Ah, nothing like selling at the peak, walking away from a now-depreciating over-priced asset, and renting for pennies on the dollars compared to the cost of ownership.
Every day, that housing loot is out earning money. And for many of us, nice secure 5% savings accounts, Gold, Oil Stocks and International Funds.
Ah, the good life.
Remember what it was like to have debt? Remember what it was like to have a credit card bill? Remember what it was like to have housing bubble stress?
Ah, it doesn't get any better than this... Join us if you haven't already
April 14, 2006
HP'ers who have sold their home (at the peak) and are now renting - tell your story and inspire others
Subscribe to:
Post Comments (Atom)
44 comments:
I dumped a POS in Bakersfield on the way up (not the top). I have saved thousands in payments, taxes, up keep, travel to and from LA for maintinance. Plus I have benefited from being in LA for business I would have missed! I have ben in this for a lond time. In the decline it can take years to sell a property at loss.
phoenix on Zip: 42561
I sold a mobile in Bullhead City that I bought from a friend’s estate. Man did I hate going out there to check on it. Once I caught my neighbor with a cord hooked up to my power and a hose to my water. Frankly, I do not care if it goes up. When its 110 in the shade 9 months out of the year it has no appeal to me.
A Flipper bought my place in CA for nearly 3X what I paid 8 years earlier. I owed very little on it, so it could be said that I made out OK. My plan was to buy in AZ but I know better than to buy during a peak bubble market that’s 40% overvalued. Being a renter for the first time in many years is a drag but I don’t miss the taxes, insurance, upkeep etc. I take comfort in knowing that home prices will come crashing down within the next 6 to 18 months. This may sound mean! but I am under no obligation to feel sorry for a bunch of greedy economically challenged flippers. I did not create the coming economic crises and have done nothing to contribute to it. It truly is a good feeling to know that I can move to so many states, pay cash for a home and not have to live in a state of financial servitude.
My rent is $1100.00 on a street in LA that has million dollar condos.
My rent in LA is 2000 per month and I live in a $1 million condo on the beach with full view. The tiny 1200 sq ft 2bd 1bth houses built in the 40's are asking 850K to 900K, they rent for 2100. LA is one of the capitals of negative cash flow.
Colleague of mine just sold his home for a great sum. He and the buyer actually came to an agreement during the summer, however they both decided to wait in order for the listing agents contract to run out. They proceeded with the sale as an FSBO.
The buyer put down less than 5% and stacked two interest only mortgages to purchase.
He is currently renting the house from the new owner until Summer. His rent is less than the new buyers mortgage and property tax payments. Property taxes on the house are approximately $9,500.
He has currently been lowballing any home he has interest in, a good strategy given his position. His offers always have 48 hour contingencies on them, a nice touch.
He says he'll continue to rent if he doesn't find a house before his short term lease is up. No problem for him, interest on his profits just about cover his rent.
Caveat Emptor!
Grim
Northern NJ Real Estate Bubble
Lots of flippers in the Bullhead area and they are in a total state of denial. That place runs about 6-8 months behind CA so the crash is just around the corner for them.
Bullhead is a sweaty armpit with bugs on a hot summer day.
I know Californians that cashed out during the peak and bought homes in the Bullhead Area. Many of them bought during the AZ peak and they are totally miserable here with the heat and property taxes. Most homes in Bullhead and the surrounding areas are bought by Californians.
If you were once a homeowner and now rent, you now feel like a sap everytime you pay rent and can only justify your move by telling yourself if you bought this rental you would be paying thousands more. The reality is that your 800K rental is actually only worth 400K so you're still a sap for paying rent. Especially since your landlord only payed 250K for it.
The pride and freedom of homeownership cannot be denied and the real winners are the ones who sold in bubble areas and bought in non-bubble areas and the ones who don't care about bubbles and refinanced a fixed rate when interest was at the bottom and didn't use their house as an ATM.
joey, your numbers don't add up. A *far* majority of the examples on Bubble Boards show that renting is significantly cheaper than the PITI on a typical mortgage that folks are getting these days, even in L.A. This is changing quickly, though, in many areas as more people are beginning to rent again. Your mileage may vary.....
If you were once a homeowner and now rent, you now feel like a sap everytime you pay rent and can only justify your move by telling yourself if you bought this rental you would be paying thousands more. The reality is that your 800K rental is actually only worth 400K so you're still a sap for paying rent. Especially since your landlord only payed 250K for it.
The pride and freedom of homeownership cannot be denied and the real winners are the ones who sold in bubble areas and bought in non-bubble areas and the ones who don't care about bubbles and refinanced a fixed rate when interest was at the bottom and didn't use their house as an ATM.
