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This waiting game is getting old


By nw888   Follow   Tue, 21 Feb 2012, 8:48am PST   19,753 views   115 comments
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We're looking for a $1.4-2.2M house in the Los Angeles area, and although the prices have come down a little, it's taking much longer than the rest of the housing market. I always see homes on the internet where the buyer purchased it at the height of the bubble, and is now trying to get out without incurring a loss, or better yet is trying to make a profit. I'm assuming the only thing to do is wait for these homes to go into foreclosure or sell as a short sale?

I was hoping to buy in 2012, but maybe 2014 will be better? I've been waiting for years for this whole mess to unfold, and it's infuriating that we can't speed up the inevitable.

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tatupu70   Thu, 23 Feb 2012, 2:50am PST   Share   Quote   Permalink   Like   Dislike     Comment 76

nw888 says

Historically housing does not go up with inflation.

Huh? Historically, housing prices absolutely have gone up with inflation.

You can argue that they won't in the future, but you can't argue that they haven't historically.

nw888   Thu, 23 Feb 2012, 2:50am PST   Share   Quote   Permalink   Like   Dislike (1)     Comment 77

Waitingtobuy says

The issue for me with Hancock Park is schools. Elementary may be fine, but once the kids get to middle school, you may need private schooling. With two kids, that is grades 6-12 (7 years) * 2 kids * $18,000+/yr= an extra $250,000. In today's dollars.

I would look at Culver City which has a good school system, and grit it out for your commute to Burbank.

Yeah I've looked at that too. It's outrageous for those private schools. Even though it's minor, the streets suck in that area too. They're basic LA streets with cracks and potholes. It's still LA, with LA police response time. A private city has nice roads and quick police response.

nw888   Thu, 23 Feb 2012, 2:54am PST   Share   Quote   Permalink   Like   Dislike     Comment 78

tatupu70 says

nw888 says

Historically housing does not go up with inflation.

Huh? Historically, they absolutely have.

You can argue that they won't in the future, but you can't argue that they haven't historically.

Let me rephrase that. I'm talking about rapid inflation problems, not inflation over the course of decades. I've never seen a situation in any country with out of control inflation where housing has suddenly spiked.

Waitingtobuy   Thu, 23 Feb 2012, 4:04am PST   Share   Quote   Permalink   Like   Dislike     Comment 79

nw888 says

The only way to curb inflation is by raising interest rates. Raising interest rates makes mortgage payments higher. The only thing that can give will be house prices.

There are two ways to slow inflation: raise interest rates and slow the growth of the money supply.

nw888 says

Historically housing does not go up with inflation. No one needs to purchase a home. They can rent instead. Real wages don't go up, therefore rents won't go up. Things people must have go up. Food and fuel.

The price of building materials is impacted by the price of oil. PVC, for example, is made out of petroleum resins. The cost to transport materials to a building site are also impacted by inflation. So are construction wages. And it's not just for new homes either.

nw888 says

I'm talking about rapid inflation problems, not inflation over the course of decades. I've never seen a situation in any country with out of control inflation where housing has suddenly spiked.

This country has not, and may never, have the inflation problems of a Weimar Republic Germany, Brazil in the 1980s and 1990s, or current Zimbabwe. We own the printing presses for the world's reserve currency (or at least for the next 20 yrs, it is), so we can slow down the presses and raise interest rates.

Waitingtobuy   Thu, 23 Feb 2012, 4:05am PST   Share   Quote   Permalink   Like   Dislike     Comment 80

nw888 says

Yeah I've looked at that too. It's outrageous for those private schools. Even though it's minor, the streets suck in that area too. They're basic LA streets with cracks and potholes. It's still LA, with LA police response time. A private city has nice roads and quick police response.

Which is why I suggested Culver City. Good private city with nice roads, quick police response, and good schools.

SubOink   Thu, 23 Feb 2012, 10:01am PST   Share   Quote   Permalink   Like   Dislike     Comment 81

Philistine says

I guess we just think places like Calabasas, etc. are bland, quasi-suburban, everyplaces.

