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(former)FormerSanDiegan
Participantasianautica, my fellow G35 compensator – you are right about sellers finally getting the picture and willing to cave.
In fact during the last great buyer’s market in SD we bought our first house and asked the sellers to agree to a 90-day escrow so that we could save up $3000 of the ~$9000 we needed to close on a 5% down with 3% credit from seller. Does that sound like a strong buyer to you ? They took it because they knew there were no other sucker-buyers around to which to sell their house. An offer, any offer is golden to a desperate seller.ParticipantIn a market like this one, you can buy on the cheap if you are patient. I don’t think trying to engineer a reverse bidding war will work too well because of the points made by the realotrs (I agree with both SD Realtor and sdrealtor on that point). However, the sellers are (or will be) under extreme pressure to not let a buyer slip through their hands. This is similar to the pressure that buyers had in recent years when they felt pressured to put in no-contingency offers within 3 minutes of a house going on the market. Put in the bid with a short-fuse response time (e.g. 24-48 hours) and move on if they don’t take it. If they don’t know they are effectively in a reverse bidding war, they will after they lose both potential buyers that submit offers in a 3-month period.
ParticipantKagster – If I understand correctly, the buyer purchased the rental property using a loan from their primary residence. Did they also take an additional loan out on the rental property.
Can you clarify how much loan is on each property ?
This is an important point. The bank only cares about the loan attached to the property being sold. If your friend took a second loan on their primary residence (e.g. for the downpayment) than that loan is not considered in the short-sale or foreclosure discussion for the rental property.
I’m not a CPA or related, but have purchased and sold rental properties and have studied the tax consequences.
Participant“It’s nobody damn business what kind of car you drive!”
Cool, then I drive a G35, too !
(this is the part where everyone else stands up and says “me too”)ParticipantJust call me “thread killer”
Participantan – I think we should all start applying economics to all our daily choices now. I could go out to lunch today, maybe In-and-Out or Rubio’s, but I think it makes more economic sense to eat dog food or just dumpster dive for some day-old bread. Who cares what it tastes like, that’s too subjective. Rational economic thinking will always come out in the long run. How can you objectively quantify taste anyway ?
ParticipantI just did an analysis of the cost to purchase a G35 Coupe and discovered that the price of a new G35 coupe has risen by 7.4% over the last 4 years. This is well above inflation and is not sustainable. I think that it will revert to the mean so I’m planning on selling mine now and waiting it out a couple years to buy when the price gets more in line with the underlying fundamentals.
ParticipantThis portion of thread gives new meaning to the forum topic “lowballing”.
ParticipantSince when did the G35 become a surrogate p*nis ?
This is a sports coupe or sedan built by Nissan (Infiniti). Not a large car. I thought that comment was limited to Hummers and Escalades and other large vehicles. Since it’s a smaller car perhaps we are to assume that you meant he is compensating for being overly endowed ?sdrealtor I appreciate your perspective and comments and even agree with you sometimes (especially on this thread wrt reverse bidding war opinions), but that was an asinine comment !
Participantlewman –
I’m testing with real money, too, but without putting all my eggs in one basket. I’m a firm believer in diversification with occasional shifting of assets as a hedge or as opportunity knocks.
I trimmed back my long-term retirement account stock holdings earlier this year to about 50% of my holdings (rest mostly in cash, with dashes of REITS and commodity ETFS) from a recent normal (for me, anyway) of about 75% in anticipation of this trade.
However, I have yet to significantly buy back in, since the previous dips were rather modest. Hopefully, we go back to 1250 or below over the next month or two (it is Sept-Oct isn’t it?), then I will put some back to work.
Participant“abnormal” – Not really …
We’ve already seen a decline on the same order of declines in mid-election years 1986 and 1994.
This mid-election year stock market activity is very similar to both 1986 and 1994 in scope. In both of those cases there were declines of less than 10%. In 1986 there was one retest of the low (after a failed rally). In 1994 there were multiple re-tests of the low (three failed rallies) in the spring/ summer and fall before the final rally started.
In 2006, the market dropped about 7-8% from the mid-May peak to the early June low and there were several periods in June/July where the market traded significantly below 1250 before moving up in Late July. This is very similar in size to the activity in 1994. We may or may not have another re-test or two at the range of 8-10% below May’s peak or we may be in the rally now. Either way, this year is not really abnormal. It’s following the same script (so far) as the 1986/1994 mid-election year markets.
ParticipantI think they got the next 2 quarters wrong (or at least the current quarter), so how much would I believe them for 40 quarters from now ?
Actually I think they will probably be pretty close, say within 10%, although their trajectory is wrong IMO.
Their result is equivalent to assuming 3.2% annual compunded appreciation over the 10 years. This is likely to be a decrease in real dollars, due to inflation.
If we assume today’s prices are overvalued by 30%, their target number could be reached by ~ 6.9% annual appreciation. A bit on the high side, but not out of line with appreciaiton from bottom to tops of cycles.
Looking back to 1982 prices, their number is the equivalent of about 6.2% annual appreciation.
During the last two cycles prices doubled or tripled from peak-to-peak, so I’d say their final number is well within historical ranges and not too unrealistic in terms of appreciation rates relative to the last 25 years (ignoring the last 4).
I just think their curve is likely to be grossly wrong for the next couple years.
ParticipantThe top plot sure looks familiar. Evidently they plotted the same data that I used.
Interesting part of the article is that for different periods the lag between housing and stocks changes, and the amount of correlation changes. In the 80’s & early 90’s there was some correlation with NO lag. In the late 90’s the lag required to get high correlation was 12 months or more.
The analysis that shows correlation by changing the lag may be data mining. If you take two signals that are out of phase and actually anti-correlated (one rises when the other falls) and lag them by a long enough factor you can show a positive correlation.
When someone changes the lag to demonstrate that two things are correlated, that makes me instantly cautious about how I interpret the results, especially for quantitative predictions.
When the underlying conditions change, statisticians call the process “non-stationary”, to a layman this means that the way these variables (HMI & S&P) relate to eachother changes over time. This makes it difficult or impossible to use this analysis to do any prediciton.
The author in the link even points this out by stating
“The question of whether there is a lag is an important one, of course, because if there is a lag, then the stock market is likely to fall over the next few months based on the recent decline in the HMI. On the other hand, if the lag seen in recent times turns out to be a temporary phenomenon and the S&P 500 reverts to a more coincident relationship with the HMI, then the recent decline in the latter could already have been discounted and provides no indication of the likely direction of the stock market.”
In other words the author says a stock market decline will either follow or it won’t, depending on where you think the lag should be going forward.
ParticipantI don’t know about Burbank area, but on LA’s westside there is extensive development of condo units, including several thousand in Century City and a large number of smaller complexes that have been sprouting up all over the West side. Condo sales activity and prices have already flattened in these areas, as have SFH. LA appears to be at the point that SD market was heading into the end of summer/fall of 2005. Volume has been drying up and prices are no longer increasing. Seems to me that LA is about 9-12 months behind the SD area market. I would not recommend to any of my friends to buy anything here and now, and especially condos. Your chance to get on the equity train will come back around in the next few years, and if you are patient you will be able to get into more house than a condo under a flight path.
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