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Thanks everyone!

To my new neighbor Cow_tipping- in which areas do you see a bubble? My guess would be the areas surrounding uptown? I would love to hear your thoughts on the uptown market. My desire to own a condo (uptown, or at least within walking or cab distance of stores, bars, etc.) vs. a house is a key driver in my decision to wait. It’s hard for me to tell as an outsider if the growth of “urban housing” is sustainable. Is there really enough interest in these type of units? Are speculators scooping up the units like they did here? I know Charlotte has changed a lot since the sleepy town of my childhood, but how much has it changed?

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Thanks PerryChase.

I’m very glad that I’ve let my rational side overweigh the emotional so far.

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If memory serves, I recall that Powayseller once said she confronts people (unsolicited) in the grocery store regarding their financial situation and real estate investments, so really, what can we expect?

(Note: Might not be 100% accurate, but that was the gist of it. Tried to search for it, but realized that would take forever…)

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Not surprisingly, Gin doesn’t really think it’s a big deal:

Gin said the news wasn’t good, but it wasn’t necessarily bad. “It means things are going to slow,” he said. “There should be some concern, but there is no need to panic.”

http://www.nctimes.com/articles/2006/09/07/business/news/19_01_229_6_06.txt

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anxvariety, you mentioned the variety of landscapes in the county, and that makes for some awesome drives. I like to take a spontaneous drive to somewhere I haven’t been or haven’t been in a while. One time I grabbed a friend, drove out to Sonic in El Centro (crazy, yes, but I love it), then went up to the Salton Sea and meandered back on the 78. A nice way to spend a Sunday.

The Salton Sea is just a crazy place. Particularly interesting for real estate and/or history buffs.

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I agree with all of the advice above, and I’ll add my two cents.

I’m 27. I always thought I’d own a home by now- I wanted to do it on my own before getting married- striving to be an “independent woman” I suppose. But it just hasn’t worked out that way. By the time I was ready to buy a couple of years ago, prices were already out of control. So I’ve happily remained a renter. There was a point about a year ago when I got a little stir crazy and started to question whether the market would ever cool off. But I came back to my senses and realized I was a lot happier enjoying my life and saving for the future instead of stretching to purchase a home I couldn’t afford.

There’s plenty of hard data supporting that we are indeed experiencing a housing bubble in Southern California, and as a finance junkie, I love analyzing it. But the way I first knew about the bubble was not through this analysis, but by realizing that even with a relatively healthy income and savings account, I could not comfortably afford a 2 bedroom condo (and maybe not even a 1 bedroom, depending on the neighborhood). If someone like me is not able to afford a condo like this, than who is going to buy it? An investor when the rent can’t cover his carrying costs? That may have happened for a while, but it’s just not sustainable.

Housing prices are cyclical. Hang in there, and you’ll be happy you did. Enjoy being 24. You have a lot of time to be a homeowner.

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1) rent
2) No, never owned (27); thought about buying a few times, but never felt comfortable doing it
3) n/a
4) When I realized that it was (significantly) cheaper to rent than to buy; saw resemblance to tech boom starting in 2004, but went through some periods of doubt; fully convinced piggington devotee since summer ’05
5) If I’m still in SD, will buy in Cardiff; love South Park but work in Carlsbad; miss family/friends/certain aspects of lifestyle back east
6) n/a
7) A mortgage broker would say I haven’t been priced out, but I disagree – I’d have to sacrafice a lot to buy. I’m not bitter though- I love my home, I love that I live comfortably and that I’m watching my savings account grow. If and when I see a place that I love and that I can afford, I’ll buy it.

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Sorry! I looked for a reference to it before I posted but I guess I missed it. And I also thought I saw it this morning in the print edition. I guess I’m just having an off day!

