[Diego Mamani]

Kev, I agree with you. I was just clarifying the meaning of 35% in the original post. Yes, condos can easily drop 35%, if not more.

Back in 1999-2000 I used to live in a nice 1/1 condo in Point Loma, my rent was $600 (which was below market). I think my landlord had bought it in 1987 or so for $50K, and by 1999 it was worth $65K or $70K, at most. My guess is that the same condo was probably worth $70K in 1990 at the peak of the boom.

[Diego Mamani]

35% is not the price drop, but rather, the share of sales in Mar-May 1995 that resulted in a loss.

[Diego Mamani]

PC: I agree with your comment about MF being a real conservative. Conservativism used to be about less taxes, smaller governments, and personal and corporate responsibility (meaning less welfare).

Nowadays the conservative movement has been hi-jacked by extreme religious types who hate immigrants, hate gays, but love war and the large government (and taxes) needed to support their activist agenda.

[Diego Mamani]

Good post PC. About that “cute” remark… the Freakonomics bestseller book reports that words like cute, cozy, charming, etc., are associated with less desirable properties and hence, lower prices. Realtors use those words when they can’t say new construction, pool, ocean view, hardwood flooring, etc., which are associated with more desirable, and more expensive, houses.

[Diego Mamani]

With the relo package, your neighbor’s employer will pay for the 6% sales commission. Also, she’ll get a subsidized, 5-year interest-only loan for up to 20% of her new house’s purchase price, and all closing costs paid by her employer. If she moves again in less than four years, she’ll probably lose money. OTOH, if she intends to stay put in Thousand Oaks, and grow old there, she’ll be OK, even if her monthly payments go up a bit when the first five years are up.

Let me add PS, that I’m with you on this one. If I were your neighbor, I’d rent a nice house for a couple of years, instead of buying. However, all of her employer’s subsidies make the rent-vs-buy comparison a little different than for most people.

[Diego Mamani]

Hey PC, for shift+click you need to use two hands. I can save 0.00001 nanoseconds (give or take) by using the single-handed right click method!

[Diego Mamani]

I’m with Woody too! ROTFLMAOSTC

[Diego Mamani]

Two words: moral hazard. As pointed out above, if banks started doing this, lots of FBs and near FBs (many of whom already have bad credit) would simply stop paying their mortgage until they get their loan balance reduced.

Of course, this doesn’t preclude a bank, on a case by case basis, from reducing someone’s mortgage. After all, the bank already incurred a loss, and then holding (owning), conditioning, and selling the house will only result in further losses.

Obviously this won’t be industry policy. Not even a particular bank’s policy. But it may happen here and there.

[Diego Mamani]

Well, if you want to unload your investment, you have to market aggressively in order to snare a buyer. Greater fools get harder and harder to snare once a bubble pops. LOL.

[Diego Mamani]

Hahaha! Well, if you want a new window, then simply right click on the link and then choose “Open in New Window.”

[Diego Mamani]

I can’t find the house I sold last year. I can’t find the condo where I used to live in the late 90s. Both can be found in Zillow. I’m not sure this SDlookup is that good… BTW I think Zillow has county recorder info, at least for some properties.

[Diego Mamani]

Prop 87 will not raise gasoline prices
There’s a popular misconception that all cost increases are passed on to consumers. This is notion is incorrect. Economics is all about supply and demand. The price of any good is where supply and demand intersect. Notice, there is no cost of prodction on a supply and demand curve. The Y-axis is sale price and X-axis is number of units.

As a former econ prof, I’m shocked to read the text above! The supply curve is given by marginal cost of production. Increasing costs will shift the supply curve upwards and to the left, hence raising gas prices. Every Nobel price winner in econ is against this proposition. (I know, many conspiracy theorists probably think that Nobel prize winners, oil companies, and aliens from Mars are all in cahoots).

This proposition is really bad. It creates new taxes, it creates a bureaucracy that is not required to accomplish anything, it increases gas prices for consumers, and discourages exploration and maintenance of existing oil infrastructure.

[Diego Mamani]

Quarter of a million dollars for an apartment?? And so far inland!!! What were these people smoking? This is proof of how crazy things got during the now defunct bubble.

The $50K loss in an understatement, as the POS will likely sell for less than the new $192K asking price, not to mention carrying costs and 6% sales comission.

From Zillow: It’s a 1/1, 688 sf, built in 1974. What a joke. Probably it can be rented for no more than $1100, which tells me that its true value can’t be much more than $130K.

[Diego Mamani]

“Our costs are going up…” Well, that’s only an excuse. A self-respecting landlord owes it to himself to get the highest rent he can. By the same token, a self-respecting tenant owes it to himself to shop around and negotiate hard for the most house he can get for his money. That’s the system.

VCJIM, by all means, try to look for another house. But you also have to consider the cost and hassle of packing, moving, and unpacking. If you do find a cheaper (or nicer/bigger place), then you can use it to bargain with your landlord. Hey, if you’re good at it you may even get your current rent reduced!!!

OTOH, if rents have actually gone up in your region, you may have to pay a bit more. But even if you agree to the full 5% increase, that’s still below inflation for the last two years. Are you in a condo, TH, or SFH?

[Diego Mamani]

I think socalarm has a very interesting point here (the car vs house comparison). It is true that cars have lots of wear and tear. However, people don’t just buy them for transportation. If that were that case, people would buy a car, take good care of it, and keep it for over 150,000 miles or over 12 years. Most people change cars more often than that though. And that’s really dumb, from a financial perspective. We change cars more often than necessary, which means we are buying expensive, depreciating assets more often than what usual wear and tear would justify.

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