patrick.net

mike2 says

Not really. I have a nice amount in the stock mkt and it has only come back to where it was

5 years ago. Plus with stocks you have to put up the entire amount in cash usually.

With RE you can by on 5-20% down. If you bought a few years ago for $200k with 10% down. Your house may be woirht $350k-$400k or more in certain areas. SO your $20k investmwnt made you $150k-$200k. Of course like any investment you have to buy and sell at the right time.

I bought a few cheap rentals for $85k-$10k in the last few years now they have doubled plus returned $13-$1600 per month every month since then. I did WAY better than my stocks. For me there is no comparison.

Housing has not come back to where it was. And in my neck of the woods, housing never got all that cheap due to the government shenanigans. And don't tell me that you did better in housing buying at the bottom than one would have done in the stock market buying at the bottom.

Feels so good to be so right. As I predicted, my property increased in value in almost 1 year since I been there. What I didn't see was that it would go up over 28%. Two of my neighbors have their units up for sale, same square footage as mine. They have em listed for 75k and 80k. I bought mine for 43.5k cash (REO). Never thought I'd be able to ask 80k for it today. Wonder what it'll be worth in June. What about in 3 more years? Should I sell, rent it out, stay there til the price goes up to 150k and then sell? Comments from other people who killed it would be greatly appreciated. Thanks

As long as last bubble bust was easy to predict, current RE market situation is difficult to predict. I would not CRITIC anyone who did not purchase and would not PRIZE anyone who purchased. Every market and everyone’s personal and financial situation is different. For Las Vegas or Phoenix 10 houses can be same value as one or a few houses in BA, or 100 houses in Detroit. Combination of cash flow and appreciation can bring similar return on equity in every market if is purchased selectively and in right time. RE is great investment vehicle but only for people who fill comfortable with, others can success much better in other professional fields. Recent upturn in western states took everybody by surprise, including Roberto, who is now stressed-out b/s he doesn’t know if he should take chips from the table or keep renting-out.

robertoaribas says

Every possible conspiracy was used as a reason to ignore all of the data.

and yet the sales numbers per Robert Shiller prove.. prices over the long run only track inflation.

but why did people expect after 2000 appreciation of 20-30-40% year over year for the long term 20-30 years... not to mention home prices never go down, and certainly never went down from 1989 to 1995.

why did people ignore the existence of the housing bubble.. they still dont..

Robert Shiller - On Home Prices Always Going Up (7min)

https://www.youtube.com/watch?v=d__GPqOVNbE

robertoaribas says

1. Multiple offers on homes ( they are all lies)

2. Disappearing inventory. ( bank manipulation will end soon)

3. Job numbers improving for two years.( all manipulation and fake)

4. Drops in foreclosures. ( banks sitting on them)

5. Rising asking prices. ( data can't be trusted)

6. Price to rent ratio at levels favorable to buying. ( prices should be at 1935 levels or whatever)

1. no "best practices, regulations or full disclosure" to prevent price manipulation.
2. no requirement to list all for sale property
3 questionable since labor participation pool is shrinking. and certainly in Silicon Valley.. we are down by half of public tech and start up companies we saw. majority of our workers are outside of SFBA and the state.
4. yes expected
5. as in SFBA.. foolish buyers.. given 1-3 above.
6. as in SFBA.. no shortage of housing, just irrational pricing. and certainly when SV enjoyed a booming economy in 1970-2000 such irrational pricing didnt exist to the extent we have seen post 2000. and yes.. as shiller has provided, prices are usually flat.

robertoaribas says

If the last bubble was so easy to predict,

we had something called a 'mortgage crisis" are you aware of anyone in govt talking about a Pricing Bubble ... where home prices should go down back to normal.

"mortgage reduction program" wow! the public back in 1989-1991 would have gone ape shit at such an idea...

https://www.youtube.com/watch?feature=endscreen&NR=1&v=uZSlOifcEo4

https://www.youtube.com/watch?feature=endscreen&NR=1&v=uZSlOifcEo4

robertoaribas says

take over my threads

You're right, I apologize, this is your thread.

I got carried away, and gave you credibility by commenting here.

robertoaribas says

Yeah. Everybody did what I did: sell 4 investment homes before the crash, pocket 400k and wait till the bottom to invest it all... It was super common, sure thing.

I'll only respond to your nonsense on other people's posts.

BTW a lot of people sold in 2006, and 2007, and invested elsewhere for a more sure return.

robertoaribas says

"And don't tell me you did better in housing buying at the bottom, than you would have done in the stock market buying at the bottom."

Why shouldn't I tell you that? Because you prefer not to know? For example, I bought one home for 80k with 30% down... 24k. The mortgage with everything is 475 a month, it is rented for 925 a month.... The home would sell for 130k today...

So I make 400 a month on a 24k investment, and in just one year, I could net 60k if I sold....

