February 07, 2008

HousingPANIC Stupid Question of the Day

After you had your housing bubble epiphany, were you able to convince anyone else to either sell and rent, or not buy?

Were you able to lead others to housing salvation? If so, do they now treat you as a housing messenger from god? And do the people who didn't listen hate you for being so right?


Stuck in So Pa said...

I preached to five, only reached one. Of the four non believers, two are holding on (no reset for a couple of years,) one’s wife has been laid off, time will tell, and one is almost out of options and it looks pretty bad.

Oh, in my travels today, I saw my first trashout. When the sheriff evicts, the stuff goes out on the curb. When the FB trashes out, the stuff goes everywhere, lawn, sidewalk, roof, pool.
Nice place, sure looked like hell though!

Max said...

Even though I always speak my mind about the insanity of the housing market, it was never my mission to actually convince anyone to do or not to do certain things. People should decide for themselves. Plus, it is nearly impossible to change someone's opinion with words - only hands-on experience matters.

Anonymous said...

I tried and failed...I am a horrible debater. :) I'm too nice about it.

Mostly people treated me like a moron with passive-aggressive comments too numerous to list here. Only one guy insulted me directly.

Now they talk about moving closer to the city so their kids can hang out with more friends, or living a simpler life without "acreage" (that's a 1/2 acre lot in pompous jackass-speak). What a joke.

A coworker of my BIL's opened up and told him he was on the verge of bankruptcy, but strongly denied it to everyone else including his mother. We will probably never know the full extent of the bubble bursting, because a lot of people will just not admit they blew it.

Frank@Scottsdale-Sucks.com said...

I was living in Scottsdale that the time where EVERYONE had a major inflated ego problem about renters. So, no one would listen, and they all said renters are scum losers.

Today, of the few people I've kept in touch with, most are struggling big-time to make the payments and one is in foreclosure (some have lost their jobs - the smart ones who rented were able to move out of state for new jobs).

IrvineRenter said...

Starting in 2004, I began preaching to all my friends and acquaintances, most of whom thought I was crazy. I had so much pent up energy for this issue that I got involved with the Irvine Housing Blog. I have received numerous emails and blog comments from people who are very thankful for the work I have done and the money I have saved them. There is even one poster at the blog whose moniker is thisblogsavedme100K. I will keep spreading the word as long as I can.

PONCH said...

This is not an issue I could touch people with. People were too fricking puckered about this issue...touchy, touchy. I have had luck getting people out of stocks and cash recently. But housing, no luck. And one person is sucking on a big one right now. I can't really be friends with them at this point. Whatever.

andy in nz said...

Not one, all wanted to beleive...

Just about cost me my marrige, two years later she is well and truely on my side and happy with our investment decisions.

I promised her babies instead of a house, know we will ruin some landlords carpet, save money and live happily on one wage while she stays home with the rug rats. She realised that she could stay home longer with kids if we rented, but would HAVE to work if we bought.

I always gave information not opinion, but I gave up because people wanted to believe the lies they were sold, they know wish they hadn't, pity for them...

Anonymous said...

I went so far as to take the podium at one of our town council meetings in 2005 to warn the towns people. They looked at me as if I were wearing a tin foil hat.

I did manage to convince my wife and that is all that is realy important.

We have stayed solvent and have thrived.

We are now helping out some of our newly homeless freinds.

In addition, I track foreclosures and one of our towns council members just got he NOD.

Morons in training to be idiots.

Exflipper said...

I rode the wave until 2005. At one point I had 9 houses. I would by a wreck and sell it to a greedy flipper wanabe.

I drove around last week and every property I had owned was for sale or upside down. I am an urban legund around here. People couldn't believe how lucky I was. I never used a RE agent and they all hate me.

I have traded a few options and made some money. I bought a 30 unit raw land development for pennies and am holding it. I bought out a developers car collection and made 5 times my money.

I am looking at deals everyday. They all are overpriced or not real.

