December 27, 2006

WSJ reports on renters and bubble bloggers rejoicing as housing crashes

"The Establishment", aka the WSJ, interviews some of the bubble bloggers about renting vs. owning, the coming recession and the corrupt David Lereah.

It does feel like one long victory lap coming up for the bubble bloggers, bitter renters and bubble sitters doesn't it? From vilification and scorn for believing there was a bubble and doing something about it to, well, hmmm, I guess more vilification and scorn as the bubble bursts!

Lot's of great stuff in the article from David, Patrick and Steven, but I can tell from the article that the WSJ authors are homedebtors themselves, and not too happy with the bubblesitters. See if you can pick out all the sly back-handed ways they try to make them look bad...

Renters Gloat Over Housing Slump - Some Who Missed the Boom Are Feeling Vindicated Now;Resisting 'Nesting Instincts'

The housing slump has been painful for millions of people who work in real estate or recently bought a house.

For Patrick Killelea, however, this year has been one long victory lap. Mr. Killelea, a 41-year-old software engineer, has long preached that it makes more economic sense to rent than buy homes. He recalls shouting "Wow!" when he heard about September's 9.7% drop in prices of new homes.

"I didn't want to gloat," he says. "But then again, maybe I did."

For years, Americans who refused to buy real estate at what they considered excessive prices were ribbed for failing to profit from one of the greatest booms in history. "Are You Missing the Real Estate Boom?" needled the title of a 2005 book by David Lereah, chief economist of the National Association of Realtors.

Now, with the housing market in a slump, renters who sat out the boom are finally getting some satisfaction.

Among all the defiant renters, few roar louder than Mr. Killelea, who pays $2,350 a month to rent a snug, two-bedroom craftsman house near Stanford University in Menlo Park, Calif. He figures it would cost him $7,000 a month in mortgage payments and taxes if he owned it.

Even though prices have come down a bit in parts of California, Mr. Killelea vows to resist the pressure to buy. Recently he mused on his Web site about why more people don't follow his example. "I get the feeling many wives are pressuring the husbands to buy," he wrote. "I know it's not politically correct to say so, but I think a lot of irrational purchases are driven by female nesting instincts."

78 comments:

panicearly said...

im living like jack, with two hotties only in Tokyo!,
no need for cars, the best subway system in the world, medical is great here, 2k in taxes/year for my condo/split three ways.

rejoicing my decison to sell in 05,
thanks to HP and all the bubble bloggers.

keith said...

Panic - my next move may be Tokyo as well. What am I looking at for rent on a 1-bedroom nice flat downtown good area?

How's the social life?

**Bubble Sitting Benefit #552: You can live anywhere in the world and not worry about a ball and chain mortgage somewhere**

Cheers

Lost Cause said...

You know the news is already 3 months too late by the time the WSJ is sneering at it.

Anonymous said...

Yes, female nesting instincts play an important part of the housing bubble. If a young 20 something guy knows that he can attract babes if he buys a house, he will borrow as much as he can to do so.

In previous generations, that guy would have to save for years to afford a house. In the 90's, he could borrow and buy right away.

David in JAX said...

I really enjoyed waking up to that article. The MSM is finally making their turn.

christiangustafson said...

You can nest in a rental.

We have a vegetable garden, a baby room for our infant daughter, a garage for my old convertible beemer, a deck for hanging out in summer, and a basement for our stuff. I mow the lawn, I plant tulip bulbs, I work on my car, we entertain friends here.

All for a fraction of a cost of buying in this insane Seattle market.

Anonymous said...

Stop listening to industry experts. The best advice is from your grandmother. I sat down with pen and paper on the rent vs. own concept. Not even close! My rent is what some people pay in property taxes alone; some cases more, some cases less. Oh wait! I forgot, I'm missing out on the deduction. Going to buy a house now. Post back later.

Do your homework. The numbers dont lie.

gangsta said...

Your victory laps may be short lived

http://money.cnn.com/2006/12/27/news
/economy/newhomes/index.htm?
postversion=2006122710

buzz saw said...

Hey, the msm is giving kudos to the bloggers because they know damn well that the corporate media they work for is nothing but a friggin' spin machine. Nobody who has half a brain listens to those corporate shills, and they know it. Green with envy, I say.

Mammoth said...

Christian Gustafson said,
"You can nest in a rental."
----------------
Yes, but can you plant fruit & nut trees, watch them slowly grow over the years, and eventually own the land under them, knowing that your residing there is not dependent upon the whims of a landlord?

(But I agree the Seattle market is indeed insane, as it is here in Kitsap County)

-Mammoth

AM Fence Sitter said...

Great Article, Patrick is good to go. Did you notice Yahoo Finance touting the New home sales numbers for Nov! I’ll wait a few fays for the revisions. The REIC Vampires always count contracts as done deals, I guess they have forgotten the 40% canc rate.