So yeah, that is a f#%ing ton better than your stocks have done. Don't be a simpleton like David the lush...

I was busy buying WFM and Apple. Tell me you did better.

So thomas...What is your point? Accept the fact that right now in the current economy you are and have been wrong.All your
predictions for RE have been proven to be off base and incorrect.
It doesn't matter if jobs areless in SV or most jobs are out of state like you say. What matters is what RE is selling for and what buyers are willing to pay for it. Right now it is selling for a hell of a lot and buyers are jumping thru hoops to buy homes and overbidding almost everywhere.Move on with whatever you
want to invest in.

No, I was one of those saying to buy low- middle price properties and get a 15-20% return on your investment thru rent and/or fix the property hold and flip. I did both. Still doing it. I bought a property in Arough prt of Oakland 2 motnd ago for $86k. It was already rented for $1250.00 per month sec. 8. Renter wanted to stay so that is fine. That is about a 17% return on the cash investment. Never lost a days rent and have not had to do any repairs which if I did will be minor bc Sec 8 requires homes to be in decent condition before they allow them to be rented.
Home is currently worth app. $135k

Did you listen to Robert Schiller last week interview? I mean if he is an "expert" then we are all in trouble. After his rambling on about RE for 5 minutes at the end of his discussion he says ,"I really don't know" Real Esate could go up or it could go Down"? DUH.. Really. my 5 year old kid could have come to that conclusion. Schiller is wrong 1/2 the time just like Peter Schifft.
Even a closk is right twice a day.

Forget those "experts" just figure out where your market is locally and adjust to it. Don't over analyze.

robertoaribas says

He'll yes I did better... The rental income plus doubling of my investment beats apple like a dog over the past two years... How is apple doing these days?

Right, you ten times your investment. And apple will probably be doing better than the housing market going forward. But I sold apple at the high and bought google.

I Bought them for $80lk- $100k not $10k..my bad typo.
Yes, I do rent then for that an even more. Just bought one in Oakland for $86k rent it for $1250.00 The house came with the renter..did not lose 1 day rent. 17% return on my investment plus future appeciation. It is worth $135k right now. After 1-2 years I will sell it and take the gain before the next "crash".

If not I can still enjoy a 17% return on the cash investment.

Figures don't lie. Bit liars figure.

Who cares a damn about what the CAR or NAR says about starter homes etc.? WTF does that have to do with what we are talking about? We are talking about how good of an investment RE is currently and in the last 5 years since the crash VS all the Bears who were and are still living in denial and saying don't ever, ever ever buy RE! We are showing how wrong that is, was and currently is. If you are making tons of cash flow each month and your equity is increasing rapidly how can you argue the facts?

Quit being in denial and join the party. Parties don't last forever as we all know!

I have lived in the SFBA all my life 50 plus years. Sure there are ups and downs in any market and any economy but even in the worst of the Great Recession SF and the surrounding cities struggled but they did not implode or estruct. It created many opportunities for the wise folks that saw an opportunity and willing to take a risk. I did not expect it to rebound so quickly but it has and why not take advantage of it? Go back and look at rents and RE prices over th e last 40 years and what do you see? Especially in SF itself? An elderly family fiendof mine was given a 3 plex near the Filmore bc she was the housecleaner of a wealthy lady who had no family when she died so she left the property to her house cleaner in the early 1960's. It was worth around $30k back then. Today the lady is in her mid 90's and going to an old folks home and will be selling that property for around $1.3 M. At the very peak of the mkt in 2006 it was appraised at $.450m. SO it went down a little from the peak..what really matters is what it is currently worth and it went up over $1.1M since she received it.

Market is HOT!!

IF SFBA continues with job losses? Hell, that has been happening all my life but people keep coming here and buying and buying and buying!New jobs are created? Economies change! We adjust. More people in the Bay area than ever right now. If, If , IF! If a nuclear bomb is set to us from Korea we will all be damned! If my grandmother had balls she would be my Grandfather!

postbubblesucess says

What about in 3 more years? Should I sell, rent it out, stay there til the price goes up to 150k and then sell?

Why just 150K? Wait for 400 Billion for christs sake. Where is your good old American Greed? Did you not get the "Screw the next generation" hand-out in high school. You should ashamed for selling out at just a 4x multiple. The land/home owners are the chosen people. Everyone else must pay!

mike2 says

I have lived in the SFBA all my life 50 plus years.

Statistically, then, if you live another 50 you will experience a wallop of a city crash. Nothing destroys value faster than the ground shaking. ;) Be ready for it. We live on borrowed time in the SFBA.

mike2 says

It is worth $135k right now

It is worth what you can actually sell it for. Not what you think you can sell if for. In many ways these number are far different. Selling it is really the only way to know the number.

mike2 says

Who cares a damn about what the CAR or NAR says about starter homes etc.? WTF does that have to do with what we are talking about?

pnet is about individual consumers.. not investors. but frankly there is some things an investor might teach a consumer when buying a home. long term matix like price trends and affordabilty does make a difference.

as far as CAR/NAR ... bad data does lead to bad decisions.. that is why the FED has dropped using NAR data and switched to S&P case shiller index.

