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People are starting to quote Patrick's 10 reasons not to buy.


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2022 May 2, 11:56am   1,259 views  24 comments

by GNL   ➕follow (1)   💰tip   ignore  

Anyone read this site? The moderator/owner has been wrong for about 10 years now. Maybe he'll be right in year 11?

http://housingbubble.blog/?p=5875&source=patrick.net#comment-188909

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1   zzyzzx   2022 May 3, 8:20am  

From the site:
"From WMAR 2 on Maryland. “Talks of home ownership at the cost of a dollar was back on the table during a hearing at City Hall Tuesday. Baltimoreans and prospective property owners flooded City Hall with dreams of home ownership. Councilman Zeke Cohen told WMAR 2 News he’s concerned rehab of a vacant home would Baltimoreans underwater — owing more money than their new home would be worth. ‘In other words,’ said Cohen, ‘most of the stock that would be eligible to be a dollar home would require mass renovations. These are primarily shells in there surrounded by other vacants. It would leave people upside down.'”

When construction materials and labor are extremely high, yeah it's not going to be economically viable to rehab these houses for sale. Most of them are rowhouses (called "townhouses" elsewhere) in bad neighborhoods with only on street parking. As long as the neighborhood sucks, nobody with any money is going to spend $$$ to live there. I would think that you would have to raze entire blocks and rebuild to provide modern infrastructure (like parking, and in some cases natural gas lines) and make the houses wider so that they can be better insulated.
2   joshuatrio   2022 May 3, 9:17am  

WineHorror1 says
Anyone read this site? The moderator/owner has been wrong for about 10 years now. Maybe he'll be right in year 11?

http://housingbubble.blog/?p=5875&source=patrick.net#comment-188909


That's actually a good site. The owner/author of it called the last peak, and he purchased himself in AZ around 2012 ish and called bottom pretty accurately.

Seems he thinks RE has peaked again, and by all indicators, it has.
3   porkchopXpress   2022 May 3, 9:18am  

WineHorror1 says
Anyone read this site? The moderator/owner has been wrong for about 10 years now. Maybe he'll be right in year 11?

http://housingbubble.blog/?p=5875&source=patrick.net#comment-188909
I've been reading that blog for years since the Great Recession.
4   GNL   2022 May 3, 10:48am  

joshuatrio says

WineHorror1 says
Anyone read this site? The moderator/owner has been wrong for about 10 years now. Maybe he'll be right in year 11?

http://housingbubble.blog/?p=5875&source=patrick.net#comment-188909


That's actually a good site. The owner/author of it called the last peak, and he purchased himself in AZ around 2012 ish and called bottom pretty accurately.

Seems he thinks RE has peaked again, and by all indicators, it has.

He's been saying it for 10 years. I even challenged him and he kicked me off the blog. That aught to tell you something. Challenge his belief system and he kicks you off. I don't doubt we are close to a peak but, he's been saying for years. How the hell is that accurate?
5   Patrick   2022 May 3, 11:01am  

I remember that site. Seems like a good guy. I thanked him for quoting me.

https://patrick.net/post/1282720/2015-07-11-ten-reasons-it-s-a-terrible-time-to-buy-an-expensive-house
6   Bitcoin   2022 May 3, 11:27am  

Patrick says

I remember that site. Seems like a good guy. I thanked him for quoting me.

https://patrick.net/post/1282720/2015-07-11-ten-reasons-it-s-a-terrible-time-to-buy-an-expensive-house


I dont think I have met anyone in my life who told me, oh gosh we really regret buying a home.

What I have come across twice in my life were people who thought they can outsmart the market. They sold and hope for lower prices. years later they are miserable because now they cant afford to buy the same house they sold years ago.

I also know people that did not purchase 8 years ago because they were telling me of the upcoming crash. Well I have heard them tell me about the upcoming crash every year since then.

bottom line. buy a freakin house or rent forever and make landlords like me rich.
7   Patrick   2022 May 3, 11:29am  

Bitcoin says
I dont think I have met anyone in my life who told me, oh gosh we really regret buying a home.


You don't live in the Bay Area, I assume.

I have indeed met people who pretty much ruined their lives by vastly overpaying for a house.
8   Bitcoin   2022 May 3, 11:43am  

Patrick says
Bitcoin says
I dont think I have met anyone in my life who told me, oh gosh we really regret buying a home.


You don't live in the Bay Area, I assume.

I have indeed met people who pretty much ruined their lives by vastly overpaying for a house.


Correct, I live in SoCal.

