December 20, 2006

HousingPanic Stupid Question of the Day

Let's Play Lowball:

If a home was listed at $x, what % below $x would you offer today if you were truly thinking of renting the money from the bank to go 'buy' a home?

A) 5%
B) 10%
C) 20%
D) 30%
E) 40%
F) 50% or more

Also report what city you're in (I've gotta believe Miami lowballs are gonna be lower than Topeka lowballs)...

And is anyone doing this yet (just for fun?)

129 comments:

David in JAX said...

50% off in Jacksonville. At the beginning of the year I was doing this for fun at open houses. Now I don't. I stopped when RE agents started asking me to sit down and put together a formal offer.

Anonymous said...

Dublin 50%

Dragasoni said...

Tampa Bay, Florida

I'd offer 40% under asking price of a single family home.

I'd offer 60% under asking price for a condo.

-Dragasoni-

Anonymous said...

65% below in Destin, Florida for a beach front condo. Current price of the model I'd like to buy: $510,000. Price it would have to be for vacation rental income to cover espenses: $330,000.

Anonymous said...

Sorry, make that 35% below in Destin, Florida for a beach front condo (got my math backward).

Current price of the model I'd like to buy: $510,000. Price it would have to be for vacation rental income to cover expenses: $330,000.

$510,000 * .65 = $331,500

Anonymous said...

I live in Phila, and it depends on the house being offered. A town house in Rittenhouse being sold for 1,000,000 I'd offer 800,000. A cute bungalow in Narberth (small mainline town) offered for 500,000 I'll offer 350,000 (in someways the mainline got really screwy).

That's what I feel they're worth -- at least to me. But since these are fairly wealthy areas I don't see any big decreases just stagnation and waiting.

Anonymous said...

50% lower in Orange, CA. House next to me is vacant in foreclosure. 3 other houses on the block have not moved in almost a year. 700k asking price for a 1200 sq ft, 65 year old home that is within a stones throw(literally) of the freeway.

Anonymous said...

30% if i was to do it today
50% in ten months

Its just a matter of time...

blogger said...

The only danger is you offer 50% off and someone takes it

The property still needs to make sense from a P/E ratio and cash flow perspective

Anonymous said...

50$ off in Rutherford NJ.

The Thinker said...

Sorry GrandInquisitor, there is plenty of bubble in the Garden State.

It is hard to put a % on all homes in a city, some homes are priced more reasonably than others. When sizing up the worth of a home you must look to the P/E as Kieth has suggested and then step back and ask yourself what you think this house is really worth to you in light of what other houses in the area are selling for and the local renter's market.

The bubble days are over, if a price seems unreasonable you don't have to pay it!

Oh, and that was the funniest picture Ive ever seen on this blog!

Anonymous said...

norther virginia 0%

i do not because i know they will not take it.

too many GF's sitll left around the nation's capital.

Anonymous said...

I saw a report recently that stated Baton Rouge has the 3rd most available rentals (based on population) in the country. This is just over a year after a big housing boom and population swell post Katrina where nothing was available for sale or to rent. The fear following the greed is that all those folks (who literally bought houses with nothing but credit - no job, no assets, and a hope/prayer that the insurance company/government would help them) are just not staying. The big companies are already starting to dump the properties they gobbled up. So what is the effect of a glut of overpriced homes, high availability of rentals, in a high risk area that was already shedding population before the big storm?

There's a pre Katrina article out there as to the mystery of exactly who was buying the record no. of homes being build in BR when population was leaving the city to the tune of about 2500 per year. Some of the reasons given by the industry are real creative.

Miss Goldbug said...

My brother and sister-in-law went to look at a brand new sub division in Rocklin, CA (ground zero for the Sac housing bubble) the salesman immediately knocked off 40k on the price without even blinking. I wonder how low they will go when really negoiating price?

My B and SIL are crazy for even considering buying right now, for some reason, they are looking in this area.

I give up talking to her about a bubble- she's says they will buy when they find something they like at the price they want to pay.

Thunder Valley will be doing brisk business when other FBers are unsidedown in their new track home...I hear gambling goes up during recessions/depressions.

Miss Goldbug said...

I want to see 1998 prices or 50% off.

Anonymous said...

My NoVa Condo went for 135k in the mind-late 80's

I paid 110k for it in 1998.

I sold it for 295k in the fall of 04

Feeding frenzy pushed it up to 340-350k Spring 05

They now languish & only the one's listed for 300k sell, but for real prices (kick-backs, closing costs, other incentives) that are in the mid 200k range. They are now 20 yeras old, condo fee is going up, speail assessments are being flaoted and many owners are behind of their dues because they are soo streched on the loans.

I can buy new for the same price or less as more condos come on the market here that would not be threatened by special assessments due to age.

If I did buy I'd pay something in the low 200's or mid 200's + escrow for special assessments.

Anonymous said...

I have been getting listings in NNJ, almost all are reduced now. Sure there are desirable locations, and just the right beauty that sells rather quickly, but generally there are reductions in price. I have seen open houses with no traffic, relists that led to homes pulled off the market. Another example, OLP $410k, now asking $325k. I could go on. I'm really a window shopper now and those are a few of my observations. Depending on the property, I would start offers at about 30% below asking. However, I would NOT pay asking price. There's always next year.

Bill said...

Here's a partial list of predictions for 2007:

Las Vegas
2006 Median Home Price: $324,000
2007 Median Home Price: $292,000
1-yr Change: -9.9%

Miami
2006 Median Home Price: $329,000
2007 Median Home Price: $300,000
1-yr Change: -8.8%

Los Angeles
2006 Median Home Price: $534,000
2007 Median Home Price: $492,000
1-yr Change: -7.9%

Home prices in most cities are predicted to rise modestly, but in the bubbliest areas, the prognosis is not good.

Bill said...

GrandInquisitor said...

Thinker, you are thinking too much. As I said I continue to rent. I agree there is a bubble but I'm telling you the prices have not come down yet. That is a fact, not subjectivity.

---------

Your joking right?

Bill said...

good article

http://tinyurl.com/u2tx7

blogger said...

new homes from desperate builders would be easier to score for big discounts as they have big profit margins they can work against.

desperate homedebtors who have cash-out refied up to their ears in new debt can't cut prices and therefore are stuck or on their way to foreclosure.

any HPers with time on your hands I'd love to see a from-the-street report where you offer a new condo development or home builder 40% below asking and see what they say.

Man, if I was home in Phoenix this would be my weekend hobby!

Anonymous said...

phoenix - 30%

i made offers to 3 sellers to buy in the same building. all 3 rejected the offers, and all 3 are still for sale. well, one went off the market, unsold, after 180 days.

these people still think their properties are worth 2004 or 2005 prices.

their realtors are clearly tools, too.

TragicElf said...

Just recently in Riverside Ca, before I could even say a word they offered 70k off price and then said make an offer. On a brand new home 4400 sqaure ft.

Anonymous said...

even better real-world experience.

i offered 235K for a investment condo that was listed for 255K. less than 10% discount. seller rejected. 9 months go buy, seller finally gets 230K. he not only settled for less than my offer, but he still had mortgage, taxes and association fees to cover for that time.

i bought another unit and remodeled and rented. positive cash, and great write offs for the IRS.

Anonymous said...

Status in my 'hood of 87 homes. I've been following very closely.

Last house to sell was two weeks ago. Sold for $450,000. Asking started at $490,000 then dropped to $470,000 pretty fast, like within 2 weeks since probably nobody came to look. On the market for 3 months.