I guess if you consider nature, the mountains, views and space bland then yes, you are right. Very bland. You sound like a NYker. :)

Some people enjoy having an ugly skyscraper peeking into your backyard and having telephone poles and electric lines across your pool.

Do yourself a favor, drive out to Malibu...then take encinal canyon up the hill from the PCH, the go to Decker Canyon...take Decker Canyon to Westlake Village, drive around there then get on the 101...exit Kanan RD. Head North into Agoura Hills...

If you don't think its just drop dead gorgeous then I don't know what is. It's very clean around here, roads are kept up and brand new, yet the neighborhoods are old enough to have a lot of old old landscaping, trees etc.
Also, drive on Mullholland. Some awesome houses there.

If you want to be close to shopping, then Agoura and Westlake Village are a bit better as you have Whole Foods, Gelsons, Ralphs, Vons, Trader Joes, right around the corner including thousands of little boutique shops. A million restaurants in all styles of food and tons of parking.

Another thing is weather - if you don't like 110 degrees SF Valley BS then you should come to the conejo valley, ocean breeze - we don't use A/C other than 10-15 times a year. Amazing! It gets 85-100 to in the summer but only peak hours and come 4pm that ocean breeze cools everything off so fast, just open windows and it cools off. That's the only aspect I don't like about Malibu - its a little chilly there, even in the summer. Barely an 80 degree day and lots of 100% overcast marine layer days. All of June, most of July and still a lot during the whole year.

But whatever floats your boat. If you want to be in a city, LA is not really the place to be - move to Boston, you can walk around. NY...etc..

JodyChunder   Thu, 23 Feb 2012, 3:22pm PST   Share   Quote   Permalink   Like   Dislike (1)     Comment 82

LASVEGASWINNER says

pring buying season around Mar 15 to May 30, will be the best in years, and your selection of houses in your price range will get smaller and smaller.

PROFEESIONAL BUYERS AGENT - INVESTOR - SALES ASSOCIATE - PROPERTY MANAGER 35 years experience

Vegas is over. Kaput. Kablooey. Victorville is where it's at, Winner.

JodyChunder   Thu, 23 Feb 2012, 3:25pm PST   Share   Quote   Permalink   Like   Dislike     Comment 83

SubOink says

Small? How big of a house do you need??

A man likes room to stretch out some. We're different on this is all.

JodyChunder   Thu, 23 Feb 2012, 3:30pm PST   Share   Quote   Permalink   Like (1)   Dislike (1)     Comment 84

Waitingtobuy says

I just picked out 6 random houses from RB to Venice whether they were pending or not to illustrate the point. Obviously, there are hundreds, if not thousands, of houses in LA that will satisfy the OPs requirements. As for style, that is in the eye of the beholder. And qualitywise, hard to tell from the pics, but if you really want quality, you are looking in the wrong state. Very few stone or brick construction homes in California because of earthquake codes.

I dont consider 3848 sq ft (Playa Vi

Another way to look at it is if you've got that kind of money to play with, you have more latitude for error than a guy who's a work-a-day stiff or a freshly minted grad student with a bun in the oven. The loss is more detrimental to the young hard working man trying to find a foothold than to the ensconced rich dude.

When I order a hot dog from Dairy Queen and they don't gimme a poppy seed bun like what I asked for than I don't sweat it. I chuck it out the window and keep on trucking. When I was younger and hungrier, that kind of liability figured more and I'd a raised a lot more hell on account of it.

RentingForHalfTheCost   Fri, 24 Feb 2012, 12:54am PST   Share   Quote   Permalink   Like   Dislike (1)     Comment 85

LASVEGASWINNER says

"Maybe I'm asking too much and being unrealistic. I wish interest rates would go up so prices would be forced to come down further"

When interest start rising this time, you will be left at the gate looking for that "dream house" The market is in "recovery" per the time magazine report. Home Depot stock soaring, New Home Starts at a 2 year high, employment up, unemployment down, rents rising.

The spring buying season around Mar 15 to May 30, will be the best in years, and your selection of houses in your price range will get smaller and smaller.

PROFEESIONAL BUYERS AGENT - INVESTOR - SALES ASSOCIATE - PROPERTY MANAGER 35 years experience

I think this exact same thing was said to me in 2005 and again in 2007. I didn't listen then (thank god) and until this puppy finishes the downward course I won't be listening now. Same trick different realtor.