Anonymous said...

New home sales up is exactly in line with a bubble burst. The home builders can't sit on the fence, they have to move product so they are dropping prices and giving massive incentives. They are still profitable because their margins have been obscene (high).

However, this lowering of price puts pressure on the existing home owners to lower prices. Some cannot without going underwater, but, ce la f*cking vie.

Dear Homeowner, would you like some KY for your upcoming reaming?

Anonymous said...

I noticed all the reports are conveniently missing "month to month" price change. They only state year over year price change for new homes. What a bunch of slimeballs.

Anonymous said...

"A slump in housing has left consumers feeling less wealthy as home prices leveled off. Mortgage applications fell 14.2 percent last week to the lowest level since August as purchases declined and fewer homeowners refinanced, said the Mortgage Bankers Association."

Gee, if mortgages fell 14.2%, who is buying all these houses? Is the real slump in existing home sales? It would have to be a real doozy to offset an increase in new home sales.

Anonymous said...

anonymous at Wednesday, December 27, 2006 4:15:11 PM

LOL!!

Anonymous said...

Anyone buying a house now has less brains than Terry Schiavo.

Anonymous said...

It is truely sad that several comments have come up how "nesting women" have created the housing bubble. Please, take responsibility for your poor financial choices and stop blaming someone else. Yes, obviously I am a female. And several years ago I decided not to buy in the current market (Los Angeles) because the financial fundamentals did not make sense (even though I make a solid 6 figure income). Instead I put it into a triplex that I don't live in, where the renters pay the mortgage (30 year fixed), insurance, taxes, management company, plus give me an extra 500 in cash to invest per month. So I will continue "nesting" in my lovely apartment until the price is right.

Housebust770 said...

Just a little FYI regarding the So Cal Auto Market:

Business is slow, slow, slow!!! The credit noose has begun to tighten around many dealer necks and the Piper has just finished playing.

Time to pay up!

I see a long, difficult road ahead for automoible dealers and those with the deep pockets will be the ones who weather the storm.

Since housing and the auto industry are so intimately related. . . . I see no change anytime soon.

friend_of_hp said...

Keith -

Word to the wise.....you may have wondered why we referenced patrick and the other bloggers.....I read HP and I did research for Anders for this article....we were set to lead with Housing Panic, however fact checkers over here found some of your immigration and islam posts and became wary.....just an fyi.

Anonymous said...

That nesting comment directed at females was warranted in many cases but there was probably just as much idiocy generated by males chasing bling or p*ssy or perceived status. I'm male and I'd venture to say that with some of the dolts of my gender, their ego is everything. I've seen an awful lot of the ladies go apesh*t over new digs (and all the trimmings) but I've seen the wannabe dudes do some awfully stupid sh*t as well.

Anonymous said...

There are stupid guys who want their bling "crib". (But often it's to attract girls)

There are x-something professional women who think they will be 'left behind' and it's the 'mature thing to do' to buy even if it is financially insane.

And then there are whiny women who want their husbands to buy them their "nest", and if they were a Real Man they would do it.

The first two cases are self-induced f@ckedborroweritude.

The last one really is different.

Anonymous said...

That nesting comment directed at females was warranted in many cases but there was probably just as much idiocy generated by males chasing bling or p*ssy or perceived status. I'm male and I'd venture to say that with some of the dolts of my gender, their ego is everything. I've seen an awful lot of the ladies go apesh*t over new digs (and all the trimmings) but I've seen the wannabe dudes do some awfully stupid sh*t as well.

Dat der p*ssy will git ya evry damn time.

Anonymous said...

Turn on the Nature Channel and you will sometimes see shows where male penguins build nests to attract female penguins. Are we humans so different?

It is not the female's or the male's fault. That is just the way it is.

Salt Lake Mortgage Guy said...

"I noticed all the reports are conveniently missing "month to month" price change. They only state year over year price change for new homes. What a bunch of slimeballs."

Anonymous,

All businesses compare year to year sales. It's the only fair way to do it because of seasonal differences and because months have a different amount of days in them. (If they did it your way, February would be renamed bubbleuary because sales would always be less.)

For example, you couldn't compare ice cream sales in December to ice cream sales in July. You can only fairly compare year over year results. Otherwise a bunch of you guys could create a Ice Cream Panic website warning of the impending Chunky Monkey bubble.

Salt Lake Mortgage Guy

Anonymous said...

you posters and threadjackers are the reason why the other blogs get press and HP doesn't.....stop it!

Anonymous said...

Hey keef, did you get the comment from the friend_of_hp?

Anonymous said...

Here's the problem... just like with the penguins, we're nesting via biological mechanisms, however, with the so-called highly educated female/male cohorts, external excuses are being generated to compensate for the lack of foresight and left-brained thinking needed to buy a unit of property.