In same neighborhood almost identical home home sold for $404,000 to a lender while in foreclosure in October (yet the same owners still live there which I don't get, if you foreclose and the bank gets the house don't you have to move out?).

There are 4 other homes for sale ranging from $435,000 to $485,000. More or less same home, the $485,000 one is a corner lot, huge yard and a pool, I don't know if it justifies a $35K premium or not, but the yard is twice the size of other yards, so maybe.

So judging by all that:
Offer 50% and you will be rudely asked to leave. Offer 60% and you will be politely asked to leave. Offer 70% and it will be written up but turned down. Offer 80% and you have a good chance of getting it depending on seller circumstance. Offer 90% and the house is yours.

The homes are 3-4 years old and were sold in the $250,000 - $300,000 by the builder. At the peak last summer, the highest price of any was $498,000 and that was in October 2005.

Anonymous said...

Costal Charleston, SC- 30%

It's funny because my firend has a house next to her for sale. The owner died and the parents are trying to sell it off.

She called the realtor, because she really wants me to buy this house and the realtor told her that they woudl be willing to accept about 25% off the listing price.

It is a really good deal, but I am still not ready to buy. I really just want to see what happens during the next year.

I am hoping our market will drop at least 30% and I will feel comfortable buying something in the next year or two.

Anonymous said...

Why is 50% included with "or more"?

Too many optimists here.

Anonymous said...

Chicago, IL (Not ChicagoLAND)

30% would be a dream. But, I'd really like to see 20%. Definately no less than 10% off the fall 06 prices.

Chicago is in hibernation. Once spring comes around I'll bet they will try to pull a fast one and list at 10% over the fall #'s.

Anonymous said...

Offer 90% and the boat anchor is yours. Be prepared to take another 40% haircut after paying that much.

Anonymous said...

I believe I will be buying in Sacramento area in a year or 2 when I can buy a new house of similar quality that I own currently (Charlotte NC) for a similar price.
I wont be low balling, but I will be waiting for it to drop to my level and stabilize like I did in charlotte in 2002 (just it case it drops further)
I will also wait for interest rates to hit 10-12%. Low balling makes very little sense when you are faced with a situation where the freaking bottom can drop out. Say I low ball 50%. What happens when I set the new low water mark for sales price, and the rest of the sellers race to get in under that.
Besides I am still waiting for gas to hit the $20 a gallon mark, so My motorcycle will get more $$$ than the house in the sticks. Till then I'd be living in charlotte and renting if I move to sac.
Cool.
Cow_tipping.

Anonymous said...

GrandInquisitor said...
Thinker, you are thinking too much. As I said I continue to rent. I agree there is a bubble but I'm telling you the prices have not come down yet. That is a fact, not subjectivity.

Wednesday, December 20, 2006 2:25:16 PM
---------------------

sales Prices won't come down until houses sell for less. They won't sell for less until you lowball them and finish the deal. Just try.

Anonymous said...

OMG. I just got it. (The picture).

That is nasty.
Reading The Thinkers post pointed it out.

San Diego - 40%

Anonymous said...

Just about anywhere i can think of or have been in travel....40%

Anonymous said...

I made an offer of 30% off in NC, that was accepted. Positive cash flow at this price, not too bad.

Anonymous said...

SanDiego 40 to 50%

....but they won't take it!

Anonymous said...

San Diego is, or can be very nice, but you pay for it in so many ways. Traffic is becoming a nightmare, overcrowding, illegals, home prices....don't even ask!

Anonymous said...

70% off Ft Lauderdale (same crazy prices as Miami)

Anonymous said...

I use to think South Florida was going back to 2001 prices. Now I think it might be 1997 to 2000 prices. I have seen ocean front homes slashed 35%...ocean side communities down 50%. Couldn't buy in this gated ocean side community 18 months ago for under $1.2M now you can at $640K and falling. I told the guy I'll give you $300K and the blood dropped out of his face and he turned white.

Anonymous said...

Low balling makes very little sense when you are faced with a situation where the freaking bottom can drop out.
-------------------

Low balling is ok if you get the right house in the right hood in which you will be there for a looooong time. As is my case.

Anonymous said...

Paid 385k for my luxury ghetto riverfront townhome in Wilmington delash$thole. Sold it for 350k (~10%) to just get out before one of the freaks from the hood knifed me. I would never make an offer to live in that rotten little town/plan. I predict that as the simple folk from the hood start to realize that an easy payday is to be had at the riverfront prices will crater to about 250k. All the natives who contracted pre-bubble for the nearby condos will cancel awemass when they see how crime has spiked unabated and the devaluation of the flipper inflated FMV becomes apparent for the townhomes. Currently many of th elarger townhomes with 2 car garages are going for less than many of the condos (which are smaller) and they are not selling!! The penthouse will still sell because its out of gunfire range & under contract to a non-native. Plus its so high up you can safely see the gunfire throughout the city. They say the muzzle flashes are pretty from that height at night.

Anonymous said...

you all can offer anything you want, 50%, 60%, hell 90% below asking. Judging by the posts here looks like 30% is about as low as anyone is accepting and I'd guess that is because asking was 10% above all the other comparable listings.

Nobody will list a condo for $300K if all they can realistically get is $150K...stupid realtor or not.

Anonymous said...

30% here is South Florida, and only if you really love the place, and plan to be here for many years. Does anyone know an easy way to get the average difference in asking vs actual price for a zip or MSA? it seems to me there has to be a way to do it.

Anonymous said...

To go back to old lending standards, 28% of gross pay if you have other loans and 36% if you don't have other loans. Considering almost everyone drives a new financed car these days and they have an average of $8k on CC and other student loans, I'd say 23% of gross pay. And that 23% of gross pay going towards housing should include PMI, taxes and insurance. Even at 6.75% for 30 years in a neighborhood where the average home income is $60k, that's $1150/month for housing. Subtract PMI, $70, insurance $55, and taxes ($4,800/yr) $400/month, and we're down to $625 for the 30 year loan part of the mortgage. $625/month will get you $97,000 of borrowed money for 30 years. Add maybe $10k for a down payment and we're in the neighborhood of $107k for a house. That's the breakdown for my neighborhood. 6 months ago the house next to me sold for $209k. $100k over what the P/E says it should go for. That's a bubble for sure, and that's in South Jersey.

Anonymous said...

bozonian said...
Why is 50% included with "or more"?

Too many optimists here.

Wednesday, December 20, 2006 3:44:58 PM

Whats wrong with being an optimist? Are you a pessimist? No one knows the future. Do you know something we don't?

Anonymous said...

Where do you get these numbers from? "Official" median household income in Las Vegas is $54K. However offical means jack shit and it is much higher "unofficially".

A dealer at Wynn, Bellagio, Hard Rock etc makes $100K+ a year. A parking valet at a top resort makes $70-80K a year, bartenders can easily be in 6 figures, all this with full benefits. All this is from tips which as amazing as it may seem doesn't all get reported to the IRS as income.

"The median wage is about $35k - $40k/year. Do the math. House prices in LV have to come down, in my opinion, at least 40% in the next two years."

Anonymous said...

Sorry to double post, forgot to inclue this

http://www.reviewjournal.com/
lvrj_home/2006/Sep-14-Thu-2006/
business/9634111.html

Anonymous said...

In Northern Virginia/Vienna-Fairfax for a townhouse 40%. But I am renting another year!

