For HP'ers - serious question.
What is it about you that made you find your way to HP, and realize a great housing ponzi scheme was happening before the rest of the sheeple figured it out?
Your parents and upbringing?
Your education?
Your life experiences?
Your open mind?
Your bullsh*t detector?
Your work ethic?
Your distrust of the media and people in power?
What is it?
Why were you out putting up sandbags when the sun was shining? Why were you the one warning others when nobody would listen?
August 25, 2007
HousingPANIC Stupid Question of the Day
Subscribe to:
Post Comments (Atom)
116 comments:
In times of peace wise men prepare for war...
Anyway, I'm a peak oil freak and I knew no one would recognize peak oil... only the financial destruction it would first cause. This is the last bubble folks, it's all down hill from here. The cheap easy energy needed to pull us out of the next depression has been used up. Good luck, you should be better off then most having at least anticipated and mentally prepared where as the sheep will be frozen with fear and unable to plan and execute.
I bought my condo at the peak, luckily for me I am just a college kid and the most condo I could afford was 83,000. With 4K closing costs included in the mortgage It was at 87,000.
I put 20% down and have a 6.5% fixed 30 year loan.
The problem is I am engadged and when I went to sell my house this year (I bought in Dec 2005) I noticed that the unit above mine, which is nicer, was selling for 4,000 less than what my mortgage was.
I was hoping I could have broke even atleast or made money in 2 years. in fact i was expecting that.
I went on the internet and looked at housing bubble and that led me to this site.
I guess the good thing is losing 10-20% of 87,000 is a lot better than losing 10-20% of 500,000. :)
Getting chumped by a POS developer and their lying bastard RE agents. I allowed myself to be duped into thinking I was getting in on the ground floor of a posh riverfront development that was really a high risk gentrification/urban renewal effort in one of the Northeast's nastiest yet unknown ghettos, Wilmington Delaware. The realtwhores were all talking about how its going to be the next Inner Harbor and how the developer owns all the land etc. BIG FAT LIE. The "city" (and I use this term loosely) is bought and paid for by a single developer and is being used to get the land on the cheap via eminent domain. So now the city and landowners are locked in a legal/political battle that will take a decade to work out. IN the interim a luxury ghetto townhome/condo complex stands like a monument to ignorance. Many are empty and owned by flippers who flopped. The neighborhood is a frankenstein combination of high end homes mixed with a rehab center, a sink hole, run down lots, a lumber yard, a whore house strip joint complex etc. I allowed myself to get into this position and the natives knew better so I educated myself with HP and realized I either had to drama price or be stuck with a luxury ghetto townhome (either by paying for it or having a foreclosure on my credit) so I drama priced and found a low life delaweasel who was willing to take it off my hands because of all the freebies and the discounted price that was 40k under the competition and 60 under "FMV". But if nobody wants them then FMV is ZERO!! Many flippers are still out there a year after my sale with minor price cuts. I know they hate me because I "ruined the comps" and eroded their FMV. But I had to move forward w/ my life and not have this over my head draining me financially and mentally. STAY AWAY FROM WILMINGTON DE ITS NOTHING BUT A GIANT CORRUPT AND NASTY GHETTO!!
THANK YOU HP!!
Robert Shiller.
.
.
.
.
I've got a huge BS detector. My parents worked hard on teaching me how to fit in society without jumping off a bridge when everyone else did.
I love nice stuff but I am willing to live in voluntary simplicity before doing what I think is wrong in the long run.
I also think that 50% of the world cannot live like America's middle class. We'll rape the world's resources before that happens unless our economies evolve into much less materialistic systems.
I also believe that this growth is secular, dating back to the 1800s. North Amercia is built around the car and cheap oil. It is based on abondant oil and resources. As China and India evolve, materials will get scarcer and I think the developed world's middle class should brace itself for belt tightening. In a world fighting for resources and energy, big houses will become harder to maintain.
When Greenspan cut the rate to 1%, I knew it meant trouble. I was managing a financials mutual fund, saw exactly what banks were putting on their books, and declared it bubble mode in 2003.
Lots of egg in my face I must say. Not easy. Hardest years of my life, it has affected my career big time and I can't wait until the whole thing pans out the way I see it. I know I'll never get outside recognition but I'll finally get my own personal satisfaction. I thrive on looking for the truth.
I came here for moral support. I couldn't talk about this with anyone without being ridiculed.
Deductive reasoning, and watching the local Orlando housing market place in October of 2005.
HP had the only news about the bubble and an eminent crash back then.
Keith,
I fully participated in the boom. I made a lot of money buying and selling at the right times.
My father has always been a don't trust anyone kind of person. He grew up in Eastern Europe and his distrust of govt/media are sometimes a little much for me. But some of it did rub off on me I suppose and I always do question things I read. I was the same in school, never accepted anything a teacher told me without challenging him/her. So when the NAR told me in 2005 house prices were still going up 10% ayear while I saw the number of for sale signs increasing, it didn't take long for me to realize the game was over.
That being said I don't hold any animosity towards realtors or brokers or builders. They have a job to do which is sell a product. I as a consumer have the option to buy what they are selling. If millions of 'tards out there bought (or didn't sell) because of a slick sales pitch, well too bad for them. I am not going to blame anyone for being good at their jobs and making lots of money off the stupidity of others.
Hello
Yes, I am what you would call a bitter renter. I live in southern California, and everyone knows how insane housing prices have gotten over here!
What led me to housing panic? Frankly, it was my job. The "talk" at lunch was always "How much money 'everyone' was making in real estate." It seemed everyone at my job was a flipper or somehow connected to making bucks in property. Even the boss let EVERYONE know how much CASH he was making flipping properties!
How did they treat me? Well, to be honest, like yesterday's garbage! "Why dont you buy property? You know you're going to priced out forever?" or here's a better one "I dont need to work here- I make more money selling just one of my properties than you can make in a year!"
To top it all off, my boss one day showed me a bank statement of one his properties he had just flipped (back in FEB 05) for a profit of $202,000. And to make it worse, it was followed with a comment "How's the renting life!"
Today- this very same person is struggling with multiple properties he got with his liar loans and he's either gonna do a short sale or go into foreclosure with two of them.
No one there talks about property anymore! No one talks anymore about their paper wealth! Talk about vindication. Talk about schadenfreud!
Its not that I wish them ill will. Its just that when I look back, I see how rude many of them were with their "GREED" and their disrespectful disapproval of my decision to stay a renter.
As a result I searched online for anything I could find on housing and the craziest bubble in financial history. That's what led me to HOUSING PANIC! And you know what, for once I feel good about myself and my decision to stay out of this insanity.
And a final parting thought to all my co-workers who let me know my place in the hierarchical pecking order-
F*#k YOU and F*#k your damn greed! This HOUSING CRASH was the GREATEST thing to happen to America the past 7 years. So- Go to Hell- There's plenty of FIRE SALE prices waiting for you THERE!
Here in the South Jersey/Philadelphia area, things have not really changed very much. It is definitely a huge bubble and I think we are still in denial in this area. I have been warning everyone about what is about to happen, not just in real estate but with the dollar, economy, stock market, etc. but I think they would rather take the ostrich approach. Most people call me chicken little or pessimistic. When did realism become synonomous with pessimism? Most people in the work force right now do not really know what a painful recession is. There about to get a crash course (no pun intended). I honestly believe that we are eventually headed to a hyperinflationary depression because of our Fed & dollar's reserve currency status. Being in cash is not good enough people. Get out of the dollar as best you can. Time is very short now. The only inkling of hope is that Ron Paul can win somehow and convince Washington of a total restructuring.
I can't remember exactly how I came to this site, which was back in March 2006. I believe I did a Google search on real estate blogs, looking specifically for blogs that believed a strong downturn was underway. HP was the second blog I came across (the first was Bubble Meter).
I also wanted to know at the time if Toll Brothers was still a good stock to short (turns out it was, at least for a brief period).
I remember running across a realtor blog at the time, where two realtors were arguing that a 10% drop in Phoenix prices would be "silly". They used the word "silly" about 4-5 times to describe it. I wonder if they think it's silly now since it's already happened.
While flying into HotAlanta last year our landing was delyed. We had to circle for awhile and I had the window seat. I could hardly believe my eyes at how many new construction and developments I could see. I was amazed. I asked myself: How are they ever going to sell all these properties? That was the real eye opener for me.
When the house I bought in Glendale, AZ for 134,000 in 2001 was worth $300,000 in 2006.
15 year fixed at %5.375. I have never banked on making a large profit from my house. Now, what I am banking on is paying this one off, selling for $140,000, and buying a nice 1 acre parcel to build a house on. (The prices should be down to 2001/2002 prices by the time we are ready to move off of our postage stamp).
I put it down to having a very acute inbuilt BS detector.
I don't care how Dopes and his mate like to paint it, property prices of 10+ X income are already unaffordable, how in the f*ck do these bozos figure 30% increases in prices YOY?
With easy credit gone by the wayside, the housing market is really up shit creek.
I could be wrong though, with McDs hiring and iphones selling like hot cakes the economy has never been in better shape!!
I'm a non-practicing licensed CA real estate broker who hasn't sold property since 1998. Ironically I have always rented (that is, I have never bought a home!!) because it is so much cheaper than buying and allows me to live near my jobs. That was the kind of truth that I actually tried to tell home buyers long ago, but it didn't help me sell homes!! :-)
Anyway, I've been in Information Technology since then and never looked back. Loan companies have told me I can buy a fairly expensive home. But I don't want an expensive home. I want a well-priced home.
I started to read web sites like HousingPanic and others like it that tell the truth because I hope for the day that housing prices again fall in line with affordability (e.g. loan amount 2.5x yearly salary...at most!) and it would actually make logical sense to buy a home.
Other than that I don't even care at all about real estate. I only keep my RE license current in case I lose my jobs. But the license is starting to look more and more worthless anyway and a waste of a few hundred every year.
Anyway, we have a long way to go in this housing recovery....
No blogger (sorry Keith, not even you...) has even mentioned the possibility that the home builders and related companies may consolidate, create a monopoly, find a way to keep house prices up AND force rents to creep up to near house price levels and screw both renters and buyers. That is what we are heading towards now. That is the opposite of free market. But most people don't realize this. Some friends tout the new "socialism" but they have no idea what they're talking about.