First off, pride is a deadly sin for a reason and secondly freedom is not being a slave to a mortgage that is atached to an overvalued house. Enjoy your bondage while the investor bails out and leaves you with the bill. Take care slave, I can take my fat wallet anywhere I want at any time.
You have some obvious realtor trolls here.
"Keith, I guess you have not seen rent in LA. My mortage is $1500/month. To rent the same place would cost $3000/month"
In my part of LA where zillow.com prices houses at over $1M, they rent for $2400. Of course the zillow price is too high and many have been sitting on the market for months priced at $850-950K.
"pride of ownership"
Consumers' ownership of a $600K mortgage on an illiquid $525K asset provides the owner (the mortgage bank) with a great deal of pride everytime they receive their monthly check!
LA county has added thousands of large multi unit apartment buildings in this expansion. It will be a while before demand catches up with supply.
Renting is throwing money away! Home prices can only go up! You know they are not making anymore land. You better buy while you still can before prices go up!
KTels Greatest Hits. I still see and hear this rubbish, when will people (I mean sheeple) ever learn.
bought a 750sq ft condo in a nice part of LA 2001, sold last Oct for 250k profit. Now renting for half of what the new owner is paying for mortgate+hoa+taxes, for a slightly bigger place (900sq ft). Most of the cash is in CDs making about 1K/mo in interest, (almost paying the rent). I love Greenspan, hopefully Ben keeps it up. I'll buy again when prices are about half of what they are now out here
You load sixteen tons, and what do you get?
another day older and deeper in debt
St. Peter, don't you call me, 'cause I can't go
I owe my soul to the company store
Please continue to tell people they should rent instead of own. Please, please, please.
Keep up the good work.
People continue to rent until the flippers and realters hurt so bad that prices get cut in half. We are looking at 6-18 months for results, then you may buy.
I sold a condo in VA/DC area last March, for 4 times what I paid for it. Moved to cheap ABQ, bought a similar condo for $40k cash, and still have lots of money left to buy 40 acres and build a house on it...for cash, no mortgage. Until that time, it is earning interest for me. I thank whatever it was that made me decide to buy when I did, and that I was smart enough to follow my instincts ("this can NOT go on forever!") a year ago and sell.
I don't know about that one comment that it's cheaper to own.
I sold and now in Manhattan Beach among places that range up to 10 million dollars plus. My place is not one of those ridiculous pads, but is plenty nice, especially for a relatively short term place. My rent $1050, one block from the beach.
I hope you guys made out like bandits and have enough cheddar to pay rent for many moons. Home appreciation is still on its way up here in some parts of SoCal. This might not be the end of it.
Bottom line is everyone here wants to be a first time home owner or a repeat homeowner (those that cashed and waitng for bust)some day. So if I have a nice homenow I like, my wife is happy, kids have space and stability, the interest is below 6 and on a 30, payment is low..why the hell would i want to sell and rent? Now if I was single....thats another story
I sold my house in the Phoenix suburbs in Fall '05 for well over double what I paid 3 years earlier. The buyer was a speculator from California.
I am renting a larger house five minutes away for a reasonable sum, and watching prices decline for my old model and many others.
It was obvious that the 5% monthly price increases of '05 were unsustainable. With the ever-increasing Phoenix area inventory, it looks like the reversal may be just as stark as the build-up after it all plays out.
I inherited a real dump in Baltimore (I live out of state) from a distant relative: elderly aunt. An abandoned vacant row home converted into two apartments. Apprased value at estate settlement in 2000 was $32000, had offers from local realtors at the time for low 20's due to deplorable condition:abandoned,pipes burst,vandalized,roof leaked,doors and windows smashed,etc. Just left it sit due to distance. Then property taxes started to rise. City hellhole was costing more than my nice country home.What was going on here? Didn't know about the bubble then. Listed in Dec 04 for anything I could get,no opening price,went into a bidding war ,sold in Jan 05 for $130,000. Almost had a stroke! I would have been happy with $25000.
Still living out in the country,out of state, wondering what that damned fool was thinking when he chained that anchor around his waist and jumped in the deep end of the pool!