Someone on this thread said not to be caught up in doom and gloom. Why bother. There are oppurtunities either watch them or ride them.

Anonymous said...

Are you freaking kidding? Trying to explain the housing bubble to the average shmuck is liking talking to a lobotomized cow. The majority of people I interact with day to day do not spend their meager brain power on anything but football, movies and videogames. I'll try to have a conversation with them but all I get is a blank stare or a dismissal of the subject.

Seriously, I feel like I'm surrounded by f*cking zombies!

straw buyer said...

A relative lowered her price in NoVa after I clued her in. She closed last month. Funny how that works.

Anonymous said...

"Seriously, I feel like I'm surrounded by f*cking zombies!"

In Utah you really are surrounded by zombies! Most of them are on some prescription med or meth. And the drugged up women are all driving huge SUVs...Yikes!!

Mark in San Diego said...

No - no one wanted to hear what I had to say

Yes - now everyone who ownes hates me. . .especially my friend in the UK who has been buying and flipping houses. . .I told him he has about two weeks to sell and get out!

Matt said...

Most People knew that there would be a correction. In fact history always repeats itself. Those who stayed renting during these times were not necessarily smarter. Those who bought did not buy within their means. As a mortgage broker even I was caught in utopia. We live with dreams hopes and aspirations and at times we let our dreams inflate above our means. It is a shame but it is human nature. You cant buy or budget based on a utopian income. You have to budget for the worst case. You need an escape plan. The escape plans were lost in the pace of the market. The tortoise always beats the hare. Congratulations to the tortoise but never shame the hare. Embrace them and hope that they learned from their mistakes.

Jason said...

I managed to get to two. Failed on one I really wanted to reach, and three more I didn't push very hard. They're all upside-down now. It's sad, but I'm not Jesus Christ. I can't save 'em all.

Anonymous said...

Real estate prices here in Chicago from 2001 to 2005 were crazy. Well after doing some balanced research (thanks to blogs like yours and others in the same category) I reached the conclusion that prices will drastically decline.

I tried to convince some close friends and relatives NOT to buy during those bubble years. No one listened. Whenever we get together about 50% of them still wonder why I am renting instead of "owning" and the other 50% finally admit that they bought during the bubble years and they are screwed.

Andrew from Russia said...

No way. "It won't happen here". But, candidly, "we can't afford those mortgages" - compare to the NINJA experience in the US!

To me it is yet uncertain in which terms we will see the decline - in terms of rouble/dollar price or in terms of hamburgers and monthly wages (i.e. inflationary hell that would reward fixed-rate mortgagors, turn RE into an inflation hedge and penalize cash savers once again).

Pets or Meat? said...

View from Silly CON Valley, CA:

I learned early on and hard in this particular cycle that "No good deed Goes Unpunished" is as true a statement as was ever told and directly applicable to the FB in the Housing Bubble. Blogs, opinions and common sense told me to batten down the windows and run for the bunkers in 2005-6 when high school dropouts learned to make a windsor knot and lease a Mercedes and call themselves "Realtors"...

They knew better. They had that smug, self-serving look about them. Realtors were smart and Rich and Moral and drove Mercedes automobiles. They were elegant women in Real Estate, not common housewives (truly an honorable, tough job when taken seriously), thieves, junkies, pimps and whores...

I said F*ck you neighbor, Greed IS Good, Right? Do Your Thing. I'm just a 3rd Generation Rube working (when I choose)class guy making my way towards retirement and then death. buy BUY, bye BYE!

$550K for 1,000 sq. feet with 3 mortgages and no money down? So YOU want to live and own a home in Silly Con Valley,California eh? OR you can have a 2 hour one-way commute in traffic/stress hell for the privelege to buy a new McMAnsion is a Farmers Field that still stinks like horesh*t?

Well, F*ck that. Go ahead. Make MY Day.