Anyway, what we are witnessing is a return to midieval style feudalism, where only one person, the King, owns all of the land in the area, and everyone who rents from him, even the Nobles. We're talking 1066 William the Conqueror days. He took a detailed inventory of all the land he owned (everything in England and Normandy).
Information technology has improved to the point that this is possible on a global scale. (I'm just glad I don't work for the company that will eventually do this...).
Keith, what are your thoughts on this? It's kind of out there, but seems logical. Keep up the good work. This is a seriously entertaining blog!
I came to the conclusion that the market was going to go to hell around mid-2005.
In my area (Palm Beach County) some townhouses appreciated 50% in six months (no exaggeration) from Dec 2004 to Jul 2005.
I had a feeling starting in 2003 that the market had to at least level off soon. It didn't--it kept going. But that last crazy year of the boom (04-05) was what convinced me that prices weren't going to just "level off". They were going to tank.
It was around then that I started reading the bubble blogs. The bubble websites helped reinforce what I already believed.
I have to say, though--even though I thought things would get bad, they've definitely gotten a lot worse really quickly. I was starting to worry that the bubble would simply move from housing back to the stock market and we'd just keep an endless Ponzi scheme going that shifted back and forth between stocks and houses.
Good to see it all come crumbling down now. I don't wish for financial disaster--I just hate seeing people making money through what was the largest Ponzi scheme in history. The only people who should be making a bunch of money are people that create good products and services. That's why I'm happy to see that the housing market is tanking and the stock market is about to follow. It's amazing this bubble has lasted so long.
Because I realized that even though my tax return is probably 98th percentile for someone my age (early twenty-something, six figures), I couldn't even begin to afford a house even with compromises within 10 miles of Washington, DC. However, that was my assessment. The people at the other end of the table (the homebuilers) were willing to get me $700,000 through their guy! I jerked them off for months and months with phone calls, low-ball offers, and hardly reasonable demands and they still entertained me.
It was like I was the only person who saw the elephant in the room. Everyone I talked to thought it was normal. You begin to believe it yourself, until you read housingpanic and it's like someone doused you with cold water.
Thank you housingpanic. The amount of money I saved by not buying a $700k townhouse, and by shifting my retirement assets to stable value pre-summer-2007 correction will save me millions by the time I'm 59 1/2!
I wanted to buy a house and found patrick.net and haven't wanted to buy a house since then; however, it was fun to find other HP blogs and crash news because I knew that patrick was right and things would come to a head.
The main reason why I believed patrick was that I had a mathematics minor and his math worked out and I don't like to work too much and, if that's the lifestyle I want, I have to leverage my smarts to make it all work out.
My parents were born in the Depression, NYC and San Francisco, and we grew up with the stories. I'd read stories about past booms and busts, and growing up in D.C burbs, I'd seen firsthand the mediocre minds of the people in charge. Pretty decent BS detector - my grandfather was a NYC homicide detective, 1st generation Irish. Living in Montgomery County, MD., as phoney an area as you'll find, full of 2 cent millionaires and overpaid gov't dopes, honed my senses, so I seldom accept appearance for reality . I saw things were askew in real estate in '01, when looking to buy. I started digging for info, for confirmation that I wasn't alone in my dismay. At first I found little, kept rooting 'til I did. I can't remember precisely when I found HP, but once I did, I felt at home. I have to say that I miss Honica, though, and the "old days" of spirited debate about illegals and multiculturalism. Just as HPers didn't buy BS from NAR/ US gov't about housing/economy, most see through BS about immigration, multiculti & globalism.
great question.
A: a strong survival instinct.
I've been an HP reader for about 18 months. One of my hobbies is reading up about history and sociology, along with economics and human tendencies.
After 911 hit and interest rates dropped, I was living short-term in Toronto. Toronto was still recovering from a housing recession in the 1990s, and decent properties could still be had for under $250,000.
I tried to sell my friends on the merits of buying an old war home in a nice part of town. There were 5 of us, and it was possible to buy a 4 bedroom, 2 bath home for about $220,000. This was in 2001. However, I wanted $10,000 from each person, and only one other person was able to come up with the money (my girlfriend, to whom I gave $8,000).
We were all planning on living in Toronto for 3-5 years, so the plan was to live in the house and pay the mortgage/taxes/utilities (which would have been cheaper than where we were renting at the time), then sign a legal document stating that the property had to be sold at a given time, and that the profits would be split equally among the parties.
About 6 months later, I started reading stories in the news about how everyone was doing what I had thought of doing with my friends. Flipping properties, renovating, speculating as to where the next Toronto hot spot would be.
Then, I realized that this wasn't only going on in Toronto, but in many cities in North America. Then, I read about all the special mortgage products in the US and how Bush was pushing everyone and their dog to buy houses, and I smelled a rat.
By this time, my friends were ready to buy a house, but I advised them not to, saying that the trick is to do it before anyone else figures it out. It was 2004 by then, and a similar house to the one we were going to pay $220,000 for now cost about $420,000.
Then, all the flipper shows and HGTV specials and reno shows and speculation was going on, and I read more and more about how all of these homes were being bought on leverage, and I knew things were going to end badly.
People in Canada say that we're not going to be hit by a housing panic. I totally disagree. Certain areas here may get it even worse than the US. When the American consumer stops building houses (wood, aluminum, copper and nickel for plumbing, concrete, gravel exported from Canada) and buying new cars (a large chunk of cars built in North America are built in Southern Ontario), it will be devastating for Canada's economy. If the US decides to protect itself via tariffs on wheat, corn and barley, we're screwed there too. Then add the collapse of our mortgage industry - we may not have as many defaults, but a lot of people will lose jobs - it spells huge trouble.
I am sorry I missed out though - I would have bought in 2001 at $220,000 and sold in 2005 for about $550,000. That would have given us about $400,000 to split 5 ways, with my wife and I getting a share each. $160,000 would be nice right about now. Coulda woulda shoulda, right? The good news is, I'm only 31, so I'll still have plenty of time to beat the speculators the next time around.
Here in San Diego, I finished my BSME degree at the end of 2004, and got a decent job by mid 2005. My wife also has a degree and makes average income. So in mid-2005, flush with confidence, I hit the bricks looking for a house to buy.
Holy Sh@t!
What a rude awakening I received at the hands of the ruthless housing market. Here we made well above average incomes, yet we couldn't even afford a sh@tbox, 2 Bdrm, condo in El Cajon!
So then I began investigating any and all information on housing that I could find, newspapers, library, internet(Google can find amazing things for you). I was glad when I found a lonely few out there on the internet who also believed the housing bubble was real, and doomed to fail. Man! We used to be ridiculed mercilessly back then too.
It's a good thing the bubble bloggers kept the faith through the rough times. They helped me a lot.
Good job, Keith.
Several reasons.....
I was a RealWhore in the late 80's and saw the decline of the real estate market due to the Savings & Loan lack of lending standards. Once the lenders tightened up, my business was ended virtually overnight. At least they were smart enough to package the risk and sell it to our foreign creditor banks this time.
I was considering buying a house around 2003, talked with a RealWhore and he hooked me up with his mortgage broker buddy. Here's almost verbatim what he told me... "You have the kind of credit score we don't see around here very often, I'm sure we can get you a mortgage in the $1,000,000.00 neighborhood". It was then I knew the wild times of real estate were back and I should stay out of this market. They were more interested in credit score (an easily manipulated number) then income verification and tax returns (as had previously been the norm).
I am shocked at how long and how high this bubble has been blown in comparison to the S&L days. I'm in a supposed non-bubble city, yet I've seen the 100% - 200% rise in prices.
Being in the R.E. business formerly I know how to really track the market. County Assessor data is now available online showing all sales activity. In my supposed non-bubble area there are many properties languishing on the market. 80% of those that have sold which were purchased in the last 5 years were either foreclosures or short sales.
There are many flipper properties sitting on the market still, we'll see how deep their pockets are in the winter when taxes come due (which btw are up over 100% in the last 6 years dues to "house appreciation")
My own situation.... I rent of course in one of the better neighborhoods in town. My cost is roughly 20 - 25% of owning the same space in the same neighborhood (p.i.) and I have no taxes, insurance, or maintenance liabilities. A big plus is my heat ,hot water, and cooking gas are included in my rent so I'm no longer subject to natural gas price variations. The rental market is such that my landlord is in no position to raise my rent anytime soon. It's never been raised in over 4 years.
It was my bullsh!t detector.
I bought a home in Placer County CA in 1992 for 118,500. Sold it in a 1997 divorce for 131,000. Five years later I wanted to buy again and a similar home was selling for 250,000 I knew that wasn't going to last. I watched the value go up another 100,000 and started telling people, "This is going to crash. It must. Who can afford these prices? There aren't that many wealthy people here." I didn't understand how people were actually buying them or how the "bubble" was lasting so long. In my desire to understand I found HP and Sacramento Landing and that began my education in mortgage fraud.
This one is ez. I worked in the TECH industry when the TECH BUBBLE crashed. I can't understand how housing is worth more in America when jobs are going to India. Anyhow, I refused to be part of another bubble.
1. agents and lenders told wife and I we could buy so much more home.
2. agents and lenders used gross numbers instead of net.
3. tear down and rebuilds in the neighborhood did not make sense.
4. the nagging question of 'what do these people do for a living that they can afford a massive home, two bmw's, and pay the property taxes?'
5. people living lifestyles indicated in item four above seemed to be greater than 10% of the area's population.
6. property taxes increased faster than our increase in incomes.
7. depth and breadth of financing tools shoe horned most into houses they probably could not otherwise afford.
Education.
I am a degreed economist, although I am in IT management. Interesting huh? Computers were a hobby of mine in school. After school, I found working in finance and not having a degree from a pedigree school, boring and menial. So I turned a hobby into a career, and my "career" into a hobby.
As an Austrian economist, I am well armed to spot a bubble. I called one in 1997, bought a fookload of gold and silver in 1999, and called housing in late 2002.
As a side note, I own a condo. Bought in a nice SoCal neighborhood in '99 for 89k with 20k down 30 year fixed. Even with HOA dues and taxes, I pay LESS than renters in the neighborhood. On average, 350.mo less. Muahahahahaha!
I remember in late '04 and early '05 EVERYONE I knew was telling me to sell, and trade up. To which I responded this is a bubble and it will pop. People would look at me as if I had just kicked a child.
