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I like pet rabbits. You can buy them for $5 and feed them veggie scraps and let them trim your lawn. They keep the grass short rather than destroy it. Bulk rabbit food is just hay pellets and leftover middlings from processing of corn and wheat. It costs $10 per 50lb bag. They require no vaccinations and fixing them is only $20-50 for males. Females are about $200 and that’s the only big expense.

So cheap environmentally friendly.

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Flyer while I don’t think it is a great time to get a new SD investment property, buying to live is still pretty attractive.

Rents are still soaring with very low vacancies. The inventory and sales rates seem to be trending toward the 2016-2019 milder bull market levels. We obviously weren’t going to have 0.2 month MLS inventory and 35% YoY pricing for long.

The cost to own here is basically the 4.5% interest, 1% tax, and maybe 0.3% for everything else like insurance.

So about 4800 all in cost per month for every million of value. Roughly rental cost. For every 1% appreciation, that’s 10k a year or about 800 a month of reduced cost. A mild 3% appreciation thus means the effective monthly cost to buy a million of SD RE is only about 2300, far below rental cost.

I think oil stocks are an even better investment however. I just can’t live in XOM and TTE.

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I had an inflationary playlist jamming yesterday on my elliptical

Gordon Lightfoot – Sundown
Donna Summer – I Feel Love
Kansas – Carry On My Wayward Son
Madeleine Kane – Feels Like I’m in Love
Thelma Houston – Don’t Leave Me This Way
The Cure – A Forest
The Jacksons – Walk Right Now

Probably will start with the mid 80s today.

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Also negative in July are import prices.

Consumer inflation expectations also plunged in July’s NY Fed survey, single biggest decline in the history of the series.

Two years of elevated inflation is certainly transitory compared to prior inflationary episodes.

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PPI: negative in July

Inflation is TRANSITORY, except maybe rents and certain commodities where supply is physically restricted.

Rents and energy share something else in common: hostile government regulation is driving down investment in new supply.

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Nothing a lawyer of a certain age likes more than telling “war stories.”

Here’s one from me. I was the lead lawyer in a case and won at the Ninth Circuit. The other side sought en banc review and was immediately rejected. Then sought Supreme Court review, which was granted.

While I wanted to again argue the case, the issue being reviewed was a narrow and technical one, and an attorney who had won a similar case before the Supreme Court offered to do it very cheaply. So I owed it to my clients to step aside.

We then lost 0-9, with Sotomayor writing a unanimous decision.

I could have done it, it couldn’t get any worse than that.

In the end, it didn’t matter. Only a narrow slice of the Ninth Circuit’s decision was reversed. With the rest of it intact, we won before the trial court.

Today I learned by best prospect for another Supreme Court trip was cancelled. The 1986 decision Kelly v Robinson has been aggressively criticized by circuit courts, who suggested it may be bad law. The 9th Circuit called it a “relic of the 80s” like “big hair and NutraSweet”

In 2020, the SC appeared to be interested in revisiting it, but declined because one of the lawyers was a pro se bankrupt attorney coming off a suspended license. In my case, the other side was a competent big SD firm.

What dashed my dream was the other side decided not to defend Kelly at all. I think I would have won in the end, but they had plenty of good cases and arguments they could have cited.

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In general restaurants are not healthy, but sashimi, poke, salads without heavy dressing, and raw vegan items are all healthy. Thai food without rice, like an eggplant and chicken stir fry, is pretty healthy outside of the salt. Hawaiian can be healthy too if you skip the rice and mac salad and get just fish beef and chicken.

Foodiedom crept up on me gradually. Now I have 12 different types of vinegar. Partly this is from adopting a better diet, since it is more of a challenge to have delicious healthy food.

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My most used card is Amex gold. 4% points on restaurants and grocery stores uncapped. I then convert to delta points which are worth about 1.4c when used for first class tix on the nonstop from SAN to Detroit, which I do annually for thanksgiving. So about 5.6%. The annual fee is made up for by the $1000+ welcome bonus. They also put $10 a month into your Uber account for either rides or food, but it doesn’t roll over.

Second best card IMO is the Wells Fargo 2% on everything card. It is slightly better than the other 2% cash back cards, easier redemption and higher welcome bonus.

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Next time you are in San Diego, check out the Costco Business Center on Convoy. It is a familiar but different experience. Parking is much easier, and their walk in freezer section is huge and you can pretend you are in a Michigan winter for 5 minutes while you check out their frozen meats.

And if you are into retail history, the Costco on Morena Blvd that Mitt Romney used to shop at is the oldest one in the USA. It wasn’t the first Costco however, it was a Price Club that is older than any other existing Costco.

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I enjoyed Weeds when it was initially airing, especially the seasons set in San Diego. Mary Louise Parker has such a great presence and Kevin Nealon is underrated.

