[gn]

seattle-relo,

It won’t be considered fraud or illegal. People’s lives change & their need change. They have the right to move around & switch homes.

One thing to consider: in most cases, the purchase of a rental property requires a 30% down payment & higher-than-normal interest rates (i.e. higher interest rate than the rate for a primary residence).

[gn]

23109VC,

Are you thinking of a possible exit strategy from your current house in case the market in Temecula collapse ?

[gn]

23109VC,

Are you thinking of a possible exit strategy from your current house in case the market in Temecula collapse ?

[gn]

When the price is right, they will all swoop down and gobble up like vultures.

The only problem is: for the price to be "right", it has to be at levels below "what's justified by the fundamentals".

Remember, there's 2 kind of money: smart money & dumb money.

"dumb money" purchased during the bubbles based on "psychology".

"smart money" will purchase based on the fundamentals. The money that you mention is "smart money".

 

[gn]

When the price is right, they will all swoop down and gobble up like vultures.

The only problem is: for the price to be "right", it has to be at levels below "what's justified by the fundamentals".

Remember, there's 2 kind of money: smart money & dumb money.

"dumb money" purchased during the bubbles based on "psychology".

"smart money" will purchase based on the fundamentals. The money that you mention is "smart money".

 

[gn]

I think that the “stigma” associated with foreclosure will greatly decrease in the next few years. That’s because foreclosures will become so common.

Most people will simply think:

I was a victim of greedy mortgage brokers/the artificial high prices of the real estate bubble. Look around, there are thousand of other victims. I’m not the only one. So, it’s OK to walk & let the lender foreclose.

[gn]

I think that the “stigma” associated with foreclosure will greatly decrease in the next few years. That’s because foreclosures will become so common.

Most people will simply think:

I was a victim of greedy mortgage brokers/the artificial high prices of the real estate bubble. Look around, there are thousand of other victims. I’m not the only one. So, it’s OK to walk & let the lender foreclose.

[gn]

bsrsharma,

Europe has its own bubbles (London, Paris, Madrid…). And these bubbles are deflating as well. The rich foreigners that you mention either:

1. Already invested their money into these bubble & are scrambling to escape.
2. Or, if they have $$$ as prices come down will have plenty to choose from in Europe.

The same thing with Asia.

[gn]

bsrsharma,

Europe has its own bubbles (London, Paris, Madrid…). And these bubbles are deflating as well. The rich foreigners that you mention either:

1. Already invested their money into these bubble & are scrambling to escape.
2. Or, if they have $$$ as prices come down will have plenty to choose from in Europe.

The same thing with Asia.

[gn]

23109VC,

Kudos to you for having the courage to look at things the way they are. Many folks who have bought are in total denial about the current state of the market.

hey, if prices fall badly enough, i'll buy ANOTHER House and rent out the one i'm in now. 🙂 

If you can afford the negative cashflow from renting out your current house, that's not a bad strategy. 

I was suprised to see rents have gone UP in my area

The main reason that rents have gone up is because of the supply reduction. Many investors who previously rented out their houses have given up & let the lenders foreclose. These houses are currently vacant but are not available for rent. At some point in the future, the lenders  will dump these houses a fire-sale prices & investors will scoop them up & rent them out. Then, rent will come down. Basically, rents have gone up because of an artificial reduction in the rental supply.

Of course, people who lost their primary residences to foreclosure also contribute to the rental shortage. But this is a minor factor.

[gn]

23109VC,

Kudos to you for having the courage to look at things the way they are. Many folks who have bought are in total denial about the current state of the market.

hey, if prices fall badly enough, i'll buy ANOTHER House and rent out the one i'm in now. 🙂 

If you can afford the negative cashflow from renting out your current house, that's not a bad strategy. 

I was suprised to see rents have gone UP in my area

The main reason that rents have gone up is because of the supply reduction. Many investors who previously rented out their houses have given up & let the lenders foreclose. These houses are currently vacant but are not available for rent. At some point in the future, the lenders  will dump these houses a fire-sale prices & investors will scoop them up & rent them out. Then, rent will come down. Basically, rents have gone up because of an artificial reduction in the rental supply.

Of course, people who lost their primary residences to foreclosure also contribute to the rental shortage. But this is a minor factor.

[gn]

So that particular pressure chasing prices down is significantly less than what you have in say, Temecula.

San Diego county is next to Temecula.
The bay area is next to the central valley.

People in Temecula commute to work in San Diego.
People in the central valley commute to work in the bay area.

Both Temecula & the central valley has a lot of land to build on. The central valley to the bay area is what Temecula is to San Diego.

But there is more: the worst real estate bubble in CA is NOT the Inland Empire (Riverside & San Bernadino counties). It's the central valley. Why ?

Speculators from the bay area flocked to the central valley & drove prices to insane levels. So, on the surface, the devastation may occur in the central valley, much of the the money that's lost is bay area's money.

[gn]

So that particular pressure chasing prices down is significantly less than what you have in say, Temecula.

San Diego county is next to Temecula.
The bay area is next to the central valley.

People in Temecula commute to work in San Diego.
People in the central valley commute to work in the bay area.

Both Temecula & the central valley has a lot of land to build on. The central valley to the bay area is what Temecula is to San Diego.

But there is more: the worst real estate bubble in CA is NOT the Inland Empire (Riverside & San Bernadino counties). It's the central valley. Why ?

Speculators from the bay area flocked to the central valley & drove prices to insane levels. So, on the surface, the devastation may occur in the central valley, much of the the money that's lost is bay area's money.

[gn]

I am wondering whether the resolve of stubborn sellers could be cracked if waves of wisecracking bears started working with " buyer agents" (yeah like they represent you) and then just started offering the prices now that they want for 2012 or whenever.

The bears don't have to do anything. In a free market, whenever sellers far outnumber buyers, prices will falls.

It's inevitable.

[gn]

I am wondering whether the resolve of stubborn sellers could be cracked if waves of wisecracking bears started working with " buyer agents" (yeah like they represent you) and then just started offering the prices now that they want for 2012 or whenever.

The bears don't have to do anything. In a free market, whenever sellers far outnumber buyers, prices will falls.

It's inevitable.

[Author]

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