My mother even tried this one, "An identical unit to yours just sold for 260K!" I responded: "You've been in my place. It's not worth a quarter mil...yet you DON'T see a bubble. That's insane."
Should I have sold and rented? Well at the time average rent where I live was higher than today ~$1375/mo. That was $600/mo more than I was/am paying. So in 20 years I have renting nothing, or a paid off mortgage and my "rent" goes down to property taxes and hoa dues. Hmmmmm....I'll stay.
All of your suggestions Keith - but probably mostly due to my engineering training and experience, although my upbringing owes much to the Quakers and Methodists. Not only was I trained in the workings of the physical world, but I've gotten to witness the long slide down the de-industrialization slope beginning almost 30 years ago. BTW, the slide now is more akin to defenestration.
I don't even remember exactly how I found HP. I probably googled 'housing bubble' and HP was among the results. But once I found HP I knew I was home.
But I think I've always been a contrarian. I've been reading about bubbles ever since the nasdaq decline of 2000.
When I would mention the possibility of a housing bubble to friends I was amazed at how emotional their opposition was. I respected them and thought they were rational people who would eventually be won over by the facts. HP gave me some good facts.
Of course my friends are like most people and are ruled by their emotions and are still in denial - I don't mention the housing bubble to them.
But now I'm hooked and am still collecting facts and information - just in case my friends someday would like to learn the truth.
I think it was Spring or Summer 05 when I noticed an article about Bob Toll telling everyone how great things were but then he turned around and dumped a bunch of his own stock. I always felt it was a bubble and was just waiting for it to pop. I lived through the whole Black Monday thing and I remember the real estate drop in the 90s so I just figured we were in a new cycle. Googling "real estate bubble" I kept getting more and more hits which at some point led me to HP at the end of '05. The biggest change this site has brought me is that I no longer feel like buying a house is the only track or even any measure of success. I like the idea of being able to pick up and move anytime I want.
Seth Jayson over at The Motley Fool recommended this blog - that's how I found it.
But the factors that caused me to immediately accept it would look something like this:
- I was raised partially by my grandparents - Great Depression survivors who imparted important lessons to me, like "be thrifty" and "the government lies to you" and "Washington DC is effectively evil."
- educated as an art and design major, with a lot of psychology studies - so I know propaganda when I see it, and how well it works (unfortunately.) Plus if you ever get expelled from a private school for political reasons, it'll get your cynicism engine revved up early in life. :)
- very open minded, yes.
- pretty strong BS detector, especially the stuff flung by government, TV, and anyone trying to sell me something.
- my work ethic could stand to improve, honestly... the internets are distracting!
- MASSIVE distrust of the media and the powers that be. I was a photoeditor for (among other clients) a real estate publication when I was in college - "hey kid, can you cover up that mud with grass, get rid of the power lines, get rid of that rust, erase stuff we don't like" etc. This was in the early-mid 90s. Photos lie. I know 'cause I did it (to prove my 'chops... now I feel very bad about it.) It's only worse now.
I went to buy a house in 2006 (I know, I know) but I wanted something that wasn't bubbly, that wasn't extravagant, that was priced nearer its real value. I was really careful about it (and laughed at for my supposed "overcautiousness"!) and got a brick 1400 square footer built in '56, in a town of less than 6000 people surrounded by farmland. A smidge over 100k and 1/3 of an acre. Not a flip, a HOME, where we have a chance of feeding ourselves if TSHTF and the city folks go all zombie.
People buying 200k+1970s-built paperboard sh1thouses in the 1 million+ population, no-farmland nearby city - well, they all thought I was crazy not to "buy in Austin before you're priced out!" No thanks, I'm from North Carolina where I lived in a 3000+ square-foot 1921 3-story that I bought for 55k in 1991 (in college). Your prices... they make no sense to me!
So now I wonder whether hyperinflation or *deflation* will get us... sadly hyperinflation looks to be the better of the two. At least then my debt (such as it is) will shrink. But deflation would kill us all.
And finally... even with the slightly more aware MSM... most people in the US still have no idea that there's even a problem. THAT amazes me. They're gonna be blisfully ignorant until the ATMs stop working.
*looks squarely at DOPES*
I wanted to figure out what the hell was going on...
In 2005, I was living in Vegas and in the process of moving. Two neighbors wanted to buy the house IMMEDIATELY and asked to be put in touch with the owners from whom we rented. And I was astonished given that from my observations, both families lived paycheck to paycheck. How in the heck could they buy my house? Also, in this time, a young couple - a teacher and guy in construction - moved into the corner house. They put in a pool. Remodeled the front. Bought 2 new cars. Unless they had a trustfund, where'd they get the money from?!? I knew my husband as a computer dude probably earned more and I knew we couldn't afford those big ass toys. Then I started surfing around and found this site. And all my questions have been answered.
bullsh*t detector all the way. Must have been close to three years ago now, maybe more. I was finishing up grad school here in the bay area and went to look at home prices on the peninsula. My girlfriend and I knew prices had gotten a bit silly, but even so we weren't prepared for the magnitude of the silliness that we saw. After one day of looking around at houses and condos, we knew our options were rent, or sign up for 30 years of a payment that would be 2-3x equivalent rent. Searched housing bubble on google and found Patrick.net and its well-thought out 50-point argument of why buying in now is a bad idea. Agreed with basically every point. The MSM offered literally nothing in comparison to the reasoning listed by Patrick - mostly just the thoughtless opinions of realtwhores. So to get news (and entertainment) I found this blog, Ben's blog, Mike Shedlock's blog, and Rich Toscano's blog. Each one of them kicks ass in its own way, and each one has helped to appease my bullsh*t detector while the MSM was asleep at the switch. Over the course of the last ~10-11 months the MSM finally woke up, nowadays it's so gratifying to see the MSM pointing out how effed the housing market is, after all those years of denial. Even orangeman is saying housing is effed now. Who's next, Lawrence Yun? Nah. Probably never for that monkey.
next bubble is gold and silver
Well I bought my first home in 99 in san diego county oceanside for 168K 0 down 30 year fixed 1500 mo total mortgage and taxes and ins. I was single had roomates paying the mortgage. Smoked alot of pot and was a dot comer too! Graphic Artist professional slacker!!!. So by 2004 I had watched prices way jump I had realtor whores soliciting me with flyers showing me that my neighbors home sold within a week for 450K! I can do simple math even as a stoner!
I watched fools overbidding on theses ugly hoa run 1200-1400 sq ft stucco boxes.
Somehow I found HP and became addicted! I was preaching the housiing bubble and crash. People kept buying and refinancing. I even had this one girl who was doing loans I was doing her!. She was 25 previously in collections telling me how customers would refi and cash out several times a year. Even she didnt believe me. I'm like these homes cant keep going up many of my friend who made 6 figures a year had to rent still.
I was seeing multiple hispanic families buying homes together even. I was seeing older folks selling asnd then paying cash and retiring in other states like Idaho and Oregon.
Well being that I was sick of my gossiping neighbors too the homes were so close together. And being policed by the HOA for playing music too loud while partying in my hot tub sometimes with naked chicks too!
So by 2005 I figured these prices are gonna crash by end of summer. So I had recently lost one of my roomates to marriage and he bought a damn house out in Lake Elsinore for 3 times what it was worth...tried to convince him too ahh the power of pussy! she was hot.
So all alone I put my house on the market for sale by owner. I held open houses...I had to smoke my weed outside that kinda sucked! So a month later only lookyloos and people that were trying to sell there condos first. I was getting nervous reading HP and thinking I might have missed the boat.
Then a young hispanic couple driving a bling bling black ford truck with crome wheels...dude had on some nice jewlry too lots of mouuse in the spiky hair.
They make me an offer of 10,000 over asking price of 485K because they were doing 100% creative financing, there realtor was a young hot latina chick driving a benz C class. Her card said "Mi" Banco I bullshit you not Realty and Lending Services. So Mi Banco also Brokered the loan a option arm. So I sold it cashed out big time. I ended up buying a 1400 sq foot mobile home on the beach in Orange County. invested the rest...smoke better pot now too.....got the card!
No I must add that 3 mo later the buyer went into foreclosure and found out that he bought another house in Oceanside 1 month later which he went into foreclosure on 3 mo later. My house eventually foreclosed and sold for 70K less then what I sold it for. I found it on foreclosure.com
Worked successfully in the mortgage biz from 2003 until i walked away from it in May 2007.
Been relaxing all summer, took a few trips - not collecting unemployment, just living off of the reserves i built up originating, yup, you guessed it, mostly sub-prime mortgages.
Being at ground zero for this whole debacle, i could see well in advance that this was all going to end badly for housing and the economy and so i was compelled to search out other like-minded individuals and get their takes on the situation.
Your site is very humorous and often hits the nail right on the head.
Yours Truly,
25-year-old former mtg broker
what the hell is a college kid doing buying a condo? i was renting a one bedroom apartment with 3 friends when i was going to college. kids today are way too spoiled
Because home price vs. income had left rationality.
Things may be FDIC insured, but the dollar will be the big loser when it's all said and done. And that means any asset valued in dollars, like homes. A lot of people who believe the mantra of real estate is the best investment because it always goes up are going to develop sensations akin to that itchy, tingly sensation 'down there'. Precious metals & miners will explode and those saddled with debt and their money tied up in real estate will have to watch from the sidelines.
One ounce of gold will soon buy a house, though the question will be do you really want to be surrounded by debt zombies?
Our friends were all buying second homes out of state (mostly for retirement) around 2003-05. I thought I'd join in, but decided to do some research first. I happened upon HP, I stayed, glad I did. I will be buying a second home for my retirement, eventually, but for a lot less.
Not even the government workers (state, county, municipal, school) can afford to stay in Taxsylvania when they retire, and they are the best-paid single group, with the best pensions. According to an AARP study, 60% of PA's government employees will retire in the next 10 years, and 70%+ of those have already bought retirement homes out of state. Think about what that will do to prices when it comes time to try to unload the old family homestead into the already glutted housing market.
I live in Ann Arbor, and watched as the houses on the street did not sell last year,(that was still strange for us then) and finally when they did it was much lower price than the realty talk in town was ready to discuss. I could find no local blog, no newspaper that was covering this problem directly. Lots of oblique references, and now more noise from the MSM than the local paper. Everyone knows now, and you just have to wonder where it will drop to.
