patrick.net

2. Daniel doesn’t really work at CSFB and actually makes about 45K a year cold calling insurance leads from a boiler room out on Long Island.

Not likely. But even better for them, after a few years though, Mrs Hyman could be making nearly $90k through teaching public school.

Oh yes, that's hard to believe, especially amongst Californians - but a lot of public schools out in Long Island pay unbelievably well.

eburbed,

Oh you're probably right and it was mean thing for me to say but it always grinds me when someone/couple is glowing (radioactive or not) about their new ridiculously overpriced POS. Kind of like all the happy people the BMW dealership snaps a picture of when the service dept. delivers their new payment, I mean car!

This is one of those polaroid moments and not in any way indicitive of what real people (or real marriages) are like as per SFWoman's post. It's a marathon, not a sprint. :)

Granted, Manhattan doesn’t have 99 Ranch or the Flint Center…

What about Fry's ? How could you forget that :-) (Honestly, I also consider Fry's to be BA's one major positive aspect.)

Hey ... nice graphics ... do I thank HARM as usual ?

Regarding the NYT article, I found it interesting that with all the analysis being done by the quants, there was seemingly no historical analysis. Lots of talk about looking at comps, but nothing about whether comps make sense in the first place. Hedge funds and I-banks supposedly hire the best and the brightest, but also the youngest, b/c you can't make really big bucks unless you pay no attention to history and are willing to risk ruin with OPM (and sometimes theirs).

I shouldn't read too much into it though. This was really more of a lifestyle article. I am sure the author had a story in mind ahead of time and sought out people who fit that profile.

“But the stock market can lose value.” — So can a home, believe it or not.

Yeah that's the tough one - my circle lost a lot of money in stocks. A lot.

On the other hand, they can go to zillow and see that their houses have doubled/tripled in value.

No amount of Excel is working. I show numbers, they're just "funny biased math".

My dad sort of kinda "gets it" from time to time when I point out the gaping rent/mortgage chasm - it's like there's a flicker of understanding - but inevitably the filament will immediately burn out and its back to "Rent is throwing away money."

Argh.

"it's like there's a flicker of understanding - but inevitably the filament will immediately burn out and it's back to"

That's been the most frustrating part about the HB. A great many people even today only give you half an ear b/c you're their friend, son etc. The only thing that will top that level will be when people you've been warning for years run up to you breathless b/c they just discovered the HB!

Oh yeah! :)

RE: very common fallacy

Common fallacies are good. Just see through them and exploit them.

Do you really want every person to be as intelligent as you? Do you really want fair competitions?

StuckInBA Says:

Hey … nice graphics … do I thank HARM as usual ?

Yes, and you're quite welcome!

What is financial analysis anyway? Who cares?

sleepless_near_seattle,

I thought the message of the article was:

Isn't it wonderful to be young, in love, well employed and (think) you have money/a future?

Also notice they are sitting on what appears to be a stack of fake hardwood flooring? So I guess at those prices you'll be installing your own pergraniteel?

I'd love to get an estimate on what percentage of that gotta gotta have it granite counter tops across America is buried under empty Top Ramen styrofoam cups, DiGiorno's pizza boxes and three months worth of unpaid bills.

Jon,

That's true, and funny. The consensus is that the RE market ran out of GF's at the end of summer 2005 (yet it took another YEAR) for sentiment to turn.

GC,

Affording a gym membership and actually using it are two different things. My point was that for all our slavish devotion to pergraniteel once people have moved in and actually started "using" their home they look totally different then when they bought them.

Why should any of us get obsessed with a counter top that's usually covered with "stuff"? Personally I couldn't live like that but look how many people do?

Cupertino has the Blue Pheasant, enough said. Be sure to go by on a Friday night around 9:00.

Report from NYC. House prices are dropping fast as flippers just want to get out.
Fixing up a house or doing any home improvements is so much better when you find the right contractor. These guys did a great job and were always looking to save us money.

www.123source.com

Hmm, is that a Housing Bear Bubble Bot?

SP -

The Blue Pheasant bar is uh, an "interesting" place. There are a lot of older men there and women "pursuing" them. Most (but not all) of the women are older and Asian, many dressed in clothes that are way too young for them. I'm guessing that the men have some money, or at least these women think that they do. My friends (we're all in our thirties) joked about going there, I didn't get it, we went, it freaked me out.

lunarpark,

How much "older" are the women? Are we talking Wendi Deng Murdoch wannabes or Empress Cixis in waiting?

Empress Cixis in waiting

Huh? Ewwww

Sorry, I was having troubling thinking of an older Asian lady stereotype...maybe the friend's mother in Eat Drink Man Woman???

astrid,

I think many of these women were pushing 50. But it's hard to tell with the botox and make-up, etc. I'm a poor judge of age really.

The men who wore suits got most of the attention. It was a fascinating spectacle.

astrid, don't worry...

I also associate Cixis with exotic imperial food.

Peter P,

BTW, you shouldn't mock Empress Cixi too much, she was a major patroness of the culinary arts.

Peter P,

It's funny that we ended up making so many food related connections to the Blue Pheasant. I think something about older Asian Woman automatically leads to thoughts about food.

I think something about older Asian Woman automatically leads to thoughts about food.

Perhaps.

Well, Blue Pheasant is a restaurant, right?

