1) Should be a matter of months
2) This is gonna take awhile - likely a few years
3) No timeframe - will rent until the fundamentals make sense again
4) Don't plan on ever "owning" again
5) I'm not renting yet - still can't unload my debt-trap
October 22, 2007
Bubble Sitters: How much longer do you plan on renting?
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I am 3 and 5.
Cool.
Cow_tipping.
Number 3. When I can get the house I want for the price I want, I'm ready. I'm not waiting for the market to bottom. I just want a home to be a place to live and not feel that I have overpaid. This winter may actually be the right time for me since a lot of homes are selling for year 2000 prices in this area.
3) I'll rent until it makes economic (and personal) sense to buy. Not a second before. I actually kind of like calling up the landlord and getting him to fix things around the house, while I'm out enjoying myself on a Saturday afternoon.
2 years.
Keep renting - if you're transient enough with no family, no wife/girlfriend, few to no friends, with few posessions, it's a great time to rent. When you have all of the above, owning makes more sense, period. Try it Keith - I think some steady IHOP would do you a world of good.
(yawn) I got my miter saw setup this past weekend - I get to actually build my workbench this upcoming one, yeay!
Onto my first crown moldings by early November!
Home improvement: cheaper than drugs, and if done properly, you'll see your $$ back and then some! Now that's my kinda hobby.
"2) This is gonna take awhile - likely a few years"
2008 Mid - 2011. Not sure.
Last year, I was thinking "until 2008 or '09."
Now I'm thinking "2011-13--if ever."
Some of that depends on whether my landlord is more Norman Fell than Don Knotts.
#3 - waiting for fundamentals to revert to mean...no rush here
2) This is going to take a while.
It seems like it would be dumb right through 2015.
Well,
I have to say:
(2) This is gonna take awhile - likely a few years
That's true regardless of whether I stay in Canada or move to the US, I think.
I'm planning on renting for the next twelve months at least...maybe longer. Here in Honolulu prices are only now starting to go down and in many places prices are still 100% higher than they were 3 years ago...it can't last.
Everything takes a little longer to happen here but eventually it will. Every Tom, Dick, and Harry cannot afford a $650K home but they're living in one right now.
Should be a matter of months.
Until it makes financial sense not to...
We're closly watching on a property-by-property basis. Who knows? We may purchase at an auction this Saturday -- as long as there isn't an idiot bidding, we stand a good chance.
Otherwise, sometime in the next year (unless something changes drastically). New housing has already fallen to $100 a square foot. I don't expect new construction to fall much more than that here (could be wrong). The REO market is falling a lot less quickly (apparently the banks haven't gotten the memo that a house that was "worth" $455 in 2005 isn't even close to that mark today).
Well Keith-
It's gonna be option #3
When the fundamentals make sense again - whenever that is.
We'll rent until the prices are where we want them to be (I know, pipe dream)
Sold in '06 after buying in '01 in D.C. sitting on a chunk (which is worth less each day, I know!!)
Oh yeah, will be waiting for the baby to finish at his Ivy League (BTW, that's 60K A YEAR)
No sooner than 2013.
I think it'll be at least 2010 before prices revert to the mean, then they might overshoot to the low side, and then continue along the historical trend beyond that.
Until then, why be tied down to a pile of concrete, dirt, wood, and taxes?
Currently in a long distance relationship so if all works well we will get a new place in 12-18 months. Most likely a rental unless there is a great deal. Because of her career we expect a big income boost in 3 years so that might be the right time to buy.
Wife and I are looking in Arlington, VA. Things are starting to go for about 10-15% below assessment. In Arlington, assessment is determined by average sales price for the region for the last three years.
The market is starting to stratify again, where POS houses are being priced as POS houses and beautiful houses are being priced as beautiful houses. If a house is a POS, our offer is at 25% of assessment. If it is a beautiful house, we go to 10%.
So far, all our offers have been in the mid range. We should probably be going to 5% on beautiful houses and 15% on POS houses, but we're cheapskates.
We are focused on putting offers in at 25% of assessment, and that seems to be
3) 3-5 years.
Hope my wife agrees :-|
We live east of Sacramento in the foothills. The reos are piling up in many of the upscale newer neighborhoods.
We will most likely purchase a home in early 2008. Then we will wait and either buy land or a second home in 2009/10 depending on where things go.
4) No timeframe - will rent until the fundamentals make sense again.
My thinking has always been that buying a home is a serious long term commitment. Just like getting married. I don't feel the need to own a home or get married JUST because all of my friends and family members have done so.
I love this quote, "Leaders are like eagles, they don't flock; you find them one at a time".
Have been renting for 3 years!
Unloaded my homes in VA and CA 3 years ago when fiscal reality "seemed to be suspended". Will rent until it makes sense to own - that may indeed be several more years from today as the depression I see coming is going to be a killer.
Who is John Galt!
With foreclosed family's driving up rental prices, renting/owning is almost balancing out here in the SF Bay area. I still think I'll wait a year or so to see if the housing prices drop. They really haven't here, and I don't think they will by much, unless you want to commute for two hours a day!
