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powayseller
ParticipantWell, everyone expects their car to lose value when they drive it off the lot. But who expects their home to worth 20% less after 2 months of purchase? Could an appraisal be so much off? In this case, the nearest appraisal was 3 miles away, so maybe it wasn’t a good appraisal. You’re supposed to stay within one mile or something like that.
ParticipantSteve, my closing costs were about half of what you estimate (tisk, tisk, don’t you know what closing costs are?) My moving costs were $1K with the help of a moving company, and my tax deduction is cancelled out by no longer having to pay property taxes. My rent is $800/month less than my mortgage, and I save $500/month no longer shopping at Home Depot. My husband has so much more free time for the family, and we live closer to town saving $250 per month in gas and spending less time driving (6 hours per week for me and the kids) My daughter can walk to her dance class, instead of me driving for 30 minutes each way and waiting for 1 hour for her to finish. My kids ride their bikes now, and couldn’t before because it was too hilly on our street.
My life is so much better since I sold my house! Oh, and I forgot the big bucks I’m earning in interest on my CDs, from the equity I had in my house. Oh, and I have no debts, because I paid off my credit card when I sold my house. But I should stop now – I’m just bragging… meanwhile, you are a debt slave to a rapidly depreciating asset.
By the way, haven’t you learned anything about the cyclical nature of real estate?
ParticipantFSD, so you’re talking about an increase in the money supply and high inflation? The gold example works if you buy and hold gold, and then exchange it back into dollars when you are ready to buy. How many people put away $50K in gold today (assume it’s worth $500K in 10 years) in gold, ready to buy a house? Usually people need a mortgage to buy a house…
DaCounselor, I am always amazed when the old timers like you (and others previously on this board) forget about the cyclical nature of real estate. You guys who made money in real estate are so stuck on it, like super glue, and think just because you made a boat load of money once or twice, you will continue doing so. A lover that was once so sweet surely won’t poison you, will she (hehehehehe). When you keep your money in real estate, isn’t that called “throwing good money after bad”? And isn’t it denial when you dismiss the cyclical nature of real estate?
Participantsurveyor, I seriously doubt that. I asked my CPA how tow of my friends, who earn $250K each, can save on taxes. They are single renters, and pay about half their money in taxes. Ok, they can save a little on a tax deduction on a house, depreciating asset, so they lose money. The only way the typical wage earner can save on taxes, according to the CPA, is to start a business, but even then, you can only deduct expenses in excess of your gains. So you really cannot lower your taxes.
If you have a way other than buying an asset losing 10% of its value each year, to save on taxes, I am all ears.
ParticipantFormerSanDiegan, it’s not regressive. Read the FAQ on the site. I’d be interested in your further thoughts after reading it.
There is a monthly rebate for living expenses (food, toiletries, etc.) You’d get to tax tourists.
December 13, 2006 at 5:02 PM in reply to: Secrets of the Federal Reserve – We need to Wake Up! #41645ParticipantAre bub and bubba99 two different people?
Dr. Gold Dredger, why should we hide our gold? It’s kind of scary to keep that kind of gold laying around somewhere. What about that bullion vault (bullionvault.com), or a bank safety deposit box or GLD? I think the risk of theft is too great to have it just stored at home.
ParticipantLindi is right. If oil became more expensive, we would have spent the money on finding a replacement. They do exist. Why doesn’t every home in CA have solar panels?
Trade is important, as each country has unique resources and skills. However, our government leaders have allowed big business and their Fed member banks most likely, to profit at the expense of the American worker and our future productivity.
When we started moving our manufacturing off-shore, there should have been a move to replace auto and textile manufacturing with something else: better farming, pharmaceuticals, engines, alternative energy. Instead, they just went for cheaper goods from overseas. There was no rhyme or reason to it, no planning at all.
Likewise,the entire development of our society with far-flung suburbs and millions of miles of freeways (just a guess) should have been recognized as unsustainable by the urban planners in the 1950’s and 1960s. Did they think that oil is the only resource on this planet that is in unlimited supply? Don’t get me started, I’m getting real pi**ed off at the way our elected officials have let this country go to pot.
