Forum Replies Created
-
AuthorPosts
-
temeculaguy
ParticipantI loved it! Cry me a river Cramer because you know people who will lose their homes. Nobody saw you crying because you knew people who couldn’t afford homes last year and next year they will be able to. If armageddon means home prices will fall to levels that six figure earners can raise a family and have their spouse stay at home with the kids, then bring on armageddon. Yes Cramer, break out your biblical references, the seas will boil, fire and brimstone, and college grad couples starting out can buy a little house and still eat, oh noooo. What’s next? People turning into pillars of salt and teachers being able to buy homes?
ParticipantI loved it! Cry me a river Cramer because you know people who will lose their homes. Nobody saw you crying because you knew people who couldn’t afford homes last year and next year they will be able to. If armageddon means home prices will fall to levels that six figure earners can raise a family and have their spouse stay at home with the kids, then bring on armageddon. Yes Cramer, break out your biblical references, the seas will boil, fire and brimstone, and college grad couples starting out can buy a little house and still eat, oh noooo. What’s next? People turning into pillars of salt and teachers being able to buy homes?
ParticipantOk Former, that makes sense, sometimes people over estimate their tax savings because only the top portion is taxed at the higher percentage and there is a law of diminishing returns as you deduct into your lower percentage brackets but I ran my 2006 tax return using your numbers and it was close enough. Here’s where the psychology comes into play. The 100k earner who is renting is netting less than 5k a month after health insurance, 401k, etc. Without the panic over being priced out of the market and no sign of near term appreciation coupled with the real fear of price declines it becomes a bitter pill to swallow to take on a 3100 house payment even if the net payment is 2100, it just looks scary.
Based on your post I was forced to do some calculations and I can now afford what I am looking for but I can’t do it, I have to go with my gut and my research, I think you may find that when other areas find themselves more inline with fundamentals there will still be apprehension on the part of the buyer, or it could just be me.
ParticipantOk Former, that makes sense, sometimes people over estimate their tax savings because only the top portion is taxed at the higher percentage and there is a law of diminishing returns as you deduct into your lower percentage brackets but I ran my 2006 tax return using your numbers and it was close enough. Here’s where the psychology comes into play. The 100k earner who is renting is netting less than 5k a month after health insurance, 401k, etc. Without the panic over being priced out of the market and no sign of near term appreciation coupled with the real fear of price declines it becomes a bitter pill to swallow to take on a 3100 house payment even if the net payment is 2100, it just looks scary.
Based on your post I was forced to do some calculations and I can now afford what I am looking for but I can’t do it, I have to go with my gut and my research, I think you may find that when other areas find themselves more inline with fundamentals there will still be apprehension on the part of the buyer, or it could just be me.
ParticipantFormerSanDiegan, I think the rent ratio in your Clairmont scenario dosesn’t find support in the 400’s. I am not saying that the bottom won’t be the 400’s, just that those numbers don’t make the masses jump. I have almost the exact mathematical scenario but in a different neighborhood and I’ve run the numbers but they aren’t within a few hundred bucks (you can’t use downpayment as part of your calculations, you should have one but it isn’t part of the comparison). Lat year the price of the houses I was looking at was about 500k and they rented for about 2k. Now I can get the same house for 400k and the rent is still 2k but they aren’t selling because P&I is $2600. At 300k it is $1900 for P&I, tax, ins and maint is cancelled out by income tax savings so just look at the straight P&I on a 30 fixed. Somewhere between 300 and 400 will be the tipping point, market psych, interest rates, etc. will cause it to fluctuate a little either way. In past cycles there were examples of it going below effective rent because the rental market shifted a little downward and vacancies were high but I think that the masses and investors jump back in when it makes too much sense to buy even if appeciation isn’t a possibility in the near term.
All areas are different but math is a universal language. I watched my area drop almost 20% across the board in the last 12 months and sales are slower than ever. I am watching the next 20% decline very closely because the mathematical equilibrium will be somewhere in that 20%, not just for me but for the rest of the people and the rest of the people is who sets the price.
ParticipantFormerSanDiegan, I think the rent ratio in your Clairmont scenario dosesn’t find support in the 400’s. I am not saying that the bottom won’t be the 400’s, just that those numbers don’t make the masses jump. I have almost the exact mathematical scenario but in a different neighborhood and I’ve run the numbers but they aren’t within a few hundred bucks (you can’t use downpayment as part of your calculations, you should have one but it isn’t part of the comparison). Lat year the price of the houses I was looking at was about 500k and they rented for about 2k. Now I can get the same house for 400k and the rent is still 2k but they aren’t selling because P&I is $2600. At 300k it is $1900 for P&I, tax, ins and maint is cancelled out by income tax savings so just look at the straight P&I on a 30 fixed. Somewhere between 300 and 400 will be the tipping point, market psych, interest rates, etc. will cause it to fluctuate a little either way. In past cycles there were examples of it going below effective rent because the rental market shifted a little downward and vacancies were high but I think that the masses and investors jump back in when it makes too much sense to buy even if appeciation isn’t a possibility in the near term.
All areas are different but math is a universal language. I watched my area drop almost 20% across the board in the last 12 months and sales are slower than ever. I am watching the next 20% decline very closely because the mathematical equilibrium will be somewhere in that 20%, not just for me but for the rest of the people and the rest of the people is who sets the price.
ParticipantUpdate, there are now 11 with three car garages but one is a tandem 3rd car and i’m not sure if I am going to include those because I hate them.
Gary, nice rant, I love the plattitudes on the MLS. Motivated seller, priced below comps, etc. and then you see what a lie it is. Here’s and example from a local townhouse development.