Probably will rent here in SLC area in UT until fundamentals make sense again. Have started looking to see where market is at. Amazing how many "deals" I see compared to last year. Price drops like crazy. Even a realtor friend of mine agrees that waiting to buy is a really good idea. Still overvalued 20% or more but it's good to know that I called it. Relatives who bought in spite of my warning couldn't sell today for what they paid last year. [*must*control*tongue* to keep family peace]
At least until December 12, 2012.
I'll put '3' as my choice: no timeframe. Why? Because right now, it's much more lucrative for me to continue renting than it is for me to try and buy a home. I make enough to make my rent, utilities, etc, but not enough to foot a mortgage payment, taxes and maintenance on a house. So, that 'excess' money that isn't quite enough for the mortgage, etc. is going into various instruments of investment, and the return is much better than any equity in a house.
So, don't call me a 'bitter' renter- call me sensible and increasingly solvent.
three's company - I can't deny
three's company - till the day I die
a few years now
#3
said burn baby burn
I just bought a great home in Pittsburgh PA for $156K. I couldn't stand renting any longer.
It helps that we haven't been hit by skyrocketing RE prices like the rest of the country.
Even if I overpaid, it wasn't by more than $10K.
If there are any health care professionals out there looking to relocate, Pittsburgh would ba a great city for you. Our health care institutions are some of the best int the country. Plus Allegheny country is the 2nd oldest county in the country. There'll be plenty of old people to keep you busy for years to come.
If you're looking to buy, the key places are West of the city through the North Hills. Steer clear of the south hills and easteran comomunities as these are the older areas of the area and prone to be more run-down.
G-LYTE
#2 and #3, as the way things are beginning to fall apart these two options should meet in several years.
We've already decided to renew our lease this coming March, after hard negotiating because rents in our area continue to fall.
I'm in So Cal where the bloodbath is just beginning so no way will I buy just yet. Maybe before my lease is up, if and only if I find a smoking deal I'd buy it, but for now we'll continue our lease until Feb 28th, 2009.
option 2-3. I cut on a 2 year lease & just moved in after an exhaustive search in NoVa lead me to the conclusion that if I rent the same place for 1k less than it would take to "own" and save that delta and if RE prices are going to drop another 20% by the time it troughs then I would be building equity by RENTING and "NOT OWNING" now.
i.e. the 1k/month if saved is like paying down principal. Price depreciation is = to the building of equity by price appreciation by not owning.
If I were to purchase now I'd not be able to pay down principal at the rate of 1k/month during the early years of the loan & any deposit I put down now would evaporate, i.e. I'd be catching a falling knife for some now former FB and I'd be the GF for taking their place.
So a 2 year lease and a quick look and if its bottomed out then I'll buy, if its still soft then I'll just renew the lease and wait another 1-2 years.
Keep renting - if you're transient enough with no family, no wife/girlfriend, few to no friends, with few posessions, it's a great time to rent. When you have all of the above, owning makes more sense, period. Try it Keith - I think some steady IHOP would do you a world of good.
Here's a guy who suffers from severe insecurity because he has amounted to nothing in life and probably never will. Since he has absolutely nothing going for him, his only outlet for his frustration and failure is to lash out at renters and call them inferior, to make his sad self feel better.
My favorite quote: "Owning makes more sense, period." Two thoughts on that -
1. Owning means you OWN free and clear with no mortgage. From your inferiority complex I'm certain you do not.
2. Owning makes sense when the FUNDAMENTALS are there and the price is REALISTIC. Or didn't you learn that before dropping out of school in the 10th grade? (Probably the root of your inferiority complex).
Based on your post, you're dumb enough to pay $100,000 for a car today that will be priced at $50,000 in a few months, just to make yourself feel better by saying "I OWN! I OWN!" Like you probably do with your BMW on a pre-owned 5 year lease.
In case you're wondering I'm a recognized expert on the science of social dynamics and can spot insecure blobs of jello like you a mile away.
Keep renting - if you're transient enough with no family, no wife/girlfriend, few to no friends, with few posessions, it's a great time to rent.
haha, you troll, this is a new one! So renters are not just bitter, but they also have no family, no friends, no girlfriends, no possessions.
Well, apparently, you are being ass raped by the banks. No wonder that you try to make yourself feel better by making such ridiculous statements.
3
There is no good reason to own ever again. The home is not owned, anyway, it owns you. It tells you where you have to live and when you can move. It is a rigid albatross I would not of my own volition assume. Returns are higher elsewhere. It is a fairly illiquid asset. I like the freedom of not "owning." I am month to month and could vacate tomorrow without a second thought. That freedom is priceless. Many place no value on that freedom. It comes down to personal preference there.
(3)
I sold my house and started renting about mid 05. I am working on my 4th move, various reasons involved.
One thing I have learned is that there are some real $hitty neighbors out there: illegal aliens, trash neighbors with barking dogs, $hit head kids, thumpty thump music bla bla bla..
I will buy in the near future but it will be in a non-bubble region on acreage away from the unwashed hordes.
Dear Happy Homedebtor:
Your perspective is ALL wrong. You believe that because we continue to choose to rent we are losers and don't have a life.
I am a happy renter! Always have been. I have been renting the same great home for 8yrs. I bet if we compare our lives side by side, we would discover that I have much more excitement than you do. I am truly satisfied with my lifestyle. In fact, my net worth is probably much more than yours considering you do NOT own your home, cars, etc. The creditors own them.
