[Jazzman]

[quote=Allan from Fallbrook]KIBU:
Concerning guns and homicide: Statistically speaking, guns are NOT the leading cause.[/quote]

In 2008, the U.S. had over 12 thousand firearm-related homicides. All of Japan experienced only 11. Almost no one in Japan owns a gun. Coincidence?

You could say arguments that deny the facts, perpetuating the status quo are a leading cause of gun-related deaths.

If you prefer, guns facilitate homicides, suicides, and accidental deaths and they are arguably the quickest, most convenient, and most effective means of ending life. By removing them you are not eliminating the desire to kill, but you are eliminating one of the easiest means to end life. Do you lock you door? Why?

[Jazzman]

Or perhaps falling off the fiscal cliff, until wings sprout.

[Jazzman]

Interesting! Thanks for posting.

“End of the Road” by Tim Delmastro doesn’t follow the accounting route in much detail, but explains the spiraling debt and deficit in terms of fiat currencies. Old hat for this forum, but I’m sure will still make one or two re-think their gold positions. How much faith we can put in these predictions I don’t know, as there were no counter arguments put forward. That to me is always suspect. I am not an economist, but you don’t have to be one to know by now that bubbles don’t solve debt problems, they seem to make them worse.

Another major problem is explaining the problem, which you need to do if you’re going to provide a fix. “We’re in debt up to our eye balls, the US economy will crash, taxes must go up, and costs must be slashed”. So everyone gets it, but you are still left with a divided government and special interests. Introduce a parliamentary system?

How likely is a depression just after a major recession? Probably low, but the likelihood of a major (economic) event happening that could tip the balance in the next ten years is probably high.

Preview here. Full version on Netflix.
http://www.youtube.com/watch?v=pfVljXu_eeo

[Jazzman]

All things being equal, you’d expect price to rise with low rates (and that seems to be happening now), but prices are affected by supply among other things, and I’d guess the supply (expansion) of credit as well. With so many distorting factors, it doesn’t follow that declining interest rates over the last forty years, hasn’t had some affect on prices, or that somehow the reverse is made true, and therefore we should all buy now. With no savings, no equity, still over-priced homes, and a dependence on low cost mortgage debt is it any wonder we’re still scratching our heads over conventional wisdom?

The other baffling notion is that price is no longer relevant, since the net income (aka affordability) is what counts. So why the fixation with price at all, since it no longer sits to the right of the ‘equal’ sign? After all, your job’s salary isn’t advertised as a lump sum. On the other hand, if memory serves me correctly a home is a manufactured product, has a shelf life, and the parts that go into its making depreciate. I think it is a mistake to ignore this. If this is all about wealth building, you’d be better off investing in a good education in the long term, than an inflatable home.

[Jazzman]

[quote=anxvariety]House prices will not reach their bottom until interest rates rise.

General statement, interested in different perspectives.[/quote]
The major complaint from buyers is lack of inventory. How much either low inventory or low interest rates are responsible for the current lift in home prices is anyone’s guess, but that they have is pretty much a given. So if either change I think it’s conceivable appreciation could at least halt in its tracks. I don’t think the recovery is robust enough to build the momentum needed to be without props, and I guess we’ll see what the long term effects of low rate dependency will be.

What’s more important in this current market is whether you are unhappy with the lack of choice …and possibly also whether you personally feel home prices should have corrected more than they did? That is a major psychological barrier to entry for some of us, and is the reason I left CA. Home prices still seemed unrealistically high to me in many places, and I would certainly resist being goaded into acting now if you have any reservations. Sometimes instincts are a better guide than a calculator.

An interesting aside, I read in the WSJ at the weekend the Spanish government demanded that lenders release foreclosures onto the market to allow a correction in prices. I can’t see that happening in the US 🙂

[Jazzman]

“Spring thaw: we told would-be sellers this year to wait for higher prices. No one will say that in 2013, which will be the first year in seven starting with a broad consensus that prices will rise. After 18 months of fewer and fewer homes for sale, the trend will reverse.”

WTF does this mean? Higher prices in 2013, not higher prices in 2013, higher prices in 2013, not higher prices in 2013. Crystal ball got a little foggy here.

[Jazzman]

[quote=bearishgurl]

Your “sage advice” to the OP here has nothing to do with “irritation.” I’m not a realtor, the OP has a realtor and trust me when I tell you that your statements aren’t taking any biz away from me. I’m currently “busier” that I want to be and would like to get out of this chair a little more often ;=][/quote]

Of course you aren’t irritated BG, and I’m glad you still find the time to write such long posts and with such frequency being “busier than [you] want to be…” with whatever it is you do that is, or isn’t related to RE.