I knew something was very wrong several years ago when people were waiving inspections on houses in Seattle. That and escalating bidding wars, suddenly houses were in desperate demand.
It all made sense once I found the blogs, Patrick.net, Ben Jones, and the invaluable HousingPanic.
In 2003 I was working for a builder in the Bay Area. Many of the buyers were going with I/O Pay Option ARMs. I kept telling my colleagues "this doesn't make sense, housing prices can't go up forever because soon condos will be over a million dollars and no raise will be enough to qualify a buyer". Of course I was laughed at and called negative. Here are the factors that assisted in my "enlightenment":
1. Conservative parents and upbringing - raised on the "don't buy stuff you can't afford" principle.
2. Education, MBA and CPA
3. Life Experience -worked with a client who was heavily invested in RE and lost EVERYTHING in the 1989-1995 recession, scared the *&!# out of me to see a bankrupt 64 year old.
4. Open mind - not so much, just common sense.
5. Bullsh*t detector - very high - people usually lie or at least grossly exaggerate about financial matters.
6. Work Ethic - moderate, but I don't want to lose what I've worked for.
7. Distrust of Media - not yet fully developed in 2003. Now, at red alert level.
What did I get for warning others? Some listened, some didn't, I got branded as negative. Those that listened are glad, those that didn't haven't yet admitted I was right. Moral here - if the audience isn't receptive, move along.
For me it was living in Scottsdale. I'm a common-sense guy and it was very plain and obvious to me that a huge bubble was about to burst.
I got sick and tired of having 100% of conversations with people in Scottsdale and Phoenix turning to real estate. It became impossible to go anywhere in the entire valley without having some jackass realtwhore, mortgage peddler, or fliptard bragging about all the money they made in r.e.
HP became my haven from that crap.
Common sense. I don't understand how people actually believed home prices could continue to go up as fast as they were.
Hello???
I got lucky. I owned a house in Portland, and had to relocate to Phoenix for personal reasons. I had lived in Arizona before, and could remember when houses sold for less than $70/S.F. Over the last couple of years, the prices had escallated to over double that. After cashing out my equity in Oregon (~$130k), where the market has continued to go up a bit, I could not justify buying a house in Phoenix. Especially considering that the market seemed to have turned south here. "Never try to catch a falling knife." Also, there were some things not yet stabilized with my job, and it wasn't clear to me what part of town it would be best to settle down in. So, I took a wait-and-see (and rent) approach. A friend of mine, who also cashed out in Oregon and moved down here, let me know about this website. We talk about this issue frequently. I've been renting this year, and will continue to rent until I see the housing market stabilize, and this whole subprime and ARM situation resolved one way or another. I suspect that what will ultimately happen will be similar to the whole S&L fiasco back in the 80's. The government will step in, cash out people's bad debt, and simply print up more money or add it to the debt tab that we're passing on to future generations. Criminal, but that's probably what will happen.
I may buy a house here when the federal liquidation agency is dumping the property at greater than 50% reductions in a couple of years, or if all these problems get resolved one way or another and the market somehow starts going back up again. The only way I think that would happen would be after significant price reductions (at least 20%).
It should be intereseting to see what the foreclosure rate is a year from now, and what that does to pricing. I'm very glad I was able to unload my house in Oregon and to not be a homeowner at all right now.
Feeling paniced to buy now or forever be priced out....in a city that has winter 8 months a year! Edmonton, Canada.
In Aug 2006 I relocated and sold my condo at peak price (unknowingly) in Portland. Heard buzz about "housing bubble", and intuitively saw that the nation-wide price gains just couldn't be sustained. I witnessed 20-30% appreciation in the California Bay Area. I also know that the MSM was too busy engaged in hyping up the massive price gains taking place. I dug and investigated on my own, before deciding on purchasing again in my new locale. I also knew that blogs were more likely to report from the trenches than the MSM.
One of the simplest things?
I just googled "housing bubble".
HP was by far the most entertaining and biting of all the bubble blogs.
I have become well educated on all things housing since.
I can't credit it to any one attribute other than maybe having a strong thirst for knowledge and intel.
Now I'm sitting on fat stacks.........
Thank you HP.
Your bullsh*t detector?
--
ding ding.
Common fricking sense and the ability to not be a sheep. Come on, was it that difficult to see it would end like this?
I think dancing around the dot.com bust of 2000 (I sold almost everything in 1999) made me realize how common bubbles are and when I saw houses here in Sacramento double in value in two years, I knew it was time to wait. Looking back, I probably should've bought a POS in 2002, sold it in 2005 and sat on the proceeds. Real Estate is easier to time than stocks because the reaction time is so much slower. Oh well
- Sacto Watcher
I've been concerned about the US budget deficits for quite some time (since the Reagan years). Shrub's idiotic attitude toward the budget plus knowledge that baby boomers would be retiring soon sent me trolling on gold-eagle.com a few years ago. I started looking around for more info and found prudentbear.com and dailyreckoning.com. Some of their posts and references got me looking here.
I knew we were in housing trouble when i heard how many people were getting ARM loans when fixed loans were at 6% or less. Doug Noland (at prudent bear) tipped me off to the pay option arm.
I have been trying to pull all the info together to try to best prepare for the future. It's easy to keep thinking things will be the same for several years - think about saving for my daughters' college education, and our retirement, but deep down I know we will all be wishing we (individually) had invested in guns, precious metals and security measures. And wishing that we had somehow kept the US from morphing into a system where congress and the presidency were the best that corporate bribes could get.
I've got a feeling it's gonna s*** being at the end of a civilization.
ironically, it was my realtor. my wife and i had bought a condo, fixed it up and sold it less than a year later for great profit. we then bought another, and did it again. he sat me down and said, "look, what you are doing is speculating, just like doing it with stocks or any other assets. if you think you can do this forever you are wrong. you made some money on the condo and now you can afford a house. i won't sell you a house for more than XXX. if you fix it up, don't spend more than xxx, because it ain't worth that much, and if you lose your job you'll have to sell it. i have seen hundreds of people like you think they can do this forever, and it only takes one dip to ruin it all. this business is full of chumps, but i have been in it long enough to know how to make money through the good times and bad. And the BAD TIMES ALWAYS RETURN".
He was a good honest realtor, who earned his commission every time. sadly, a very rare breed.
i saw things were f£$%d when i walked through my office and everyone was on mls.ca looking at how much the house down the road was selling for so they could go refinance and buy an SUV.
i knew trouble was brewing, so i came here to watch the whole thing fall over a cliff. Good job Keith!
when my daughter moved to Georgia from California she said because the houses were cheaper and they would never be able to afford a house in California and my husband wanted to move to Memphis, Tenn (about 2 years ago) I started scanning for new homes and links began to appear and it was then I started started to read them. I was terrified. I told my daughter don't buy a house because in about two years they will have 2 for 1 sales. She complained she couldn't find a decent job because all the jobs have a multilingual requirement (spanish: two years ago so the government knew this running over the border years ago, it was just us who didn't realize it until recently). In Memphis, I didn't think the square footage of the house was worth 300,000. No one should pay 300,000 for a 1800 square foot house. I don't care what they put in it, how big the lot is (eventually you'll get tired of taking care of so much land unless you live someplace where you can allow it to run wild) and I don't care what gated community it is in) the price was too high. It was then I saw a link to HousingPanic and I clicked on it. Because it wasn't reading alot of newspaper articles, it appeared it someone was trying to converse with the public more directly without a lot of stuff no one understands, graphs and charts and a lot of finacial data that only makes sense to the person writing the article. I stuck with it. It has been a year and one half or so. The only thing it didn't tell me not to do was to buy that brand new truck 2007, until later anyway. LOL Anyway we all make mistakes, just glad I didn't fall for that subslime...subprime loan mess because I watched the blogs. I was told I was crazy quit reading that stuff on the net those people don't know what they are talking about. Nothing is going to happen those people don't know anything. I told them 6 months ago CountryWide is going, Washington Mutal was going, the stock market was going to tank, the dollar was being sucked into a big black hole, and most importantly the housing market was going down in flames and don't be surprised when Wal-Mart starts losing money and the Chinese get mad and start calling in on the bonds in real time american dollars and then they start having problems on the stock market. It will all come to pass. They said I was just a bearer of bad new (it didn't help when I told them to save food, water and powdered milk), then they thought I was crazy, I told them the govenment doesn't "slip" and tell you to have this stuff on hand if they aren't trying to warn you now. Think KATRINA. Now they won't talk to me because they say I am like some man you haven't seen in a while and all he does is tell you about who just died. LOL So now I just watch their sad little faces as those stock just slide day by day. Last thing I can remember telling them was make sure your stocks aren't backed by mortgage securites because you are going to loose your shirt. To be honest I think they checked and guess what, they are. Tried to tell em, but unless people are being led to the well for a drink they will die of thirst before they use their brains and go check out what's in the well. That is was HP has taught me.
Also I learned most white people think black people are stupid and will fall for anything, but I tried to warn all my Las Vegas House Buying friends (BTW I'm black) DON'T DO IT, that interest only stuff was just another form of creative financing from the 80's and you are going to loose your house when you can't make those ballon payments (2 years ago). I guess, I must be a token because as white people say there is one in every bunch. HOORAY TO HP THE WEBSITE OF THE KKK, ON THE LINE RACIST, AND SOME OF MY BEST FRIENDS ARE BLACK posters, you did your job well. Blame the weakest race for this fiasco and ignore the only people making money hand over fist are whites and chinese. Ta Ta have a good day shopping. Sending all your money to Germany, Canada, UAE, Japan, England and most importanly CHINA. HA HA HA Black people don't have the money it takes to sustain another country. You can't do much with a welfare check. LOL SUCKERS
Pure dumb luck.
We just closed on our house in the Los Angeles area a few weeks ago. We bought in 2003 with zero down. We were selling because of a job change. Our market was "a normal market" according to our realtor, but we could tell as soon as we listed that things were not "normal." We went through May with far less than expected traffic. Then May sales numbers came out confirming our suspicious - worst month for sales in LA in over a decade. That's when I hit the internet and found many sites like this one. Until we decided to sell, I really had no idea how bad the fundamentals were in the housing market.