Owning means you have no debt on the property or a substantial amount of equity.
So many home debtors are incredibly superficial!
Looks like I lost the rent vs. own here in San Diego - if 5000 homes go up in flames, rents will soar. . .oh well, I can always move to Orange County. . .or Phoenix!!! . . .the nice thing about renting, is that if an area has a major problem (like burning to the ground) I can just pick up and leave. . .so much smoke downtown, the airport may have limited operations. . .wouldn't be suprised if some developers torch their homes and say the fire did it. . .one way to get rid of inventory!
If you have crappy neighbors and "own" you're stuck. If you rent you can move
If you want a job in a different state or country and "own" you're stuck, and might have to sell in this awful market. If you rent you can move.
I'll likely "own" again one day - but I'll OWN, not rent money from a bank. And I'll rent that place out for a good return on my investment should I not live there.
My guess? 2010 or 2011. All depends on how this crash plays out - fast or slow. But play out it will.
OK if it doesn't recover till 2009, it will be a very very short recovery before it starts to crash in earnest in 2012-2015 - 30+ year crash for most of the country. Why, baby boomers retiring. OK fine the whole retire in place BS isnt going to fly when you're living in arctic tundra. The whole Northern US is frocked. Florida and ironically AZ will benifit a little, but most of the rest of US is toast, but that is 2012 and later. Maybe the question to ask yourself is, am I going to sell by 2012 if I buy now and if so will I be able to for a profit or not a loss. If you're in a retirement hotspot you may make out OK selling or holding past 2015.
To HappyHomedebtor - Yea, I own a house and lived in ittill last month, so has Keith and several others that are renters now, and we all know how hollow your "thrill of crown moulding" is. All I can say is, I should have rented, 4 1/2 years wasn't long enough to make it profitable in my case even though I timed a bottom perfectly. Renteing may have been more $$ by a small amount but will have been much more stress free especially the part where I wait for the damn thing to sell.
My next house may be a full custom built to my plans which we will live in forever (OK that's what I said the previous time I bought too) so I may have to do it sooner than later. Pre existing houses will fall through the floor, but building a house isn't going to get cheaper I feel. Of course we dont have to build, but then again we just might end up doing that.
Cool.
Cow_tipping.
Until Suzanne Sommers comes up on outta my lap. Until then--I'll be a happy renter, yess sireee!!
Frank - you're cute. :)
Don't have any luxury cars.
Don't lease what we have.
Don't own a plasma.
Don't eat out much - prefer to cook, and it's cheaper.
Running out of room on the walls for all our degrees and certifications, 2 more currently in progress.
Our combined ages are less than 60.
I'm the youngest person on our contract, and I'm management.
Yeah...man, I haven't accomplished anything and I'm spending like it's monopoly money.
Generalize some more and make yourself look like a bigger idiot next time please. I enjoy a good laugh before leaving for the day.
Now time to go home and clean the carpets - damn dog got ahold of a paintbrush. :( I guess that is a downside to owning - I actually care about the carpets...doh, what a huge mistake I've made by buying! I didn't think about the carpets! NOOOOOOOOOOOOOOOOOOOOOOOOO! I should go sell for 50% off RIGHT NOW so I can go somewhere and pee on the carpets care-free!
Sold in 2005, been renting one houe since then, just signed a lease for a nicer house for another year.
Nicer rentals are hitting the market every day. Alot of houses that were never meant to be rentals are showing up because the sellers refused to lower their prices enough for a sale.
I'd say by 2010 we will see some stabilization.
If you have crappy neighbors and "own" you're stuck. If you rent you can move
I totally agree Keith.. I'm just getting worn down a bit in my resolve. The homes I have owned in the past were in good areas on acreage.
I'm going on 2 years plus renting and society as a whole has changed since I last rented 2 decades back..
I should not be showing weakness here because the realterds will try and exploit it..
Happy Homedebtor said...
Keep renting - if you're transient enough with no family, no wife/girlfriend, few to no friends, with few posessions, it's a great time to rent. When you have all of the above, owning makes more sense, period.
Huh? I have a girlfriend and lots more friends now then I did when I owned. I don't have so much stuff that I need a house to put it in but then again I don't need all that stuff to be happy as it appears you do.
If house maintainance is your idea of a fun hobby that's fine, it's just not my idea of fun.
Dear Homedebtor:
There is nothing wrong with you being proud of the home you bought. I do however, hope that you have a long term fixed rate on your mortgage. That way you can ride out the coming economic storm with a piece of mind.
Your words actually sound quite bitter. Just because we choose to rent doesn't make us any less than you. Look all I'm saying is I'm enjoying my life to the fullest. Life is about experience. That is all you will be taking with you when you die. Not your home and other possessions.
So by all means continue to bask in your superiority. It isn't bothering me one iota.
I bought at the bottom of the previous bubble (remember the 80s!), but about 5 years before the most recent re-inflation. How I pine for the old days when my taxes were a small fraction of what I get hung for now.
Is it OK if I keep my house until I build new and more energy efficient one in a rural area on land I inherited? Assuming I can put the money together before the oil runs out.