My brother-in-law in 2001 bought a 3 bedroom townhouse 1 mile from Vienna metro at $125,000. Sold it in 2003 for $260,000. Peek bubble people were buying in the neighboorhood for $400,000. Post bubble--I am thinking $200,000 sounds good to me or even less! We'll see I am loving the crash and watching the sellers sweat it out! However, the fools are so reluctant to lower their prices around here. Give it a month or two and we'll see more tears. By the way the median income around here is $90,000 so all those $400,000 townhouses bought at the peak were totally funded by ARMS.

The Thinker said...

Your offer should be based on the worth of the house. Since asking prices are arbitrary and not based on the worth of the house, your offer should not be based on a percentage of the asking price.

Oh and in case you don't see why that picture is so funny, look at the lowballer's legs.

http://financialjudo.blogspot.com/ said...

I just rented a home in Santa Fe for $1,350/month. It was for sale at $360,000. The home has some nice features, but needs some work and is a bit dated (especially the kitchen). Based on my calculations, I would offer him about $200,000 to buy the place, that's a 44% haircut. Do you think they would go for it?

Anonymous said...

This is a repeat of what happened in Toronto in the mid 80's.

First guy buys at 400K, then sells 6 months later at 385K.

Second guy then sells at 365K after another 6 months.

Third guy sells at 343K.

Fourth guy sells at 322K.

etc. etc. etc.

Eventually the prices dropped to about 220-250K, and all of the flippers paid 20K-30K as prices dropped. Not a bad way to spread the pain... but I found it amazing how there were always suckers who got into the game only to lose a couple years worth of salary.

The problem however is that it took over a decade to unwind - it wasn't until about 96-97 (coincidentally when the economy started improving again) that prices started to go back up (after stopping at a low of 230K). Today they hover at around 330K - which is still overpriced.

An average 2000 sqft house costs a developer about 120-140K to make. And as far as I'm concerned, the price of a lot in Toronto should be between 50-100K, which means your looking at 170-240K for a house. Add 20k for the home builder/owner profits and you have 190-260K... which is pretty much the same as 10 years ago plus a bit of inflation.

(1 - 190/330) * 100 = 42.4%
(1 - 260/330) * 100 = 21.2%

So... loball them 20-40%, (a 25% drop in price is healthy both for the home buyer and the seller as the property taxes will go down).

In alot of cases, the builders won't be losing any sleep (due to tax write offs) and most homeowners already bought before the boom started here.

Fortunately, Toronto went through what the US is now going through a decade sooner. This helped in not making it a mania (though you will still find morons trying to sell +$1 mil in downtown). I expect that house prices will ease an level off over the next five years which will make sure all the speculators get out.

As for the US... I feel sorry for you - the collapse in house prices caused alot of secondary problems in the city. Since taxes couldn't always be collected, pot holes wouldn't be fixed, garbage workers would go on strike, (as well as the transit workers), huge increase in crime (worst in Canada at the time). It was a real sh$thole back then.

Fortunately, things got better - but it took over 15 years. Heck - after I graduated, it took me over 4 years to find a decent job. That had a major impact on my life which reverberates even today.

IB

Anonymous said...

A friend of mine just purchased a house, even after hearing all my advice. He low balled the guy 150k off what he was asking for it. I tried to explain to my friend WHY a seller would take the offer like that, but he would not listen. I told him, WAIT MORE, THE PAIN IS ONLY STARTING, but again, doesn't listen. Oh well. People are living in LA LA land. Seriously.

Anonymous said...

The penthouse will still sell because its out of gunfire range & under contract to a non-native. Plus its so high up you can safely see the gunfire throughout the city. They say the muzzle flashes are pretty from that height at night.

Wednesday, December 20, 2006 4:31:16 PM
---------------

Elevation is also a tactical advantage when returning fire.

Anonymous said...

jrinlv said...
cnnmoney.com stated that Las Vegas is one of the 10 cities that will experience a major fall in prices. That I agree with. They stated a decline of 6.6 percent in 2007 and 8.1 percent in 2008.
-----------

For them to admit that is a big step in the right direction.

Anonymous said...

A parking valet at a top resort makes $70-80K a year, bartenders can easily be in 6 figures, all this with full benefits

AAAAAAAAAA HHHAHAHAHAHAHAHAH

ya right.

David in JAX said...

bozonian said...
Why is 50% included with "or more"?

Too many optimists here.


It depends on where you live. Here in NE Florida, there is a 20-24 month supply of unsold homes. Many homes ARE selling for 50% off asking.

But, that still does not make them a good deal. Asking is just that, asking. If a new home sells for 50% off asking and is still at a 2003 price, is it really a good deal?

Anonymous said...

Where I live, the south bay area of Silicon Valley, I would undercut by about 50%.

Using the P/E ratio calculators I am aware of, a house currently listed at about $650-$700k rents for around $2k a month.

Low balling the price and low balling the yearly expenses, the calculation yields:

P/E = 650,000/(24000-1200) = 28.5

The historic P/E is usually between 11 or 12. I am even going to add some buffer to this since Silicon Valley is quote-unquote a "desirable" area. So lets assume a P/E of 15 to take that into account. So in order to achieve a P/E of 15, the house price would need to be:

15 = X/(24000-1200)

X(House Price) = $342,000

Which is 52% of the current home price. Scary ain't it? And that is taking liberty with low balling expenses and highballing the P/E in the house's favor!

I know I probably don't need to explain this to the bubble watchers, but the only advice I have is: BE PATIENT. The current noise regarding housing is nothing. We have not even begun to see the true nature of this bubble. That will take time and a lot of it. Hell, it took the Nasdaq 2 1/2 years to find bottom after the dot com bubble. It took the L/A property bubble 5 years to find bottom. (At a time no one was even talking about bubbles) But Japan is the best (and closest) example. In an area that has a greater land shortage (they aren't making any more land there either), housing prices are just NOW beginning to stabilize, a full 16 years after the top was reached in 1990.

Don't listen to David Lereah or the Realtor talking heads. We are not near a "bottom". No where near. This is just he beginning.

Anonymous said...

San Diego- 40% below original list price.

Anonymous said...

#1 rule in the equities arena; never ever try to catch a falling knife.

Now, apply that formula to todays housing market.

Anonymous said...

Looks like the "low-baller" teabagged an alligator!

Michael-Joe said...

I still live in RE nirvana in LA (the area is called Pico/Robertson). Just last month, according to Zillow, a 2BR 1BA 65 y.o. home 1280sf 6000sf lot traded for 1.25 million! Oh and last night, a stolen car ended upside down on a neighbor's lawn at 2am after a cop chase. Hey, but they ain't making anymore RE is they?

Anonymous said...

San Diego 50%
but based on zillow price, I'm renting now for 23% of what a 30 year 6% mortgage + tax payment would be.

Anonymous said...

Orange County -- good luck getting 5% or 10% below, there seems to be plenty of money, housings are selling, but there are many for sale, and for a very long time. Just not a desperate situation for some reason -- I guess people are THAT rich. However, I think there are plenty of places, maybe a few scattered here too, to offer 50% or more. I would offer 50% no problem -- that is my final answer.

RipeDurian said...

Don't offer a damn thing until after the mighty TRILLION $$$ ARM reset of '07.

In 2008 you can start to have fun lowballing, still wouldn't buy in '08 though,

patience patience.

Anonymous said...