So we started cutting our price, knowing we had to do it before everyone else did. After 60 days on the market and cutting our price 3 times, totalling 8%, we got an asking price offer. We closed in 30 days. I sweated up until it was recorded because our buyers did 5% down, interest only jumbo loan and the credit crunch was just going into high gear. Fortunately, they were financing through a credit union/portfolio lender so the seconday market meltdown had no effect. We made out like bandits in our 4 years of home ownership, hauling in over $200k after closing costs, and I consider myself lucky, not smart.
In fact, proving how dumb I am, we almost bought in an overpriced market in Northern California. But we found only unreasonable sellers who were not willing to deal, and ultimately ran out of time so we had to rent. In that vein, I would like to extend my heartfelt thanks to those who made my luck possible: First, to the sellers who failed to fix the horizontal drywall cracking and off-center door frame found by my inspector. Next, I would like to thank the seller with stars in his eyes who thought his house was worth not a penny less than the one down the street sold for back in February, and turned down our more than reasonable offer. I'd like to thank the seller who mortgaged herself to the hilt and could not meet our very reasonable offer. And finally, I'd like to thank Zillow for showing me a comp that closed significantly less than this seller's counteroffer, and which I found literally minutes before we were going to sign the counter (unfortunately for my realtor, I cannot thank her for finding that one....).
Ah, it's been quite the learning experience for me....
Harry Dent predicted a lot of this years ago I was out of housing in 2006 out of stocks and into PUTS in May 2007. Whats coming next is no huge surprise for the people here.
It will catch the sheople by surprise though. They will get sheared one last time then slaughtered. Can't say as I feel sorry for a single one of them though.
Hey Dopey up 350% plus original investment in PUTS since May hows the stock market doing for you.
IDIOT
All the reasons mentioned plus
I have been dreaming of a great
economic dislocation since age of
3 (now 63 yr old grandmother).
Followed by many natural consequences. PKK
My Bulls*&t detector combined with life experience. I was 15 in 1987, and saw all the chaos and pain wrought from that time.
I had two questions no cheerleader could answer:
Has our population doubled in the last 5 years?
Has the average wage doubled in 5 years.
Answer no, then why have house prices doubled in 5 years?
Not one 'expert' could answer my simple question. Supply and demand is old thinking its different this time...
"Your parents and upbringing?"
Probably. Because my parents have always struggled to make ends meet, I have always been allergic to debt that I cannot afford.
"Your open mind?"
I like to think so. I am willing to look at any argument and see if it's reasonable.
"Your bullsh*t detector?"
I was just wondering how long house prices could go into the stratosphere. Eventually, people would not be able to buy them without getting a crushingly huge mortgage. Looks like it finally broke the lenders, lol.
"Your distrust of the media and people in power?"
You can't trust any of those slobs further than you can throw them. This was definitely a factor.
We listen to Dave Ramsey's radio show, where he exposed all this crap two years ago. We took our hit a little over a year ago and sold at a loss when we realized that all of the realtors/builders/mortgage were lying and homes were not rising in value. Everyone kept telling us that as soon as the community was "built out", then our values would start to rise. Uh, no. We weren't going to pay $1500 a month in interest while waiting for that possibility. Houses were moving slowly, because of the new construction we were told, so we took a loss and moved on. Soon after, the HOA came in and told people that they couldn't sell within a certain amount of time of buying, couldn't have a sign in the yard, etc. The builders still ran the HOA until the community was "built out". It was a total racket. People were angry with us too for selling "low". Whatever. Your houses is only worth what someone is willing to pay for it! No one in that neighborhood can sell right now and there are so many foreclosures. We did try to tell people what we were seeing and most were either dismissive or bashed us on the neighborhood website. I am a complete cynic now when it comes to housing. It's a zip code lottery and we will play when the odds are much better.
Not sure really. The numbers just didn't add up and as stupid as it seems I recognized the speculazation because I first saw in the 1990's with comic books. Same exact concept but with adults who should know better. Also, I never bought the idea that you had to make a huge sacrifice to buy a place that would be easy to rent.
I enjoy life too much to be scrimping for a stupide house. I know plenty of people who bought pre-bubble who are sitting pretty, but I know some others who are living a bleak life because of their debt-trap.
I usually try to research things before doing something major, like buying a house or investing.
When everyone says that something is a good deal or that "everyone" is making money, then usually it is not true anymore. I had a lot of pressure from friends and family to buy a house in 2006 since I had just moved back from overseas. I felt that houses where extremely overpriced compared to most people's wages. Therefore, against family and friends' wishes, I decided not to buy and I became an HPer. The scourge of the family so to speak.
Now I feel bad for most of my family in Sacramento (I live in NC). My brother-in-law's parents lost their house three weeks ago. That bubble was probably the easiest to predict. Who would pay 570,000 for a house in south Sac?
Working in the industry opened my eyes up a couple of years ago.
The fact that the market turned has nothing to do with your Realtor. Believe it or not, many Realtors have also been hurt with their own real estate investments -- at least in the short term.
Hang in there for a while and your money will probably double in 7 or 8 years.
How much nicer it would be if people would just study the subject of real estate before crying that it's the end of the world, or that everyone is corrupt. This is so pathetic -- does anyone know how to think any more?
For me it was a combination of things:
1. Rational open mind.
2. Canadian upbringing where the "free market" isn't worshiped quite as much as US.
3. Economist father.
4. Being in school in CS during the tech bubble and seeing the NASDAQ both up and down.
5. Going in to the California Wells Fargo to ask about mortgages in 2004 and being told, before I said anything about my credit worthiness or salary or existing relationship with the bank, that I could get a 500,000 mortgage no questions asked and then when I asked what if I wanted a fixed rate mortgage being given a look and told why would anyone want that and when replying because interest rates are at historic lows and I'd rather have the security of locking them in getting a blank stare like I was a space alien. I thankfully didn't buy and have enjoyed renting.
Moved to DC in 2005 from Upstate NY. Rent went from 600/Month for a sweet 2 bedroom Victorian apartment to 2500/month for a POS 60s townhouse 2 blocks from the projects. It wasn't too bad, though. Then after a year, the LL decided to sell and we were given the option to buy- LL wanted 580K. Again, this was a 2 bedroom 60s POS! Looking around, I could not understand how all of these people, were able to buy their homes and drive their BMW's and Mercedes. After all, I was a high paid professional and I could not afford these things. That's when I thought there must be a bubble and found HP. Still renting a place that costs way too much for what it is and cannot believe that people are still buying. But hey, this is DC, it is different here.
Background: physicist PhD, extremely overeducated. Booted out of my career as my funding got dropped on Iraq.
I believe in global warming and peak oil because the laws of physics and geology always win.
I believe in housing bubble because the laws of
Live in San Diego. Actually own a nicely located but otherwise POS small house. Have a 5.25 fixed. Zero cash out in 7 years.
I guess the only answer as to why I'm here is BS detector.
I wanted to profit by shorting lenders and homebuilders, but I started doing this in late 2005 (exact bubble top was Aug 2005).
Got screwed because I was way too early, thanks to this blog. Then, when the HousingPANIC (tm) really happened, I was long out of my shorts and puts. I didn't have the nerve to hold them on the whole time. Oh well.
I'm trying to make up by being long oil and uranium, another painful experirence.
Background: physicist PhD, extremely overeducated. Booted out of my career as my funding got dropped on Iraq.
I believe in global warming and peak oil because the laws of physics and geology always win.
I believe in housing bubble because the laws of capitalism eventually win: in the real world, Mister Potter wins, not George Bailey,
Live in San Diego. Actually own a nicely located but otherwise POS small house. Have a 5.25 fixed. Zero cash out in 7 years.
I guess the only answer as to why I'm here is BS detector.
I wanted to profit by shorting lenders and homebuilders, but I started doing this in late 2005 (exact bubble top was Aug 2005).
Got screwed because I was way too early, thanks to this blog. Then, when the HousingPANIC (tm) really happened, I was long out of my shorts and puts. I didn't have the nerve to hold them on the whole time. Oh well.
I'm trying to make up by being long oil and uranium, another painful experirence.
What is it about you that made you find your way to HP, and realize a great housing ponzi scheme was happening before the rest of the sheeple figured it out?
Family history lessons.
I grew up hearing "Don't expect your government pension to be there for you, it's a Ponzi scheme."
And "Your grandfather put his money in 3% 30 year bonds and now the money is mostly gone due to the hyper inflation."
My grandmother bought a house in the 30's for $500 (back property taxes). In 1929 it was priced at $20,000.
I was in my twenties and married when the last time silver went crazy, I could have bought a house with the silverware my parents had. Needless to say, they gave the silverware to me after the price of silver fell.
I sold my house in 2005 and put all the money in gold, silver bullion and gold and silver mining stocks.
I am sitting in a grungy apartment waiting for the cost of housing vs. silver or gold to go way down.
I plan to buy apartment blocks when no one else wants them.
I don't remember on what site I saw the chart of the cost of housing priced in silver ounces. It can get as low as 2,000 ounces for a median house. ($12 per ounce of silver times 2,000 ounces at today's price would be $24,000.)
I have learned so much from HousingPANIC and these financial websites:
http://financialsense.com/
http://www.lewrockwell.com/
http://www.dailypaul.com/
http://commentary.goldseek.com/
http://www.silverbearcafe.com/private/home.html
http://www.321gold.com/
By the way, if the financial crisis causes a complete economic collapse, it would be very smart to have food stored.
Food is going to become VERY EXPENSIVE! You will get a very good return on your money (tax free) if you put aside - grain, rice, beans, flour, sugar, powdered milk and eggs, canned meat and fish, booze, etc. plus mung beans to sprout.
If your stores have no food or your money is inflating at 10,000% (or more) a year the above will keep you alive for a very long time.
A few years back in Australia, housing prices went crazy. It seemed insane that the average person could no longer afford a place to live (unless you wanted to be so in debt that your life was virtually over). So, I did a bit of research and found this site. Since then I've told people I'm not even thinking of buying a place until after the bust in the USA. A lot of people thought I was just plain stupid, but in the last few weeks, I think they get what I was talking about... People here still tend to think we are immune from what's coming due to our exports to China and India. It's a bit sad really.
My parents, father born 1928,"just because somone says something is worth a certain price, doesn't mean it is." "all advertisement is a form of lying."
http://tinyurl.com/2u6745
ken said...
