WatchWe need to move and are sick of renting, but worried that the market has another leg down. We've been waiting for this bubble to play itself out since 2001, are getting older, and don't plan on being lifelong renters.
If you've been waiting to buy, are you waiting indefinitely (as we have for the past 13 years) or do you have a time frame (ie., 6 months, 1 year).
If we buy we plan on staying 10-20 years, or forever, whichever come first.
Thanks to this website and a few other housing blogs, we didn't buy during the bubble. I have friends who did and are now seriously underwater and stuck.
Would hate to be the sucker that shoulda waited another 12 months. Waiting another 3-5 years isn't really an option, I'd like to quit being an amateur armchair economist and get on with my life and stop thinking about housing before I retire.
I know none of us have a RE crystal ball, but the group wisdom saved me from being a sucker 6 years ago when everyone else was behaving like lemmings.
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Campbell, CA
I've been waiting and saving since 1998. From 97-98 I noticed prices doubled in many areas (literally 100% in 1 year) while others just a measly 30-70%. I said to myself, this has got to be a bubble, I'll wait it out.
2012 and I'm still waiting. Looking back, I should have bought, but those are the breaks. I've had a good career so far and have saved a significant down.
I'll give it one more year (unless I come across something I like and can afford) and then I'll probably just relocate to another state.
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Mountain View, CA
bmwman91's website
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Personally, I would wait until after the election & inauguration. There will be all sorts of pie-in-the-sky promises made to loan-owners to buy their votes. These promises will come from both candidates during their campaigns. Most underwater folks know this, and they are holding-out to see what sort of free bribes they will be offered. That is one component of the Bay Area's super low RE supply. Once the elections are over, those promises will probably be largely forgotten, and people will be left with a choice between selling at a loss, walking away or continuing to pay money for nothing.
Second, it is highly likely that all this FB IPO jazz will be largely done & over with by then. From talking to a friend that works there, they have to have their IPO in the next month or so, since employees can't sell until 6 months later. Well, the top tax bracket's tax cuts expire on 12/31/12, anf FB wants its employees to be able to sell off their vested RSUs before the rate goes up. So, the market will get a few hundred, or thousand perhaps, new-monied folks looking for houses right around election time, and I am willing to bet that they will have spent it on housing by the time the inauguration rolls around. There are surely a number of would-be sellers along the peninsula that are holding-out for the FB IPO because they know that they will have an opportunity to get these folks bidding against each other for the short commute.
I admire your perseverance in waiting since 2001. That is a long time to want to get out of a rental, so I commend your self-control (and your partner's). The hard truth is that nobody here knows what is coming. Prices seem nonsensical, but they may just stay that way. There is more than enough dumb money out there to ensure that. Then again, maybe there will be some sort of implosion if web-based ad revenue dries up and causes our Web Services 2.0 economy to blow up. It's anyone's guess. I have seen a couple of articles now about how various celebrities are "investing in and doing high-tech start-ups." I see that and think, "oh boy......the writing is on the wall now!"
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Best to wait until the last Realtor® suicides.
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San Francisco, CA
dodgerfanjohn says
We're public school teachers. We are the middle class. Rent is expensive and owning is expensive.
Like most folks in America these days, we are fretting over the cost of shelter.
I'm not talking high class problems like where should we invest our piles of cash and what will give us the best rate of return. It's about where should we lay our heads each night and do we want to buy a home before we retire...
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rootvg,
If you want to generalize go ahead. Maybe it makes you feel bigger? Cause obviously insecurity is a main component of racism. size is not the issue. It's the constant stereotyping of Asian men in media. It's the william hung that gets all the media attention. It's like watching Samurai, and have all the japanese killed except the white savior Tom Cruise, who gets to take the Asian bride after killing her genetically inferior husband first. I lived her all my life and have been thoroughly subjugated to all the hate. And yes you do feel threatened by me. Cause i work harder, smarter, and I don't have your precious entitlement attitude. Yes I do get with all sorts of girls. And race is not an issue but every now and then I come across people like you that can't understand how the girls you want, like me better.
And when one undeniably talented Asian man is promoted in the media like a Jeremy lin. People like you are the first to be hating. Cause honestly root, u feel threatened by Asian men. cause we go to harvard, straight ball, are righteous, and humble. what a freaking surprise?? In this modern world, where the individual ego has destroyed everything good in this country. Too bad big penises can't save the housing market??
Contrary to the public stereotype, there are many Asian men that fit this description. Except we are well marginalized in society. Asian men are like precious metals. Institutions can manipulate our value. But when the SHTF, true price discovery will be reached. Cause we get it.
Im not saying all Asian men, but I've been to the gym and not all white dudes either. But unfortunately for me, it's all asian dudes are weak all the time in our 247 media driven world. It's tough having to navigate life with all these pre-judgments, but things are changing.
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Redwood City, CA
Armchair economist comments re housing prices in the SF Bay Area. . . .
Prices have definitely dropped over the past few years, but the price of a single family home on the peninsula is still waaaay out of whack with income. Some will argue "that's the way it's always been", but I'd like to see some historical affordability data to back that up.