Everything is not honkey dorey in rental land. Rents in Snottsdale (Scottsdale, AZ) have gone up 50% in the last 2 years thanks to all the people from CA, NY and Chicago. I hope this summer it gets to 150 degrees to burn up all the carpetbaggers who can't stand the heat. May I strike the match?
i'm not seeing prices decreasing in socal, seattle, hawaii, utah, austin, oregon and these are the areas i'm familiar with. Keep hoping and maybe in 10 years you can by in because renting sucks. Renting when you have no kids is ok but married and kids renting has no future. I'm from socal and renting in maui after selling 2 houses in socal over the past 3 years and own 3 rentals in utah. Would love to live in socal but the prices and mexicans and arab have taken over and socal will never be the same for the middle class. The rich can avoid the public schools, parks, hospitals etc and live behind their gated communities. I make a 100,000 a year in socal but kids would have to go to public school and avoid 50% of what use to be great places in socal. So after screwing around in maui for a year i will probably move to utah, or bainbridge island wa, if i were single there is no better place then socal and i've been alot of places. The coast of cali is the best. I spend alot of days on maui in the most spectacular beaches surfing, canoeing(single man,try it) but being from cali the coast there i love such as avila bay, malibu, half moon bay etc but who can afford it without giving up all your freedom working 60plus hour weeks to live there. Thats my whine. viva LA.
In 2002 (I know I should have waited but I saw the writing on the wall and didn't want to miss my window of opportunity), I sold a 1-BR condo near the beach in La Jolla for $275,000 that I bought in 1995 for $104,000 during the last real estate crash. I cleared $150,000 and made a low LTV 1st TD loan to someone at 10%. The interest I got was slightly more than it cost to rent the same condo I sold and had mortgage payments on. Do you people understand the significance of this?
The return I got from investing the "excess" equity in my former residence more than covered the rent to live there. Before the sale I paid about $1,000 a month out of my salary to cover PITI & HOA and after the sale, I didn't have to use ANY of my salary for housing expense.
THAT'S WHEN YOU KNOW HOUSING IS WAY OVER INFLATED.
I went from PAYING $1,000 per month to own and live in this condo to GETTING $1,000 a month to live there.
THAT's WHAT I'M TALKING ABOUT!!!
Why would housing prices go down in Austin when it never went up other than at the rate of inflation
Reading this board, I realy feel like a weirdo...
I bought a $200K house in 2002 in the midwest, nice home 6 years old, 3100 sq. ft, 9 foot celings, finished 8' basement all set on 5 acres within a 10 minute drive to a major metro area.
Over the past 3 years I have spent apx $25K at Home Depot to change the cosmetics the way I like it.
I made this house an expression of myself and its become my comfort zone. I'm in my 40's and can't ever see myself ever leaving.
What's the current value? Who cares... I have spent $225K+ for my domicile. Interest Rate.. Got a 4% 5-1 ARM and put 20% down so I didn't have to pay that blood sucking PMI. Then I busted my ass 7 days a week, to get rid of this debt-monkey off my back... Paid this sucker off last summer.
Why post this here? Because I think you folks need a goal.
That goal should be to get a shelter that you like and can afford; finance it if you have to and then dump all your disposable income on the mortgage to get rid of it as fast as possible.
Its amazing what happens when you get mad, I mean real mad at the fact that you have to bust your ass to pay back a damn loan with interest to the leach bankers.
You will get so mad that you don't care about driving a fancy car or impressing the neighbors. All you want to do is to deny those evil banker as much profit as possible... and the only way to do that is to get and stay 100% debt free!!!
And yea, you need to own your own piece of land free and clear with something on it to provide for your need for shelter... otherwise you are still a slave to the market and bankers via your rent paid to others still finds its way through thier mortgage pmts back to those pesky bankers.
BEING MAD AS HELL AT THE BANKERS, HAS LIFTED MY FAMILY INTO THE UPPER-MIDDLE CLASS FROM THE LOWER-MIDDLE CLASS IN LESS THAN 5 YEARS... JUST IMAGINE WHAT IT CAN DO FOR YOU!!!!
CHEERS :)
The problem is today most people are going with an Interest Only loan, many are no docs, many are arms, these people cant afford them. They are driving a huge SUV and have massive credit card debt. People are not seeing housing for what it is, a roof over your head, nothing more, they are seeing it as a get rich scheme. They will never get out of debt the way that you have, in fact, when their ARM adjusts, their home price goes down 50%, and gas is at 5.00 per gallon, they will be bankrupt.
Anonymous said...
Reading this board, I really feel like a weirdo...
I bought a $200K house in 2002 in the Midwest, nice home 6 years old, 3100 sq. ft, 9 foot ceilings,
BRAVO! I APLAUD YOU! THIS IS AS CLOSE AS WE CAN GET TO FREEDOM! THIS IS WHAT I HAVE DONE ALSO! I HATE BANKERS AND REALTORS> THEY SHOULD BE REQUIRED TO TAKE A HIPOCRATIC OATH TO HANDLE PEOPLES WELL BEING
>>>Rents in Snottsdale (Scottsdale, AZ) have gone up 50% in the last 2 years thanks to all the people from CA, NY and Chicago.