I am looking for 50% off in West Los Angeles. I want to see prices go back to 1997.

Anonymous said...

Monterey, CA

40-50% or more.

Anonymous said...

Ugh!!! Another expert on Las Vegas who thinks they know all about the city since they spend 3 weekends a year here.

$13.30 is what is called straight wage. This means before tips are added in. About 70% of jobs in Las Vegas have a tip component to them including dealers, valets, taxi/limo drivers, waiters, bartenders, maids, nighclub attendants, golf course employees you know pretty much everyone in the hospitaly business?

Look up "official" wages for a casino dealer and it's something like $6.50 an hour. That is the straight wage and is absolutely meaningless. No dealer makes anywhere close to that in reality, but "officially" that is the wage of a dealer.

And almost all these tips are cash. Do you really think it is all declared as income and it all shows up in official numbers? You think when you tip your limo driver $25 all $25 of that gets recorded in "official" wages? You think when a taxi driver gets a $20 kickback from a strip club after he drives a customer over, that gets recorded? You think each time a stripper gets $20 for a lap dance that $20 shows up in the "official" wage statistics? You think each time $100 is slipped to a nightclub bouncer it is recorder in "official" wages of Las Vegas?

"Officia" median wages are about as meaningful in Las Vegas as what the NAR has to say about housing.


http://vegasblog.latimes.com/vegas/2006/08/
wynn_vs_wynn_de.html

http://www.reviewjournal.com/
lvrj_home/2005/Dec-29-Thu-2005/
news/5116535.html


"In response to "Anonymous" who stated that my median wage of $35k - $40k/year is way too low for Las Vegas. He/she stated high wages of bartenders, casino dealers, etc. Some of these people do make good wages, but they are the minority of jobs in LV.
Well Anonymous, the median wage in Las Vegas for 2005 was $13.30/hour for All Occupations. That computes to about $28k/year. Reference:
Las Vegas MSA Wages on http://econdev.nevadapower.com/sppc/county/clark/documents/wages.pdf
Another site states for 2005: "The average individual wage rose to $35,060 from $25,528 over the same period, according to the Nevada Department of Employment, Training and Rehabilitation."

Anonymous said...

HA HA I get the cartoon now, missed that before

Anonymous said...

Orange County (median home price $710k) is a center for the sub-prime mortgage business. Real estate is the biggest industry. This knife is gonna fall like it has a magnet on it.

Anonymous said...

SLC is going to take it in the shorts!! I would guess a 30+% trim is coming. Most think that RE will go up forever and are spending that way.

Anonymous said...

$710K? In which universe is that?

Median price of OC is $629K. But whatever, on this blog statistics mean nothing...except of course for the 40% crash that everyone knows for sure is comig.


"Orange County (median home price $710k)"

Anonymous said...

Agree the "crash" is coming but only to certain inflated areas. Prime areas like San Marino, La Canada, Ca etc.... are not going to crash. I keep watching these markets and although homes now take longer to sell, price slashing is not happenning.

Anonymous said...

Suburban Boston, MA market:
25-30% off listing price

Anonymous said...

All you losers who have a wait-and-see mentality are all perpetual renters. That is the renters mentality. It is the renters mentality that I experienced in 2002 when you all had the wait-and-see rotten attitude. In 2002 if you bought anything anywhere in the US, you could've doubled your money in 2 years. You all circle jerks splashing in each other's cum when it is just all rationalizing the fact that you all remained renters and now feel good about it. Guess what renters, right now you are paying someone else's mortgage off. Keep renting. Us home homeowners need people like you to get ahead.

Anonymous said...

If you need renters to get ahead - why the bitterness and the obscenity ... Oh I get it, no one is buying your overpriced crap and you're taking it out on us ... OK ... Here is a constructive idea for you ... call it free job training ... repeat after me ... "would you like fries with that" ...
Cool.
Cow_tipping.

Anonymous said...

What are you talking about? I have nothing for sale. I buy with a "cash flow" strategy where I don't give a rat's ass what direction the market is going in.

You are actually helping my cause by perpetuating this "group-think" about the housing bubble. Now I can go bargain shopping.

Paul E. Math said...

Hilarious graphic. It took me a couple takes to realize that the guys ball was hanging out of his shorts (low). Good stuff.

Anonymous said...

Tony1790 said...
I made an offer of 30% off in NC, that was accepted. Positive cash flow at this price, not too bad.

Wednesday, December 20, 2006 4:08:15 PM

I did too, and they turned me down.
I bought a new one that was larger for a good bit less.
Pity was, I liked that one because it was a plan that had a garage and bonus room on top. That mean I can drill and saw all night long and no one was above me staying awake with the racket.
6 months after I bought mine, it went into HUD forecloseure and went for 15K under my offer. Anyway 150K for a 2700+ sqft new financed 15 year at 5% straight fully amortising loan isn't bad. Managed to hold it together through 7 months of unemployment last year.
Cool.
Cow_tipping.

Anonymous said...

Anonymous said...
What are you talking about? I have nothing for sale. I buy with a "cash flow" strategy where I don't give a rat's ass what direction the market is going in.

You are actually helping my cause by perpetuating this "group-think" about the housing bubble. Now I can go bargain shopping.

Wednesday, December 20, 2006 10:44:49 PM

In that case this is what you think of your customers - Brilliant.
And no, none of us are ever going to contribute to your positive cash flow. Because that = negative cash flow for us and its not going to last. Needless to say, you are a liar.
Cool.
Cow_tipping.

Anonymous said...

Phoenix Area Formula:

Offer 60% of current comp value

(forget asking prices & find the comps for last 2 months)

Or, if you prefer the lazy way... 50% of asking price

Thoughts, anyone?

Anonymous said...

hey renters. There are 2 constants in life. 1) you need to eat. 2) you need a roof over your head.

Regarding #1 You need to eat there is no other option.

Regarding #2 You have two options.

A. You can rent and pay someone else's mortgage off.
B. You can own and pay your own mortgage off.

Irregardless of what direction the market is taking or how much you bought it for vs. how much you can sell it for or the fact that you can't use it like an atm machine anymore. Who says a house was ever an atm machine? You have to choose either the blue pill (A) or the red pill (B).

Choose one Neo : A or B.

This blog is kind of addictive, yes, and funny and stupid, but it is basically a narcississtic (sp) clap trap and attracts a horde of renters.

Anonymous said...

In 2002 I was buying my first home. After looking and looking and looking I finally settled on one. It was 2024 sq ft, barely a yard and the asking price was $329,000.

I grew up in a part of the country where $329,000 at the time for a home was huge. For $329K you got 5000 sq ft and an acre of land. So the thought of that much money for such a small house kinda scared me. I rememeber I told my parents what I was getting and they told me I was crazy to pay that much for such a small house and that I should wait it out because no way prices like that would last. Mom and dad are usually right about things, this time thank god I ignored them. I ended up in a bidding war and ended up getting it with a bid of $329K. Even though it was lower than someone else's bid, I had no home to sell myself, so the sellers took my offer with no contingency.

Two months ago I got a great job opportunity which requires relocating. So I put the home up for sale at what I thought was a reasonable $569,000 on October 17th. Someone from HP must have shown up and offered $329,000, 42% off. Not sure if he was serious or not, but he made the offer. I didn't even bother responding.

On December 4th, I got an offer of $505,000 (88% of asking). I countered, she countered and we settled on $525,000 (92% of asking). Closing date is Jan 24th.