Corporations are just as bad. They use corporate bonds and their big profits from the recent liquidity boom to buy back stocks, so the stock price goes up. Then the insiders sell the stock at high prices, in anticipation of the decline which is coming. Not enough money is invested in the future of the company, in building it up. The money goes to elevate the share value for the insiders.
Then we’ve got the bubble in private equity funding. What value is created by that? Just as with free trade where we shift higher paid jobs to lower wage countries and don’t replace those jobs with anything at all, what good comes of it?
If we really want to help the poor countries, we should teach them how to farm and manufacture. Maybe I’m just rambling…
ParticipantI wouldn’t call a flattening of a decline line as a dead cat bounce. Compared to last year, our sales are still down 30% year over year.
My charts from the last downturn mirror this well. A decline of 20% year over year in sales lasted at that level for one year, before dropping further to a 50% decline year over year.
As AN says, nothing goes up or down in a straight line.
sdrealtor, thanks for calling Steve Beebo out to step up to the plate. Both you and SD Realtor, and Bugs have added an invaluable service by sharing what you are seeing in the field. Why is Mr. Beebo out here defending this market – maybe he’s worried his own house is going to lose too much equity? Maybe he joined the refinance boom and can’t afford to lose the equity? Why else would an appraiser be in such a denial?
ParticipantNever mind, my error. Zip inventory for SD County is 16,338 for single family and attached.
ParticipantMLS inventory on 12/1 was 19,066, so we lost 2200 listings in 2 weeks? I guess that’s about right – December inventory was down 10% last year too.
I’m confused about ZipRealty vs. MLS. Right now, Zip has 2000 more listings than the MLS, but in September it had 2000 fewer listings. (ZipRealty has 18,664 homes, MLS has 16,681. In Sept, ZipRealty had 20,500 , MLS inventory was 22,785)
ParticipantDo you think there has always been the same amount of crap inventory? Homes messy, in disrepair?
In ZipRealty, you can choose the area of town to search. So you wouldn’t end up with Riverside, because searching under San Diego, you only get San Diego areas as options. So maybe ZipRealty is better?
ParticipantYes, I have that same experience. As my friend explained to me, “telling someone their house will go down in value is like telling them their spouse is cheating with the neighbor”.
A house is a security blanket, and an emotional issue. That’s why so many people buy instead of rent when renting is half the price, why sellers won’t lower their price by even $5K (because their house value reflects the owner’s own value and if the house is worth less then the owner is worth less).
Housing is a fincial security too. People are counting on it for their retirement. They cannot continue life as they know it if their home’s value drops and they are upside down or they lose their piggybank.
Regarding inflation and the weaker dollar – how can real estate go up when the dollar goes down? Only if foreigners are buying houses? In the past, rising inflation led to higher housing prices only because wages rose too. But in today’s global economy, that’s not happening. So I don’t understand the connection.
I think it’s good to tell people that housing prices will go down. You may save someone’s retirement plan. I’m glad my brother persisted in telling me about this bubble. His constant comments made me start researching the topic, and that’s how I found piggington’s data. I believe I am helping people by at least planting the seed that their financial security is enhanced if they sell their house now, at near the peak. It’s my duty to help people in this way. Say it once to acquaintances, twice to friends, three times to to family, and then let it drop.
ParticipantSD Realtor and SDrealtor, what are your thoughs on the quality of inventory? What I mean, is the effect of rising mortgages and unemployment or relocations creating incentives to sell, versus those just listing to test the market? Also I’d like your thoughts on the quality of the homes themselves, are they cleaned up and fixed up ready to show/sell? I’ve heard that many homes are an embarassment to show, and the few good homes out there end up with multiple offers. So there’s a lot of inventory that is not serious or that’s just plain crap, so the “true inventory” is not 20K but much less. So the true months supply is not 8 or 9, but could be even 4 or 5.
Also I’d like anyone’s input on why there’s a 10% discrepancy between ZipRealty and MLS on the inventory numbers. MLS has about 10% more listings than ZipRealty.
ParticipantCONCHO, you are right. Think about all the people counting on their home to fund their kids’ college tuition and their own retirement. This is just anecdotal, but I’ve had so many people tell me they will sell their home when they retire, and I try to plant the seed that that retirement portfolio is shrinking (and then they change the subject).
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