RentingForHalfTheCost   Fri, 24 Feb 2012, 12:59am PST   Share   Quote   Permalink   Like (1)   Dislike (2)     Comment 86

tatupu70 says

nw888 says

Historically housing does not go up with inflation.

Huh? Historically, housing prices absolutely have gone up with inflation.

You can argue that they won't in the future, but you can't argue that they haven't historically.

People on this forum with attempt to argue the dots off a dalmatian if you excite them. This is the court of no accountability. People talk like they know it all, like they have lived it all, and everyone around should stop and listen to them and only them. There have only been a few bits of knowledge exchanged and I think we all get a little dumbed down just by being here.

SubOink   Fri, 24 Feb 2012, 3:25am PST   Share   Quote   Permalink   Like   Dislike     Comment 87

RentingForHalfTheCost says

I think this exact same thing was said to me in 2005 and again in 2007.

And the same thing was said to you 1999...and they were right. So what?

If you say the same thing long enough you will be right eventually.

sheltielover1   Fri, 24 Feb 2012, 5:37am PST   Share   Quote   Permalink   Like   Dislike     Comment 88

Rents in Danville/San Ramon are really high! Between $3000 - $4000 for 2000 sq. ft. I can buy a house for these rent prices! CRAZY! RENTS aren't cheaper there and this is where I want to live...

RentingForHalfTheCost   Fri, 24 Feb 2012, 10:15am PST   Share   Quote   Permalink   Like   Dislike (2)     Comment 89

SubOink says

RentingForHalfTheCost says

I think this exact same thing was said to me in 2005 and again in 2007.

And the same thing was said to you 1999...and they were right. So what?

If you say the same thing long enough you will be right eventually.

Actually, realtors got much much pushier in 2007. Can't blame them when their commission pay doubled for the same amount of work. Add to that the fall off in sales in 2008 and 2009 when we had too many realtors competing for too little buyers, and things got really silly.

I had a much better view of realtors in 1999. Now they just suck, cause they are leading more and more people into financial prison. You guys are suppose to study this market. You either don't study it well enough, or you purposely are misleading people at this time. In 2 years from now will probably be a good time to buy, but right now is NOT.

Down we go. I'll be enjoying the ride. It is actually like I already own a home that is appreciating. Add to it, I can call my landlord and get shit fixed at anytime without worrying about the cost. Deal!

RentingForHalfTheCost   Fri, 24 Feb 2012, 10:50am PST   Share   Quote   Permalink   Like   Dislike (1)     Comment 90

sheltielover1 says

Rents in Danville/San Ramon are really high! Between $3000 - $4000 for 2000 sq. ft. I can buy a house for these rent prices! CRAZY! RENTS aren't cheaper there and this is where I want to live...

Show me the numbers where you can buy a reasonable house in Danville/San Ramon and be paying less than 3-4K/mth. I've seen some pretty executive style housing (4bd/3ba) in San Ramon in that range. You don't get them for an ownership cost less than 6K/mth, 2K is a lot of savings per month. No?

RentingForHalfTheCost   Fri, 24 Feb 2012, 10:55am PST   Share   Quote   Permalink   Like   Dislike (1)     Comment 91

A quick search of San Ramon today turned up a few houses that are much much cheaper to rent than buy.

http://sfbay.craigslist.org/eby/apa/2828366285.html

http://sfbay.craigslist.org/eby/apa/2862360150.html

http://sfbay.craigslist.org/eby/apa/2844094608.html

That took all of about 10 seconds.

iwog   Fri, 24 Feb 2012, 12:27pm PST   Share   Quote   Permalink   Like (1)   Dislike     Comment 92

RentingForHalfTheCost says

A quick search of San Ramon today turned up a few houses that are much much cheaper to rent than buy.

http://sfbay.craigslist.org/eby/apa/2862360150.html

That's a $700,000 house.