Therefore, I do recommend you fellows to join panicearly and Keith in Tokyo, where everyone avoids RE like the plague, and have some Sake, Tempura, Udon soup, and some hotties and if you're too old for that [ dating scene that is ], you can always go to a Soapland w/o society treating you like an ogre as they would in puritannical societies like the US (and even Canada but to a lesser extent).

AM Fence Sitter said...

No disrespect intended toward Friend of HP. However, Keith is one of the few with insight into the correlation between the The War on Terror, Illegal Immigration and the Housing Bubble. The US economy was under tremendous stress from the dot com fiasco, the last thing needed was a bunch of nut jobs flying planes into buildings. Easy money and cheap labor to the rescue and the rest is history. May be politically incorrect but it’s factual and you will never get this perspective from the MSM.

Anonymous said...

Mammoth said...
Christian Gustafson said,
"You can nest in a rental."
----------------
Yes, but can you plant fruit & nut trees, watch them slowly grow over the years, and eventually own the land under them, knowing that your residing there is not dependent upon the whims of a landlord?"


Lose your job, have a medical problem, stop paying the mortgage on the property you "OWN" and see how long you enjoy those fruit trees.

One of the few who paid off your mortgage? Get old, pension plans self destructs (after the fund manager gets a $8 million bonus) stop paying the taxes on the property you "OWN" and you won't be enjoying those trees too much longer.

Whim of a landlord or absolute ownership by the bank or government hanging over your head. It's really not as clear as some "OWNERS" think.

Anonymous said...

It's really not as clear as some "OWNERS" think.

Very True! Check out the property tax's and insurance rates in Fl. How are fixed income folks going to afford this madness?

sk said...

Hey gangsta,

You have the MSM behind ya but in the interests of truth justice and the 'Murican way you should look at the original press release by the commerce dept http://tinyurl.com/bp7jt

The month to month increase is actually quoted as 3.4 % +/- 12.9 meaning the "increase" can be anywhere between -9.5 to +16.3 %

Would one draw ANY conclusions from something like that ? Not me.

-K

panicearly said...

keith,
social life is good, though if you are working at home, it takes a direct effort, than with meeting people through friends at work and extending from there. perhaps the same anywhere new, but if you are out going you`ll do well.
I can introduce you to everyone i know and you can take it from there.

1 bedroom, depending on location and
quality , varies greatly in price.
there are some hurdles however with deposits, gaurantors etc. let me know when you are coming this way and i`ll help you where i can. i think you know my email already so feel free to send me an email anytime.

Anonymous said...

Anonymous said...
It's really not as clear as some "OWNERS" think.

Very True! Check out the property tax's and insurance rates in Fl. How are fixed income folks going to afford this madness?

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

Yep, and the government can seize your property so ChinaMart can build another store.

Anonymous said...

Mammoth said...
Christian Gustafson said,
"You can nest in a rental."
----------------
Yes, but can you plant fruit & nut trees, watch them slowly grow over the years, and eventually own the land under them, knowing that your residing there is not dependent upon the whims of a landlord?

(But I agree the Seattle market is indeed insane, as it is here in Kitsap County)

-Mammoth

Wednesday, December 27, 2006 3:51:29 PM

I have lived in 2 rentals that had Lemon and peach tree in 1 and an unbelivable plum tree and a so so apple tree in the other. Both planted by owners which we took full advantage of. Heck I still have lemon ginger marmalade (wifey is one super cook) and we moved out of that over priced turkey in 2001. BTW I rented it for 1695 when it had a 297,000 loan outstanding amount on it. That was just the balance, no idea what the price was. I have tons of plum and peach seeds that I have sitting in a box and they may be going in the ground (yea been saying that for 3 years) in my house (owned it since 2003) if I dont have to move. So not all renters are fruit challenged and not all owners are fruit rich.
Cool.
Cow_tipping.

Mammoth said...

Anon 7:36:22 PM wrote:
“Lose your job, have a medical problem, stop paying the mortgage on the property you "OWN" and see how long you enjoy those fruit trees.

One of the few who paid off your mortgage? Get old, pension plans self destructs (after the fund manager gets a $8 million bonus) stop paying the taxes on the property you "OWN" and you won't be enjoying those trees too much longer.”
-----------------
Good points! How do you prepare for crises? Live frugally and maintain prudent spending habits. Ask yourself before buying, “Do I really need it or do I just WANT it?” Buy when it’s on sale, buy used, make it yourself, or learn to do without.

Having room for fruit trees also means having room for a vegetable garden, which does keep grocery costs lower.

The food I grow organically likely contains more nutrition than supermarket produce, which is grown in depleted soils and sprayed with poison, so that contributes to my good health and hopefully reduces the chances of any medical problems.

