[jstoesz]

As if I have not posted enough this evening, I have one other note.

If your property does not cash flow (really cash flow meaning paying for maintenance and taxes) you are not an smart investor, you are a bubble rider/speculator. I guess the third option is you are willing to lose you shirt, because well dammit, you would rather be damned than ever rent again.

Remember, rent is just as bad as interest, except for all the strings!

[jstoesz]

As if I have not posted enough this evening, I have one other note.

If your property does not cash flow (really cash flow meaning paying for maintenance and taxes) you are not an smart investor, you are a bubble rider/speculator. I guess the third option is you are willing to lose you shirt, because well dammit, you would rather be damned than ever rent again.

Remember, rent is just as bad as interest, except for all the strings!

[jstoesz]

[quote=AN][quote=jstoesz]AN I tend to agree.

I think the link is not so much causative as correlative.

Lower stock prices harm the economy, and when the economy is harmed home prices drop.

So stock prices do have a causative effect on the economy, there link is not DIRECTLY causative to home values. Sometimes, some other asset class is waiting in the wings (a la 2001).

One other note regarding rent vs. buy. Even in markets outside of california, a favorable rent vs. buy is not enough to buoy the market.

In MN (probably in NV too, but I have no anecdotal evidence there) homes can easily cash flow. My friends who have bought in the last 2 years are still underwater even though they can cash flow their home. Psychologically it helps them stay current, but it is still interesting to note.[/quote]
Like sdr, I agree with you that high end homes tend to fare poorly when comparing against rent. Has it ever fare well against rent?

As you move down the desirability scale, the rent vs buy equation gets better. I never suggest that the lowest the price will drop is parity with rent. But if you’re buying your primary resident, comparing rent vs buy is very different than comparing it for a rental property. Although this might be a cliche, but we all have to live somewhere. Every month that you’re paying more for rent than buy that same property, you’re pay more than you need to, to put a roof over your head. Yes, you can wait a few years and price might bottom then, but how much will you save in nominal price vs how much you’ve thrown away in rent (the $ difference between rent vs buy)?[/quote]

Its an opportunity cost thing. If a home is a roof over your head (which it is not, it is a home with an ethereal awesomeness) then the question is could you get a better, safer return with all of your equity elsewhere. In today’s market of low yields, maybe not. I would have to do a detailed analysis, if I were in the position of having gobs of equity (which I don’t). But RE looks like a losing bet to me, at least in the neighborhoods of SD I like and in the near term.

That ethereal stuff is tricky…

[jstoesz]

[quote=AN][quote=jstoesz]AN I tend to agree.

I think the link is not so much causative as correlative.

Lower stock prices harm the economy, and when the economy is harmed home prices drop.

So stock prices do have a causative effect on the economy, there link is not DIRECTLY causative to home values. Sometimes, some other asset class is waiting in the wings (a la 2001).

One other note regarding rent vs. buy. Even in markets outside of california, a favorable rent vs. buy is not enough to buoy the market.

In MN (probably in NV too, but I have no anecdotal evidence there) homes can easily cash flow. My friends who have bought in the last 2 years are still underwater even though they can cash flow their home. Psychologically it helps them stay current, but it is still interesting to note.[/quote]
Like sdr, I agree with you that high end homes tend to fare poorly when comparing against rent. Has it ever fare well against rent?

As you move down the desirability scale, the rent vs buy equation gets better. I never suggest that the lowest the price will drop is parity with rent. But if you’re buying your primary resident, comparing rent vs buy is very different than comparing it for a rental property. Although this might be a cliche, but we all have to live somewhere. Every month that you’re paying more for rent than buy that same property, you’re pay more than you need to, to put a roof over your head. Yes, you can wait a few years and price might bottom then, but how much will you save in nominal price vs how much you’ve thrown away in rent (the $ difference between rent vs buy)?[/quote]

Its an opportunity cost thing. If a home is a roof over your head (which it is not, it is a home with an ethereal awesomeness) then the question is could you get a better, safer return with all of your equity elsewhere. In today’s market of low yields, maybe not. I would have to do a detailed analysis, if I were in the position of having gobs of equity (which I don’t). But RE looks like a losing bet to me, at least in the neighborhoods of SD I like and in the near term.

That ethereal stuff is tricky…

[jstoesz]

[quote=AN][quote=jstoesz]AN I tend to agree.

I think the link is not so much causative as correlative.

Lower stock prices harm the economy, and when the economy is harmed home prices drop.

So stock prices do have a causative effect on the economy, there link is not DIRECTLY causative to home values. Sometimes, some other asset class is waiting in the wings (a la 2001).