So if you have nothing to do with your days go ahead offer 40% or 50% off asking price. We all need hobbies. I play golf myself, but if you get pleasure from low balling, all the best to you.

Anonymous said...

Yes you have to eat, and about number 2. I have paid 40% of someone's mortgage while living in 100% of the house. That is not even figuring in Prop taxes or HOA dues or maintenance costs. Heck I never even looked at the freaking holes in the stucco that let in water and rotted out his walls. I left in 9 months (6 month lease) and it was back in 2002 where I lived in a 400K+ house for 1500 a month.
So yes there is option 1 that you cannot negotiate and option 2 that you can.
And no it doesn't just attract renters. It attracts people who know a good deal from one that is a good deal only when the winds of neg am, IO option are blowing.
I own and have since mid 2003. There may be a bubble and I may be in it. However I can see other bubbles very very clearly. Here is my house - It will cost more to rent it than my house payment. I ahve a fully amortising 15 year 5% straight loan I bought with 0 down. But all my neighbors who rent it out are taking in over 50 cents a sqft and I could rent it for ~13-1400.
My payments just broke that 1400 mark when my prop taxes went up earlier this month.
Like I said - people that know a good deal ...
Your realtor style trolling is also sorta endearing in a frail and scrappy fight for survival sorta way ...
Cool.
Cow_tipping.

Anonymous said...

I am a landlord, a business owner, and a home owner. I love real estate and I love realtors. They work very hard for me and earn every penny.

I don't care to bash them here like everyone else is doing. But I am saying with clarity that I chose A (to be an owner), not B (renter) and I'm happy about it. It is a real paradigm shift in your mentality. I know it's hard. Just make that leap when the numbers work out for you.

blogger said...

A. You can rent and pay someone else's mortgage off.
B. You can own and pay your own mortgage off.

Actually, B is "You can rent money from the bank, paying back significantly more than you originally borrowed, and like most people screwing yourself by doing cash out refis"

A is much smarter today as real estate prices crash. B is much smarter a few years from now, especially if you pay with cash

Bubble Shmubble said...

That's right Keith assume everyone refis, assume everyone is in an option arm, assume everyone is a complete fucking moron...except you of course.


"Actually, B is "You can rent money from the bank, paying back significantly more than you originally borrowed, and like most people screwing yourself by doing cash out refis"

Bubble Shmubble said...

Run for the hills folks!!!

PHOENIX? CALIFORNIA? NOBDOY WANTS TO LIVE THERE ANYMORE!! HOME OWNERS ARE FUCKED!! HOME BUILDERS ARE TOO SINCE THERE ARE NO PEOPLE TO SELL TO.

"Small Sunbelt cities, such as this suburban Sacramento enclave (Elk Grove, CA), lead the nation in population gain by percentage. On a pure numbers basis, Phoenix added more population than any other city, more than 44,000".

WASHINGTON AND ORERGON...YOU ARE SOOOOO TOAST!!

"Prices grew 24.7 percent year over year. The capital of Oregon outpaced every other city in the United States in percentage increase in median housing prices for the 12 months ended September 30."

"The only city with a median price above $300,000 that recorded a double-digit price increase in the 12 months ended September 30 was Seattle (median price $372,400), where prices rose 14.6 percent."

MIDWEST...YOUR TIME HAS COME!!
"Not only are houses inexpensive in Indianapolis, but wages and salaries are fairly high, an unbeatable combination. In no big city could more residents earning the median household income afford a greater percentage of all houses bought and sold during the three months ended September 30."


(all quotes from money.cnn.com)

blogger said...

Uh, yeah, I do assume everyone is a moron

Except HP'ers of course, especially those who sold at the peak and now rent. And who when they "buy" again really will "buy", vs. rent money from the bank

Anonymous said...

you've entered middle class...congrats!!

"combined income in our household will top $130,000 a year."

Anonymous said...

or were you bragging about that income?

Bubble Shmubble said...

keith,

But in a year or two won't the dollar have collapsed leading to astronomically high interest rates? That's what I read here numerous times and why everyone is buying gold like it's going out of style.

So OK today's $500K home costs only $375K in '08 but if your mortgage is 10% instead of today's 6%, you're actually worse off with the "cheaper" house.

Or are the brilliant minds here so wealthy as to have $350K cash ready to go in '08?

Anonymous said...

hey hemorrhoid. I wasn't bashing you as a renter. Please don't bash me. I actually need ppl like you to pay down my mortgage and deposit money into hip-pocket national bank.

You're the one who makes $130,000 but spends $200,000. You're the one who has a huge SUV payment and loan, huge student loan for a degree that doesn't apply, and maxed out consumer cc debt, trying to keep up with the jones'. How's that treadmill? Legs tired? That's the only reason why you are where you are, oh, and your rotten attitude too.

As far as Keith, are you going to pay cash with all the google ad revenue you're reaping? You need to change your ads from real estate mortgage brokers to "consolidate your debt" or "roommate finder" or something. No one is clicking. Everyone here is a renter.

Bubble Shmubble said...

That is the IQ level we are dealing with here...ads for mortgages on a blog devoted to bashing real estate, lenders and realtors.

Priceless.

"As far as Keith, are you going to pay cash with all the google ad revenue you're reaping? You need to change your ads from real estate mortgage brokers to "consolidate your debt" or "roommate finder" or something. No one is clicking. Everyone here is a renter."

David in JAX said...

Anonymous said...
All you losers who have a wait-and-see mentality are all perpetual renters. That is the renters mentality. It is the renters mentality that I experienced in 2002 when you all had the wait-and-see rotten attitude. In 2002 if you bought anything anywhere in the US, you could've doubled your money in 2 years. You all circle jerks splashing in each other's cum when it is just all rationalizing the fact that you all remained renters and now feel good about it. Guess what renters, right now you are paying someone else's mortgage off. Keep renting. Us home homeowners need people like you to get ahead.


I also bought a home in 2002. But, I was smart enough to put it on the market at the end of 2005 and sell it at the begining of 2006. Now I rent. Not only did I make a good deal of cash when I sold, but now I'm saving a ton of cash off of my idot landlord. When the time is right, I will buy another home. So, we are not all perpetual renters. A lot of us just smart about real estate.

Bubble Shmubble said...

And after paying 2 sets of closing costs and paying to move twice, how much will you end up making?

Just the hours spent selling, moving, buying, moving would cost someone making $100,000 a year tens of thousands of dollars before 1 dime was spent in actual costs.

Think about it..$50 an hour in cost of your time. 250 hours spent on selling, moving, buying, seeling is $12,500...and I think 250 hours is way too low.

"I also bought a home in 2002. But, I was smart enough to put it on the market at the end of 2005 and sell it at the begining of 2006. Now I rent. Not only did I make a good deal of cash when I sold, but now I'm saving a ton of cash off of my idot landlord. When the time is right, I will buy another home. So, we are not all perpetual renters. A lot of us just smart about real estate."

David in JAX said...

I am a landlord, a business owner, and a home owner. I love real estate and I love realtors. They work very hard for me and earn every penny.

I don't care to bash them here like everyone else is doing. But I am saying with clarity that I chose A (to be an owner), not B (renter) and I'm happy about it. It is a real paradigm shift in your mentality. I know it's hard. Just make that leap when the numbers work out for you.


I'm also a landlord and a business owner. But, I'm smart enough to be a renter in a true renter's market. And when this has all shaken out, I will have even more rental property and even more cash because I was smart enough to sell my house and rent.