Places with market rents of $1500/month in April '04 are now leased for $2250/month. I don't think so.
While average Scottsdale rents would naturally be higher than say, average Peoria rents, the trend is still stagnant or dropping. Scottsdale has plenty of vacant house rentals offered by "investors." My NW Valley rental is 15% less than it was leased for in previous years.
Rental rates may (but probably won't) inch up as more folks choose not to buy, but the speculative bubble created over the last 2 years worked to lower rents b/c of the increase in empty houses and their owners trying to offset their carrying costs.
Does anyone know of any asset class that right now is not inflationary? Except for
Burn-an-kee
Anon 8:07-
Not sure about the other places you listed, but prices in Seattle are definitely coming down. Almost NOTHING sells for original asking price (they all sell below asking).
Within a month of being on the market, the 50K price reductions begin.
That being said, it's still much cheaper to rent than buy here. Seattle RE has a long way to fall before cost of ownership makes sense again.
My apt. in Scottsdale went from 615 to 875 after conversion (Aventura at Shea and 94th St.) for the same old tired 15 year old dump. 875-615=260. 260/615=42.27%. I was off by 7.73%. Most other places have gone up 35-45%. Who moves into these absurdly-priced places? Plates from New York, Cali, etc. fill the parking lots. These rents are comparable to the East Bay ! At its best, this is a miserable situation.
Yes, Virginia, rents are out of whack in Scottsdale. The same is happening all over the area, if you can even find a vacancy! Whore landlords are really sucking the cash and our blood.
Do some research before assuming Peoria is the same as Scottsdale.
Sold my Paradise Valley AZ fixer-upper at the end of 2005 for two times what I paid for it 24 months earlier. Pocketed $575,000 after tax, now buying rental property to fill with bankrupt homeowners.
The Wall Street Journal has an article about the housing slowdown that says this about Santa Barbara: "Erik Eyman, a computer technician, couldn't snag a tenant for his three-bedroom ocean-view house, which he estimates is worth about $1.7 million, until he lowered the monthly rent to $2,900 from $3,500."
from http://online.wsj.com/ article_email/ SB114498084718125862-lMyQjAxMDE2NDE0NDkxODQwWj.html
So I don't know who said earlier he could rent his place in LA for which he had a $1500/mo mortgage for $3K, but that situation is clearly not typical in So Cal (and most likely realtor spin). Nothing has come CLOSE to such pos cash flow for at least three years in the parts of California that are not situated on a toxic waste dump.
In April there was an efficiency for rent in Northern VA for under 800 dollars a month in a high rise. Efficiencies were listed for 150-200K in realtor.com, with the 20% down, the condo fees, the taxes, it does not seem as good a deal. If you bought seven years ago with a fixed rate loan it is likely your mortgage is cheaper than rent. These days with mortgage rates in the 6-7% APR range for people with immaculate credit ratings the housing speculative craze is losing ground. They are not making anymore land, but population growth may be limited by a growing scarcity of cheap energy supplies, the conversion of surplus sugar and corn to ethanol, and Chinese auto sales up 25% in the first quarter of 2006.
Anonymous 4/14 said...
"Reading this board, I realy feel like a weirdo..."
You're not a wierdo. You're just lucky you found a place where you want to stay for a long, long time. I never liked No. VA; in fact, I hated it. I couldn't wait to leave. When I found out how much my condo was worth last year, I practically left skid marks getting out of there. I had no intention, when I bought the place, of making money. I was not a speculator. I just wanted a place of my own, where I could live without roomies or a live-in BF. I consider myself incredibly lucky that prices went up and I was able to use that to my advantage and get the hell out of NOVA!
I am hoping that I will like it in NM enough to stay for a long long time. I think I will, because I can afford to live the way I want to...which I could not do in VA in a gazillion years.
I have been following a site now for almost 2 years and I have found it to be both reliable and profitable. They post daily and their stock trades have been beating
the indexes easily.
Take a look at Wallstreetwinnersonline.com
RickJ
Hello Friend! I just came across your blog and wanted to
drop you a note telling you how impressed I was with
the information you have posted here.
Keep up the great work, you are providing a great resource on the Internet here!
If you have a moment, please make a visit to my at&t credit card site.
Good luck in your endeavors!
Hey Fellow, you have a top-notch blog here!
If you have a moment, please have a look at my avantas insurance universal life site.
Good luck!
Post a Comment