I bought two weeks ago. It was time. I got a house for $625K. It was originally listed for $800K in December. I don't know if it's the bottom or not. I like the house, I can afford it, I bought it. I'm happy.
Anonymous said...
With foreclosed family's driving up rental prices, renting/owning is almost balancing out here in the SF Bay area. I still think I'll wait a year or so to see if the housing prices drop. They really haven't here, and I don't think they will by much, unless you want to commute for two hours a day!
October 22, 2007 8:34 PM
This is what I call the ultimate Phallus-y (Fallacy).
Lets try this in some actual numbers.
A family that cannot pay $1000 for house payments, is now renting a identical house for $1000 with the bank holding the other house as a foreclosure.
Can you see how it doesn't make sense ???
OK, so if it is $1000 its a better house, or they hold on to their original $1000 house, or its much below $1000 cos that is all they can afford.
Rents can almost never greatly exceed payments. Effectively rent being 1-200 more than payments is a great profit for a house. Usually the renting business turns profitable when the owner had held it a few years. 2-3 years in times of high inflation (AKA high interest rates)or 6-8 years in times of low inflation.
Cool.
Cow_tipping.
Depresso and Frank.....way to deflect guys. That is an absolute true statement. Renting makes sense for those with no roots, no family, no friends and no posesions. At least no family/friends/poseesions that you can't live without. Pick up and go on a moment's notice.
If that's how you want to live great but it'll catch up to you.. I know guys like you. Pathetic men who have tons of money but are single in their 50s, no kids, and lonely as shit.
All this talk of renter freedom is bullshit. Anyone can make his or her freedom and renting/buying has nothing to do with it. I own and if I wanted to I could pick up and move as well. Sure it woudl cost me more in selling costs than you breaking a lease. But that is not what's preventing me from moving. I have a life where I live. I have friends. My family lives in the area. My wife's family lives about 100 miles away. I have a network of business associates that would take years to build up from scratch in a new area. I'm not going to give all that up so I can save $50 a month on rent by moving every 6 months to a new city.
I've seen the world. I've lived in 5 countries over the years. But at some point in your life you grow up and stop living like a vagabond. Eventually you will figure it out too.
#3 I have 2 commercial buildings in Orange County have apt in one of them just like Dan Tanna in Vegas. No bills, No f'ing neighbors, single, bicycle 100 miles a week, spend time in Mexico with Chicas. Friends say I am the richest bumb in Anaheim.
Burdman
Depresso and Frank.....way to deflect guys. That is an absolute true statement. Renting makes sense for those with no roots, no family, no friends and no posesions. At least no family/friends/poseesions that you can't live without. Pick up and go on a moment's notice.
If that's how you want to live great but it'll catch up to you.. I know guys like you. Pathetic men who have tons of money but are single in their 50s, no kids, and lonely as shit.
Do you feel better now?
I understand that you are a bitter debtor and can't stand the fact that there are people with more brains than you have - the renters who are free, have plenty of friends, families and live happy lives without the burden of a mortgage, without annoying neighbors and without being tied to a piece of land like medieval serfs.
You made the wrong decision and now you have to live with that. Though shit...
Dear Anon who posted at October 22, 2007 11:04 PM. Homedebtor It's very very sad that you have to hide behind Anon now.
I do wish you the best, really! You sound quite panicked and scared. You keep bashing the guys. Could this be because of your insecurities?
It's quite clear that you have made your life choices due to your circumstances. That's fine... no one is mocking you. Continue to enjoy your life as you have and we will do the same.
As far as the growing up part of your post... I think we can all agree that "growing up" is based on perspective.
"Frank@Scottsdale-Sucks.com said...
Keep renting - if you're transient enough with no family, no wife/girlfriend, few to no friends, with few posessions, it's a great time to rent. When you have all of the above, owning makes more sense, period. Try it Keith - I think some steady IHOP would do you a world of good.
Here's a guy who suffers from severe insecurity because he has amounted to nothing in life and probably never will. Since he has absolutely nothing going for him, his only outlet for his frustration and failure is to lash out at renters and call them inferior, to make his sad self feel better.
My favorite quote: "Owning makes more sense, period." Two thoughts on that -
1. Owning means you OWN free and clear with no mortgage. From your inferiority complex I'm certain you do not.
2. Owning makes sense when the FUNDAMENTALS are there and the price is REALISTIC. Or didn't you learn that before dropping out of school in the 10th grade? (Probably the root of your inferiority complex).
Based on your post, you're dumb enough to pay $100,000 for a car today that will be priced at $50,000 in a few months, just to make yourself feel better by saying "I OWN! I OWN!" Like you probably do with your BMW on a pre-owned 5 year lease.
In case you're wondering I'm a recognized expert on the science of social dynamics and can spot insecure blobs of jello like you a mile away."
-----------------------------------
Oh and you forgot, this guy MUST live in Scottsdale, right? God, I think I found the place where Real Estate will never recover - THE CHIP ON YOUR SHOULDER! Due to low demand, and ever increasing land size! That can only be matched by the RE bubble on your forehead, because they will never stop making land there either!