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This paragraph in today’s Wall Street Journal’s front page article “Housing Slump Proves Painful For Some Owners and Builders” reminded me of this thread:

In April 2005, Jennifer Bloom paid about $229,000 for a condominium in Yarmouth Port on Massachusetts’s Cape Cod, where her son planned to live. After his plans changed, Ms. Bloom, a software specialist for a computer company, decided early this year to sell the condo. She initially listed it at $229,000, and then gradually shaved the price to $199,000 as the market weakened. Earlier this month, she gave up on finding a buyer at a price she could bear to accept. Instead, she is renting out the condo for $1,000 a month, which she says is more than $200 below her monthly costs for mortgage payments, insurance, taxes and other items. She says she intends to hold off on selling it until the market improves.

We 20-somethings are a flighty bunch. Not necessarily a deal breaker, just something to include in the analysis.

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Secondly, from what I know and truly believe, rents NEVER go down.

As someone who signed a lease in Manhattan on 9/8/01, let me assure you that is not the case. I could have gotten the place at LEAST $300 cheaper a week later. Rents still weren’t back where they were pre-9/11 when I left NY in August 2003. Obviously, 9/11 was a once-in-a-lifetime shock to the real estate market(let’s hope), but all it takes is one unexpected tragedy. Earthquake anyone?

No reason to live in fear, of course, but it CAN happen.

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This comment is nothing new but – don’t these people think to save their money? It’s great that they’ve done well in the boom years – but who cares if they end up with nothing to show for it?

I strongly believe kids should be taught about personal finance in school. People will still do stupid things, but at least they will have some underlying knowledge of the basics of financial responsibility.

By the way, some of the best advice my dad has given me was not to buy too nice of a car too quickly – that it’s a lot easier to move up than to move down.

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“To me the distinction is between actually adding value and creating something as opposed to just buying and expecting to sell it at a huge profit.”

poorgradstudent, agreed that there is a difference. I was talking about the former, which I would consider “flipping” vs. “speculating” (which is what I would call the latter). One could argue that there are social benefits to “flipping”- fixing up the neighborhood eyesore, for instance. JES is right, though – “speculating” is not illegal, and similar to speculation in the stock market. Whether it’s ethical or not is an interesting question.

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bgates, you’re right. My argument was flawed. Let’s try this:

I believe that Iraq is a catastrophe, not because the media told me so, but because of first hand stories I’ve heard from people I know who’ve been there, who are there, and who will be there again. This does disprove your argument that everyone on this board thinks Iraq is a catastrophe because of media coverage. For the record, I do believe that media coverage of the war is biased, whether it be towards the pro- or anti-war side (depending on the source).

That being said, your original argument assumed that there was a cause and effect relationship between trust of the media and anti-war sentiment. I respect your opinion, but your argument is flawed.

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I’m addicted to “Property Ladder” (not “Property Latter” as the auction page said… that was pretty bad). I Tivo it every Saturday night. I think they actually do a pretty good job of showing that flipping is not an easy buck. There have been several flippers that have either made minimal profit, still had the property on the market at the end of the show, or decided to turn it into a rental after not selling (of course, they all say they will do it again, which I find hilarious). They also show people’s mistakes, which I think is good (for example, the newlywed couple didn’t get a full inspection before buying).

I hate that “Flip This House” always makes it look like a walk in the park. That just makes me mad, so I don’t watch it.

“Flip That House” was good when the group from SC was on – they’d been in business a long time, knew what they were doing, and generally came off as successful, not greedy. The new group is sleazy.

I really don’t think there’s anything wrong with flipping houses for profit. No different than any other business. The ones who will be successful in the long run are the ones who know the market well enough to make good decisions on purchases, pricing, and design, and have relationships with subcontractors and suppliers that enable them to minimize their costs and time. Even the amateurs that did one or two flips at the right time are better off for doing so. It’s the morons who get greedy or have unrealistic expectations that will lose out big time.

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bgates, my point was that my opinion is not based on what I have heard in the media, as was implied in your initial post.

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