Prop A claims to be the lowest price in the complex, it’s the smallest model and the ask is 318k for a short sale and claims the price reflest the need for new carpet.
Further investigation reveals three other untis at 299k, the model match is nicer and the other two are larger. Why claim to have the lowest price when you don’t, do they think the sellers agents won’t check the one accross the street. Sure one could argue that the others came on the market after the listing agent wrote the narrative but I remember when it came on the market and there were still others priced lower. Even so, leaving that in the ad seems counterproductive, it doccuments a minimum 6% reduction during it’s time on the market, where’s my checkbook I better buy it before it loses another 6% next month.
ParticipantUpdate, there are now 11 with three car garages but one is a tandem 3rd car and i’m not sure if I am going to include those because I hate them.
Gary, nice rant, I love the plattitudes on the MLS. Motivated seller, priced below comps, etc. and then you see what a lie it is. Here’s and example from a local townhouse development.
Prop A claims to be the lowest price in the complex, it’s the smallest model and the ask is 318k for a short sale and claims the price reflest the need for new carpet.
Further investigation reveals three other untis at 299k, the model match is nicer and the other two are larger. Why claim to have the lowest price when you don’t, do they think the sellers agents won’t check the one accross the street. Sure one could argue that the others came on the market after the listing agent wrote the narrative but I remember when it came on the market and there were still others priced lower. Even so, leaving that in the ad seems counterproductive, it doccuments a minimum 6% reduction during it’s time on the market, where’s my checkbook I better buy it before it loses another 6% next month.
ParticipantI think Rustico and Allan have an excellent point and the latest wall street meltdown and the NOD charts have me looking for a spot in their camp. Sure SD there has been interest for prime properties where there are few REO’s but that doesn’t mean it will stay like that, at some point when houses are half the price for the same thing a few miles away it will affect your target areas. But back to the Big Chunks, I think we may be entering those times and since it has happened in the past to a lesser degree the never before seen storm we have brewing may have some never before seen effects. The builders have had to drop in chunks and they have the luxury of slowing down construction, the banks don’t have that luxury and they are taking a beating right now from investors. One look at the NOD charts and it is obvious that it’s going to get silly real soon. Looking back in five years i think the story will be told that the massive REO’s and the banks trying to clear them before the next batch will be credited with what drove the prices down.
ParticipantI think Rustico and Allan have an excellent point and the latest wall street meltdown and the NOD charts have me looking for a spot in their camp. Sure SD there has been interest for prime properties where there are few REO’s but that doesn’t mean it will stay like that, at some point when houses are half the price for the same thing a few miles away it will affect your target areas. But back to the Big Chunks, I think we may be entering those times and since it has happened in the past to a lesser degree the never before seen storm we have brewing may have some never before seen effects. The builders have had to drop in chunks and they have the luxury of slowing down construction, the banks don’t have that luxury and they are taking a beating right now from investors. One look at the NOD charts and it is obvious that it’s going to get silly real soon. Looking back in five years i think the story will be told that the massive REO’s and the banks trying to clear them before the next batch will be credited with what drove the prices down.
ParticipantHOLY CRAP, this is amazing.
http://www.redfin.com/stingray/do/printable-listing?listing-id=802217
Everything looks fine until you get to the 5th picture. My kids are teens so I haven’t shopped for cribs in a long time but what the heck is that, it looks likes cages. Who am I to judge, that’s not the crazy part. Just above the changing table and adjacent to the cribs, there is RIFLE mounted on the wall, I have to go and get some paper towels I just laughed so hard coffee came out of my nose.
ParticipantHOLY CRAP, this is amazing.
http://www.redfin.com/stingray/do/printable-listing?listing-id=802217
Everything looks fine until you get to the 5th picture. My kids are teens so I haven’t shopped for cribs in a long time but what the heck is that, it looks likes cages. Who am I to judge, that’s not the crazy part. Just above the changing table and adjacent to the cribs, there is RIFLE mounted on the wall, I have to go and get some paper towels I just laughed so hard coffee came out of my nose.
ParticipantSorry to hog the board but I’ve got it, this may be the winner. 10 pictures of this 3 br 2.5 baths and I can absolutely guarantee that is has 2.5 baths, how can I know that? Because three of the pictures are of the toilets themselves, one is a nice lid up open bowl shot (nothing sells a house like a clean bowl). One has the lid down but that is probably a good thing based on the plunger next to it. No worries here about too many pictures of the bedrooms or living rooms because there are none, just three toilet shots, a washer and dryer pic, bathroom sink, kitchen (sink visible), two exterior and one is obstructed but the odds are there was a toilet or sink in it. This realtor probably used to be a plumber based on their love of sinks and toilets. I am going to e-mail the realtor and ask if the extra roll of t.p. on top of the toilet tank is included.
http://www.redfin.com/stingray/do/printable-listing?listing-id=819615
ParticipantSorry to hog the board but I’ve got it, this may be the winner. 10 pictures of this 3 br 2.5 baths and I can absolutely guarantee that is has 2.5 baths, how can I know that? Because three of the pictures are of the toilets themselves, one is a nice lid up open bowl shot (nothing sells a house like a clean bowl). One has the lid down but that is probably a good thing based on the plunger next to it. No worries here about too many pictures of the bedrooms or living rooms because there are none, just three toilet shots, a washer and dryer pic, bathroom sink, kitchen (sink visible), two exterior and one is obstructed but the odds are there was a toilet or sink in it. This realtor probably used to be a plumber based on their love of sinks and toilets. I am going to e-mail the realtor and ask if the extra roll of t.p. on top of the toilet tank is included.
http://www.redfin.com/stingray/do/printable-listing?listing-id=819615
-
AuthorPosts