Can you ever stop being Mr. Elite for even a day and submit something remotely intelligent? Seriously, it would be great to hear something with a little more substance than the usual BMW bashing and everyone must have low self esteem, or be inferior to you because THEY don't have a "Best Selling Book on Amazon". Oh, and as far as you being a recognized expert, from what I have seen, you appear to be nothing more than a recognized Jackass. It was not to hard to RECOGNIZE your usual tired commentary a mile away. BTW, I don't live in Scottsdale, but I have visited, and I found it to be no different than anywhere else. Good, bad, all the same ratios of both. Has it ever occured to you that some people LIKE to own a home? And those very people may not be OVER LEVERAGED AT ALL? If you are so recognized in psycology circles how is it that you fall for the same dumb mistake that many of those lemmings you make fun of do: Lumping everyone in the same basket and then passing blanket judgement. Unfortunately it is people like you that are starting to dumb down the gene pool in what used to be a very topical and intelligent blog. Now it just seems like the same tired arguments by the same tired posters.
Frank - you're cute. :)
Don't have any luxury cars.
Don't lease what we have.
Don't own a plasma.
Don't eat out much - prefer to cook, and it's cheaper.
Running out of room on the walls for all our degrees and certifications, 2 more currently in progress.
Our combined ages are less than 60.
I'm the youngest person on our contract, and I'm management.
Yeah...man, I haven't accomplished anything and I'm spending like it's monopoly money.
Generalize some more and make yourself look like a bigger idiot next time please. I enjoy a good laugh before leaving for the day.
I hate to make you feel bad, but I *do* have the luxury car, HDTVs, eat out at great restaurants, and enjoy life.
And all with ZERO DEBT. Only surplus.
I don't have a bunch of certificates hanging on the walls, but I do have one that negates all of yours combined. Keith banned me from saying who I am on this site, but hopefully he'll allow this one clue: You can find my name on the front table at your nearest bookstore.
I am 34 years old.
I recognize that the "rent vs. buy" thing, at least when it comes to so-called status, is as stupid as the "Ford vs. Chevy" crap that went on in high school. If you have to brag about your so-called "ownership" and put down renters, you are telling the world that you're an insecure loser who has such a massive inferiority complex that you must lash out at others to overcompensate for it.
DOPE.
I'm willing to bet you don't own a thing and your house is actually on a mortgage that is currently ass-raping you on payments, and THAT is the real reason why you have no luxury car, big screen TV, and eat top ramen at home every night.
This discussion is about one very simple fact that a 3rd-grader can understand: Buying an asset today that will be cheaper next month or next year is STUPID. Plain and simple. If you can't understand that, then your diplomas must be mail order from somewhere in South America.
Unless it makes financial sense, or put another way until owning a home stops being the favorite hobby of poor people with no math skills.
It is possible this will be NEVER if the "Democratization Of Extreme Leverage" (I'm sick of hearing the empty term "subprime") w/ 0% down/100% LTV returns to the market.
I think in equilibrium the avg American will pay a substantial premium to own- chasing the dream of painting their walls purple.
The Democratization of Extreme Leverage removed any minimal barrier for everyone to chase this dream.
Mostly 3 - I would only buy again if it made financial sense to do so - As a mom I used to have this whole nesting thing going on so I thought I needed the house - but I no longer buy into that myth. I love that I'm not one of the 265,000 people in California that had to be evacuated because of wildfires. Even if I was a renter there - it would all be someone else's headache. I feel so liberated to have found my inner nomad
Frank@Scottsdale-Sucks.com'
re; In case you're wondering I'm a recognized expert on the science of social dynamics and can spot insecure blobs of jello like you a mile away.
********************************
Ah, more please, on ths "science of social dynamics" of HP!!
Hah, too much fun.
Sorry bout the thread-jack, Keith, I could not resist.
I've sold my home July 2007 but I've been renting for two years. The bottom with this market won't be realized in Los Angeles coastal cities until 2011 if at all.
I think selling my home was a prudent financial move but I HATE RENTING.
It's official... Happy Homedebtor, Anon & People that have chips suck, (all the same person or act like it) is a complete Asshole!
Net worth are the key words here. Everything you own minus everybody you owe. I RENT a great home down the street from Bob Hope's house in Toluca Lake. I drive a sport's car that is PAID in full.
I'm sure you will be re-thinking that home purchase when your home value is upside down for many many many years. Then, I will come into the market, buy MY dream home free and clear for $100,000s less, pennies on the dollar. All the while, I've been living life to the fullest.
It's kind of like "The Hare and the Tortoise" tale.
Number 2 or 3, which ever comes first!
Keep renting - if you're transient enough with no family, no wife/girlfriend, few to no friends, with few posessions, it's a great time to rent.
And when you die, it will be alone... and nobody will know until the neighbor notices that smell and calls the landlord.