You are right on that.I know the market extremely well and I own other properties that I have recently sold withn a few blocks. The same floor plan across the street just sold for $133k and was not as updated. That was 2 months ago and mkt has increased 5% since then. I am not worried either way... I keep collecting the rent since I do not owe anything on the house. For the next 18 months I will continue to rent it. No one knows where the mkt will be in 2 years buty my guess is more of the same or at least a leveling off. We bottomed 18 months ago.

mike2 says

F SFBA continues with job losses? Hell, that has been happening all my life but people keep coming here and buying and buying and buying!New jobs are created?

we are down to people migrating out of state along with jobs... so the great inflow in CA is actually turned into the great outflow....

mike2 says

No one knows where the mkt will be in 2 years buty my guess is more of the same or at least a leveling off.

that is why you start to learn to use leading/trailing indicators not to mention expectations.. so you can do predictions.

To much thinking..to much over analyzing..Investors and individual owners have a common thread. All are effected by the ultimate cost. Don't over analyze. It is cheaper to buy a property already built than to build one from ground up. That should telly you something. A few years back there were lots of Individual contractors buying small fill in lots and building causing lots to escalate in value. Now that is not happening except for huge builders like K and B homes who buy acres of land at a time very cheap.I have noticed small iindividual lots increasing in price quickly in inner city areas indicating to me that "SOON" the small builder will be back trying to make a profit and some money. Why build when you can buy a property fo 50-70% of the cost of building it. Don't over analyze...It messes with Reality!

Been hearing that all my life now also. So now we have 38 Million people in Calif now instead of 37 million? There is not a great Exodus out of the state. Drive the freeways, go to the malls, go to the baseball games, go anywhere. Packed with people!

I know the indicators.. I can see it and I know what people say and you can see what they are doing. I have done this over 30 years and never lost any $$ selling or buying a property.

I have bought and sold over 75 homes myself.
Some I kept for rental cash flow.

If you listen to the "experts" they are usually 6 mos- 1 year behind the curve. They all contradict each other.Don't over analyze.

Not crying here.

All the crappy, defective, undesirable condos I could have bought the last 3 years are for rent on Westside Rentals ! And have been for the month I have been a member. Let's review:

1.) Undesirable location in the complex, i.e. looking at other condos closely or the first floor where people can walk past and look in.
2.) High HOA cost
3.) 1 car parking even for a 2 bedroom
4.) Plain or damaged enough even the lipstick applied makes no difference.

http://realtytimes.com/rtpages/20060818_worsenafford.htm

hings have changed since the California Association of Realtors (C.A.R.) first started producing their annual Housing Affordability Index in 1984. At that time, the index used was very different. Fixed-rate mortgages were the norm, along with 20 percent down payments, and it was assumed that the monthly payments for principal, interest, taxes and insurance would be no more than 30 percent of a household's income. Since then, mortgage products have expanded and underwriting criteria has relaxed, but affordability hasn't increased accordingly.

Explains Robert Kleinhenz, deputy chief economist for C.A.R., the index criteria has changed according to what's more normal today. First-time homebuyers no longer put 20 percent down on houses they can afford on 30 percent of their income. They no longer overwhelmingly choose fixed-rate mortgages.

Today, first-time homebuyers, as reflected by the Housing Affordability Index, buy 85 percent of the median price in the area. They put 10 percent down, the qualifying ratio is 40 percent, and they get adjustable-rate mortgages.

robertoaribas says

Thomas wrong, you have been 100% wrong on here forever. You spent the past three years predicting a housing collapse, that never happened.

Please, tell us what leading predictors you use, so I can use the opposite of them! You have unmitigated gall to say anything about housing, given your completely wrong track record,

You might want to check with that as i said.. it was a good time to buy in Miami...
certainly not in SFBA... so that makes me wrong... it certainly makes you look clueless if not a liar... care to try again...

Real Estate is LOCAL. Roberto’s experience in Maricopa County, Arizona is not necessarily repeatable in other areas. It is good to be a landlord in Arizona. It is a lot less good to be a landlord in California where a renter can get away without paying rent for 18 months.

‘Multiple Offers’ are now common in many areas of California. The reduction in inventory is causing ‘bubble like behavior’.

Bulk sales by the GSEs are happening in Ventura County, Riverside County, Sacramento County, and San Bernardino County. Prices asked have risen by 10% or more at the low end in just two months. But there are also cases where prices are dropping and investors are selling to buy elsewhere.

