patrick.net

Strategist says

I'm pretty sure you could have purchased a home 4 years ago at a bargain price but did not.

False. We didn't live in San Diego 4 years ago. Because of not knowing where my job would have ended up, I never felt stable enough to buy a home. There were a few times I could've bought right when I moved somewhere, but I would've lost money because of having to pick up and move.

Strategist says

Please pass on this message to your wife:

Dear Mrs. Just Any Guy,

Make hubby buy you your dream home. Everyone deserves one.

All the best

Strategist

You sound like a realtor.

just any guy says

Strategist says

Please pass on this message to your wife:

Dear Mrs. Just Any Guy,

Make hubby buy you your dream home. Everyone deserves one.

All the best

Strategist

You sound like a realtor.

I'm not a realtor.
I do know we are in the middle of a severe shortage of homes. Prices can only go up in that scenario.

Strategist says

I do know we are in the middle of a severe shortage of homes.

True, but that could easily mean we've peaked. This could be the absolute worst time to buy.

just any guy says

Strategist says

I do know we are in the middle of a severe shortage of homes.

True, but that could easily mean we've peaked. This could be the absolute worst time to buy.

Not possible in the middle of a shortage. They have to build like crazy for several years to cure the shortage.

Strategist says

Not possible in the middle of a shortage. They have to build like crazy for several years to cure the shortage.

That assumes no job loss recession, which I fear is just around the corner given many factors. We're due for one, but I could easily be wrong. The crystal ball I bought on Amazon isn't working.

just any guy says

Strategist says

Not possible in the middle of a shortage. They have to build like crazy for several years to cure the shortage.

That assumes no job loss recession, which I fear is just around the corner given many factors. We're due for one, but I could easily be wrong. The crystal ball I bought on Amazon isn't working.

No one has a crystal ball. It does not exist. You have to take a long term approach, and do what's right for your family.

Strategist says

No one has a crystal ball. It does not exist. You have to take a long term approach, and do what's right for your family.

I know. The concern I always have is I'm not a doctor or a dentist where I'm more in control of whether I want to move or not, or with what happens to my job. Considering that my company could get sold at some point, I have to think about contingencies if I have to move. Finding work at my level ain't easy in San Diego like it is in the Bay Area or NYC.

So, I'd like to buy when there's at least rental parity in the event I can't sell to break even. However, we're not at rental parity right now. I'd be $800 in the hole every month if I bought a $900K house WITH 20% down. So, performing some analysis helps in determining what plan B or C might be if/when the shit hits the fan.

just any guy says

Timing can be everything in a place like San Diego or the Bay Area. I know many people, including family, who lost their life savings in the last recession, so you'll have to forgive me if I seem to over-analyze the decision to buy a $900K home.

the more important question is "where" you should buy, not when.

what areas are you looking at?

Cost of shelter to your own capacity to own the debt... that is the main thing to look at for a home, not the investment side of the equation

landtof says

just any guy says

Timing can be everything in a place like San Diego or the Bay Area. I know many people, including family, who lost their life savings in the last recession, so you'll have to forgive me if I seem to over-analyze the decision to buy a $900K home.

the more important question is "where" you should buy, not when.

what areas are you looking at?

Poway Unified School District. Northeast San Diego

Logan Mohtashami says

Cost of shelter to your own capacity to own the debt... that is the main thing to look at for a home, not the investment side of the equation

But who wants to buy an overpriced house just because they can afford it? Although this will become my primary residence, I don't want to drastically overpay for it just because I can. As I said above, there are other things to consider if I lose my job and/or have to move away, and the price I pay relative to the rental income it could earn does play a significant factor.

just any guy says

Poway Unified School District. Northeast San Diego

wouldn't say that's a rental hotbed, but good for resale. if you have family, just focus on the best place for them and others who are in the market will think the same when/if you need to sell it.

there are some highlights within that area - some zips are definitely better than others. however, the new developments have insane bond debt and mello roos. not really worth it.

landtof says

just any guy says

Poway Unified School District. Northeast San Diego

wouldn't say that's a rental hotbed, but good for resale. if you have family, just focus on the best place for them and others who are in the market will think the same when/if you need to sell it.

there are some highlights within that area - some zips are definitely better than others. however, the new developments have insane bond debt and mello roos. not really worth it.

Yea, the resale area is great. However, prices have run up to insane levels...for example, houses selling for $900K today sold 5 years ago for $650K. I'm definitely avoiding the areas like 4s Ranch and Carmel Valley where there are new developments with ridiculous HOA and Mello Roos.

I predict an anal lube shortage as the petting zoo near Call It Crazy is restocked with sheep and goats.

Back from the Trip and I see the Buddies are at it again

Homeowners with the lowest total net worth have the highest share of their net worth stored in their home!

Logan Mohtashami says

Homeowners with the lowest total net worth have the highest share of their net worth stored in their home!

ok?

High net worth individuals have 1/3 - 1/2 of their net worth stored in their home?

Yikes

SubOink says

ok?

Head economist of zillow and Freddie Mac right now.. all three of us are having a live twitter chat on this showing our charts on this

So, to keep it simple

Low down payment borrower, doesn't have the liquid assets to put a big down payment down, probably doesn't have much in a 401K plan or stocks in general, saving rates $$ isn't much.. so there one forced savings is in their home

Chart is August of last year

http://libertystreeteconomics.newyorkfed.org/2016/08/which-households-have-negative-wealth.html

Logan Mohtashami says

saving rates $$ isn't much.. so there one forced savings is in their home

Again: "Ok?"