My answer is number 3. But that is to start buying more rental properties. We own half our home, the bank owns the other half,and most of our rentals are financed at about 50 to 55% LTV's so the pullback won't kill us. I figure around 2010 or so I will be able to find deals at 50% of appraised value through short sales, and REO deals. It will also be a great time to start doing sandwich lease options. That is when you lease option a property from a distressed seller that is happy to cover his debt expenses to stop the bleeding. You give a very small option consideration fee, and agree to lease for lets say 850 and an option pay 100k for the property within the nex 2 years. If timed properly prices may start appreciating a bit once again. I now have control of the property for very little cash(3000 option consideration), and agree to lease for 850 a month. I now find my buyer with credit issues who can't currently get a mortgage. I agree to a 6000 dollar option consideration(non refundable) and charge 1200 a month rent with a purchase price of 120k(the appraised value) I credit 200 a month toward the downpayment, along with the 6k deposit. I then put them in touch with my credit repair specialist. Over 24 months they acumulate 4800 towards the downpayment + the 6k deposit. With the 24 months of rent checks, and credit repair. They can now get a 90% LTV mortgage. For a 3k investment I recieve3600 in rental cash flow and 20k in profits when the property sells. If they default I keep the 6 grand, and make 8400 in cash flow. I then try to find a new lease option buyer and do it all again. This is a great strategy to use in an appreciating market. If you do one now it won't work out if prices are falling, but at the bottom of the curve it is a graet way to make money, and have control of the property for little cash. If the property sells my return on investment is around 700% in 2 years. If it goes south my returnis still around 400%, and I get to try again. When fully leveraged cash flow is back, and you can use creative financing options I plan on doubling my investment portfolio. It may not seem so now, but Real Estate is one of the best wealth building vehicles between cash flow, tax advantages and appreciation. You do need cash flow and appreciation to make it a wise investment, neither of which exist right now. That is why the crash is imminent. The fundamentals of cash flow must return. In my local market that requires a 20% pullback of prices, and a 20% increase in rental rates.
Until all this occurs I will focus on selling cheap used cars. You can have 50% to 70% returns on investment without all the BS of being a landlord. I think summer of 2010 is the time to get back in the RE game.
Botton Feeder in Philly
If that's how you want to live great but it'll catch up to you.. I know guys like you. Pathetic men who have tons of money but are single in their 50s, no kids, and lonely as shit.
I didn't realize renting equated to lonely bachelorhood. I know lots of older men with houses who are lonely and vice versa.
Another observation: the owning vs renting thing seems to be a class conscious argument with renters seen as somehow lesser. That's probably why so many of us are enjoying the housing collapse.
3) though I think I am going to start testing the buying waters because I think it will make sense to go into debt soon due to raging inflation....
I want a serious bargain though.
6) Plan to rent in the US for a long time since this is a rigged, manipulated economy by shady groups like Blackwater, Halliburton, Wa-Mart, Skull & Bones, Israeli interests that control the Senate, etc. However I own properties overseas. This country is going down fast and I want to be very mobile.
Good luck with that water shortage in more than 10 states:
http://tinyurl.com/2ccbhr
50-60% + reduction from 2005 market prices or no deal, whenever that is. That's from a licensed non-practicing real estate broker who hasn't been in the industry since 1998 (fed up with the stupidity...)
I first thought it might be as short as a year or two. But now (after a year) I think we will be renting at least 2 or 3 more years.
Jan-March 2009.....can't stand waiting beyond that.
Remember folks, if you ever run out of dollars in the bathroom, you can always use pages from Frank's book.
My gosh! When I said the homebuilders and lenders were going to be having a fire sale... I never expected it to be an actual fire. I'm in California and there have been a dozen catastrophic fires throughout Southern Cal. All fires span from the Mexican border up to near Magic Mountain. Most communities have been given a mandatory evacuation. Some of the fires are expected to be arson.
Case in point... Every homeowner is taking ONLY what is priceless to their hearts; their children, their pets and their photos (memories).
Home IS where the heart is and nothing else matters.
I am 3. But personally, I am not buying in my area no matter what. (The SF Bay Area)
My plan is to rent for a few more years, bank my high California salary while it lasts, and then head to a less expensive area of the USA. I am not sure what northern Californians are putting in their ganja, but they have a very skewed perspective on what constitutes "value". I look at houses here that currently cost $650k and even if those prices were cut in half, I would still consider them to be over-priced. I mean honestly. $650k for a 60 year old fixer upper in a not so great neighborhood? Meanwhile I rent (for much less) in one of the most posh areas of the SF valley. From my standpoint, I live well below my means considering my salary. My rent constitutes 15% of my pre-tax income. Had I purchased, even 3-4 years ago, I would be paying upwards of 25-30% of my pre-tax salary. (Even including the tax deduction) And now, at these moronic housing levels, its more like 40-50% of pre-tax income to buy.
Sorry, but I'll stick to being a bitter renter. And considering that we will likely be hitting a recession in the next year or so, I don't want to be facing layoffs AND have a crushing mortgage to contend with. Like my two friends who both bought, are both underwater, with both having I/O loans resetting soon and now both are unemployed.
With foreclosed family's driving up rental prices, renting/owning is almost balancing out here in the SF Bay area
That is actually not true. While the median price has not moved much (and actually increased in certain areas), the price per square foot has dropped. What is occurring now is that nicer, higher end homes are selling at reduced prices while lower end houses and condos are not moving. This skews the median.