In the Bay Area house prices have gone through the roof. Overpaying for a house in the Bay Area still means you can sell the house for a huge profit a couple years later, no?
9   Patrick   2022 May 3, 11:51am  

Bitcoin says
Overpaying for a house in the Bay Area still means you can sell the house for a huge profit a couple years later, no?


No.

I personally know a couple that overpaid in Palo Alto, went bankrupt, and had to sell at a loss.

Remember that you're instantly 6% underwater from the moment you buy, because realtors.
10   Bitcoin   2022 May 3, 11:52am  

DooDahMan says
People are fucking stupid all over the country and buy what they are "qualified to borrow" instead of what they actually need and or can afford to maintain, heat/cool and otherwise take care of comfortably.


Right, but....why would they regret buying? every month their equity has gone up. a few years later they have 100's of thousands of equity. Great reward for being stupid I say. If they cant afford the payment, they just sell and walk away with 100's of thousands of tax free money (assuming they lived there 2 years).
11   GNL   2022 May 3, 1:55pm  

Patrick says

I remember that site. Seems like a good guy. I thanked him for quoting me.

https://patrick.net/post/1282720/2015-07-11-ten-reasons-it-s-a-terrible-time-to-buy-an-expensive-house

This guy is a terrible blogger though. He doesn't allow open discussion. Very quick to ban people. All I said to him is my area doesn't in any way reflect his advice and that I was going to post debativley (new word alert). He blocked me immediately
12   porkchopXpress   2022 May 3, 2:06pm  

Patrick says

Bitcoin says
I dont think I have met anyone in my life who told me, oh gosh we really regret buying a home.


You don't live in the Bay Area, I assume.

I have indeed met people who pretty much ruined their lives by vastly overpaying for a house.
Agreed. I know many people who lost their shirts buying homes right before the Great Recession. My parents almost foreclosed on the house they bought in 1990 when they had to move in 1993. Some people just live with blinders on or are too young to know tough times.
13   Bitcoin   2022 May 3, 5:31pm  

porkchopexpress says
I know many people who lost their shirts buying homes right before the Great Recession.


Most People who foreclosed during the great recession shouldnt have bought in the first place. If you could fog a mirror you were given a loan in 2005-2007.

Today is different, people who buy can afford the house and if something changes in their lifes and they stop making money they can sell with a large profit.

In a bull market people dont regret buying a home. In a market where you are underwater and prices decline for years, people regret that purchase.

Being annoyed at your HOA or neighbor or with unexpected repairs doesnt mean buying a house was a mistake. As if renting and having ever increasing rents is somehow smarter. On top of that you get wealthier just by waking up in the morning (skyrocketing prices).
14   porkchopXpress   2022 May 3, 5:40pm  

I disagree. The people I know were prime borrowers, not just a person with a pulse. A big misconception about the Great Recession is that it was primarily ninja loans that failed. The ninja loans were the catalyst, but most of the loan value that defaulted were prime loans. People act like prime are impervious...it's BS
15   WookieMan   2022 May 3, 5:58pm  

Patrick says
I personally know a couple that overpaid in Palo Alto, went bankrupt, and had to sell at a loss.

Primary residence? You can BK and keep the house 90% of the time unless it was mortgage fraud or a 2nd home/vacation home. Homes/Roths/401k's are all protected assets. If you BK and can still afford the house, almost nobody besides the bank can take it from you besides the government.

Debt is a business transaction. They loaned you the money knowing you might not pay it back. That's the risk THEY took. Never ever sell your house in BK because if you can at least make that payment, keep doing it. Dump all the other payments if you've racked up CC debt or bought a boat. I learned this during the bubble and also my dad did BK fillings for clients. Everyone gets freaked out about missing a payment. Every successful person has 100% defaulted on something. Creditors have brainwashed and stigmatized not paying your debt.

If I loan $5k to my sister and she doesn't pay, that's on me. Either you didn't do due diligence or didn't set up the right structure for repayment. Expect money to not be repaid when you loan it out. My SIL borrowed $50k on margin from my MIL's stocks to finish a kitchen. Kitchen ain't done, she hasn't paid the interest and the money is all gone. The money wasn't for the kitchen. It was for fun.... Hence the reason CC rates are insane. Although they may come down with inflation as people borrow less. Not that you should ever pay interest on a CC anyway.
16   Bitcoin   2022 May 3, 6:06pm  

porkchopexpress says
but most of the loan value that defaulted were prime loans


you had nowhere near the regulations back then compared to now. I closed this year on my investment property in AZ. Every penny gets sourced and you have to have 6 months of reserves. The prime loan in 2005-2006 was not what it is today and ARM's was a big thing which it isnt today.