The question I like to ask is "How many residents of cities like Palo Alto could afford mortgage and property tax payments on their current home at current market prices and assessed values assuming they had 20% down?" My guess is less than half based on median family incomes for those cities. So you have to ask yourself where will the tens of thousands of 1% earners who can afford to buy these houses come from when baby boomers start to downsize or die?
It's possible Bay Area prices might drop substantially over the next 2-3 years if pent up foreclosures / short sales kick in, and/or potential sellers realize that prices aren't recovering any time soon and they decide to cut losses and move on. Higher interest rates might have an effect too.
If prices don't drop substantially over the next 2-3 years, the local market could be looking at a very prolonged decline. I just don't see enough high end job creation to soak up downsizing/dying baby boomer inventory long term.
I make $200-260k/year and rent a small house in a very nice neighborhood mid-peninsula for $2100/month including utilities. I have more than $150k set aside for a downpayment and auto-deposit $2k/month into a separate investment account, which is the difference between my rent and a mortgage payment. So I'm in a pretty good position to buy if the rent vs. buy math starts making more sense within the next couple of years. That being said, if the prolonged decline scenario looks to be more likely, I will probably move to a more affordable locale if suitable employment opportunities arise.
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Mountain View, CA
bmwman91's website
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myob says
Yup. Is it any wonder that the rest of the nation considers CA, specifically the SF Bay Area, to be The Land of Fruits & Nuts?
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Redwood City, CA
E-man, you must be talking to older folks with alzheimer's. Plenty of average, middle class folks were able to purchase homes in Silicon Valley during the 70's and into the 80's.
Older people love to tell younger people how hard the older people had to work, how easy the younger folks have it these days, etc. And because older folks have mostly benefited from the run-up in Bay Area housing prices and Prop 13, they don't spend a lot of time thinking about the long term negative impacts to the younger generations.
For those of us non-average Joes who can afford to buy here, the question is whether we want to contribute to a massive transfer of wealth from Gen X/Y to Baby Boomers. This of course affects family planning (e.g., having kids) and retirement timing.
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Santa Cruz, CA
Peninsula prices are caused by the 1. guys making just enough money to qualify for the mortgage 2. the social climbing females pressing them into the market 3.the females short-circuiting the brains of the men by direct stimulation of the hypothalamus. 4. men reacting to hypothalamus tickling by females and wanting to "keep her" and thereby buying the over-priced house.
The wages are high enough so the guys will keep struggling to buy.
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Campbell, CA
I'd like to add that the company I contract for is ~80% EE PHDs and quite frankly the majority of them have the common sense of a turnip.
Of course some of them are absolutely brilliant, but it stands for paid high dumbass for a reason.
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Mountain View, CA
bmwman91's website
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CrazyMan...it IS true that housing here is a bargain for anyone that lives in HK and has any money. $1M will barely get you a 400SF condo in the desirable parts of that place. You can have all the cash in the universe and still not be able to get a house because there are so few of them in HK and they almost never go up for sale. Now, whether those people actually want to come here in any large number is another story entirely, but it is absolutely true that a Chinese person with money would see Bay Area RE as a deal.
I am not really sure WHY, but buying a house is even more dogmatic in Chinese culture. They are a pretty group-think society (not saying it is good or bad, just that it is what it is). You do well by conforming and not rocking the boat. So, there are a billion people over there convinced that buying a house is the only way that one can ever appear successful and (for males) attract a mate. Buying a house equates to safety & stability, and demonstrates that one is serious about making money & investing. Much of this mindless dogma carries right over here, and I see it a little among some of her family, and among some of her first-gen friends (spread by their zero-gen parents). Once they have been here a couple of generations, it usually subsides slightly to match the still idiotic fervor of white Americans.
My fiancee's father is worried, like REALLY worried, that we still rent. In his mind, not having a house prior to marriage just doesn't compute, and I imagine that he is embarrassed to tell friends/family in China (where he lives & works) that his daughter is marrying some American guy with no house. Over there, marrying a guy with no house is probably a social statement like, "well she's a nasty hag and that's probably the only option she'd ever have anyway, although you'd think she'd at least try find an UGLY guy with money!" Money & appearances are huge...it's an odd bastardization of eastern culture mixed with most of the worst parts of western capitalism. Sad, really.
With that said, not everyone there is like that. Most people are decent, hard working folks. It is the ones that have come upon a lot of money that generally seem to be the piles of crap. That's probably because you get rich by breaking rules and screwing over anyone and everyone, including family, to get the money. I have seen real life examples of this in my fiancee's family, and a number of my Chinese coworkers families. Anyway, most people there are good & hard working just like us. But, with a population of well over 1 billion, even if only 1% are bad apples, that is still over 25% of the US population worth of bad apples!
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CrazyMan says
+1111111111111111
sf ace is so full of shit and the sheeple just eat it up like crack. no data ever.
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bmwman91 says
I don't know...in the IPO-rich 90's, I don't remember housing shooting up that much -- maybe the upper upper end will see a little thrust, but I think this is mostly an overplayed scenario.