But you are right - accidents do happen and people do become ill. The thought of being bankrupted by some sort of unforeseen health issue should scare the crap out of all of us (but don’t expect our elected officials to do anything about this).

The prospect of having property taxes rise until they are unaffordable should also scare the crap out of us. Many retirees on a fixed income are already facing this.

As for myself, I have health insurance through work, save whatever I can, and own a rental house which almost pays for itself and can be sold to pay off the mortgage on my residence. If I hang onto it for another 10 years it will be paid off and then begin generating income. (BTW, the tenants get to enjoy cherries from the trees I planted in the back yard.)

Meanwhile I am operating a small business selling plants, fruit & vegetables.

Hopefully this provisioning for the future will protect me from the financial shocks you brought up, but there is no guarantee. However, the fact that there is uncertainty in life, is no reason why a person should not take risks in order to get where they want to be.

Cheers,
-Mammoth

Anonymous said...

One of the bib bubble drivers: pussywhipped men.

http://www.youtube.com/watch?v=Ubsd-tWYmZw

keith said...

on the 'friend of hp' post - if that's the case it's a badge of honor for HP

1) I turn down interviews now with the MSM, turned down another one today, and they seem to be coming out of the woodwork now that the bubble has burst. Why turn 'em down? I don't want "general public" or more REIC trolls. HP should take some effort, some searching. HP should be a bit like fight club. Rule #1? You in the know know.

2) We rail against the MSM here. They're lazy, corrupted by advertising dollars and being disintermediated by the internet and bloggers. Partnering with them would be like partnering with the REIC. Catherine Reagor is a perfect example of a fat and lazy MSM

3) Look at the back handed slaps and condesending nature of this WSJ article. You can't trust the MSM as far as you can throw 'em. They'll eat you for lunch.

Bottom line - F the REIC and F the MSM. Two institutions that need to be torn down to their cores.

Thoughts?

Anonymous said...

::Bottom line - F the REIC and F the MSM. Two institutions that need to be torn down to their cores.

Keith, this is where you kick ass.

And please keep it up without the sensationalism of Iran's retarded leader, Mexicans invading Cali/AZ/NM, and terrorists which detracts from the core of your movement.

Anonymous said...

"However, the fact that there is uncertainty in life, is no reason why a person should not take risks in order to get where they want to be."

Bingo. The anon who said its too risky to own a home because 'shit' happens. That mentality will keep you as a renter for life. Pussy.

Anonymous said...

:One of the bib bubble drivers: pussywhipped men

If we were more like Holland, with legalized prostitution, this would change dramatically.

PW-ing is a function of withdrawing sex for financial favors. Once guys can get it, without the wallet hostage situation, the level of PW-ing will drop and the 'Sex in the City' crew will have to negotiate their terms on a more equal basis.

Anonymous said...

:too risky to own a home because 'shit' happens

Well if one loses one's job and takes a 30% paycut, just to stay in the same location, then I'd say that it's best to rent and purchase a low cost retirement home in Maine or New Brunswick (~$100K) while renting in various bubble zones where higher income jobs are plentiful but the cost of ownership is ~2.5x rent with the average 30 yr mortgage payment plan. That retirement home could be scooped up with an easy 15 yr fixed loan which'll leave plenty of time for building that eggs nest.

Anonymous said...

Anonymous said...
::Bottom line - F the REIC and F the MSM. Two institutions that need to be torn down to their cores.

Keith, this is where you kick ass.

And please keep it up without the sensationalism of Iran's retarded leader, Mexicans invading Cali/AZ/NM, and terrorists which detracts from the core of your movement.

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

Why? The stuff about the Islamofascists and the illegal Mexican invasion has to be said, and the ultra-PC, corporate MSM Thought Police is sure as heck not going to say it!!

Anonymous said...

"Well if one loses one's job and takes a 30% paycut, just to stay in the same location, "

I have been laid off twice and I am still here at the same house. Its not the end of the world. If your skills are worth something and you are confident, you should have no problem bouncing back. BTW.. Both times I moved up the salary scale, not down.

Anonymous said...

:The stuff about the Islamofascists and the illegal Mexican invasion has to be said

It's not the stating of the world news issues but the sensationalism of it. Of course there are crazy islamic leaders (esp that cleric who induced the Bali bombing in Indonesia) and illegal Mexicans but the way it's stated in these threads is very armageddon-like and paranoid inducing rather than stating what Ahmadinejad says and then letting the thread run its course.

True, the RE bubble talk is also sensationalistic, however, that's the theme of the blog to begin with but when all issues in the world convergence along the same lines, with the same level of emotional firebrand rhetoric, then the blog becomes little more than another hate group with extremist agendas.