One other note regarding rent vs. buy. Even in markets outside of california, a favorable rent vs. buy is not enough to buoy the market.

In MN (probably in NV too, but I have no anecdotal evidence there) homes can easily cash flow. My friends who have bought in the last 2 years are still underwater even though they can cash flow their home. Psychologically it helps them stay current, but it is still interesting to note.[/quote]
Like sdr, I agree with you that high end homes tend to fare poorly when comparing against rent. Has it ever fare well against rent?

As you move down the desirability scale, the rent vs buy equation gets better. I never suggest that the lowest the price will drop is parity with rent. But if you’re buying your primary resident, comparing rent vs buy is very different than comparing it for a rental property. Although this might be a cliche, but we all have to live somewhere. Every month that you’re paying more for rent than buy that same property, you’re pay more than you need to, to put a roof over your head. Yes, you can wait a few years and price might bottom then, but how much will you save in nominal price vs how much you’ve thrown away in rent (the $ difference between rent vs buy)?[/quote]

Its an opportunity cost thing. If a home is a roof over your head (which it is not, it is a home with an ethereal awesomeness) then the question is could you get a better, safer return with all of your equity elsewhere. In today’s market of low yields, maybe not. I would have to do a detailed analysis, if I were in the position of having gobs of equity (which I don’t). But RE looks like a losing bet to me, at least in the neighborhoods of SD I like and in the near term.

That ethereal stuff is tricky…

[jstoesz]

[quote=AN][quote=jstoesz]AN I tend to agree.

I think the link is not so much causative as correlative.

Lower stock prices harm the economy, and when the economy is harmed home prices drop.

So stock prices do have a causative effect on the economy, there link is not DIRECTLY causative to home values. Sometimes, some other asset class is waiting in the wings (a la 2001).

One other note regarding rent vs. buy. Even in markets outside of california, a favorable rent vs. buy is not enough to buoy the market.

In MN (probably in NV too, but I have no anecdotal evidence there) homes can easily cash flow. My friends who have bought in the last 2 years are still underwater even though they can cash flow their home. Psychologically it helps them stay current, but it is still interesting to note.[/quote]
Like sdr, I agree with you that high end homes tend to fare poorly when comparing against rent. Has it ever fare well against rent?

As you move down the desirability scale, the rent vs buy equation gets better. I never suggest that the lowest the price will drop is parity with rent. But if you’re buying your primary resident, comparing rent vs buy is very different than comparing it for a rental property. Although this might be a cliche, but we all have to live somewhere. Every month that you’re paying more for rent than buy that same property, you’re pay more than you need to, to put a roof over your head. Yes, you can wait a few years and price might bottom then, but how much will you save in nominal price vs how much you’ve thrown away in rent (the $ difference between rent vs buy)?[/quote]

Its an opportunity cost thing. If a home is a roof over your head (which it is not, it is a home with an ethereal awesomeness) then the question is could you get a better, safer return with all of your equity elsewhere. In today’s market of low yields, maybe not. I would have to do a detailed analysis, if I were in the position of having gobs of equity (which I don’t). But RE looks like a losing bet to me, at least in the neighborhoods of SD I like and in the near term.

That ethereal stuff is tricky…

[jstoesz]

[quote=AN][quote=jstoesz]AN I tend to agree.

I think the link is not so much causative as correlative.

Lower stock prices harm the economy, and when the economy is harmed home prices drop.

So stock prices do have a causative effect on the economy, there link is not DIRECTLY causative to home values. Sometimes, some other asset class is waiting in the wings (a la 2001).

One other note regarding rent vs. buy. Even in markets outside of california, a favorable rent vs. buy is not enough to buoy the market.

In MN (probably in NV too, but I have no anecdotal evidence there) homes can easily cash flow. My friends who have bought in the last 2 years are still underwater even though they can cash flow their home. Psychologically it helps them stay current, but it is still interesting to note.[/quote]
Like sdr, I agree with you that high end homes tend to fare poorly when comparing against rent. Has it ever fare well against rent?

As you move down the desirability scale, the rent vs buy equation gets better. I never suggest that the lowest the price will drop is parity with rent. But if you’re buying your primary resident, comparing rent vs buy is very different than comparing it for a rental property. Although this might be a cliche, but we all have to live somewhere. Every month that you’re paying more for rent than buy that same property, you’re pay more than you need to, to put a roof over your head. Yes, you can wait a few years and price might bottom then, but how much will you save in nominal price vs how much you’ve thrown away in rent (the $ difference between rent vs buy)?[/quote]

Its an opportunity cost thing. If a home is a roof over your head (which it is not, it is a home with an ethereal awesomeness) then the question is could you get a better, safer return with all of your equity elsewhere. In today’s market of low yields, maybe not. I would have to do a detailed analysis, if I were in the position of having gobs of equity (which I don’t). But RE looks like a losing bet to me, at least in the neighborhoods of SD I like and in the near term.