The fact that the market turned has nothing to do with your Realtor. Believe it or not, many Realtors have also been hurt with their own real estate investments -- at least in the short term.
Hang in there for a while and your money will probably double in 7 or 8 years.
How much nicer it would be if people would just study the subject of real estate before crying that it's the end of the world, or that everyone is corrupt. This is so pathetic -- does anyone know how to think any more?
August 26, 2007 3:24 AM
-------------
Oh the irony of the end of your BS statement. It was the fact that people do not think that was exploited by realtwhores such as yourself that as a collective effort of all realtwhores contributed to this bubble mania. This blog site is evidence of those who DO THINK and if realtwhores got burned because the drank their own Kool aid then so much the better. The end of the REIC parasites as we know it is here and it was all their own doing. This is the only good that is coming of the realtwhore instigated bubble and you know it. Please supersize my order sucker!!
Anonymous said...
I bought my condo at the peak, luckily for me I am just a college kid...
The problem is I am engadged
I was hoping I could have broke even
------------
What college are you attending with such awful command of the English language?
First read about peak oil in 2005. Seemed like a crazy theory, but all the counter-arguments made even less sense. As a academic exercise I 'assumed' peak oil was real, then started to watch the news with that in mind. Resource wars, Iraq, inflation, (in real prices, not the lies of the central government) the bio-fuel scam, the M3 figures being hidden, the rise of the Euro, China's moves on the world stage, and the Housing Ponzi Scheme. The last gasp of our economy. I found HP by looking around at the "booming" east coast housing market in 2006. If it wasn't for the housing atm, we would have had god's own crash 2 years ago, but now - looks like time is up.
Not being married, and being very busy with my work, I saw no utility in purchasing a house because of the chores of upkeep, paying property taxes, repair work, yard work, and so on. I preferred renting a nice apartment simply because of my life circumstances. That began to change this past year. For some reason, purchasing a home to have more space seemed attractive to me.
But then the shock came when I looked at the prices that were being asked for the houses in my area (Dallas). Then even more shocking was learning what the prices were in other cities such as Phoenix, Las Vegas, etc. It just did not make sense. I began to think that my rent payment on my nice apartment was not so bad.
Then, in March of this year, the idea popped into my head to google the term "real estate bubble". One of the top links was Patrick.net. Needless to say, I was astounded by what was there. One of the links on that site is to Housing Panic.
I had no idea how dangerous things were in the market until reading these sites. Dallas is nowhere near as bad as other parts of the country, but I still cannot find a good enough reason to go out there and plop down that kind of money for a box to live in.
Someday, it will be a good time to buy, and I am looking forward to that day... God willing.
I've always been a contrarian. I've never done something simply because everyone else is doing it. I was considering a real estate purchase in 2004 when I realized that my scumbag employer wasn't paying me enough to afford something in NJ. Of course lack of income was a minor obstacle, and I looked anyway, but my BS detector went off with every realtor I made contact with. One in particular was a realtor / appraiser / flipper / rental property owner who is now probably selling Amway. I had visions of realtors, appraisers, and lenders high-fiving each other in the back room as the realtor pressures a buyer into buying something which magically "appraises" at the inflated price, and somehow the lender delivers the crazy loan which makes it all possible, not to mention a fat commission check. Good friends who bought back then would exhort me to buy something, anything, just to get in the game, and their eyes would be glazed over as if they had joined a cult.
The problem is that it is not a game. Home ownership should be a normal part of life, but the hordes of morons willing to financially cripple themselves to own a home and the idiots loaning the money have made that dream impossible for me, for now. I can't wait for the whole game to collapse. Recent comments by the Bush White House point to no bailout for ramen-eating home-debtors, which is probably the only wise decision that has ever come out of there.
"How much nicer it would be if people would just study the subject of real estate before crying that it's the end of the world, or that everyone is corrupt. This is so pathetic -- does anyone know how to think any more?"
- - - - - - - - - -
Ken,
This comment is so utterly stupid. Holy crap man. The people on this board have studied real estate more than you, this is plainly evident based on your retarded 7-8 year doubling time prognostication. What exactly have you studied that leads you to this conclusion? The trailing returns from 2000 until now? Is that what you call studying the subject? Find yourself a plot of the ratio of median house price to median versus time, going back well into the 20th C. Everyone here has seen it; you apparently haven't. We're above the equilibrium position that's been established over several decades, by a greater amount than we've ever been away from equilibrium, and the forces that allowed this move away from equilibrium (CDO investors who are now burned, and the Joe 6-packs of America all thinking they'll get rich off RE simultaneously) are gone. Now find yourself a plot of the housing prices in Japan going back to about 1980. We've all seen it; you apparently haven't. Nice peak around '90, 15 years of decay afterwards. I'm sure there were plenty of numbskulls like yourself around '92 that were claiming recovery and doubling times of 7-8 years were right around the corner for Japan in '92.
Be smarter, or take your stupidity elsewhere. If you're going to make a retarded prognostication about recovery in the housing market, make it less retarded by defining the basis for your assertion. This will allow us to take your case apart in a more precise manner than I've been able to do here, which will help educate newbies that are actually interested in knowing about the bubble. Jackass.
The following is true. It has been hard to deal with since at the time of this intuition "everybody" thought things were peachy.-
"As I sat in the Costco food court, sipping a coke, a visual image along with a feeling came into my mind. I saw my wife and I at some future date having a despaired discussion. A feeling of hopelessness hung like a pall over the scene. We were cleaned out and unable to make a house payment. The money we had put down was gone and we had nothing. The American dream had become a noose around our necks. I sensed that this was at least a nationwide thing and that there was pain everywhere. I sensed the tragedy of murder suicides occurring in some instances as families lost everything."
This was back in March of 2006.
(Loss is painful, I know, but please work thru it-That is so sad)
On August 24th 2006 I wrote-
"The mass awareness of the bubble broke wide open yesterday, August 23rd when the bubble was the lead story on ABC, CBS, NBC, and The Drudge Report. The domino effects of this process will be admitted into the mass awareness later and with great resistance."
Talk about ridicule! I got it even from so called bubble sitters! I wrote in my journal in April 2006 that a housing collapse would be the main factor that would bring down the economy. I wrote that there would be domino effects and severe social effects. I would like to be "normal" because when I relate this experience I am attracting ridicule from some quarters. I was warned. I cannot deny that. What is coming is coming. I wish I could downplay this and hope it wont be what it may well be. I had a premonition and it came true. That makes it hard to not focus and think through what may be coming and how I should prepare myself.
For me, my parents lost it all during the last real estate crash, '85-'90 time frame, in both Boston and Houston (dual residencies). They'd never been the same ever since.
And after the tech crash of '00-'02, my b.s. detector took off and I started to take notice of how fast the 3.5 to 1 homeownership cost to income ratio index had departed from the reality of the RE fundamentals and sensed that this was credit bubble part deux. I hope that here isn't a trilogy in the making because there's only so many times that the middle class can be screwed without becoming a third world nation.
Lived in DC area since 1996 and have seen housing triple. My brother in law bought a townhouse in 2000 for $125,000 sold it in 2002 for $260,000. That same type of townhouse in his old neighborhood would now listed for around $400,000. I doubt anyone is getting that much but its hard to access real sales prices. The prices make no sense whatsoever. No one should buy those townhouses for more than $125,000.
Unfortunately, experience. I came into some money at a young age and lost a bunch of it in the dot.com bubble. I warned friends about high housing prices but they all had that look in their eyes. Too many of them bought at the peak. Thank goodness I didn`t get taken in. I hate not being able to afford a house but watching the value of the house you just bought drop 30 percent almost overnight must be horrible, especially considering the leverage and illiquidity.
Westchester County, NY
I'm kind of a guy who always enjoyed raining on others' parades. I can't stand braggarts or deceivers.
I left the investment management biz in 1998 because my clients didn't want to hear that they could lose a lot of $ and why wasn't I making them $ in the dot.coms like their new broker?
So when people 'without a pot to piss in' ended up buying houses/condo's I knew the end was near. I rented since 1998.
The ultimate peak of the housing market happened to my gf and I in 3/06 when a mexican lawn cutter bought the house we were renting and decided to evict us. The dude paid $460,000 for a 3 br and I figure he'll be 'adjusted' in the next 6 months.
Keither and the Housing Panic blog were never just reporting on facts. This blog encouraged creative thinking as to who else, where else, what else would ultimately be affected by what to us readers seemed a quite logical ending to the mania.
FUNNOMINAL
While I was daytrading, I began to see the lies at the core of our financial system. That led me to the Federal Reserve. The most evil institution in all of human history. Evil being defined as screwing everyone else for the benefit of a few.
They created this bubble so I started watching.
I stayed here because your blog is the most entertaining of all the bubble blogs. And probably the most informative.
Has anyone here ever meet someone who fell for those get rich quick scams on TV? I have, he was my uncle and he didn't just fall for one. He fell for practically every scam. Every time we saw him he had a new scheme and of course he was going to be rich from it and pay us back for the car. Not only that but he would tell us that we should get in on what ever it was or we would be left behind. He spewed lots of junk about how you have to bold and willing to risk it all if you ever want to win. He died in his filthy apartment, massively in debt, and with credit so bad even loan sharks wouldn't touch him. In fact he had been committing identity theft on his wife so long she had no credit left either.
My good steady parents on the other hand had set aside enough money over these years to put me and my sister through college with plenty left over.
After I graduated in 2005, I moved to the same city as my sister, two years after she had. In that time the price of housing had DOUBLED!! She was pushing me to buy things that I couldn't support on a normal mortgage. I went on line looking for more advice and practically everyone was saying the same stuff. Everyone can get rich, you just have to be bold and buy, you can always sell for more.
It all sounded like the BS conferences that my Uncle always attended. Anything that says EVERYONE can get rich is wrong. It's either a lie that will make you poor, or massive inflation is at hand.
So my BS meter saved me and the $3,000 dollars my parents loaned to my uncle oh so many years ago was not wasted after all.
like Formosan i was overseas so missed out on the runup in prices.
grandpap told the story of the depression and the two boys living next door who had to pull wood off the side of the house to feed the fire.
friend's dad grew up in WWII era Ireland...no gas available. he made his living making deliveries by horse cart. how ironic if the peak oil thing happens his old skills may be of use again.
personally i won't believe the economy is getting hammered until i see the starbucks line at work getting shorter than the one for cafeteria coffee which us plebes must drink.