Anyway, apologies to OP for the thread jack. Here endeth the lesson. Amen! Over and out!

[Jazzman]

[quote=bearishgurl]But I think the arguments used by these “doomsayer” posters (ESP the ones that were highly motivated to buy, qualified to buy . . . but didn’t – Jazzman and many others come to mind) aren’t valid because they are comparing apples to oranges.

This OP-FTB thanked Jazzman for his “sage” advice, lol, yet he wasn’t successful in purchasing a home here! Of course, the OP didn’t know that until I pointed it out.

Buyers need to be told straight up what they can and can’t do with the resources they have. They need to be helped to find a suitable property by a qualified agent, which they can qualify to make an offer on, unless they decide to suspend their search until a later date.[/quote]

Well I’m not clear the fact that I didn’t buy in CA disqualifies me from responding to the OP, or that the advise was somehow amusing. I also like to think that I was “successful” by not buying in CA. Logic seems to have eluded you somewhere along the line. However, I agree that buyers need to be told straight up, which includes suggestions other than from those connected professionally to real estate, as they provide useful antidotes to the rot that got us into this mess. I am very aware of the irritation (exempli gratia “doomsayers”) caused to business-as-usual Realtors, but I have no sympathy. Nothing personal BG.

[Jazzman]

[quote=bearishgurl]Jazzman, I’m sure you’re aware that you’re going to have to use those “devalued (US) dollars” to buy your retirement home in France!

Maybe someday I’ll visit :=][/quote]

There we go with assumptions again. The purchase will be funded with mostly euros. Even if it weren’t the price differential still makes it attractive all things considered.

You really should visit, not because I want to prove my point, but because it will open your eyes to a world beyond San Diego. There aren’t huge cultural differences, but the subtle shifts in emphasis are rewarding to explore. You can then come back and write long essays, about how Jazzman was maybe onto something 🙂

[Jazzman]

[quote=bearishgurl][quote=Jazzman] . . . Soon we’re off to France and will be buying a beautiful stone farmhouse. The total tally will be our budget for California. Yep, two homes, in two of the most beautiful regions of the world for the price of one nothing-out-of-the ordinary single family home in southern California.

Here’s what’s on offer in France[/quote]

http://www.rightmove.co.uk/overseas-property/property-32298586.html

Asking price in US $: $582,400
Sq ft: 2034

http://www.rightmove.co.uk/overseas-property/property-20292576.html

Asking price in US $: $275,600
Sq ft: 1039 sf (main house) 273 sf (summer house/kit)

For comparison to US listing measurements, I did not count the sf in the hallways, terrace, garage, workshop and woodstore, as the above listing did.

http://www.guillon-immobilier.com/detail-IJL5135279-maison-lhoumois.html

Asking price in US $: $477,750
Sq ft: no size given but looks tiny in first photo

spdrun, can you translate this listing comment for us?

“Le tout sur 4.4 hectares de terrain en bordure de fôret.”

Does this measurement apply to the lot or the perimeter of the home?

References used:

approx (+/-) current Euro to dollar exchange rate: http://search.yahoo.com/search?ei=UTF-8&fr=ytff-yff17&p=exchange+rate+Euro+to+US+dollar

sq meter to sq feet conversion calculator: http://www.metric-conversions.org/area/square-meters-to-square-feet.htm

[quote=Jazzman]Now I love California and the people, so don’t get me wrong here, but they think they’ve got it right, and when it comes to home prices …well, they haven’t! According to a survey reported on NBC tonight, CA is the worst run state in the country. Now I don’t know about that, but I do know value when I see it.[/quote]

Jazzman, you had the opportunity to at least purchase a similar home to the your first link right here in CA for a comparable price (except its wood shingle is no longer insurable in CA). It may not have been hundreds of years old (not sure of the age of the one in your link) but like spdrun posted, there ARE homes like this in the US. The second and third link are a bit unusual. There ARE many stone and rock houses in TX, OK and AR, mostly 1600-1900 sf, which would cost about $180K to $220K today. Many of them are situated either lakefront (with a boat dock) or within blocks of a lake. The vast majority of them are owned as vacation homes by city dwellers (workers) who often move into them when they retire. They are mostly fully furnished down the last detail and almost never rented out.