That ethereal stuff is tricky…

[jstoesz]

sdr, I am dying to know, what neighborhood are you living in. You don’t have to give the street or anything, but I really would like to know the area.

100% in 11 years, it looks like you are a good realtor indeed! I guess if I ever move back I will be looking for your advice on this matter.

Maybe I needed to broaden my horizons from Pt. Loma. It would have required a different job as the commute would have slayed me, but I do like some areas of NCC. And as I have recently proven to myself, I can get another job elsewhere…maybe not in NCC though I suppose.

[jstoesz]

sdr, I am dying to know, what neighborhood are you living in. You don’t have to give the street or anything, but I really would like to know the area.

100% in 11 years, it looks like you are a good realtor indeed! I guess if I ever move back I will be looking for your advice on this matter.

Maybe I needed to broaden my horizons from Pt. Loma. It would have required a different job as the commute would have slayed me, but I do like some areas of NCC. And as I have recently proven to myself, I can get another job elsewhere…maybe not in NCC though I suppose.

[jstoesz]

sdr, I am dying to know, what neighborhood are you living in. You don’t have to give the street or anything, but I really would like to know the area.

100% in 11 years, it looks like you are a good realtor indeed! I guess if I ever move back I will be looking for your advice on this matter.

Maybe I needed to broaden my horizons from Pt. Loma. It would have required a different job as the commute would have slayed me, but I do like some areas of NCC. And as I have recently proven to myself, I can get another job elsewhere…maybe not in NCC though I suppose.

[jstoesz]

sdr, I am dying to know, what neighborhood are you living in. You don’t have to give the street or anything, but I really would like to know the area.

100% in 11 years, it looks like you are a good realtor indeed! I guess if I ever move back I will be looking for your advice on this matter.

Maybe I needed to broaden my horizons from Pt. Loma. It would have required a different job as the commute would have slayed me, but I do like some areas of NCC. And as I have recently proven to myself, I can get another job elsewhere…maybe not in NCC though I suppose.

[jstoesz]

sdr, I am dying to know, what neighborhood are you living in. You don’t have to give the street or anything, but I really would like to know the area.

100% in 11 years, it looks like you are a good realtor indeed! I guess if I ever move back I will be looking for your advice on this matter.

Maybe I needed to broaden my horizons from Pt. Loma. It would have required a different job as the commute would have slayed me, but I do like some areas of NCC. And as I have recently proven to myself, I can get another job elsewhere…maybe not in NCC though I suppose.

[jstoesz]

Speaking in absolutes is always going to yield obviously contrary data. So your beef with dz is valid, but I think he makes a strong point. RE loans were largely driven by speculative loans (option ARMs and the like). Now, did everyone do it in some choice neighborhood, certainly not. But they are not so far insulated as they would like from the hoards of people inland who did.

[quote=sdrealtor]js
I cant disagree that for higher priced RE the rent vs buy looks better. However for many people (not all) renting is a substandard lifestyle. It typically means moving every couple years and sometimes more often than that. It means not having control over the place you live. For many people their home is the core of their existence. I hate moving, I hate answering to anyone other than my children and I love the sense of security our home provides us. There are alot of people like me. This means you can take your calculator and toss wherever you want because all things considered a home is and will remain a good store of value (throwing out the crazy the few year we went through which we all agree was an extreme outlier period) because there will always be someone who wants what we homeowners have around here.

So if you want to live your life under the auspices of calculators you should do so. I on the other hand enjoy the rewards of my hard work be it a nice bottle of wine, a ticket to see Roger Waters play The Wall live in concert that I missed 30 years ago or on my home that makes no sense to own when you compare buy vs rent. I can live with that.[/quote]

sdr, I completely and totally agree! Buying a home has some sort of ethereal awesomeness that I too long for (note: I used the word home not stick framed shelter). Thankfully, I am not in the place in life yet where it really has its teeth in me. I dream of buying a fixer in some sweet neighborhood and making it my own through the sweat of my brow. I grew up in this kind of neighborhood, and I can not fathom making a home in some irvine development. You can not put a price on this (or maybe everyone has a different price for that feeling’s value). I can not argue with you on this front. But my point was simply that from a PURELY numbers basis, in most SD neighborhoods (at least the ones I like) there is much financial risk and little financial reward possibilities, even if you get a smoking deal! Now in regards to the ethereal…I can’t play the numbers with that. I just know it sucks to lose you shirt and the rent vs buy in my preferred hoods point to losing your shirt.