Macaca
*
When you make a good living...very good!
With no debt, live in So.Cal, and literally can't afford anything that wouldn't be considered a fixer!
My Bullsh*t meter!
I ended up here as I watched the phony boom become a bust as I knew it would. I have been in the real estate business for over 25 years, have never let any client go into an ARM or other such silliness, and I have advised people not to buy for more than the last two years. I will be dropping out of NAR at the end of the year because I am sick of the BS that comes out of there. They should have preached more prudence and helped consumers. We learned the dangers of adjustable rates & prepayment penalties in the late 70´s/early 80´s, but history repeats & greed is universal. What no one is talking about is all the 3 year balloon land loans that were made in the last 2-3 years. It will be another shock to the market very soon...
Hi, I realized this was a housing bubble back in 2000 listening to Lyndon Larouche on a.m. radio. Back then he called them McMansions, and tar-paper shacks. It was lonely all those bubbilicious years, everyone saying "You had better get in now before it's too late and you will NEVER be able to afford a house!". Now people who were positive that they were soooo much more clever than I have buttloads of real estate that they no longer like, can afford, and can get rid of for twice the money that they paid. What are ya gonna do? People just didn't want to hear that real estate can be a pain in the butt to get rid of and that it does
n't only go up!
I seem to have a gene that makes me allergic to bubbles. I started writing very publicly in 1997 (no, not blogging, I'm talking about the San Jose Mercury, the San Francisco Chronicle, and the Wall Street Journal) about how the Silicon Valley bubble was going to end badly, and soon. I cashed out my entire tech portfolio in summer 1999.
It's really simple: if you have an instinct for human greed, economic hyperbole, major deviations from the historical mean, and the phrase "but it's different this time," well, you're a bubble-caller, too. It ain't rocket science. The only problem is if you're seriously greedy, in which case you start drinking the Kool-Aid and you get trapped like everybody else.
Housing cycles are longer than stock market cycles, so this one was difficult time. Still, I sold my house in 2003 because the market seemed seriously psychotic to me (and yes, I wrote about it this time, too.)
Right now I'm sitting in a lovely rental with my wife and child, and the proceeds from my last home sale have been appreciating in SPDRs. And yeah, life looks pretty darned good right now. I'll start looking in a year.
I read John Kenneth Galbraith ["A Short History of Financial Euphoria"] -- and have a working memory.
And am suspicious as hell of overly chummy something-for-nothing scam artists.
That's about all it takes.
Jane - I'm also in Australia and would like to discuss the Australian situation. If you read this, drop me a line. mporter -at- gmail.com
what brought me here was common sense, and a recommendation from a friend. I pay my bills with cash flow from rental properties we bought cheap in emerging markets, fixed them up and rented them.,They were old industrial towns that took a beating when they lost their manufacturing base.I started selling real estate as well, so I needed to keep a pulse in the Real Estate market. Things stopped making sense in the areas I invested in around 2003. I couldn't steal cheap buildings that made sense. I also became the hero of friends who told me I was smoking crack for buying ghetto buildings in 1996. Everybody wanted to be a real estate investor. I sold a lot of buildings for 3 years to people buying for appreciation instead of cash flow. I told them they were dancing with the devil, and should rethink the investment strategy. Every one wanted to Rehab and Flip, like they see on TV. I tried to explain that buy and hold cash flow was the way to go so you don't get burned. I bought all my properties with none of my own cash,so I never really had anything to lose, since they had positive cash flow(it was 1996 to 2002 I bought most of them). The more I knew about Real Estate the more I knew it didn't make sense. As a realtor I wouldn't write bad deals for people. I told them find a realtor that doesn't care about them. I started telling my friends about this site, and to buy wisely.Since then I have become a student of the market. I thought things would level off far sooner than they did. People bought negative cash flow properties from 2003 to 2005 like hotcakes. I just didn't understand. Things are also unraveling faster than I expected, and I did not anticipate turmoil in the lending markets so soon.It's going to get real ugly if history repeats itself. This is by far the biggest RE bubble in history, which did not have the normal fundamentals of an upmarket, like a strong economy and good job growth. It was caused by cheap easy to get money, and a bunch of people's get rich quick scheming. I hope things happen hard and fast so I can scoop up my next wave of cheap boarded up buildings,giving me more added cash flow, tax advantages, and appreciation on the way up the next bullish cycle. Next time around I will sell most of it off when people get silly about RE again. I fear we are in for a long painful ride however.
Bottom Feeder in Philly
I owned a condo in Houston in the mid-1980's. I was transferred to California so my employer bought me out for the amount of my mortgage principal. They took a 35% loss when they finally unloaded it.
Observing California's housing market over the last few years has been like watching the same bad movie. Deja vu all over again.
When I could sell my teeny-tiny single family house in 2005 (DC Suburbs) for ($500k) $250,000 in profit in 4 years, or rent it at a $800/month loss, I knew the bubble was going to pop, and it would never again be worth 500k. I sold it and bought a 1000 sq foot larger house for only a $50k +delta. (read, I made 250k and spent total of 550k = 300k to move up) my mortgage person told me I could afford $900k mortgage. I said what the hell am i going to do in a 900,000 house? My only regret is that I didnt rent for a while, but I have a large dog and that makes it difficult to rent.
I spent 10 years in a house I didn't want. I bought it at the top of the market in 1988 and sold it 1998, it took 10 years for the price to get back to what I paid for it. During that time I found a house is NEVER EVER EVER worth more in payments to own than you can rent it for, and that no matter what the interest rate, if the house rents for $1200, don't think you can pay $1700 mortgage, rent it for $1200, and call that an investment.
I also have a nasty habit of breaking things down. My 40k boat is costing me $200 every hour I take it out, plus fuel and support. it used to cost me $400 per hour but I have more hours on it now.
New solar system on the pool was $5200 cash. I see it as $52 monthly for 100 months or as $21.67 per month FOREVER due to lost interest income at 5%.
My free and clear homes cost me about $3600 monthly the way I see it....
So to recap:
most of you are pissed off you can't afford a house. you are even more pissed off that other can. so you searched google for a place to bitch and moan about it with fellow loser renters. you found HP and now you are a little less pissed off at the world.
AWWWWW how nice.
Well here we are 2 years after HP started and same story.
Don't you baboobs see? If people can't afford a 20% down they will get a 10% down. If they can't afford 10%, they'llgo 0%. If they can't afford 0%, they'llgo 40 year or 50 year or who knows, probably a 60 year mortgage is on the way.
And if they can't even afford that, well Aunt Hitlery, Uncle Dodd and long lost Uncle Bill Gross will be there with a big bag of money to help out.
You will be renting forever. Better get used to it.
Bought my house in mid 2004 in the "boonies" 35 miles from work because it was cheapr there. Appraised at 400k and I paid 335k. Now I have had it on the market for a year for less than I paid and can't get that. Gas prices suck and so does my cpmmute. The worst part is I have a new baby (one week) and a 27 month old and they have to ride to work every day too. What a big mistake. I want out but it is too late. I even asked the realtor if it really makes sense to pay more than the assessed price and she assured me it was fine. I had a bad feeling but she was a "pro", righ? ugh. So, I found hp on google as I was beginning my house selling meltdown from hell that never ends...
I am in Massachusetts.
Your parents and upbringing?
Yes
Your education?
Yes
Your life experiences?
Yes - I lost a fortune in paper wealth because I was too naive and greedy to cash out during the dot com crash in 2000-2001.
Your open mind?
I don't always follow the crowd
Your bullsh*t detector?
Yes
Your work ethic?
Yes
Your distrust of the media and people in power?
Yes
Why were you the one warning others when nobody would listen?
Because I already went through this kind of pain in 2000-2002 when I lost my fortune (on paper) due to stupidity, greed, and unwillingness to listen to contrarian/minority opinions.
I must say, it's because I'm a traditional (everything pre-1962) Catholic, and I'm used to going against the ways of the world.
That can be a good thing when the world is crazy, right?
Both life experience and BS detector. I had been very familiar with real estate prices in my area (MD) since the early '90s. I expected the prices to rise a little in the early '00s as they had been stagnant for so long, but they kept creeping up. Slowly at first, then at a ridiculous pace and led to stratospheric prices. I kept asking "how the hell are people affording these insane prices?", and eventually I ended up at sites like patrick.net and this one.
Common sense.
I found this site while looking for vindication of my renter position -- I just couldn't make the numbers work for buying a house in SF, and couldn't figure out if "everyone" knew something I didn't or what! Renting is 1/3 the cost of owning, SF GRMs are over 20 in most cases, bidding wars were starting at a half-mil for even mediocre properties. I scratched my head -- did EVERYONE have a trust fund or a 500,000 annual salary? I just couldn't explain the insanity.
I found Housing Panic while looking for someone who was approaching all of this like me; I never believed the 'priced out forever' crap, because it's just so ridiculously illogical. There IS something powerful about feeling like the only person who's 'missing the boat', however -- it was a strange sort of pressure, despite my research. Thank God for HP. I still browse ZipRealty and we occasionally pop into open houses, but we're definitely going to wait at least another year to even THINK about buying.
-M
Anybody with a good "BS meter" and good critical thinking abilities could figure out that double digit growth in housing prices is unsustainable. Eastern Europe upbringing helped some (gov't distrust, questioning MSM and such).
What was strange is how many people bought into this euphoria. I had conversations with very educated friends who laughed at my assertion that it's not possible for the present state to continue. They thought I was nuts. One of them bought a sh|thole townhome just 3 month ago...
I guess it's the American Way - get rich quick without busting your back.
My father once said to me...
When God opens a bank, I'll be the first in line to take out a loan...
That struck a nerve - and made me realize that the people who loan you money and charge interest are not doing so for your good - but theirs!
I can sacrifice a few pounds of flesh or even my life for my family, my community, my ideals, and even my freedom... but for money lenders? WHY?
Well, I don't make decisions lightly. We were trying to figure out whether to sell our house, stay and remodel, or stay and do nothing but necessary maintenance. So I started researching the real estate market and the rest is history. We decided to stay and do nothing but necessary maintenance. We bought pre-bubble with a low-interest fixed-rate mortgage.