I'd rather we focus on RE and the frankenstein economy (ala Goldman Sach private equity/hedge fund bonuses) and let the Honica types worry about tying it together with the so-called Jewish conspiracy and the lack of a viable modern KKK in America against non-whites in this country.

Anonymous said...

::If your skills are worth something and you are confident, you should have no problem bouncing back.

I usually get those kinds of raises when I switch locales, (i.e. DC to Boston, 30% increase) because the work moved from one region to another. And it's also not within the same company either. That's why I'm working on a retirement pad with a shorter term 15 year loan rather than buying in a bubble town. The more mobile I stay, the easier it is to maintain continuous employment with equivalent or higher pay.

Anonymous said...

Anonymous said...
::If your skills are worth something and you are confident, you should have no problem bouncing back.

I usually get those kinds of raises when I switch locales, (i.e. DC to Boston, 30% increase) because the work moved from one region to another. And it's also not within the same company either. That's why I'm working on a retirement pad with a shorter term 15 year loan rather than buying in a bubble town. The more mobile I stay, the easier it is to maintain continuous employment with equivalent or higher pay.

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

That's what I keep trying to explain to people. I would only buy in coastal Southern Craplifornia if the price truly made economic sense, i.e., if I could reasonably expect to
(1) save money compared to renting, and
(2) at least break even on the resale if/when I needed to relocate for job reasons.
Right now, renting is about 50% of the cost of "owning." That's not counting the tax "savings," but also not counting the added risks and hassles of "owning," as well as the resulting decreased mobility. The area is pretty overcrowded and congested (not to mention overpriced and overrated), so even taking a job across town would force one to choose between a killer commute and relocation.

friend_of_hp said...

Duly noted.....thx Keith.

Anonymous said...

"I noticed all the reports are conveniently missing "month to month" price change. They only state year over year price change for new homes. What a bunch of slimeballs."

All businesses compare year to year sales. It's the only fair way to do it because of seasonal differences and because months have a different amount of days in them.


Not exactly, Salt Lake. YOY and MTM results should BOTH be viewed to get the most accurate picture. In fact, a graph tells even more. YOY is fine, but you can end up quoting a rise in a benchmark that's actually falling -as when a bubble high was reached mid-year and the numbers just haven't fallen back to year ago levels. CONTEXT is key. Numbers can be intentionally or unknowingly made to tell a misleading story. Question all numbers and their source.

Anonymous said...

"...own the land under them, knowing that your residing there is not dependent upon the whims of a landlord?"

Nobody owns shit in this country except the corporate kleptocracy. You can either live at the whims of a landlord, or the tax authorities and planning bureaucracies.

OwenF said...

Well said, anon

chris said...

Mammoth said; Yes, but can you plant fruit & nut trees, watch them slowly grow over the years, and eventually own the land under them, knowing that your residing there is not dependent upon the whims of a landlord?

Mammoth youre right, us renters are dependant upon the whims of a landlord, however how many landlords are also dependant on us renters shaving off a little chunk of there high ass mortgage and will be for quite some time.

chris said...

Mammoth said; Yes, but can you plant fruit & nut trees, watch them slowly grow over the years, and eventually own the land under them, knowing that your residing there is not dependent upon the whims of a landlord?

Mammoth youre right, us renters are dependant upon the whims of a landlord, however how many landlords are also dependant on us renters shaving off a little chunk of there high ass mortgage and will be for quite some time.

Anonymous said...

:us renters are dependant upon the whims of a landlord

I don't know what state you live in but where I live, it's very difficult to evict a tenant esp one who pays on time.

All a tenant needs to do is file a single complaint with the housing authority and he can sit tight w/o paying rent for six months before an eviction notice can be generated. That's why landlords are willing to bend over backward for a creditworthy, paying tenant.

OwenF said...

Hey Keif. I'm the anon who posted the Debt Suicide video link.

Anyway, right on, f the MSM. Nobody in the blogosphere really understands how bad it is in the heart of those empires. I used to believe in them. I read the Globe and Mail, our nation's (Canada) paper of reacord, daily from the day I learned to read. All my youth I dreamed of being a journalist. Of weilding truth to maim tyranny. To make flesh words divine, offering my fingers to be mashed against the sacred broken altar of the typewriter 'till they were lacerated and dripping viscera.

I was a good student and easily talked my way into the best university-level journalism program. It was as easy as highschool. This is when I started to realize that I'd spent my youth boxed in a paper cage of fear.

Journalism is not something that should be taught at a school. Schools are great for anything requiring discipline, sloth and a willingness to believe and behave acording to what you are told.