Side note: I do wonder how many landlords would be more than pleased to sign a 10 year lease with a tenant…given some elaborate buy out and remodel provisions of course.

[jstoesz]

Speaking in absolutes is always going to yield obviously contrary data. So your beef with dz is valid, but I think he makes a strong point. RE loans were largely driven by speculative loans (option ARMs and the like). Now, did everyone do it in some choice neighborhood, certainly not. But they are not so far insulated as they would like from the hoards of people inland who did.

[quote=sdrealtor]js
I cant disagree that for higher priced RE the rent vs buy looks better. However for many people (not all) renting is a substandard lifestyle. It typically means moving every couple years and sometimes more often than that. It means not having control over the place you live. For many people their home is the core of their existence. I hate moving, I hate answering to anyone other than my children and I love the sense of security our home provides us. There are alot of people like me. This means you can take your calculator and toss wherever you want because all things considered a home is and will remain a good store of value (throwing out the crazy the few year we went through which we all agree was an extreme outlier period) because there will always be someone who wants what we homeowners have around here.

So if you want to live your life under the auspices of calculators you should do so. I on the other hand enjoy the rewards of my hard work be it a nice bottle of wine, a ticket to see Roger Waters play The Wall live in concert that I missed 30 years ago or on my home that makes no sense to own when you compare buy vs rent. I can live with that.[/quote]

sdr, I completely and totally agree! Buying a home has some sort of ethereal awesomeness that I too long for (note: I used the word home not stick framed shelter). Thankfully, I am not in the place in life yet where it really has its teeth in me. I dream of buying a fixer in some sweet neighborhood and making it my own through the sweat of my brow. I grew up in this kind of neighborhood, and I can not fathom making a home in some irvine development. You can not put a price on this (or maybe everyone has a different price for that feeling’s value). I can not argue with you on this front. But my point was simply that from a PURELY numbers basis, in most SD neighborhoods (at least the ones I like) there is much financial risk and little financial reward possibilities, even if you get a smoking deal! Now in regards to the ethereal…I can’t play the numbers with that. I just know it sucks to lose you shirt and the rent vs buy in my preferred hoods point to losing your shirt.

Side note: I do wonder how many landlords would be more than pleased to sign a 10 year lease with a tenant…given some elaborate buy out and remodel provisions of course.

[jstoesz]

Speaking in absolutes is always going to yield obviously contrary data. So your beef with dz is valid, but I think he makes a strong point. RE loans were largely driven by speculative loans (option ARMs and the like). Now, did everyone do it in some choice neighborhood, certainly not. But they are not so far insulated as they would like from the hoards of people inland who did.

[quote=sdrealtor]js
I cant disagree that for higher priced RE the rent vs buy looks better. However for many people (not all) renting is a substandard lifestyle. It typically means moving every couple years and sometimes more often than that. It means not having control over the place you live. For many people their home is the core of their existence. I hate moving, I hate answering to anyone other than my children and I love the sense of security our home provides us. There are alot of people like me. This means you can take your calculator and toss wherever you want because all things considered a home is and will remain a good store of value (throwing out the crazy the few year we went through which we all agree was an extreme outlier period) because there will always be someone who wants what we homeowners have around here.

So if you want to live your life under the auspices of calculators you should do so. I on the other hand enjoy the rewards of my hard work be it a nice bottle of wine, a ticket to see Roger Waters play The Wall live in concert that I missed 30 years ago or on my home that makes no sense to own when you compare buy vs rent. I can live with that.[/quote]

sdr, I completely and totally agree! Buying a home has some sort of ethereal awesomeness that I too long for (note: I used the word home not stick framed shelter). Thankfully, I am not in the place in life yet where it really has its teeth in me. I dream of buying a fixer in some sweet neighborhood and making it my own through the sweat of my brow. I grew up in this kind of neighborhood, and I can not fathom making a home in some irvine development. You can not put a price on this (or maybe everyone has a different price for that feeling’s value). I can not argue with you on this front. But my point was simply that from a PURELY numbers basis, in most SD neighborhoods (at least the ones I like) there is much financial risk and little financial reward possibilities, even if you get a smoking deal! Now in regards to the ethereal…I can’t play the numbers with that. I just know it sucks to lose you shirt and the rent vs buy in my preferred hoods point to losing your shirt.

Side note: I do wonder how many landlords would be more than pleased to sign a 10 year lease with a tenant…given some elaborate buy out and remodel provisions of course.

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