Here's the PITI breakdown. Apparently you're wrong about it being much much cheaper to rent. We'll call the principle pay-down and maintenance costs a wash. Then you've got a guaranteed housing payment for 30-years (while rents increase) and of course your tax deduction for points and interest. We can call that a wash with the cost of money on your $150,000 down payment.

Weren't you the one complaining that no one ever proves anything around here?

iwog   Fri, 24 Feb 2012, 12:41pm PST   Share   Quote   Permalink   Like (1)   Dislike     Comment 93

RentingForHalfTheCost says

You don't get them for an ownership cost less than 6K/mth, 2K is a lot of savings per month. No?

If you seriously believe this, post a breakdown of costs totaling $6k per month on the large supply of 4br, 3ba homes selling for around $700,000 in Windemere and elsewhere in San Ramon.

I'd like to see an analysis of your numbers.

http://sfbay.craigslist.org/eby/reb/2869079463.html

RentingForHalfTheCost   Fri, 24 Feb 2012, 3:08pm PST   Share   Quote   Permalink   Like   Dislike (1)     Comment 94

iwog says

That's a $700,000 house.

Your seriously comparing a 2300sqft house forsale to a 3270sqft house for rent? Wow. You get me that 3270sqft house for 700k and I'll actually gladly pay you the commission check. Even you know that 1000sqft is a big difference.

RentingForHalfTheCost   Fri, 24 Feb 2012, 3:25pm PST   Share   Quote   Permalink   Like   Dislike (1)     Comment 95

iwog says

RentingForHalfTheCost says

You don't get them for an ownership cost less than 6K/mth, 2K is a lot of savings per month. No?

If you seriously believe this, post a breakdown of costs totaling $6k per month on the large supply of 4br, 3ba homes selling for around $700,000 in Windemere and elsewhere in San Ramon.

I'd like to see an analysis of your numbers.

http://sfbay.craigslist.org/eby/reb/2869079463.html

I'll play anyway with your comparison. Lets run this exact 729K home through Patricks rental/own calculator. With a conservative assumption of only -1% depreciation a years over the next 7 years the number are way in favor of renting. You will actually be 120K richer for renting rather than buying.

Rent cost after 7 yrs: 261K
Owning cost after 7 yrs: 386K

http://patrick.net/housing/calculator.php?uaddr=1868+Barossa+Dr%2C+94582&rent=3500&price=729%2C000

Changing the assumptions to just no appreciation (rather optimistic in my opinion) still looks good for renting

Rent cost after 7 yrs: 261K
Owning cost after 7 yrs: 340K

It only works in this part of the country if you assume appreciation of >3% each year, which is long gone.

RentingForHalfTheCost   Fri, 24 Feb 2012, 3:44pm PST   Share   Quote   Permalink   Like   Dislike (1)     Comment 96

iwog says

I'd like to see an analysis of your numbers.

http://sfbay.craigslist.org/eby/reb/2869079463.html

Forgot to say that the breakeven point for this house to be comparable to a 3500 rental is 574K.

That is without even the argument that for the same 3500/mth rent I can actually get something way better than this 729K house. Now the rent verses buy is way out of whack. You got a 900K or more home verses a 3500/mth rental. Wake up people, the math is pretty easy. Rent FCOL! Buy later for much less and when it feel right. Not because someone who's income depends on you drinking the Kool-aid.

Rent this house before going into debt over a 730k overpriced POS.

http://sfbay.craigslist.org/eby/apa/2862360150.html

If I was a renter in that area I would find 20 more like this one above in the course of a month. Just do the leg work.

Patrick's calculators are perfect and insightful. I wish everyone on this site took the time to use and understand them. That whole inflation, appreciation, depreciation, taxation, thing has been proclaimed to be great reasons for overpaying. No on really takes the time to actually see if it works out properly. They just say it does. Ugh.

JodyChunder   Fri, 24 Feb 2012, 3:46pm PST   Share   Quote   Permalink   Like (1)   Dislike (1)     Comment 97

RentingForHalfTheCost says

Even you know that 1000sqft is a big difference.