And to be fair, If I wasn't in my 30's and was older with kids I probably wouldn't have sold. But, since I am young and free, it was a fantastic move.

Anonymous said...

cool david, you just made that choice to be a renter not a homeowner. No judgment here.

Sorry about my tone, but it kind of trickles down from the top, right keith.

David in JAX said...

Bubble Shmubble said...
And after paying 2 sets of closing costs and paying to move twice, how much will you end up making?


I came out a few hundred thousand dollars ahead after the first set of closing costs. When I buy again I will have the seller pay all closing costs. They will agree. So lets say $200k for easy math.

Just the hours spent selling, moving, buying, moving would cost someone making $100,000 a year tens of thousands of dollars before 1 dime was spent in actual costs.

Think about it..$50 an hour in cost of your time. 250 hours spent on selling, moving, buying, seeling is $12,500...and I think 250 hours is way too low.


Nobody works 24 hours a day. So, instead of watching TV or playing around on the internet, I sold a home. Money lost from doing this on my spare time, $0.

You are also forgetting that many renters are renting for 50 cents on the dollar or better. I happen to be renting for one third of what my old PITI was (moved from a home to a condo to wait things out) and one half of my landlords PITI&CondoFee. To make the math easy I will put it at $1500/month savings for what I rent right now. $1500/month * 24 months (just a guess on the time) = $36,000

Total so far = $236,000

If I buy my same home back for 1/3 off what I sold my home for, then I can now put over 50% down. I will also have a lower interest rate if things keep going in the same direction.

I just don't see the negative.

David in JAX said...

Anonymous said...
cool david, you just made that choice to be a renter not a homeowner. No judgment here.

Sorry about my tone, but it kind of trickles down from the top, right keith.


NP. I get a little fire up myself. I think what we really all hate is people who make bad economic decisions that end up having negative ripple effects on the rest of us (owners or renters).

FlyingMonkeyWarrior said...

when the hyper inflation begins and the world is a wash with cash i shall be happy i bought in 06 from a FB.

got credit?

thanks HP.

Anonymous said...

Seattle WA - I'd offer a price based on the following formula:

Zillow 1997 price plus 3% per year return for 9 years.

THAT would be my offer and not a penny more.

That equates to 40 to 60 percent haircuts depending on how bad the "froth" was on a given property.

--SeattleMoose

Bubble Shmubble said...

jax,

1. Of course nobody works 24 hours a day. But your time has value no matter how much you work. Personally my time is worth not moving/looking for rentals, etc. I remember the last time I moved it seemed to last forever from going out to look at homes to dealing with mortgage apps, inspections, appraisals, the closing etc. Then packing. Then moving. Then unpacking. Then getting all utilities changes. A fun trip to the DMV since I couldn't renew my licence online because I had moved within the past 60 days. Then what seemed like a never ending series of trips to Home Depot/Lowe's to buy things. Hundreds of hours, multiplied by 2 for selling/renting/buying. Re-esimating I'd say betwee my wife and I that is

2. You are assuming lower interest rates. Odd since everyone on this board is convinced hyperinflation is upon us. Can't have it both ways. Personally I have a fixed 25 year mortgage at 5.35%...now way in hell I'm giving that up when in 2 years rates could easily be at 8% or higher even.

3. I am already 4 years into the mortgage. In 2 years I will be 6 years into it and by then the ratio of interest/principle paid will be very nicely in my favor . If I start over my principle payments will always be 6 years behind where I am now. In other words I will be 6 years further away from paying off the house.

4. You have not included any moving costs. Or did you get your buyer and will you get the seller to pay for that as well? Personally it would cost $3-5K each time to move my stuff since I swore I would never move myself as long as I live. I have a lot of expensive heavy furniture and it costs a lot to move.

5. Your PITI allowed you a tax deduction did it not? And you were paying off principle I assume. You have to subtract that from your "savings" by renting calculation. I don't know your tax situation and the size of the mortgage but personally that is about $700 a month for me and always increasing as my principle paid increases every month.

7. It would cost me the same to rent my home as my PITI. Sure I could rent an apt for 1/2 price but I don't want to live in an apartment..and that's all a condo is. I like having a house, with no neighbors above, below and beside me and I like a yard. Your situation is like saying well I can sell my Porsche and drive a Hyunday for 2 years and I'll be saving $1000 a month doing so. Sure, you will indeed save $1000 a month, but you will be driving a Hyunday.

Anonymous said...

I love coming here for the Schadenfreude. All the renters/bubble sitters nut hugging each other is great. All the pissed of Interest Only Option ARM trolls is great. But the best part are the ones that laugh at both: people that bought pre-bubble with a rate below 6, their property is worth 3 times, and NEVER hit the home ATM machine. NEVER. That be me. Suck it and suck it good biotches.

Anonymous said...

Can you guys help me find the circle jerk? I want to participate.

Last one who comes has to eat the pizza!

Anonymous said...

$710K? In which universe is that?

"Orange County (median home price $710k)"

CNN Money

Anonymous said...

50% here in the OC.

Anonymous said...

you just joined the circle jerk. All you have to do is declare renting as the only way to go.Then state how much you'd underpay in any given area (i.e. 50% in O.C.) even though you'll never get it.

It only serves as a backhanded admission of your own financial situation instead of where real estate is actually going.

Welcome to the jerk.

Anonymous said...

And you "rich homeowners" who are bragging about owning a bubble house, make sure you come back after your are bankrupt. Hopefully you will still be able to afford a tube of KY jelly so it won't hurt as much.

Anonymous said...

There is no winning position buying at the top. None. It's all downhill no matter how you look at it.

Anonymous said...

cleveland, house for sale at $200K all summer, goes to auction, highest bid? $125K. Seller takes a pass.

Anonymous said...

Seattle = atleast -20%

Anonymous said...

"There is no winning position buying at the top. None. It's all downhill no matter how you look at it."

Is that your frame of mind when you buy that shiny new SUV getting 9 miles to the gallon and drive it off the lot? No, you don't bat an eye, but that is exactly what you are doing every time - buying a liability with known depreciating value at the top of the market. It loses 30% of its value the minute it rolls off the lot. Then you trade it in after three years and do the same thing all over again like clockwork.

You renters are all deluded hypocrites.

Although, yes, you can get burned in any business or investment, but in general, Real Estate is the best asset you will ever purchase if you do it right and within your means.

David in JAX said...

Bubble Shmubble said...
jax,

blah, blah, blah


It cost me $1200 to move so I would say $2700 to move twice.

Interest rates are lower now than what I got in 2002.

The interest I receive in my savings dwarfs the mortgage tax deduction.

My new home will be paid off faster than the old one because I will pay between 50-80% down. I may buy my next home outright. My ratio of principal to interest will be much better by doing this no matter what.

I chose to rent a condo. I would be saving even more if I rented a house because homes rent for less than condos in JAX. I chose the condo because it gave me the most flexability for when I do move and has less maintenance hassles.

Your arguements just aren't adding up.

Anonymous said...

Anonymous said...
I love coming here for the Schadenfreude. All the renters/bubble sitters nut hugging each other is great. All the pissed of Interest Only Option ARM trolls is great. But the best part are the ones that laugh at both: people that bought pre-bubble with a rate below 6, their property is worth 3 times, and NEVER hit the home ATM machine. NEVER. That be me. Suck it and suck it good biotches.