Anyway, to cut a long story short, I worked at the student paper, won News Story of the Year award and quit in the middle of second year to work at the largest paper in the country (The Toronto Star). What can I say? It was riddled with unions, women, pensioners and management. Everyone feared for their jobs every day. In short, it was nothing like a revolution. It was like a dilbert comic strip, but with Pointy Haired Bosses fucking up NEWS. FUCKING UP INFORMATION. I couldn't stand it. I left. There's no money in telling the truth anymore, because nobody's going to pay you to rail against usury, perversion, ignorance and apathy. Now I work as a butcher. It's much less stomach churning.

Anyway: count me on board. Time to burn down babylon.

chris said...

Rent vs Own; I rent a room in a 1800 sq ft house from a realtor in Orange County 1 mile from the beach. His mortgage is $5,120.00/mo I pay 800.00/mo and I have a bigger room even then him. I also drive a 2002 4runner thats paid for, his SUV just got repoed last week for payments missed.

I also have over 200K in my savings and growing with 5.5% int. He is flat broke and eats 99 cent banquet frozen dinners, I eat well. He stays home watching TV I go out and have fun.

I earn about 900/month in interest. So technically I can subtract at least 600/mo after taxes from my rent. My quality of life is not different then it was before I sold my home which I bought in 99 sold in 05. Before I rented out rooms against a 1800/mo mortgage which included the HELOC (to pay off the car and improvements) and utility bills. I collected then 1200/mo for 2 roomates so 600 bucks out the door was my share. If I lost a roomate I could cover the differnce.

Now my current landlord collects $1,900/mo for 3 roomates leaving his share $3,200/mo plus his former car payment and lets not forget utilities.Plus he has credit card debt I have no payments on anything other then a cell phone.

Now owning a home dosen't seem like a very good deal dose it?
But he can plant trees and watch em grow if he can stay afloat that long. After all he is a realtor in OC a very cool market and everything he's earned he's had to contribute to the mortgage. Oh but he does have a Option Arm and he does get to deduct that 5 grand/mo payment from his taxes however will he make more then 60K in income next year?

Will the house get foreclosed on which will mean I'll take my money and good credit and maybe move south to say Newport Beach or wherever I want by looking on craigslist I'll find another FB in OC and rent again.Or maybe I'll rent a house and rent out rooms.I can still BS women and say I own it if I want to front like I'm some player to get laid. WTF will he do? no home? bad credit? no pussy? BK???

chris said...

Panicearly; I want in so you bought a condo in Tokyo outright and just pay low taxes on it? What will 200K USD buy me in Tokyo? And do the Jap hotties come with it?

Anonymous said...

Chris, you're right on the money, what can I say.

I'm the "rent in bubbletown/buy in Buffalo-Nova Scotia-Maine" anon and I look to buying a retirement pad for $140K (or less) in one of the above, low cost (but low employment) regions with a 15 year loan while job hopping from DC, Chicago, Boston, LA to maintain a stable six figure income. I see no reason to buy into this RE madness just to keep up with the Jones and to tell others that I'm a proud owner of an overpriced condo in Boston or DC.

I also tend to agree with some who say that one shouldn't necessarily be renting during their retirement years but for me, that doesn't mean buying a $650K townhouse which could easily depreciate to $400K since so many were built in all the bubble cities during the past five years. I say, buy a pad which makes sense and keep it for retirement.

chris said...

Panicearly; I want in so you bought a condo in Tokyo outright and just pay low taxes on it? What will 200K USD buy me in Tokyo? And do the Jap hotties come with it?

Anonymous said...

::What will 200K USD buy me in Tokyo? And do the Jap hotties come with it?

Warning: A lot of east Asian countries limit foreign ownership of property to joint ventures with locals.

Anonymous said...

Anonymous said...
::What will 200K USD buy me in Tokyo? And do the Jap hotties come with it?

Warning: A lot of east Asian countries limit foreign ownership of property to joint ventures with locals.

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

I'd imagine the language barrier would also be not insignificant...

BubbleShanker said...

Warning: A lot of east Asian countries limit foreign ownership of property to joint ventures with locals.


The US needs to have laws like these, to keep the illegals out of our country, it's funny how a crap hole like Mexico sends us all their criminals and they pack 50 in one house.

panicearly said...

Chris,
200kwont get you much, maybe a one bedroom 350sf.
but in the higher range there can be deals if you do your homework.

no the japanese hotties dont come with 200k, add another zero.
its tokyo.

Anonymous said...

"The US needs to have laws like these, to keep the illegals out of our country"

It's not for that reason (i.e. keeping hispanics out), it's to prevent a widescale pump 'n dump which can completely wipe out local economies.

Imagine a country where rich Soviet, Arab, and US/UK developers show up, bid up the prices, drive out working class locals, and then crash the place while taking off with a ton of cash.

That's what happens in economies with minimal capital controls where the local populations are subdued by well off capitalists from abroad. At least if it's a joint venture with a local firm, someone in the country can also profit from the pump 'n dump so that a percentage of the cash flow stays within the nation's banking system.

