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This waiting game is getting old


By nw888   Follow   Tue, 21 Feb 2012, 8:48am PST   20,052 views   115 comments   Watch (4)   Share   Quote   Permalink   Like   Dislike  

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   befriend   ignore   Thu, 23 Feb 2012, 2:50am PST   Share   Quote   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   befriend   ignore   Thu, 23 Feb 2012, 2:50am PST   Share   Quote   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   befriend   ignore   Thu, 23 Feb 2012, 2:54am PST   Share   Quote   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   befriend   ignore   Thu, 23 Feb 2012, 4:04am PST   Share   Quote   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   befriend   ignore   Thu, 23 Feb 2012, 4:05am PST   Share   Quote   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   befriend   ignore   Thu, 23 Feb 2012, 10:01am PST   Share   Quote   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   befriend   ignore   Thu, 23 Feb 2012, 3:22pm PST   Share   Quote   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   befriend   ignore   Thu, 23 Feb 2012, 3:25pm PST   Share   Quote   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   befriend   ignore   Thu, 23 Feb 2012, 3:30pm PST   Share   Quote   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   befriend   ignore   Fri, 24 Feb 2012, 12:54am PST   Share   Quote   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   befriend   ignore   Fri, 24 Feb 2012, 12:59am PST   Share   Quote   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   befriend   ignore   Fri, 24 Feb 2012, 3:25am PST   Share   Quote   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   befriend   ignore   Fri, 24 Feb 2012, 5:37am PST   Share   Quote   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   befriend   ignore   Fri, 24 Feb 2012, 10:15am PST   Share   Quote   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   befriend   ignore   Fri, 24 Feb 2012, 10:50am PST   Share   Quote   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   befriend   ignore   Fri, 24 Feb 2012, 10:55am PST   Share   Quote   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   befriend   ignore   Fri, 24 Feb 2012, 12:27pm PST   Share   Quote   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   befriend   ignore   Fri, 24 Feb 2012, 12:41pm PST   Share   Quote   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   befriend   ignore   Fri, 24 Feb 2012, 3:08pm PST   Share   Quote   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   befriend   ignore   Fri, 24 Feb 2012, 3:25pm PST   Share   Quote   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   befriend   ignore   Fri, 24 Feb 2012, 3:44pm PST   Share   Quote   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   befriend   ignore   Fri, 24 Feb 2012, 3:46pm PST   Share   Quote   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   befriend   ignore   Fri, 24 Feb 2012, 5:06pm PST   Share   Quote   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   befriend   ignore   Fri, 24 Feb 2012, 5:21pm PST   Share   Quote   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   befriend   ignore   Fri, 24 Feb 2012, 6:22pm PST   Share   Quote   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   befriend   ignore   Fri, 24 Feb 2012, 7:31pm PST   Share   Quote   Like   Dislike     Comment 101

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

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

For a claimed controller of a SEC registrant, your logic is shocking. I'm horrified actually or just can't comprehe