Inventory is low for many reasons besides foreclosures being held off of the market.

Cash buyers (like me) are losing bids to other cash buyers well over asking.

Asking prices in many areas are now just to bait the hook. At the higher end (400K+ in Socal and 800K+ in Norcal) homes can sell at a discount to asking. The first time buyer is finding California to be “unaffordable”.

Even at Phoenix’s recent price rise, California retirees will likely make Roberto rich.

fedwatcher says

Bulk sales by the GSEs are happening in Ventura County, Riverside County, Sacramento County, and San Bernardino County. Prices asked have risen by 10% or more at the low end in just two months.

Sounds like Bubble II is progressing much faster than Bubble I in CA. The general feeling in the public is already at 2006 frenzy levels, and we are only about a year in. This one is going to be SPECTACULAR. The last one was merely a practice run.

Roberto is lucky he got in when he did. If he can time things right, he can unload everything he bought at 2x what he paid, wait for the next crash and then buy twice as many rentals. Double that cash flow for NOTHING. Just keep an eye on those hedge funds though.....when the big players move, it's going to be swift and without warning.

I'll start out by saying I am a homeowner and bought last year. So theoretically I should be tickled as punch right? Not so fast. If anyone looks at the overall buying demographic, the market is missing a large factor, and that would be first time buyers. The market is being heavily controlled by investors, speculators, and large funds sopping up all the inventory, which then of course makes the leftovers seem precious and thus highly desired.

All its going to take is an exit of the investors ( which will eventually happen because shortly the numbers aren't going to work as well) and then we'll likely see either a decline or a normalization of the market.

So I'd avoid getting smug or cozy just yet.

edvard2 says

All its going to take is an exit of the investors

It could get interesting if the effects of the sequester start being felt this summer and investors pull back. Will there be enough demand from first time buyers at those prices? Or will the prices start to dip and cause a panic by all of those investors who just bought at inflated prices?

In theory another dip shouldn't cause an investor to lose the place (if their numbers made sense). But I think a lot of the newbie investors out there are starting to factor appreciation back into their calculations, which IMHO is a foolish move. For them.. It will end badly.

edvard2 says

So I'd avoid getting smug or cozy just yet.

Doesn't mean you can't be happy with your purchase though, especially as it sounds like it was for you and your family (as was mine back at the end of 2011). There is no real reason for house prices to shoot up and I'm sure things will settle down soon enough, but it also looks like they aren't going to drop down substantially either (and even more so from the prices paid back in 2011).
Monterey prices appear to have gone up a little in the last 18 months, but the number of sales is so minimal I don't really see much difference in the comparables even though the graphs show a pretty meaningful up tick. That's fine with me. I like the house. It's going to be mine for a long time. If its price tracks inflation, then that will be a bonus.

There was no housing bubble

There was a mortgage bubble

If there were a housing bubble, then houses would have been built at such surplus that they'd be giving them away now.

I laugh at these simple folk that generalize, and confuse terminology, to the point that they believe that its possible to have a housing bubble, immediatlly followed by a housing shortage. Ha!

Ha ha ha hahahahahaha

In order for something to be defined as a bubble, the elevating prices have to dupe the market into over producing whatever it is that is being bubbled, which is what brings on the crash. In its aftermath, there would be massive surplus of "housing". There doesn't seem to be any over there on the left coast.

What did bubble, is credit. Credit collaterized by the housing stock. The market became super saturated with this funny money, and that is what caused the bubble to form, and to burst. Mortgage debt is what we're left with in over supply. Not houses.

So get it straight, skippy. It was a motgage bubble,,,,not a housing bubble. If you can't take the facts, best stay out the kitchen.

Well if everyone agrees, they must be right!

sincerely, the dipstick whose boarders pay his mortgage, while he stays at his sugar mommas house for free, working 30 hours per week, and wouldn't be caught dead in a coffee shop. Jackass!

Lmao at conventional wisdum and low iq folk like roberta whom follow it

errc says

Lmao at conventional wisdum and low iq folk like roberta whom follow it

Whom is an object relative pronoun. Just saying.

Bigsby says

Doesn't mean you can't be happy with your purchase though, especially as it sounds like it was for you and your family (as was mine back at the end of 2011). There is no real reason for house prices to shoot up and I'm sure things will settle down soon enough, but it also looks like they aren't going to drop down substantially either (and even more so from the prices paid back in 2011).

Yes- it was a house to live in and whatever its value is of less concern. But if you live in California like I do ( Which I see you do) then you're also well aware of what happens when bubbles get out of control: It wrecks the economy and that in turn is bad for stability and bad for owners and renters alike. So while I 'am' happy we purchased, I am also more akin to like a situation where prices rise only modestly and the market is able to offer a stable entry point to first time homebuyers which in turn keeps the market healthy and predictable. As it is now, things are off the chart.