Alexander's Steakhouse in Vallco is pretty good though.

There were older people dry-humping on the dance floor. AGH, my eyes! At least I had a lot to drink that night so there are parts I do not remember...

Ah... the "Hey Buyer, F-ck You" house of Campbell.

They've already dropped the price once before:

http://www.burbed.com/2006/09/08/31-price-drop-seriously-check-out-this-campbell-house/

Used to be $800,000.

Frist mortgage interests are dedcutible.

But you cannot get deductions beyond your AMT rate (which is probably lower than marginal rate), right?

Not tax advice

ExNorCalBoomer,

My friend in WI built a house in a non bubble market and also has that low 15 year fixed rate. That decission was all about having a house for his family and wanting to own it outright as soon as possible. It's like my wife said this evening, "remember when buying a house was about having a nice place to live long term and not about how much you'll make in the next year or two?"

Peter P,

I remember we were getting caught in the AMT when we owned the house. I believe it phased out the mortgage interest deduction and it was one more reason for us to sell in '05.

Paul

I should add that the AMT issue came up in some years and not others since 2000. There were two reasons for this. One was our wildly fluctuating income and the other was the always changing tax code.

Paul/ExNorCalBoomer,

More and more I find myself being a lot more impressed with a home that's paid off (or on a path that's toward being paid off) than all the pergraniteel in Orange County!

We did a thread sometime back on mortgage acceleration programs and platforms and I must say I was a little bummed it wasn't better rec'd? If no one else is patting you on the back, at least I am.

ExNorCalBoomer ...

That's awesome. I also want to buy with a 15 year FRM (10 year would be even better). I will wait till I can.

What's a typical home insurance for a $500k townhouse in Sunnyvale?

I'm trying to calculate something.

Is $1000 a year in the right ballpark?

"Scary Sign for Home Buyers"

http://sfgate.com/cgi-bin/article.cgi?f=/c/a/2007/02/07/BUGV8NVQNO1.DTL

We didn't blow it, the FB's did. There is no opportunity for the long term investor when you are buying into a bubble. Cheap money appeared to make housing cheaper for many financial illiterate people, but was in reality making it much more expensive.

There was an opportunity for people who bought before the bubble, to refinance into a shorter term fixed rate and many have done just that.

Our opportunity is on its way,but will only be an opportunity if we do not choose to buy too soon.

I know that there are many young people who still do not know we were in a bubble; let alone know what a bubble is. Especially where I live (Long Island N.Y.); we have only one newspaper (Newsday) and one cable news station (NEWS12) that do not report the facts about what is happening.
They will have you believe everything is fine when it obviously is not. As an example, if you read this NYPost article, you can see that foreclosures are exploding here, this was also reported on FOX news; it was not, however reported in Newsday or on NEWS12 which sadly enough is where many people here get their news from. Inventories are already very high here,but the local media does not report any of this.

Some young newlyweds here have been looking for a house for six or more months and the instant they start seeing prices fall, they think they will not find a better deal, so they buy it. This is a real shame; these couples are starting their lives 100 yards before the starting line and do not have the slightest clue!

It is a good thing though how we are seeing alot more for sale signs, but I have noticed that many who are selling do not have a sign in front of their house. The realtors are behind all this; I think they also have a certain rule amoung themselves to not show a buyer too many houses; thus causing the buyer believe that there is a lack of inventory.

Peter P,

But you cannot get deductions beyond your AMT rate (which is probably lower than marginal rate), right?

As I understand it, since deductible mortgage interest is not an AMT preference item, it isn't counted toward your AMT taxable income, unlike state taxes & misc deductions. So it should lower your overall AMT (there is a limit to the amount you can deduct here).

Also, for most of us mere mortals "caught" in AMT, the AMT rate is often, but not always, lower than your marginal rate. But for those AMT was originally intended to catch, their marginal rate can be extremely low. I've even seen someone with top 1% level AGI but negative regular taxable income....

NTA, check with a competent CPA.

As I understand it, since deductible mortgage interest is not an AMT preference item, it isn’t counted toward your AMT taxable income, unlike state taxes & misc deductions. So it should lower your overall AMT (there is a limit to the amount you can deduct here).

I see. Thanks for the information.

NTA, check with a competent CPA.

Definitely. Trust only a professional.

"The typical first-time buyer had a median age of 35, earned an annual household income of $80,000, and purchased a home with a historically high median price of $450,000."

OK, so now almost 6x income is considered the norm for a person buying their first house? I don't care if their introductory interest rates are low. As a young couple my husband and I made sure we were below 3x, so we could have a life and save for things we wanted to do in the future, retirement, a cushion for when we had kids, etc. This is nuts. These people are slaves to their houses.

http://www.car.org/index.php?id=MzcwNzU

There are some hidden gotchas regarding AMT and qualified home mortgage interest deductions. We got bit one year a few years back. I know they changed some stuff in 2005, so maybe the muzzled the bullshit that we got nailed by. It was all some pro rata basis over the life of the loan because of a refinance in which we substantially paid down the principal crap. Somehow that ended up reversing enough of the mortgage interest deduction that I distinctly recall being extremely pissed off, knowing that others were finagling full deductibility on 2 or even 3 homes while most likely earning higher incomes.

AMT is uniquely evil, which is quite an accomplishment in the world of generally evil income taxes.