larger proportion of the population is jailed here.
Unfortunately, there’s a limit to how much crime can be reduced (in a large metro area) without turning our country into a police state. As an example, the Saddam-era Iraq was very safe crime-wise, because the dictator’s cops were in every corner watching everything and everybody. Sure, they had no muggers or rapists, but no freedom either.
Diego MamaniParticipantWell said, Barnaby. I grew up in a home with guns and I know what you mean. If you have a gun, that’s fine, but are you ready to use it? Some believe that pointing a gun to a bad guy and saying “hands up” is going to work magically as it does on TV. Truth is, before you get to the “S” in “hands up” you may be dead. My point is, if you have a gun, and you intend to use it, then you have to be ready to shoot the mugger before he even knows that you have a gun.
Killing a thug, aside from the traumatic experience that it may be for some, can be very costly (time and money) in legal proceedings. Much easier and cheaper to surrender a few hundred bucks in your purse or wallet; after all, these people are so stupid to begin with, that they will end up in jail, or dead, sooner or later. Think of the money gone as a “random tax” for living in a large metro area… No need to risk your health or life over this.
The above is real life, which of course is different from what we see on TV, or from what some joker with a cowboy complex may tell us in cocktail parties.
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