I spoke with a friend of mine who is a mortgage broker and he tells me that things are not rosy in the Bay Area. Many, many people here just as over-extended as those in the subprime realm. The reason subprime did not have as much of an effect here in SF Bay is due to the fact that most loans were either Alt-A or prime. They have longer terms. So my mortgage broker friend thinks we won't see the real problems in the Bay Area until the beginning to middle of 2008. Most Alt-A and prime I/O loans have a 3/27 type term. So being that the market peaked in 2005, it will be about 2008 until the resets begin.
This blog has gone the dumbed-down route. All it amounts to is macho-wannabes telling anyone who owns a house that they've been raped. What an ignorant generalization. I bet you're the kind of renter that turns nice neighborhoods into slums with foot-tall grass and redneck trucks on blocks on the front lawn.
I suspect the 2 or 3 people who constantly post here got turned down for sub-prime liar loans and now they're one-trick ponies ranting and raging on the same tired subject over and over and over and ...
Books, certificates, luxury cars blah blah. Lets get to the point. My penis is bigger than all of yours, therefore I win.
I am happy to be renting. Sold my last property late 2005 and bought 2 3/4 acre lots at 20% value. I have recently submitted my plans to build my residence along with one income property that will pay for my low 30 year fixed mortgage on my house. Don't worry, this is an owner builder project in which I will do 80% of the work. I am a real estate investor who has a skilled craftsman background. I am sure glad all these speculators are being cleansed out. I have a choice of developing the other lot with up to 4 other rentals or sell it to the city redevelopment agency for a city project.
Sure feels great to rent!!!
Happy Homedebtor said...
"Keep renting - if you're transient enough with no family, no wife/girlfriend, few to no friends, with few posessions, it's a great time to rent. When you have all of the above, owning makes more sense, period. Try it Keith - I think some steady IHOP would do you a world of good."
How would eating at The International House of Pancakes do Keith "a world of good"
How would pancakes be any better than say a burger, or some fried chicken? If pancakes are good, wouldn't waffles be even better?
Frank@Scottsdale-Sucks.com said...
"If you can't understand that, then your diplomas must be mail order from somewhere in South America."
Frank,
I lived in South America. People in South America are friends of mine. This guy is no South American nor does he hold a degree from there. The South Americans I know, know how to stretch their money.
Perhaps he's an economist?
No timeframe for me. When it financial sense to do so, and if I can find a place I expect to live for a decade or more...
#3 - rent until it makes economic sense. However, for it to make economic sense to me, owning has to be less expensive than renting. Alas, I live in 94041 which is downtown Mountain View, California which is Google country. Home ownership costs here are uber-inflated by all the G-money around here. I'm thinking 2011-2012 at the earliest before prices re-set, but I can wait longer or I can elect to never purchase a home in this zipcode and just retire earlier than planned instead.
4:47AM is the post of the month.
Spot on. This was an interesting blog for a while. While the MSM was cheering housing, this and other blogs exposed the lies behind it. Now it is nothing more than renters (most not all bitter) saying I told you so and high fiving each other.
What you gloss over though is that even with the downturn, you will still end up with the short end of the stick. Had you bought in 2001, 2002 and in some areas in 2003, you'd be OK now. Better than OK even.
You guys were as stupid renting 2001-2005 as anyone who bought in 2005 or 2006 that you mock. You are two sides of the economic stupid coin with the same result.
And not only that you are getting very boring.
And for crying out loud, you rent. Get over yourselves. I rent as well. It is a financial decision nothing more nothing less. I don't go around shouting to the world that I rent. If tomorrow owning becomes the better option, I'll own. I don't care one way or the other.
The way you morons talk you'd think you just discovered the cure for cancer because you rent. Get over yourselves. All you've done is make an investment decision that for some of you has turned out OK and for others not so OK long term.
That's all. The Nobel people won't be calling any time soon.
I am happy to be renting. Sold my last property late 2005 and bought 2 3/4 acre lots at 20% value. I have recently submitted my plans to build my residence along with one income property that will pay for my low 30 year fixed mortgage on my house. Don't worry, this is an owner builder project in which I will do 80% of the work. I am a real estate investor who has a skilled craftsman background. I am sure glad all these speculators are being cleansed out. I have a choice of developing the other lot with up to 4 other rentals or sell it to the city redevelopment agency for a city project.
Sure feels great to rent!!!
Sometimes I think I am reading the last words spoken by passengers of the Titanic, who just didnt understand the crisis they were faced with, and as a result they refused to leave the sinking ship.
Some of the posters on this blog strike me as people fleeing from reality into a deep fantasy life.
Good luck with that water shortage in more than 10 states:
http://tinyurl.com/2ccbhr
October 23, 2007 2:54 AM
==============================
We take the government back, announce emergency economic measures, create a government controlled bank that will issue low interest credit targeting infrastructure projects, then we'llcommence building new damns and other water projects.
That will take care of the water shortages while youre off in some foreign land. Farewell.
Heck, I bought at the market Nadir in '99. The rent on a house equivalent to the one I bought would be higher than the PITI of the 15yr fixed I refi'd to in 2003. While I think that it's likely that I'll lose >100k of equity as house prices retreat, I'm sure that I'll never see a 4.875% fixed rate mortgage again, so I'm staying put. But it's going to be years for this to work out.
I don't have a bunch of certificates hanging on the walls, but I do have one that negates all of yours combined. Keith banned me from saying who I am on this site, but hopefully he'll allow this one clue: You can find my name on the front table at your nearest bookstore.