Jazzman, it appears that you only “shopped” in some of CA’s most prestigious communities (mostly coastal) in which you “expected” to make a “killer deal.”

http://piggington.com/future_housing_purchase_trading_up_when_rates_are_higher#comment-216296

http://piggington.com/future_housing_purchase_trading_up_when_rates_are_higher#comment-216305

http://piggington.com/future_housing_purchase_trading_up_when_rates_are_higher#comment-216314

Even after reviewing these posts, I still feel like you may have “overshopped” and “overthought” your retirement home purchase up and down the state and so ended up talking yourself out of buying in CA for no other reason other than you were “tired” (and also got “distracted” by the “doomsayers” on the MSM).

http://piggington.com/future_housing_purchase_trading_up_when_rates_are_higher#comment-216410

http://piggington.com/future_housing_purchase_trading_up_when_rates_are_higher#comment-216468

Why am I now bringing back up the issue of “overthinking” as it applies to RE purchases? Because I believe it is very possible the OP here has done the same thing while shopping for a home for more than a year (albeit on a much shorter leash than Jazzman due to job constraints and available resources).

I’m unfamiliar with Europe but just trying to make a true apples-to-apples comparison of those listings in France to CA listings in the same price range. Since it doesn’t look like there are any jobs for miles around ANY of those listings, they should be comped to inland rural and semi-rural areas in CA, IMO. I just don’t think CA prices are that bad today for what you get, where the property is located and the fact that CA actually has “potable water” available everywhere and a very good infrastructure in comparison to other states.

When all is said and done, Jazzman will likely have spent $750K – $1M on RE but was “unable” to make a deal on a suitable retirement property for himself and his spouse in CA while diligently shopping between 2010 and 2012. There’s nothing wrong with having two homes, distant and diverse from one another. But I still feel he could have done the same thing in CA (condo near beach plus large Lake Tahoe cabin) or fixer mini-estate outside of Ojai, SLO, Napa or Sonoma (likely larger but as a comparable to listing #1 in France).

Thanks for sharing with us the listings in France, Jazzman. They are very interesting.[/quote]
BG, you just can’t compare. Old homes are not sold on a sq ft basis, and you are comparing prices using a devalued dollar so it’s academic. Also, you simply cannot find these kinds of homes in the US, and you really need to go there to understand that. Just look at the pictures! The closest I came to finding similar was Montecito, but there are faux Tudors, or homes reminiscent of turreted chateaux, and are new(er) constructions, probably wooden, and they sell for multiple times the price. The very fact that the owners wanted something that mimics European history and tastes says it all don’t you think? Now, here’s the thing. Many Americans recognize this and buy in Europe, France where ever. The logic goes why pay millions for a Picasso copy, when you can have the original at a fraction of the price.

I grant you, these can seem largely pointless arguments/comparisons when framed in the bigger picture, such as job opportunities, earnings potential, language barriers, home and family ties etc. The point of them is to create an awareness about how you place a value on what is your biggest financial liability, your home. And do you tolerate external factors that create huge problems, because they can be conveniently forgotten with the passage of time. Psychological bubbles, beget economic bubbles and denial of that dooms history to repeat itself.

[Jazzman]

[quote=spdrun]Apart from the ages of the homes, it’s not as if you can’t find similar deals in rural Vermont or some parts northern California/rural Oregon. We’re not talking about Parisian pricing here.

As far as bureaucracy and taxation, France is far from being free of it, rather the opposite. Though the good thing is that there’s a much bigger tradition of lawbreaking and evasion there, so the effects of the bureaucracy tend to be tempered.

Vive l’anarchie![/quote]
The difference though is what you’ve got in those rural areas. For me the beauty lies in the history and culture, and how it has blended into the rural landscape. The Loire is dotted with the most unimaginably beautiful chateaux, Provence is dotted with ancient hilltop villages, rocky landscape, and rural beauty. You simply cannot compare places like Vermont to France. Each region of France has its own culinary traditions, festivals, architecture and so on. There is nothing remotely like it in the US.

Yes, taxes, bureaucracy, and other things are challenges to living there full time. But let’s keep the debate on an even footing. Home prices in France are lower largely as a result of much tighter lending regulations, and home ownership does not have the same emphasis as the US. That has changed more recently, I believe as a result of foreign lenders from places like the UK that have targeted the expat communities, and brought with it the same home buying fever, and greed tendencies. But in spite of that, rural France has not, for the most part seen tripling of values, and therefore remains (as you can see from the examples) relatively cheap.

Now getting to the homes themselves–where I have first hand experience–there is really nothing comparable in the US, and if there were they would be historical monuments. The homes are often solid stone with walls up to two feet thick, and you can’t help but think that “charm” played a big part in their construction, even all those hundreds of years ago. No two homes are alike, but rather reflect regional styles. Normandy thatched cottages, Perigordine towers of Acquitaine, even Valoise homes of Picardie near Paris. They exude character and charm, and have a permanence about them that is both endearing and awe inspiring.