I got a 1000 square foot space or thereabouts just for my trophies.

iwog   Fri, 24 Feb 2012, 5:06pm PST   Share   Quote   Permalink   Like (1)   Dislike (1)     Comment 98

RentingForHalfTheCost says

Your seriously comparing a 2300sqft house forsale to a 3270sqft house for rent? Wow. You get me that 3270sqft house for 700k and I'll actually gladly pay you the commission check. Even you know that 1000sqft is a big difference.

No I'm not, I simply linked the wrong url. Here's the first one you posted. It easily would sell for $700,000:

http://sfbay.craigslist.org/eby/apa/2828366285.html

You nitpicked my example when you knew damn well you posted another one that fit my argument perfectly. Disingenuous much?

RentingForHalfTheCost says

That is without even the argument that for the same 3500/mth rent I can actually get something way better than this 729K house. Now the rent verses buy is way out of whack.

Then why was it your example? Are you going to throw out everything you wrote and start over with new examples? What a waste of time.

iwog   Fri, 24 Feb 2012, 5:21pm PST   Share   Quote   Permalink   Like (1)   Dislike     Comment 99

RentingForHalfTheCost says

I'll play anyway with your comparison.

My comparison? I used the house you linked and the number you gave for expenses. All I did is find the exact same home in the exact same housing project with nearly the exact same sq. ft. then ask you to breakdown your $6000. How is this my comparison?

RentingForHalfTheCost says

Lets run this exact 729K home through Patricks rental/own calculator. With a conservative assumption of only -1% depreciation a years over the next 7 years the number are way in favor of renting. You will actually be 120K richer for renting rather than buying.

Rent cost after 7 yrs: 261K
Owning cost after 7 yrs: 386K

I reject this premise entirely. Homes do not depreciate 1% per year. If true, a home built in 1912 would be worthless. There are homes in Berkeley and elsewhere built in 1912 worth $1 million. There are homes in San Francisco built in 1912 worth $6 million.

thomas.wong1986   Fri, 24 Feb 2012, 6:22pm PST   Share   Quote   Permalink   Like   Dislike     Comment 100

iwog says

I reject this premise entirely. Homes do not depreciate 1% per year. If true, a home built in 1912 would be worthless.

Home prices fall (depreciate), even in the best areas...1% and sometime more..

Agassi suffers a loss -- in sale of Tiburon home

Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2006/11/29/BUGJEMLGLA1.DTL#ixzz1nO4XqW9u

It took almost four years, but retired tennis stars Andre Agassi and Steffi Graf finally have found a buyer for their Tiburon estate for $20 million, or about $3 million less than what they paid for it in 2001.

Steven Spielberg Sells Malibu Home at a Loss

http://realtytimes.com/rtnews/reu2pages/19980819_celebrity.htm?open&Vol=86&ID=sampleplus%22

Not everyone is making money in the California real estate boom. Director Steven Spielberg just sold his oceanfront Malibu home, not his primary residence, for approximately $4.5 million or $1.5 million less than he paid for the property when he purchased it in 1992. His loss is his lucky buyer's gain.

Bigsby   Fri, 24 Feb 2012, 7:31pm PST   Share   Quote   Permalink   Like   Dislike     Comment 101

That Agassi sale was 6 years ago and the Spielberg 2 years ago.

SFace   Fri, 24 Feb 2012, 9:58pm PST   Share   Quote   Permalink   Like   Dislike     Comment 102

For a claimed controller of a SEC registrant, your logic is shocking. I'm horrified actually or just can't comprehend what is being asked and addressed, in this case Patrick's rent/buy calculator.

The CFO of a 70 year old company asks:, "Controller, give me a 7 year projection of SG&A expense for the company". Controller gives the projection based on the 10 years where the company "rightsize" down and ignore the other 60 years where the company's SG&A went from 20M overall to 200M overall.

Boss, SG&A in 2020 will be 185M. Be prepared to explain yourself and pray for the best. (Controller's language based on past interaction, As we have seen in the early 1990's, prices does go down and we were succussful in reducing our SG&A at select periods in the company's history, therefore that is my basis of the forecast)

That's the calculator in a nutshell.

Nomograph   Fri, 24 Feb 2012, 11:19pm PST   Share   Quote   Permalink   Like   Dislike (1)     Comment 103

SFace says

For a claimed controller of a SEC registrant, your logic is shocking. I'm horrified actually or just can't comprehend what is being asked and addressed,

Mr. Wong also claims to be German.