Asian economies are especially sensitive to the above because a lot of their capital is in the hands of conglomerate cliques like Chaebols in Korea, etc. They do not like foreign powers infiltrating their markets in high percentages. Yet, despite this cliquey MO, Asian economies have grown by leaps and bounds since the early 80s which is why a lot of so-called US based free market theories don't necessarily apply on a worldwide basis.

Anonymous said...

Yeah but I need those illegals to clean my house, clean my pool, do my landscpaing and wash my car. Are you going to do all that for me Mr. I hate Mexicans? If not please shut the fuck up.



"The US needs to have laws like these, to keep the illegals out of our country, it's funny how a crap hole like Mexico sends us all their criminals and they pack 50 in one house."

honica jewinski said...

We need to turn the entire Mexican/American border into a mine field......... after deporting all non-white European immigrants that have invaded us over the past 50 years, along with any and all offspring they may have had.

foxwoodlief said...

Among all the defiant renters, few roar louder than Mr. Killelea, who pays $2,350 a month to rent a snug, two-bedroom craftsman house near Stanford University in Menlo Park, Calif. He figures it would cost him $7,000 a month in mortgage payments and taxes if he owned it.

Gloating that he is smart? He'd be smart if he moved! Even in Austin you could buy a McMansion and pay the property taxes for that price! And if you have job that pays well enough to rent at that price then you would earn as much in Austin and no state income tax, remember you're payin at least 10% to the State of California in income tax!

foxwoodlief said...

Yah, Tokyo is the best, right. Crowded, expensive and over-due for a big quake that experts expect to cause at least a trillion in damage.

And no bargains either to buy. If you think $200,000 to buy a crappy 350 sqft box is a bargain than your idea of a bubble is quite limited. Even after 15 years of price adjustments in Tokyo it is still one of the four most expensive cities in the world.

Yes, all those HPers who can't wait for a Japanese style decline thinking it will bring them a bargain, think again! If you think $400,000 for a 2800 sq ft 3 car with a pool in Phoenix is a bubble then what is a $250-300,000 for a 350sq ft box in Tokyo after 15 years decline in price?

Anonymous said...

"...remember you're payin at least 10% to the State of California in income tax!"

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

The TOP state income tax bracket in Mexifornia was 9.3% the last time I checked...

Anonymous said...

Yah, Tokyo is the best, right. Crowded, expensive and over-due for a big quake that experts expect to cause at least a trillion in damage.

And no bargains either to buy. If you think $200,000 to buy a crappy 350 sqft box is a bargain than your idea of a bubble is quite limited. Even after 15 years of price adjustments in Tokyo it is still one of the four most expensive cities in the world.

Yes, all those HPers who can't wait for a Japanese style decline thinking it will bring them a bargain, think again! If you think $400,000 for a 2800 sq ft 3 car with a pool in Phoenix is a bubble then what is a $250-300,000 for a 350sq ft box in Tokyo after 15 years decline in price?

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

But what about median incomes and population density in Tokyo? I'd bet those are pretty high up on the list of the world's cities, so, at least to some extent, the high prices are justified by fundamentals. High prices don't necessarily mean a bubble and low prices don't necessarily mean a bargain.

chris said...

Foxwood said; Gloating that he is smart? He'd be smart if he moved! Even in Austin you could buy a McMansion and pay the property taxes for that price! And if you have job that pays well enough to rent at that price then you would earn as much in Austin and no state income tax, remember you're payin at least 10% to the State of California in income tax

Hey Foxwood Mr. Killea is smart how is it that you think anywhere in Texas even Austin is any comparison to California? We have the best weather and in the Silicon Valley (Menlo Park) I doubt he could earn anywhere close to his present salary in Austin.And his proximity to San Fransisco is worth it too.

So why would he be smarter to buy a McMansion in Texas, pay the high "very high" property tax on it and be stuck in Texas with less pay and humidity, hot, full of huge ass mosquitos no beach Austin? Besides Austin has allready bubbled up due to it being the only progressive Texas city. You my friend have some dumb ideas. Austin is way overrated!

foxwoodlief said...

Chris, there is a lot of money in this town...real money. Also the high tech jobs pay as much here so if that is what he is into then why wouldn't he be better off? I'm in the medical field and I wouldn't trade an extra 20% pay just to live in California as in the end after taxes and the high cost of living I'd be worse off than paying the high property taxes here.

Also the bay area is very dense, overpopulated, not the area I grew up in in the 60s/70s. I think it has a lot to offer if you didn't have to pay the bubble prices they've created since 2000.

And quality of life here is good. You can also fly anywhere you want to get away if you think you need a break from mosquitoes or humidity. Plus my mom says they past few years the humidity in Los Gatos has been hell so with climate change....and quakes...