I am 34 years old.
===============================
Ladies and Gents, ol Frank is the illegitimate love child of Zig Ziglar and Ayn Rand. That might also make him related to grandpa Alan Greenspan. We dont know but were checking into it.
Frank is a guy who is making money as a "guru" in the "post industrial society" which was imposed on the United States before Frank was born.
You see prior to the "post industrial society" peole in the United States worked as "skilled machinists, engineers, farmers, steel workers, etc. People back then were actually employed in productive jobs where they actually produced wealth.
Today in Franks uptopia we have replaced the old productive jobs with hamburger flipping, real estate, stock brokers, internet ponzi schemes, etc.
There are no high wage productive jobs for people today so alot of them turn to selling any stupid scheme/product that might pay their bills. After all they think selling on commission beats flipping hamburgers and they might get lucky and get rich!
Like Suzanne the fictional real estate rep. What is out there for the Suzannes of the world as far as employment? Not much.
So good ol Frank has set himself up as sort of the Ayn Rand of sales training. If you can just capture the right "magic" then you can become rich beyond your wildest dreams.
And Frank holds all the "secrets" and he'll share them with you for a small fee. Or you can purchase his best selling book which contains all the "magic secrets" of success and riches.
Ayn Rand's "black magic" techniques are now a best seller 40 years after the start of the "post industrial society".
What a tragedy we are living today.
3, but have looked. May have to move soon, doing comparison shopping. Climate way better for buyers, but I'm still getting sticker shock.
Anon said:"I rent the same place for 1k less than it would take to "own" and save that delta and if RE prices are going to drop another 20% by the time it troughs then I would be building equity by RENTING and "NOT OWNING" now.
i.e. the 1k/month if saved is like paying down principal. Price depreciation is = to the building of equity by price appreciation by not owning.
If I were to purchase now I'd not be able to pay down principal at the rate of 1k/month during the early years of the loan & any deposit I put down now would evaporate, i.e. I'd be catching a falling knife for some now former FB and I'd be the GF for taking their place.
So a 2 year lease and a quick look and if its bottomed out then I'll buy, if its still soft then I'll just renew the lease and wait another 1-2 years".
---------------
These are excellent points you made for the reasons to keep renting in this market.
I just wanted everyone to see your post again.
Another good reason to rent instead of buying right now:
When realtors tell you it a good time to buy because the interest rate is so low - in actuality, It's the worst time to buy.
Realtors dont tell the whole story... the truth is - buying an expensive house with historic low rates, doesnt get you anywhere.
Why? interest rates are way below the average of 8% - so essentially, there's hardly any interest to write off on your taxes, on an item that will surely lose value, and drop in price.
The only time to buy a house is when house prices are low, and interest rates are high. Fiancing a low priced item (house) is the only way to beat inflation, not the other way around, because houses lose value, it's a simple fact.
There's both troughs and peaks in real estate - don't count on the realtor to tell you so.
Right now, we are at the peak looking straight down.
#6 - I don't plan on selling for at least 10-15 years because I bought a reasonably priced home in December 2004 ($56 per square foot for a now four-year old home). I couldn't rent anything remotely comparable to what I have for the same monthly house payment, and we don't want/need to move for a very long time. Sorry to rain on your parade, but not every homedebtor who bought a home in the past three years is screwed.
I will buy when housing as an investment is so unpopular folks will call me an idiot.
I will buy when gas is so high it costs hundreds of dollars in gasoline to get to a vacation home only a few hours from the city.
I will buy when realtwhores have lost the smug grin, return my calls, and work for me.
I will buy when the interest on my money is so high that I won’t want to give it up on a looser investment.
I will buy when Bush is out and the fall guy is in.
I will buy soon, probably in 1 to 2 years.
I cannot hold the wife off any longer. We already owners (not renters) but she has been wanting to move to a more expensive area / bigger house for about forever. I told her if she could save $100k we could move and damn if we aren't almost there. I put it off as long as I could but I do not think I have any choice after my next bonus.
2 - likely a few years
With house prices falling and job market deteriorating, there is little incentive to put a mortgage around my neck.
As long as I have children in Private School I will keep renting. Hey, don't get me wrong... I love public schools. It is just that the ones in my area are horrible. By renting I am able to supplement my children's tuition by not paying the high property taxes, not to mention I am renting a $360,000 place for $980 a month.
Well I have to say that I can't rent. I need the R/O's. I own a home and yes it has gone down but still I don't end up giving the money to the IRS. Yes I'm in California in a big house with the kids in private school and the BMW's. In fact I'm on the golf course. I cook steaks and watch people tee off. I used to rent when I was single but now I live The American Dream. So I toast all you people out there waitning like vultures for your big break. Oh BTW I made/make all my money from Real Estate. I hope you enjoy giving people like me your rent money. Ta Ta Take Care..
When this bubble blows over, I'm buying a retirement house in cash (~$150K in Nova Scotia) and then renting, all over the nation (USA/Cn), as a transient white collar worker going from one, three year stint to another, hopping city to city, to keep up the salary. This is the only way to survive in the years to come because jobs don't stay local anymore.
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