RentingForHalfTheCost   Sat, 25 Feb 2012, 3:30am PST   Share   Quote   Permalink   Like   Dislike (1)     Comment 104

iwog says

I reject this premise entirely. Homes do not depreciate 1% per year.

They have been falling since 2007 and will continue to fall for some time. We are paying for the decades of your thinking that has ruined many peoples net worth to say the least. I know more than one married couple that have divorced when the house they overpaid for in 2007 became the 1000lb elephant in the room. Your chants were annoying in 2007 and now they are even more annoying. Houses at best will go down at 1-2% per year. We just had a huge drop in the last month that is more than this yearly estimate. My best guess is more like 5-7% per year, but that scrares everyone too much so lets not do that. People need to be slowly educated on our stupidity with housing in this country.

RentingForHalfTheCost   Sat, 25 Feb 2012, 3:31am PST   Share   Quote   Permalink   Like   Dislike (1)     Comment 105

Bigsby says

That Agassi sale was 6 years ago and the Spielberg 2 years ago.

And these homes that can't even be sold? They are today!

http://flippersintrouble.blogspot.com/

On one side your have Iwog saying depreciation of housing never happens, then the other we are square in the middle of it. Which to believe? Just give Iwog a full year of your savings to secure 30 years of a debt for a depreciating asset. That is where all the smart money is going. How could we believe any different.

All I see is red, and lots of it in the housing market. When it turns black, then I'll be back. Btw I sold in 2009 because of this site, and I am so much better because of it. Thanks Patrick.

RentingForHalfTheCost   Sat, 25 Feb 2012, 5:12am PST   Share   Quote   Permalink   Like   Dislike (1)     Comment 106

iwog says

Then why was it your example? Are you going to throw out everything you wrote and start over with new examples? What a waste of time.

That makes absolutely no sense what you are saying. I am comparing the two houses that are close in square footage and the result is rent by a big margin. 120K Savings over 7 years!

Now, I say. Wait you can get an even bigger house (+1000 sqft more) rental. If you want to stay in the argument can you say that you can match that 3700sqft $3500 rental with a 700K purchase. No, you can't, so give it up. Your chanting to buy fails on all comparisons. You haven't shown us one case in San Ramon/Danville that makes sense to buy over rent. That is unless you are factoring in 3-5% appreciation in the house. What? you are? If you think that, then I can understand your argument. If you don't then you are actually not following your own logic. I can't help you with that.

RentingForHalfTheCost   Sat, 25 Feb 2012, 5:17am PST   Share   Quote   Permalink   Like (1)   Dislike (1)     Comment 107

iwog says

No I'm not, I simply linked the wrong url. Here's the first one you posted. It easily would sell for $700,000:

http://sfbay.craigslist.org/eby/apa/2828366285.html

You nitpicked my example when you knew damn well you posted another one that fit my argument perfectly. Disingenuous much?

I think I figure this out after I sent a few responses, which was why I then went ahead and compared the two equal houses. 3500 rent verses 730K purchase. It still is better to rent like I said a few times already. I wasn't being disingenious, I can be sharp and opinionated, but I am always trying to be genuine. I'm not trying to prove a point for emotional sake. It is more because I believe the point and am trying to get others to see the same. Too many people are in trouble and more to follow. Lets not add even more to the same problem. Rent, wait for the carnage to stop, and then buy when the number make sense. I hope I am sharp enough to see the reversal when it starts to happen. I'm sure we all wish that.

iwog   Sat, 25 Feb 2012, 10:11am PST   Share   Quote   Permalink   Like (1)   Dislike     Comment 108

RentingForHalfTheCost says

That makes absolutely no sense what you are saying. I am comparing the two houses that are close in square footage and the result is rent by a big margin. 120K Savings over 7 years!