It sometimes isn’t enough to visit these places, which are often away from the tourist routes, since you need to live there for a while to understand them. It is like a fine wine, lost on the uninitiated palate. This is the point missed by many Americans, where instant gratification shapes the mindset.

Now, I’m not French but I recognize my jealousy and don’t fight it. The bottom line is that for the price of one home in California, I can buy two homes in two places that for someone like myself, offer a more enviable life style than suburban soCal. Even if you disagree with my comparisons, you have to ponder whether CA is so expensive due to the life style, or other causes. Since it was the birthplace of many of our current housing woes, you can decide for yourself, as I did, and make your choice, as I did

[Jazzman]

[quote=AN]I don’t know all the areas in France, but looking the maps for those houses, they look like they’re out in the country side. I was expecting Paris or something similar at Inland Empire pricing. How much is property tax in France?

Maui’s beaches are nice, but hardly what I’d call the best beaches in the world. I’d rate Bora Bora, Moorea, Tahiti, Fiji, Maldives, etc heads and shoulders above Maui.[/quote]

Central Paris is very expensive. The suburbs just outside less so. A nice homes in somewhere like Compiegne is about $700-$800k. You need to remember that Europe is not laid out like the US. Rural France is France. There are something like 36,000 villages alone, and that excludes hamlets towns and cities, that crisscross forming a giant network over a largely arable land. So living in rural France is not like living in rural US. You do not need to live in Paris to enjoy a good life style. Southern California doesn’t really have cities, at least in a European sense. It is for the most part a suburban sprawl, so population density are what drive central Paris prices, as well as the sheer beauty of the place of course.

There are two equivalent property taxes in France, but they are small in comparison.

I guess beaches are in the eye of the beholder, and yes places like the Caribbean, Seychelles, other Polynesian islands, spring to mind, but I was really comparing Hawaii’s to CA’s. I think Napili was voted best beach by someone, so I should have used quotes.

[Jazzman]

[quote=bearishgurl][quote=Jazzman]I think I paid about $450 in property tax, so small I can’t remember and can’t be bothered to look it up, but your calculations are way off. Different rates for kama’aina….[/quote]

Jazzman, that’s not what your county is saying on their website. Are you sure the taxes you already paid this year weren’t what we in Cali call a “supplemental bill” (the difference between the previous owner’s bill and yours for FY 11/12 or 2011)? After all, you stated you just purchased it this year and it was new construction. It’s very possible the tax bill you paid was representative of your portion of a fractional interest of the unimproved lot your condo complex now sits on.

Perhaps you haven’t received your full tax bill yet for FY 12/13 or 2013 or it is not yet due.

In any case, property taxes ARE lower on Maui than mainland cities (not sure about HI’s other islands) but this is likely attributable to a much smaller population who use services there and therefore much less infrastructure was needed/built on the island.[/quote]
As I already pointed out the rate you quoted is for non-residents. I paid for the full year.

[Jazzman]

I think I paid about $450 in property tax, so small I can’t remember and can’t be bothered to look it up, but your calculations are way off. Different rates for kama’aina. There’s street lights, a run-off canal, sidewalks, ocean front (literally pied dans l’eau) restaurants, cafes, movie theaters and yes a Costco. I’m one minute from stores and restaurants and the best beaches in the world, lots of sunshine, and the whales arrive this month and will be frolicking about outside my front door (well …nearly).

Soon we’re off to France and will be buying a beautiful stone farmhouse. The total tally will be our budget for California. Yep, two homes, in two of the most beautiful regions of the world for the price of one nothing-out-of-the ordinary single family home in southern California.

Here’s what’s on offer in France
http://www.rightmove.co.uk/overseas-property/property-32298586.html
http://www.rightmove.co.uk/overseas-property/property-20292576.html
http://www.guillon-immobilier.com/detail-IJL5135279-maison-lhoumois.html

Now I love California and the people, so don’t get me wrong here, but they think they’ve got it right, and when it comes to home prices …well, they haven’t! According to a survey reported on NBC tonight, CA is the worst run state in the country. Now I don’t know about that, but I do know value when I see it.

[Jazzman]

I should I suppose presage my posts with “now wait for the Realtors responses to come fighting back”. BG, it was not aimed at you, just a general note of caution, and since you claim not to be a Realtor, I’m sure you will agree that pressure from a broker is usually a pretty one sided affair and to be avoided. As for the rest of your essay, I will have to come back to you. Got to dash (from my $270/sq ft home in paradise with no property tax) to catch the next big surf. Yep, there’s a good reason indeed. Common sense mostly.

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