Thursday, December 21, 2006 2:50:35 AM


Ha ha ... me too.
I however plan to buy in another 1-2 years (when its 1996-7 again in sacramento) Its comming. No one knows how much of it was flippers just as yet. They all said they will live there.
You can subscribe to the bubble paradigm no matter what. Own, rent, just sold, never intended to buy. Its just a theory, somewhat similar to the Pets.com not worth the $11 or the webvan not worth the $$$ ... I never owned, worked for or even thought of them other than that.
Cool.
Cow_tipping.

Anonymous said...

REF: The Schadenfreude posts

The problem is that many pre-bubble owners who did not touch their equity & have a great rate are also suffering. The pain? Skyrocketing taxes that have trebled and greater in accordance with the rising property value. So any pay raises they've gotten are eaten-up by that larger payments. And are they getting anything better/more/improved in terms of government services? NO is the majority response.

And guess what now all the bubble FBs will be bringing down property values w/ short sales, foreclosures or the financial inability to maintain their property. My same friend that complained about the trebling of her taxes & condo fee says the default rate for condo dues has more that doubled, many people are renting the units out to multiple renters to just cover their carrying costs, they are not maintaining the homes and they look like hell. End result: Rapidly dropping property values.

But will the government lower the property taxes Hell NO. She wants to sell & go elsewhere but no one is buying right now and she would only get serious lowballs that cripple her from affording anything else.

So enjoy your Schadenfreude but its very short sighted. This mania is affecting everyone in a negative manner now no matter what their realty position may be.

Anonymous said...

Bubble Shmubble said...
Run for the hills folks!!!

PHOENIX? CALIFORNIA? NOBDOY WANTS TO LIVE THERE ANYMORE!! HOME OWNERS ARE FUCKED!! HOME BUILDERS ARE TOO SINCE THERE ARE NO PEOPLE TO SELL TO.

"Small Sunbelt cities, such as this suburban Sacramento enclave (Elk Grove, CA), lead the nation in population gain by percentage. On a pure numbers basis, Phoenix added more population than any other city, more than 44,000".

WASHINGTON AND ORERGON...YOU ARE SOOOOO TOAST!!

"Prices grew 24.7 percent year over year. The capital of Oregon outpaced every other city in the United States in percentage increase in median housing prices for the 12 months ended September 30."

"The only city with a median price above $300,000 that recorded a double-digit price increase in the 12 months ended September 30 was Seattle (median price $372,400), where prices rose 14.6 percent."

MIDWEST...YOUR TIME HAS COME!!
"Not only are houses inexpensive in Indianapolis, but wages and salaries are fairly high, an unbeatable combination. In no big city could more residents earning the median household income afford a greater percentage of all houses bought and sold during the three months ended September 30."


(all quotes from money.cnn.com)

Thursday, December 21, 2006 12:03:47 AM


Oh yea they all are gaining population.
So is South florida, and so is North and south carolina (Raleigh-tri city and Charlotte and Myrtle beach and charleston to be exact) as is Atlanta, chicago, dallas, houston, austin ... in fact the list is end less. Every city is on that list.
Here is how they are counting it I think. This is just a rough guess.

You live in SoCal lets say, but you buy a new house in bakersfield to flip. OK that house gets built and you have now listed it as primary residence to get tax and interest and other breaks.
Now you have added to the population of bakersfield without reducing the population of So Cal.
That repeated 1000's of times over makes all the cities think they are busting at the seams and they are growing like crazy.
No one comes to your door and counts you and says OK look here, you are living here, and when you bought your house in bakersfield you said you're living there, which one is it, and if you say here, they will automatically not come to your door in bakersfield.
So lots of double and bogus counts. That way Casey Serin is 9 people and has caused all the states to bust at the seams.
Cool.
Cow_tipping.

Anonymous said...

Anonymous said...
REF: The Schadenfreude posts

XXXXsnip

I agree. That's how I feel. if I have to sell in the next 2-3 years, I am shafted.
However if interest rates climb nice and good, hopefully I'll get more $$ in my pay check (not much relevance but ... ) I will then be able to do a wrap style sale and the buyers get a break in interest while I get my 5% from my old fixed loan.
You know in the Tulip bulb mania, the entire financial system collapsed including people that made tons of $$ selling tulips in place of buying them.
I often feel like the fictional tulip seller who sold a tulip bulb in exchange for a estate and I still am going to starve. Yes irrational manias hurt everyone. the ones that hurt the least are the ones that participated the least, or the most ... Like Casey Serin - he gets a free ride in jail. Yea some white collar foo foo dumbass prison with Martha stewart and Andy Fastow. Big freaking deal. No Bubba's pet BS for him.
Cool.
Cow_tipping.

Bubble Shmubble said...

RE: You live in SoCal lets say, but you buy a new house in bakersfield to flip. OK that house gets built and you have now listed it as primary residence to get tax and interest and other breaks.
Now you have added to the population of bakersfield without reducing the population of So Cal.


No. Population counts are done on based on things like

- DMV records
(if you own 3 homes you still only have 1 liecence with one address)

- school enrollment
(if you own in SoCal and Bakersfield, your kid won't be enrolled twice)

- traffic counts (if you own 10 houses you still drive one car at a time)

- employment numbers
(if you own 3 homes you most likely only have 1 job still)

Anonymous said...

So OK today's $500K home costs only $375K in '08 but if your mortgage is 10% instead of today's 6%, you're actually worse off with the "cheaper" house.
----------

Dumb Dumb, that house might "cost" 375 with a 10% rate, but it won't SELL for 375!

Why do all you current homedebtors think that RE prices stay rock solid, or only go up for *YOUR* benefit?

375 @ 6% = 2248 / mo

375 @ 10% = 3290 / mo

Face it, no one can afford that, so either the house sits and laguishes or the price comes down.

For everyone's laugh, at 10% to get back to the previous monthly, the price would have to skid to $255,000!

Bubble Shmubble said...

Dumb dumb? Are you 12?

Nobody can afford that? Maybe you can't and that is why you rent your studio basement apartment for $550 including hot water. Don't assume everyone is in your situation. Using the 28% rule a $3290 montly payment would require a gross annual income of $137K, so a married couple each making $68K a year. Simply unheard of!!!! Average starting salary for an engineering grad was $55K for the class of 2005. I think at some point they'll hit the $68K mark and be able to afford the mortgage, don't you?


RE:
Dumb Dumb, that house might "cost" 375 with a 10% rate, but it won't SELL for 375!

Why do all you current homedebtors think that RE prices stay rock solid, or only go up for *YOUR* benefit?

375 @ 6% = 2248 / mo

375 @ 10% = 3290 / mo

Face it, no one can afford that, so either the house sits and laguishes or the price comes down.

For everyone's laugh, at 10% to get back to the previous monthly, the price would have to skid to $255,000!

Anonymous said...

Anonymous said...
Seattle WA - I'd offer a price based on the following formula:

Zillow 1997 price plus 3% per year return for 9 years.

THAT would be my offer and not a penny more.

------------

How do you "Zillow 1997 prices"? I looked at zillow.com. did not see any back date info.

Help?

Anonymous said...

Seattle's median price from 9/05 to 9/06 went up 14.6%. You go ahead and offer '97 prices and 3% appreciation per year.

Can you bring along a camera when you make the offer? I'd love to see the expressions on the seller's face followed by the roaring laughter that is sure to follow.

Anonymous said...

San Diego, 30%, for single-family house.