This TV show was set and filmed in OB. It got good reviews, but the premise didn’t interest me and it only lasted one season.

https://en.wikipedia.org/wiki/Terriers_(TV_series)

I remember them blocking off roads and the huge Hollywood sized film crews two blocks from my house.

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Thank you flyer teaboy and scaredy for the kind words.

Teaboy’s comments show the fallacy of the “why not just pay 1% more if you really care.” The extra 1% can be repeated endlessly, something like Zeno’s paradoxes.

Yes, I would have walked over the 25k difference. Prices are falling in east county at least, and the type of big suburban homes I was targeting start losing some of their potential buyers as the school year approaches. If this were the only McMansion in San Diego under 2m, yes I would have paid the extra 25k. But that’s not the situation.

I might have come back to the same home, or found another, or just waited a couple months and reentered the market. The home was the best home for me on the market now and I really like it. But there was 1 home that sold in early June I wish I had grabbed that was better than the one I am buying, and maybe 2-3 more over the past 6 months that were about equal.

I negotiate litigation settlements all the time, so while I may not be an expert, nor am I noob. Suburban homes are a lot easier to value than most legal cases. For example, property sales are public record, but most settlements are confidential, so the pool of “recent comparable sales” in litigation may be small or oftentimes zero.

So far I am liking the jumbo loan process. While pretty close to conforming mortgage process, there seems to be less of a focus on checking Fannie Mae guideline boxes and more on just documenting the major income and assets. I also like that it will be serviced by the same big bank originating bank. I have had Wells and Chase service mortgages, and they are a lot more user friendly than tiny companies that right now have my three current mortgages. My processor also noted that if I choose to make a 15k+ extra payment, I can have my loan “recast” such that instead of an earlier payoff date, the minimum payment is recalculated lower. There have been times when that would have been great.

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They accepted my initial offer after I remade it. Their counteroffer was 25k higher, I said no, they took the initial.

I think the sale is a win all around. Sellers up about 500k, sliding right under the capgains exemption for a married couple. I am getting a place that’s about 10% below March 2022 peak price and perhaps 3% below market price, giving me a little safety cushion. I really don’t expect or care if I make money on this one, it is huge so will have high monthly expenses, and I don’t think RSD is especially well positioned for appreciation. (Santee and Mira Mesa are suburban areas that will outperform RSD in my opinion.)

I will probably end up with a 4.375% 7/30 Jumbo ARM.

Looking at my increased costs, my house in OB I believe will rent for about 4400. Net cost of the new place will be about 7000. 2600 a month isn’t peanuts, but if the new place appreciates 1.5% a year, then the appreciation makes this a break even, and anything more than 1.5% is profit.

As for the risk on the ARM, the interest savings will be about 30k before the rate resets. I am ok with the additional risk that in 7 years I will still have the mortgage and it will reset higher. Part of me being OK with this risk is that all my other debt is fixed at lower rates.

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I am pretty close to a deal in RSD. We’re 1.3% apart now on price.

I never looked at LJ proper, too expensive.

4S looks great online but I am looking for bigger lots and lower prices so never seriously looked. My search was generally in the 1.3-1.8 range. Even 2.0 doesn’t go very far in 4S right now. 4S there’s a premium price for location, new construction, and school district that I value less than others.

I did look at a lot of listings at University City canyon fronting homes, PL and Clairemont. I probably would have stretched my budget up to 2.2 if I had found a perfect place in UC or PL, but I didn’t.

Another thing is I find older suburban areas more cozy. Prior to moving to SD I grew up in 60s and 70s suburbs. So PL/UC/Clairemont feel somewhat like my midwestern burb hometowns, but with palm trees.

Other homes I was interested enough to go to showings included Ramona, 2x La Mesa, Spring Valley, and El Cajon.

This week I also had my first visit to Poway, it reminded me of Pasadena where I have spent a lot of time for work. I had a lot of Poway places bookmarked to view, but the RSD place just won my heart first.

I do have many refined and pretentious tastes, but in physical buildings to spend my time in my tastes are very middle class Midwest. The two story huge entry room thing in so many post-2000 lux homes I just don’t like.

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If you find mortgage and bond pricing interesting, this is a great article:

https://www.mortgagenewsdaily.com/markets/mortgage-rates-07292022

Short version is the market thinks rates will drop, so the rate decrease you get for paying points up front is much much higher than normal. The article says the break-even point on a point is only 17 months right now. It was always more like 50-60 months whenever I applied before, too long so I always did 0 or negative points.

So…BULLISH. 5% average rate with the ability to pay a small fee to turn it into a 4.375% is a better environment for buyers than 5% without this option.

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1. Talking about dow points rather than sp500 percentage change is a bad look.

2. Conventional mortgage rates are behaving strangely lately. They did indeed rise 0.5 even while jumbo and treasuries only went up 0.10 and .15 from recent lows. Their blowout way above jumbo rates is back to about 0.9.

3. I predict conventional rates will trend back towards normal spreads soon.

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