Now if he loves it there, great. Better to live somewhere you love and rent than live somewhere you hate an own.

foxwoodlief said...

Chris, had to go, back now.

My neighbor is also a software engineer. He is early 30s, moved here from San Diego where he sold his condo (2bdrm) he bought in 2000 in early 2005 and made over $300,000. Came here, put 75% down on his 3800 sq ft stone home and has a mortgage of $600PI (pays his taxes and insurance annually). He would pay about $600 a month for taxes (but no income tax). He makes good money here and isn't paying $2300 a month to rent. Is he stupid compared to the guy in California? I'm sure their incomes are quite similar before taxes and expenses but the guy here will own a house at the end of the game and can save more since his owning costs are half that of the guy renting in California.

Having been born in Monterey, grew up in Santa Cruz and Los Gatos I can say that the bay area is nice, but not as nice as when I was a kid and definitely not the only place to live. Growing up I thought there was no better place on earth but now I'm a bit wiser, more experience, and more traveled to know that what was once paradise has been ruined by over population, excessive living costs among other issues.

But beyond those issues, my question was more directed about choices. If he chooses to not own a home and is quite content to rent I'm happy for him. If he is one of those who'd rather own then I think the trade off of living there is greatly diminished. As I said, I considered moving back to be near family and friends and looked at a job offer that would have paid me $45,000 a year more without overtime and the increased income was not worth the high cost to live there versus Phoenix or Austin or even Tampa for that matter.

Having chosen for thirty years not to live in bubble markets like California, New Jersey, Mass, NY, etc I'm less jaded by those examples of excess and recognize that not every city in America is over extended and over leveraged as those cities and that there are still many places in America where one can raise a family and have what our parent's had on their incomes.

panicearly said...

Im not saying that Tokyo is a good investment, or that its cheap.
But like anywhere, if you do your homework there are deals. Its not for flippers.

Anonymous said...

Funny thing about the WSJ article is that if you analyze the numbers, you see that Killelea and Baker are kidding themselves. Baker is counting the pullback from price heights that he didn't experience because he sold his place a year too early. He also ignores the roughly $50,000 that he's paid in rent.

They're kidding themselves because they made a bad decision and have to rationalize their mistake.

foxwoodlief said...

Annonymous you hit the nail on the head.

Don't we always rationalize our mistakes? Hard to ever admit we were wrong.

Will be interesting in six months to see how many of those who were "certain" that a certain course of events would occur will admit they were wrong if they don't...they'll either say, it was coming but I was off by a year or insist that "renting is always better" or "owning is always better" when in reality any decision is fluid and specific to a particular situation.

Love rational thought here! Keep it up.

Anonymous said...

Anonymous said...
"However, the fact that there is uncertainty in life, is no reason why a person should not take risks in order to get where they want to be."

Bingo. The anon who said its too risky to own a home because 'shit' happens. That mentality will keep you as a renter for life. Pussy.

Wednesday, December 27, 2006 11:51:37 PM
"

Let me clarify. The topic of this thread is renting versus buying in TODAY'S price climate. NOT renting vesus buying as a lifetime "one way or the other" commitment.

Buying today in the bubble areas is a bad financial move. Paying too much just to "OWN" the land underneath you is the topic. This "Pussy" has been buying and selling homes since he was 21. Sold the last one June 2005. Of the 6 homes I have owned I never talked myself into believing I "OWNED" them. Its a financial move, and thus emotions are best left out. When it makes sense to rent, then rent. When it makes sense to "OWN" then buy (I will, when it makes sense).

Since you obviously are not a "Pussy" buy a house in So.Cal., or pick your bubble spot, (no fair picking the 10 cities left in the counrty that are not overpriced) Post the particulars and show everyone how "you take risks". Then revisit us in 10 months and let us know what that house you "OWN" is worth and how it "got you where you want to be".

Anonymous said...

"Post the particulars and show everyone how "you take risks". Then revisit us in 10 months and let us know what that house you "OWN" is worth and how it "got you where you want to be".
```````````````````````````````````
Ok tough guy here you go: I bought my current home here in ORANGE COUNTY, CA. in November 2002. 30 year fixed, 5.375 interest rate, no money down. Right at the rise, perfect timing. I have approx 400k equity untouched (never refied), which some will be gone, I know. But if it drops 50% I still come up smelling like roses no matter what.
In August 2003 I purchased a rental in the Inland Empire which has now tripled its value. I could sell it but I plan on holding for my kids.
If I didnt have the balls to make a move I would still be living in 2003 in my 725 sq.ft. apartment jacking off to Oprah, like you :0)

Anonymous said...

I sold my house with a
flat fee mls broker

I got some calls its the best so many offers just price it right