For the original poster -- I'm in your boat. I just renewed the lease on my baby-shit green hovel, as I see nothing worth a damn out there, and no good lots to build on. I've been saving for the last four years. I had been saving and looking to buy in 2003-4, but backed away from that plan for obvious reasons. Spent the money on other stuff, and then started saving more seriously in mid-2008. Most of our salaries, plus every bonus, every ebay sale, every freaking onesy-twosy surplus. The biggest expense this year was paying my income taxes and replacing the transmission in my '89 Volvo. My savings habits have gone beyond frugality and well into abstemiousness. If most of Americans enjoy wealth effect, I enjoy something like poverty effect! The crisis I am encountering right now is that longer I defer gratification and live beneath my means in this way, the more my expectations rise in tandem. I find myself thinking, "is this really the dump it's all been for?" about places I would have readily considered even two or three years ago. I know I can't be alone in this.
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Helloeeze says
my own experience:
1. from the guy's perspective: asian women usually have less attitude than white women(less hassle)
2. from the asian girl's perspective: asian women want to be white and can move up in class (an economic decision). white guys are more generally masculine than asian guys making them more physically attractive
the guy and girl both see benefits, for the small price of getting used to a different race.
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Mountain View, CA
bmwman91's website
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RE: White guys & Asian women
I don't know why it is so prevalent here, to be honest. When I was younger, I SWORE that I'd never date an Asian woman because a) every white guy in the Bay Area does, and b) I figured they were all boring little subservient types (HAHA, yeah right) that cared about nothing other than fashion. I ragged on one of my buddies pretty bad when he was dating a Chinese girl back in like 2002.
Well, as karma would have it, I met my fiancee (HK/Chinese) in 2006 while I was an intern at Cisco Systems. It was a total coincidence as she was the other intern's friend from their days at UC Davis (she was visiting Cisco as a vendor and randomly went to lunch with my coworker, I tagged along...the rest is history). As far as I can tell, part of the reason for white guys + asian girls in the Silicon Valley is just the nature of high tech. There just aren't any white chicks in engineering! Well, even if there are, attractive ones are even fewer. From my experience, most of the ladies are Asian (Chinese) in technical fields around here. If you are going to meet a girl at work, and you are an engineer, then your options get sort of narrow.
I don't have any preference between white chicks & Asians. It just worked out that way...her & I clicked & the rest is history. She moved here in 1997 from HK (for obvious reasons) and went to HS & college in Davis. She got her citizenship a few years ago. I do have to say that she is a LOT more reasonable than a lot of white females that I knew & dated in college. Lots (not all) of American white chicks have this sort of "feminist entitlement" mentality where they think that they are supposed to own the man in the relationship, and that "maternal instincts" will always trump anything else (like common sense about borrowing $730k on 3.5% down "for the baby"). I think that that mentality leads to a lot of divorces, and it's been documented that women initiate the divorce 70% of the time, probably because they feel like they are not getting their way. People in general seem to have difficulty compromising & being reasonable, but I really do feel like women have become MORE unreasonable in the last 30 years, largely because society tells them that it is OK ("you are asserting your rights as a woman"). What ever happened to the 50/50 relationship?!
Anyway, I knew my lady was a keeper because we can both call each other on each other's BS, and we can both say, "I'm sorry I was wrong." I dated a lot of girls, and very few were capable of that (and neither was I when I was younger). Just as a funny aside, Planet Granite in Sunnyvale after 6PM is basically nothing but white guy / asian girl couples climbing. It must be the fact that white people are obsessed with the outdoors & related activities, and that Asian women are super competitive that seems to make that sport so attractive to them lol.
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Black man has the largest.
I don't see White and Asian woman line up to marry them :)
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My plan is to save few years and find job where I can work from home and do some travel and buy a place in south Florida to be closer to Latin America and the Caribbean. Much cheaper than overpriced California.
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Los Angeles, CA
Austinhousingbubble says
Reminds me of a great quote from a movie:
"I can feel it like cancer, getting bigger and bigger like the blob! One day it'll rip me open, and it'll be there in my life, ready to rob me of every bit of fun I deserve to have!"
We've decided it's the responsible thing to do to *not* have kids because we could not afford to raise them, since we only make a paltry 150k combined income and can't even afford to buy a house for stability.
We barely even go out to dinner anymore, let alone more than a neighboring town for vacations, and still scarcely have money for iPhones and coconut water.
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Madison, WI
I already waited, then bought and sold within ten years time, realized housing is not affordable when my wages are not going up tandem with everything else. Well, you have to jump jobs to get paid more, well that makes buying a mute point. I wanted a smaller home, but heck, even the property taxes on those are still going up, and I can rent for two-three times the cost of the average property tax bill.
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bmwman91 says
The rest of the nation, fruits and nuts, are the ones who migrated to California.. bearly 1 our of 4 Californians are actual natives.. the rest are from Mexico or the North East. Things were very very different here in prior decades..
Charlie dont surf here!