Your analysis is flawed. It assumes:

- a 5% mortgage instead of the current average of 4% or less.
- a cost of money at 3% after taxes which is nonsense. The stock market has made about 0% in the last 12 years and most government bonds are at 0% also. The average Joe isn't going to make 3% and is lucky to make 0% after inflation.
- $50,000 added on for brokerage fees, which doesn't belong in this analysis.
- What happens if I pay $729,000 cash and that $3500 rent payment becomes a 5.7% gross return? You put landlords and prospective owner/occupiers in the same box but they don't belong there.

I'm not saying I would buy a house in San Ramon and I'm not even saying someone could get positive income flow out of San Ramon. I expect San Ramon will continue to function as an upper-middle class adjunct to the aristocracy in Blackhawk and Lafayette.

Therefore using a rent analysis as the only basis to determine value is wrong. Rents will probably never make sense in San Ramon because too many people are willing to pay an ownership premium.

iwog   Sat, 25 Feb 2012, 10:16am PST   Share   Quote   Permalink   Like (1)   Dislike     Comment 109

RentingForHalfTheCost says

I wasn't being disingenious, I can be sharp and opinionated, but I am always trying to be genuine. I'm not trying to prove a point for emotional sake. It is more because I believe the point and am trying to get others to see the same. Too many people are in trouble and more to follow.

Okay I understand and I retract my statement.

The carnage has stopped in most areas. Telling people to wait when interest rates are at 4% and homes in most areas are renting for more than PITI is extraordinarily dangerous. I think the downside is very small while the potential risk is huge.

Even if prices stay the same, missing a 4% mortgage rate might be a 30-year blunder.

RentingForHalfTheCost   Sat, 25 Feb 2012, 2:21pm PST   Share   Quote   Permalink   Like   Dislike (1)     Comment 110

iwog says

Even if prices stay the same, missing a 4% mortgage rate might be a 30-year blunder.

Very true, if you really are working to buy from the month payment deal. A lot of people here have downpayments larger than 20% and actually don't like the 4-5% game. To me it just means I pay more for the same house.

Anyway, sounds like you just disagree with the assumptions in the calculator. I think they are correct for the analysis, so you can run the calc with your assumptions and use that data. The only thing that seems odd is you want to subtract the brokerage/realtor fee? That is a valid expense (large btw) in any real estate transaction. If you play to buy and then sell after 7 years, then it hits your pocket book. I wish it didn't. :)

bubblesitter   Sat, 25 Feb 2012, 2:40pm PST   Share   Quote   Permalink   Like   Dislike     Comment 111

iwog says

Even if prices stay the same, missing a 4% mortgage rate might be a 30-year blunder.

Uh,how does 3% rate and still lower price sounds to you?

bubblesitter   Sun, 26 Feb 2012, 3:53am PST   Share   Quote   Permalink   Like   Dislike     Comment 112

robertoaribas says

Mortgages have built in expenses

Who cares about those expenses when they all are going to be dumped on taxpayers - stupid lawmakers. :(

RentingForHalfTheCost   Sun, 26 Feb 2012, 7:02am PST   Share   Quote   Permalink   Like   Dislike (2)     Comment 113

robertoaribas says

maybe, but there is a bottom limit to rates.

I think we make the mistake sometimes ( I know I do) of thinking about the absolute rate. Say 3% and considering that it doesn't have much room to go down. However, in reality we can go down 10% of that rate pretty easily - to 2.9%. Like a bond that 10% drop is huge when you crunch the numbers. We could drop the relative 10% for the next foreseeable future. The limit, is by putting the 10yr bond at 0%, but we have a ways to go before we are even close. The 10yr bond could drop 10% relative for my lifetime and still not be at 0%. In short, the lower the rate, the smaller the absolute drop required to give a relative 10% drop. We really only care about the relative.

1sfrenter   Sun, 26 Feb 2012, 1:32pm PST   Share   Quote   Permalink   Like   Dislike     Comment 114

AlexG says

I hope more of fellow Americans will see house for what it is - a place to enjoy and raise your kids

Yeah, but my kids will be grown with all this waiting

bubblesitter   Sun, 26 Feb 2012, 1:41pm PST   Share   Quote   Permalink   Like   Dislike     Comment 115

1sfrenter says

Yeah, but my kids will be grown with all this waiting

So what are you waiting for? Vote of approval from pat.net? Buy the one that costs the same as renting and move on.

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