Education . . . the hard way.
I received burned fingers on a condo I purchased in a rush in 1989. At the time I thought when I did not want to live there anymore I would sell it. Well I learned that 1. real estate does not always appreciate and 2. where you go for your mortgage REALLY matters. At that time I thought as long as you got a rate in line with what was in the newspapers you would be okay. Well my mortgage was at a fixed rate because I had enough sense to make sure of that, but I must have been a test subject for what is going on now because I had that mortgage for over 10 years and the principle never went down that much. I moved back home when I became tired of shelling out money for no benefit and rented it out. This paid the p & i once I refi'd but I still had to pay the condo fees and when someone moved out I had to find another decent tenant, paint and do repairs myself. This was no fun and now I have a bad case of the "Scarlets." As God as my witness this will never happen to me again. Right after September 11 when rates went down and people started buying anything, I sold and got a liitle money out of it, but no where near the money and sweat that I put into it. By this time I had my own place again (renting) and doing pretty well with income from working. The realtor tried to sell me something else, but I said "no I will sit this one out", knowing that what happened to me before was what was going to happen to a lot of people. I knew when the twin towers fell that someway, somehow, poor and working people were going to be made to pay for the money that was lost, but I was not going to be one of them. When they lowered the interest rates and everyone started jumping in, I stood up and said "I am not buying anything until GB is out of office." I watched this bubble get bigger and bigger. Builders knocking down perfectly good houses to build sometimes 6 houses on the single parcel of land (DC) for 1 million each. I looked at my friend and said "who has that kind of money, not me."
I started reading about money on the internet to educate myself. Unfortunately I could pay an institution of higher learning and they would actually teach me nothing because I not part of the "in crowd" and then turn around and tell me how ignorant I am. I started reading Contrarian Chronicles because fundamentally I want to keep what I have earned ( and saved) and pay a fair price for what I want and not get ripped off. If I make a little money by passive activity, great. Fleckstein's talk about the housing ATM and how people buying things they cannot afford caught my attention. HP was mentioned there. I think I have been here quiet from almost the beginning because I was learning a lot about how money works and mania and crashes. I am also learning what to look for when I do finally try to go with my hard earned money and try to buy a place of my own. If things get really bad maybe I will never buy again. My focus right now is to make sure I am okay by renting and saving my money because I am positive no one is going to hand me anything and things are going to get bad.
Keith is lost on some topics, mainly when he starts about "illegals." And there are people who write here about a lot of nonsense. Regardless, there is a lot of good information here and I am going to take it and make it work for me which is something I did learn from my parents. How to survive.
I've seen this in 1979 and 1990. I bought at both of thoses peaks and watched the market plunge for 5 years in terms of price and sales volume. I knew this would happen again but thought it would start in 2004.
I bought in Nov 04 and I was prepared for a 5% decline in price every year for 5 years. It did'nt matter because i loved the house and desperately needed to drop my federal and state tax bill. I also refused to pay 1,500 for a crummy apartment. I am a controller in a chapter 13 bankruptcy office and we are seeing homes taken back by the lenders at an incredible rate.My personal opinion is that prices will head south for @ 3 to 5 years and we may see a 30 to 40% drop in prices. But it beats paying rent and a huge tax bill.
Zoe Rochelle
"It was my bullsh!t detector."
"I knew that wasn't going to last. I watched the value go up another 100,000 and started telling people, "This is going to crash. It must. Who can afford these prices? There aren't that many wealthy people here." ....
The above was just like me when I was trying to decide whether to sell, rent my house near Oakland County / Detroit subs when I wanted to take a job out of the state. I found HP when trying to find predictions for the future direction of house prices. I decided to sell the house at a lower offer than what were the neighborhood's 2005 comps after reading HP.
Since then I noticed the realtors using a lot of tricks to try and make zillow look like there has been no drop in housing prices in the old neighborhood, but my realtor managed to wise me up tp those tricks pretty quick.
So many want to sell but aren't willing to reduce prices. I dropped price and worked my ass off to upgrade/ remodel everything. Many were envious when I finally found a buyer. Some FB acquantiances have had homes on the market over a year /18 months when I last spoke to them.
thanks Keith/HP. The blog trained me to make a critical assessment of the local market conditions by asking the right questions of the realtor. Taking my lumps and getting out financially disappointing but the best move I could make at the time (2nd half of 2006).
I bought in 1991 not really knowing much, I got stuck in my house after divorce living with my EX for 5 yrs because I could not sell! RE does not always go up like these scam artist realtors keep telling people. Shit happens and if your value is down you are screwed. When they started overbidding, I said this is gonna end in tears. It just lasted longer than I thought it would.
What is it about you that made you find your way to HP, and realize a great housing ponzi scheme was happening before the rest of the sheeple figured it out? Found your site thru a link listing and enjoyed content. Been watching this unfold since 05 when the builders topped out.
Your parents and upbringing? Only child, European immigrants. Frugal, hard working folk.
Your education? College degree. BA in Econ. Helps understand this mess.
Your life experiences? Small business employee for 7.5 years, starting in 83 with the high rates and hig unemployment. Out on my own business 91 to present -- successful.
Your open mind? A mind is a terrible thing to waste.
Your bullsh*t detector? very good usually. especially on econ stuff.
Your work ethic? I used to work 45-60 hrs week,
Your distrust of the media and people in power? I distrust the media more than the powerful. The powerful always move in their best interests, the media are just not decipherable at time.
What is it? You have to assume they all lie, and figure out who's screwing you the worst.
Why were you out putting up sandbags when the sun was shining? Why were you the one warning others when nobody would listen?
Because I READ READ READ all the time, and not just the MSM crap.
but I have a large dog and that makes it difficult to rent.
August 27, 2007 5:01 AM
I've heard of 'screwed the pooch' but it looks like this time the pooch screwed you. Did you really make such a life affecting decision based on a dog? I'm guessing/hoping/praying that it was really a lesser consideration thatn it appears in your post....
When a mortgage broker in 2003 told me I could borrow 800K without a job, I figured it was headed for a nuclear explosion.
While in college in the Detroit area back in 1980, I saw first hand that real estate could go down and what happens to owners when it does. By the late 80s I was in the Boston area working as a software engineer. Everyone around me was buying real estate "before the price gets too high and we can't afford it". I declined to join in and told them what I had seen in Detroit. That's how a earned the nick name "Mr Gloom and Doom". I ended up buying a modest house in 1992 at the bottom of the real estate market after the minicomputer market crashed in Boston taking 11% of the jobs with it. After a refinance in 2003 my PITI is at least $600 less than what it would cost to rent in my town. Rental houses are rare here so that would be an option for very few.
I started looking into this housing bubble back in 2002 when Forbs published a chart of house prices. It did not look sustainable to me. About the time I started to see house prices stop rising here I started to look into the current bubble with more interest. It has been like watching a slow train wreck since. I can't turn my eyes away.
BULLSHIT DETECTOR!!!!
I went about life the smart, traditional way. Graduated from college, got a decent job, worked my way up, saved for a down payment, got married, bought a home with 20% down and a fixed 30 year rate, drove conservative cars, in general live a conservative life.
All of a sudden my brother in law, an ex delivery truck driver, is a RE mogul overnight, not even a high school degree, living in an IO loan McMansion, Escalades with rims, trips to exotic locations. This happened overnight. He was in poverty for most of his life. And now he is back in it. He WORKED for Peoples Choice in Irvine :-)
Life experience. I have worked for lenders since 2001. In 2003, the products got more exotic, there were more liar loans, cash out refi's and flips. It cannot stay this way, I said, but no one would hear it. 2005 brought confirmation, suddenly houses were on the market longer, investor guidelines started tightening. Even though I could see it happening, no one was talking about the impact to come. I found this site then, reality prevails.
>> So to recap:
most of you are pissed off you can't afford a house. you are even more pissed off that other can. so you searched google for a place to bitch and moan about it with fellow loser renters. you found HP and now you are a little less pissed off at the world.
AWWWWW how nice.<<
Yeah... it is NICE.
If it was a problem of not being able to buy a house, then why would I have put in a google search for the term "real estate BUBBLE"? My income was more than sufficient to join the sheople in debt hell at any time. The value that I was getting with renting seemed to be too good to pass up for what I would be paying in a mortgage.
Yeah, of course, the high prices of houses ticked me off. My gut reaction to the prices was "are you kidding"? I acknowledge that I am vulnerable like anybody else, and that various circumstances could have led me to buy against my better judgment (such as having a spouse that would have it no other way).
But circumstances beyond my control kept me from jumping into debtors prison... and I can't help it that God made me like this. When I sense that something is not a good deal, then I usually avoid it like the plague. I am so thankful that a power greater than my self kept me from making such a huge mistake.
>>Well here we are 2 years after HP started and same story.
Don't you baboobs see? If people can't afford a 20% down they will get a 10% down. If they can't afford 10%, they'llgo 0%. If they can't afford 0%, they'llgo 40 year or 50 year or who knows, probably a 60 year mortgage is on the way.<<
60 year mortgage? How absurd.
I would rather rent because it is essentially the same! When you leave this world, you can't take anything with you. Why would I want to leave behind something to my heirs that I paid 60 years worth of interest to finally own? How absurd!
" So to recap:
most of you are pissed off you can't afford a house. you are even more pissed off that other can. so you searched google for a place to bitch and moan about it with fellow loser renters. you found HP and now you are a little less pissed off at the world.
AWWWWW how nice.
Well here we are 2 years after HP started and same story.
Don't you baboobs see? If people can't afford a 20% down they will get a 10% down. If they can't afford 10%, they'llgo 0%. If they can't afford 0%, they'llgo 40 year or 50 year or who knows, probably a 60 year mortgage is on the way.
And if they can't even afford that, well Aunt Hitlery, Uncle Dodd and long lost Uncle Bill Gross will be there with a big bag of money to help out.
You will be renting forever. Better get used to it.
I sold my house and now rent a condo (I prefer luxury condos to houses) that comps out at 600k+HOA fees of almost $500/mo here in Seattle...you know...the place that the MSM says is doing well.
I pay less than 1700/month...do the math smart guy.
Preach all you want about different loan products...a 40, 50 or 60 year mortgage hardly shaves anything off the payment.
Post a Comment