We keep talking about the great recession. the market today is nothing like it was back then. People have great recession PTSD and they think that housing is just a continuous cycle of boom and bust. You might see something like the RE crash in 2008 only ones in your lifetime....
17   mell   2022 May 3, 6:12pm  

Bitcoin says

porkchopexpress says
but most of the loan value that defaulted were prime loans


you had nowhere near the regulations back then compared to now. I closed this year on my investment property in AZ. Every penny gets sourced and you have to have 6 months of reserves. The prime loan in 2005-2006 was not what it is today and ARM's was a big thing which it isnt today.

We keep talking about the great recession. the market today is nothing like it was back then. People have great recession PTSD and they think that housing is just a continuous cycle of boom and bust. You might see something like the RE crash in 2008 only ones in your lifetime....


Agreed, the sourcing of the funds is pretty thorough. The only way you'd see a crash would be mass layoffs and a severe recession when people simply lose the ability to pay. We're far from it, we may be entering a slow recession that may drag on for a while, but it's nothing compared to the dot com bust or 2008. As long as people can service their mortgages there will be no crash, this year there won't even be a decline.as house prices are still projected for 5-10% gains, pretty much tracking inflation. Sure if you're looking to buy and can afford to wait it may be fine to take it slow, but you won't see steep discounts if any. In our area most houses still sell before hitting the market or within the fridge 2 showings, either right at the ask or significantly above. No discounts.
18   clambo   2022 May 3, 7:18pm  

House ownership is a strong natural desire, and is hard to resist.
So, it will be popular.
I’m very glad that I grew up in one. I think it’s good for children to experience the feeling of stability of the knowledge that they don’t have a landlord.
Today at the doctor as I was making a future appointment I told the girl and her coworker that I would be away for months and living in a little house in Baja California Sur Mexico.
I showed it to them and both said “awww, I want it!”
It’s actually very small, but it’s like showing a baby picture to a female, it causes a reaction.
I don’t believe there will be a “crash” of real estate like in 2008, for several reasons.
I don’t know how it will continue to rise, the places are less and less affordable in popular areas.
My friends who are owners are generally glad, until something happens like a forest fire burns it down, a neighbor parks an RV nearby and illegally rents it out, homeless invaders come in the yard at night, etc.
19   Al_Sharpton_for_President   2022 May 3, 7:29pm  

It is difficult to get a man to understand something when his belief in his home equity depends upon his not understanding it.
20   Bitcoin   2022 May 3, 7:45pm  

Al_Sharpton_for_President says
when his belief in his home equity depends upon his not understanding it.


believe is one thing, facts and an enormous equity gain is another :)

Well, maybe you want me to believe the equity gain is not real if I dont sell?

here is an example for ya: neighbors of mine refinanced when rates were low. Their monthly mortgage increase was barely anything. But they got a bitchin backyard and nice pool. lower rates + pushing out the loan = almost like stealing 100 grand and getting away with it
21   Patrick   2022 May 3, 7:51pm  

WookieMan says
Primary residence? You can BK and keep the house 90% of the time unless it was mortgage fraud or a 2nd home/vacation home.


Yes, it was a primary residence, but they just could not afford the gigantic mortgage. I don't know the details, only that they are a lot poorer for having bought the house.
22   mell   2022 May 3, 7:51pm  

Al_Sharpton_for_President says

It is difficult to get a man to understand something when his belief in his home equity depends upon his not understanding it.


Yeah but if you have gone throughout approval lately you'd know that it's a pretty brutal grilling. No liar loans, every part of the funds needs to be sourced and most can't be loans
23   Bitcoin   2022 May 3, 8:00pm  

clambo says
My friends who are owners are generally glad, until something happens like a forest fire burns it down, a neighbor parks an RV nearby and illegally rents it out, homeless invaders come in the yard at night, etc.


of course they are.....waking up and being richer just by owning a house during this bull market is fun!

In most HOA communities the above wont happen. However, If you live in a rural area, you might get neighbors that rent out their backyard (ADU/RV/Whatever). But you chose a rural area to have less oversight for a reason....so....
24   GNL   2022 May 5, 9:13am  

Sorry if I sound like a baby but, this site allows a total bullshit comment like this...http://housingbubble.blog/?p=5884&source=patrick.net#comment-189230

But, I (who knows a couple hundred realtors in this area and I live in Mclean Va. which is right next to Vienna) get blocked from posting. You simply cannot believe people who shut down discourse.

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