That's how much lower prices willd drop in 4-6 years, IMO.

Anonymous said...

Bubble Shmubble said...
RE: You live in SoCal lets say, but you buy a new house in bakersfield to flip. OK that house gets built and you have now listed it as primary residence to get tax and interest and other breaks.
Now you have added to the population of bakersfield without reducing the population of So Cal.

No. Population counts are done on based on things like

- DMV records
(if you own 3 homes you still only have 1 liecence with one address)

- school enrollment
(if you own in SoCal and Bakersfield, your kid won't be enrolled twice)

- traffic counts (if you own 10 houses you still drive one car at a time)

- employment numbers
(if you own 3 homes you most likely only have 1 job still)

Thursday, December 21, 2006 3:49:35 PM

DMV records with license will totally miss out of state moves ending in double counts. I know because my CA license was still active and valid for 17 months when I lived out of CA, and swapped my license. I came back to CA and walked in the dmv and they issued the same old one - like I was applying for a lost one.

- School enrolment will totally miss it if you have more than 1 child. obviously you wont enrol in the flip house, but if a school doesn't even exist specific to that (like 12 bridges and lincoln in the sac area) anyway they are not counting your kids. This is grossly inaccurate. How do they know how many kids you ahve, or if they even go to school as opposed to home or private school.

Traffic counts - they count popupation with that ??? anyway if you drive to your flip 1-2 times a month when building there you have contributed to it.

Employment: Lets see, you buy a flip house, and its not selling that quick like you thought ... wont you be putting in all the extra hours you can and getting another and another, sending the wife and kids to work before it all caved in ... there is your double count again.

Its either this or we are seriously missing a few 100 million people from somewhere. Cos everywhere I see ... its all growing. Heck arkansas claimed they were exploding in one aritcle. Arkansas ... yes arkansas.
All I can say is, every city is exploding, and every city is so special, and every city has no bubble and every city is immune.
Cool.
Cow_tipping.

Anonymous said...

Anonymous said...
Seattle's median price from 9/05 to 9/06 went up 14.6%. You go ahead and offer '97 prices and 3% appreciation per year.

Can you bring along a camera when you make the offer? I'd love to see the expressions on the seller's face followed by the roaring laughter that is sure to follow.

Thursday, December 21, 2006 7:25:30 PM

You know, when they start saying make a formal offer and we'll talk when you low ball 50% that is much more scary. They can laugh, in 2002 I low balled 30% and they laughed, I bought a larger newer house for less than my offer, and 6 months later that house went into HUD foreclosure and ended up on the street for 15K under what I offered them. I presume that builders are going to prep the shaft and the owners are going to receive the shaft and the buyers will be delivering it.
Builders control the market in most cities. They will be in turn able to get labor and materials cheaper and cheaper ... dropping their bottom line more and more.
Cool.
Cow_tipping.

Anonymous said...

So now population numbers are not to be believed either. OK. So we can't believe the MSM cuz they're all lying. We can't believe the NAR cuz they're lying. We can' believe Bernake cuz he's lying. We can't believe realtors cuz they all lie. Now we can't believe the census about population changes because they too are lying.

Aside from this blog, is there any organization we can believe?


I live in one of the top growing cities. When I moved here in 2002, it took me about 20-25 minutes to get to work. Now it takes me 30-35 minutes. I live and work in the same locations now as I did then. If the change is not due to more people on the highway, what the hell is it?

Anonymous said...

Bubble Shmubble said...
Run for the hills folks!!!

PHOENIX? CALIFORNIA? NOBDOY WANTS TO LIVE THERE ANYMORE!! HOME OWNERS ARE FUCKED!! HOME BUILDERS ARE TOO SINCE THERE ARE NO PEOPLE TO SELL TO.

"Small Sunbelt cities, such as this suburban Sacramento enclave (Elk Grove, CA), lead the nation in population gain by percentage. On a pure numbers basis, Phoenix added more population than any other city, more than 44,000".

WASHINGTON AND ORERGON...YOU ARE SOOOOO TOAST!!

"Prices grew 24.7 percent year over year. The capital of Oregon outpaced every other city in the United States in percentage increase in median housing prices for the 12 months ended September 30."

"The only city with a median price above $300,000 that recorded a double-digit price increase in the 12 months ended September 30 was Seattle (median price $372,400), where prices rose 14.6 percent."

MIDWEST...YOUR TIME HAS COME!!
"Not only are houses inexpensive in Indianapolis, but wages and salaries are fairly high, an unbeatable combination. In no big city could more residents earning the median household income afford a greater percentage of all houses bought and sold during the three months ended September 30."


(all quotes from money.cnn.com)

Thursday, December 21, 2006 12:03:47 AM

The Daily Bulletin. “More than 27,000 more people moved out of Los Angeles County than moved in during 2005-06. ‘They’re definitely escaping Los Angeles for the Inland Empire,’ Fontana Mayor Mark Nuaimi said.”

OK there it is for LA.

The San Francisco Chronicle. “California’s population growth rate slipped for a sixth year in a row as tens of thousands of residents left for other states, according to new estimates the state released Wednesday.”

“‘In the past when (the economy was strong), California has attracted a lot more people from other states. Now we’re losing people to other states, and the Bay Area is part of that flow out,’ said Hans Johnson, a research fellow at the Public Policy Institute of California. ‘Why? The answer is housing prices have a lot to do with this.’”

That is for the whole of CA.

I guess you're part of the Kool aid brigade counting traffic to determine population.
Cool.
Cow_tipping.

Anonymous said...

Anonymous said...
So now population numbers are not to be believed either. OK. So we can't believe the MSM cuz they're all lying. We can't believe the NAR cuz they're lying. We can' believe Bernake cuz he's lying. We can't believe realtors cuz they all lie.


Why would you believe them anyway? They are all just trying to sell you something.

Anonymous said...

Bubble Shmubble said...
Dumb dumb? Are you 12?
-----------------

No, I'm trying to speak down to your level.

Nobody can afford that? Maybe you can't and that is why you rent your studio basement apartment for $550 including hot water. Don't assume everyone is in your situation. Using the 28% rule a $3290 montly payment would require a gross annual income of $137K, so a married couple each making $68K a year. Simply unheard of!!!! Average starting salary for an engineering grad was $55K for the class of 2005. I think at some point they'll hit the $68K mark and be able to afford the mortgage, don't you?
-----------------

Guy, you are confusing QUALIFYING and AFFORDING. My wife and I both GROSS $70k. With the current enviroment we could QUALIFY for 4x+ our GROSS to buy a house. That amounts to $560,000+!

Putting that in to the calc at 6%, my monthly would be $3,357 on the mortgage alone!!!

After taxes, def comp, pension, etc I only see $3,600 a month. As I sit here and breathe, I'm telliing you that I cannot AFFORD to pay 1/2 our TAKE HOME salary, or nearly 100% of mine, for a godd^mn house!

And we don't have the $$$$$ eng school loans, zero loans to be honest, I drive an altima, and she has a Camry. We want to have kids and don't want to haul them around in a beat up '87 Olds Cutlass being held together with duct tape. We have zero cc debt.

Your math is all fvcked up because you don't understand the difference between QUALIFICATION and AFFORDIBILITY.

Anonymous said...

So we can't believe the MSM cuz they're all lying. CHECK

We can't believe the NAR cuz they're lying. CHECK

We can' believe Bernake cuz he's lying. CHECK

We can't believe realtors cuz they all lie. CHECK