Nobody would disagree. You're telling us the sky is blue.

Why does it matter?

Logan Mohtashami says

Hey, did they strip search you?

errc says

High net worth individuals have 1/3 - 1/2 of their net worth stored in their home?

Yikes

What do you consider as high net worth?

Logan Mohtashami says

Chart is August of last year ...... so there [their] one forced savings is in their home

Hah, that chart (post 84) is quite revealing. In the negative wealth terciles (meaning 1/3 in each each group), I observe that the people with the most negative wealth are the same ones that have the most housing "assets".

That fact is quite telling, Mr. Mortgage Broker Logan Mohtashami! Forced savings? More like voluntary non-savings and debt, my friend.

ADDENDUM:

I think I need to explain this. Among people who have negative net worth (personal equity, if you will), the tercile (1/3) that has the most negative net worth is also the same one that own the most expensive/valuable housing assets. While this fact does not imply that it is the houses that is the cause of having negative equity, one observation must be true: Among people with negative equity, the 1/3 subset that has the most negative equity also owns the most expensive housing.

I think this observation is quite telling: The personal mindsets and personal actions that cause negative equity is the same as the ones that cause people to buy the most expensive houses. I find that to be a very interesting observation.

Debt of a salesman....did anyone coin that phrase before?

Ironman says

-

Now there's a normal looking guy that you should listen to for important financial advice.... NOT...

Which loony bin did he escape from?

Forget that photo, this is the photo from Mexico last August, now how did I get let into the country

justme says

More like voluntary non-savings and debt, my friend.

Forced savings is much better, PITI payments all the way...

NY Fed analysis, only 36% of negative wealth homeowners had negative housing equity:

Gives you a age twist to the data and break down on net assets to debt

Strategist says

Hey, did they strip search you?

No but they did my wife, put her in a room in Dubai for 20 mins, I have never gotten searched once post 9/11 my wife 4 times and she is as white as they come. :-)

Strategist says

Logan Mohtashami says

Hey, did they strip search you?

The face he made when Dr. Jellyfinger achieved deep 9 insertion.

Logan Mohtashami says

Gives you a age twist to the data and break down on net assets to debt

That is quite interesting. Never saw the curve over lifetime before.

Logan Mohtashami says

NY Fed analysis, only 36% of negative wealth homeowners had negative housing equity:

"ONLY" 36%, compared with 7% for the entire population? That is highly significant!

Ironman says

$1000 in an emergency.

Those are worthless surveys

However, this data line looks off to me too if we are really counting everyone

Ironman says

I'd like to see where they pulled the data for that chart. I don't believe it to be that high for those age brackets.

I mean really, how many 30 year olds do you know today that have a $100K net worth? Plus, there are articles after articles lately stating that 2/3rds of the population can't come up with $1000 in an emergency.

Could it be that the 1% are skewing the averages?

Waitup says

Could it be that the 1% are skewing the averages?

I would say 30% skew the 70% big time

just any guy says

Strategist says

I'm pretty sure you could have purchased a home 4 years ago at a bargain price but did not.

False. We didn't live in San Diego 4 years ago. Because of not knowing where my job would have ended up, I never felt stable enough to buy a home. There were a few times I could've bought right when I moved somewhere, but I would've lost money because of having to pick up and move.

i would always do a rent vs buy analysis. if the rent covers all expenses, what is there to be afraid? if not, wait.

i personally believe Socal is in a small bubble. prices will eventually go down.

Renter economics is so much different than home owners economics, especially now when people have to have the capability to own the debt.

For the most part, people rent because they can't afford to own a home. 20 years of doing this that is the data out take I have seen from people's financials.

Ironman says

Why?

Less than 5,000 people at best sample

To me you have to take a pool of at least 1,000,000 people then make it an age proper poll, ages 28-45 would be a good age group and make it either primary wage earner or family.

A high school drop out age 28-45 could fit that model easily

Anyone with education or a trade show skill set it would be very hard to less than $1,000 in saving.

Some of these small samples would = that a home owner with 200K of equity is in that group

Also, I would take all liquid assets into the equation not just a saving account.

A lot things that are worthless about those polls

On another note

Top 3 years for light vehicle sales:
1) 2015 17.396 million
2) 2000 17.350
3) 2001 17.122

2016 looks like to be all time record in car sales

At this point, only the Chinese fundamentals matter...and they are awful. It is a textbook bubble economy. Even after a recent correction the Shanghai real estate index is up 700 percent over past 15 years. A price per square foot increase of 100 percent over only the past six years. It's only a matter of time until a blood bath, and when it goes, there will be a rapid decrease in demand for residential real estate down under, over the pond, up yonder, and under your feet.

Multiply the impact of uncertainty in short-term real-estate based revenue streams by 500 percent to approximate the chaos in the derivatives markets. There is simply no fundamental justification for the Chinese Bubble phenomenon. You see it in luxury items as well. (there's a shorting stock tip for you)

Ironman says

upper 10% of income,

Even 10% top earning income, 98K for 30 year seems high, so I would imagine the top 3% screws the top 10% number a lot on a 3 year moving average

0.01% is much much higher than the 1%