Just Today, mid morning after a leisurely walk, shower and shave, after the traffic had died down and the cube dwellers were already hard at trying to churn enough bullsh*t to make the next payments as I was on my way to the market to buy more tinfoil for my hat and door arches, One short-sale 'victim' neighbor (and 2 Mercededs car 'owners' originally from India in those little crocodile tears people get when they are doomed and desperate asked me if anyone I knew was looking for a cat...

I said 'try the Korean woman over there, they LIKE cats... They also LOVE dogs because they are bigger than cats' - more meat from a dog...

Thank God there are still douches with Big Brains, no necks and Fat Wallets graduating from wonderful schools of higher learning (Stanford, Berkeley, Santa Clara U, etc) and enlightenment liberal and stupid enough to believe the MSM propogandists that California is where its at and the SF Bay Area "is special" and they are willing to sign up for a lifetime of debt slavery for a used stucco shack in which to play house/pay bills in...

What A Country Bush's America.

Welcome to the New Depression.

Welcome to Dog for Dinner.


Pets OR Meat? Think about it.

Anonymous said...

I have to agree with the other posters.

I tried convinsing even family members and they wouldn't listen. They bought at the worst time, end of 2006.

Just about every other person I know STILL, yes, STILL thinks real estate is a GREAT investment. What a bunch of retards.

I have even explained in STUPID terms and they still dont get it. I am almost giving up now. The only important to thing to me now is just stashing cash away to pick up when shit hits the fan.

People cant use their brain cells anymore, it's just to hard for them to think.


Princess Mononoke said...

Deer caught in headlights everywhere...

Then fish out of water everywhere...

I don't even bother anymore. It's a huge waste of my time. They're on their own and solely responsible for their decisions!

Anonymous said...

Convinced my hubby to sell in NoVa in 2006, after we bought in 2001.

Friend thought we were nuts - now they tell us dinner parties "we are watching you, we want to do what you are doing"

Problem is, they still own & ain't gonna get a sale!

One pal bought his McMansion in Oct '05. Monthly note is 6K & utilites run him another 1K Monthly to heat & cool that 7,000 square foot beast. Plus they've lost about 500K on the value. Wonder how they sleep at night

Oh yeah, we are sittn' on a WAD!
Thank you blogs!!!

Jay said...

I was not able to change anyone's mind about buying a house. I did however make my friends that rent like me feel better about renting. I guess they feel better at this point even though they had no other course to take.

Anonymous said...

I attempt to convince, I just try to posit a counterpoint/weight in an RE conversation so that the RE boosters' comments are not taken as fact/gospel. Of course this pisses the RE boosters off because they are sweating bullets trolling for the next GF and I am viewed as upsetting that endeavor.

I am well received by fellow renters and pre-bubble buyers who've not ATM HELOC'ed their places.

Anonymous said...

According to everyone around me, things are different in Canada. Canada has been managed better. Whatever!

I was seen as a lunatic. Now they don't remember I was right, they just remember I was a lunatic!

JaneZinfandel said...

Matt said...

The tortoise always beats the hare. Congratulations to the tortoise but never shame the hare. Embrace them and hope that they learned from their mistakes.
February 07, 2008 5:47 AM

Actually, the tortoise is called the "Snapper Turtle" here.

Anonymous said...

Wonder what ever happened to Monkey Warrior? Use to post here all the time, saying she bought a condo but was happy about her decision.

Guess she's underwater about now.

LauraVella said...

It's interesting what Pets or Meat said....

I live near a lagoon and walk regularly... theres lots of ducks swiming around. Sometimes my mind just wanders when I'm walking, checking out the scenery.

Lots of expensive homes around these lagoons here on Harbor Bay...

Lower duck population in the future? I'm going to bet on it.

Anonymous said...

Hey pets or meat-
I despise the Bay Area ALMOST as much as you do! Let 'em crash and burn, couldn't happen to a more deserving group.

Anonymous said...

As I may have indicated in the open thread yesterday, I was able to solidly convince 2 people not to buy last year and probably saved them each 100K thus far. I may have also convinced a few other coworkers, but it is hard to tell because, despite their making six figures, they simply can't afford to buy a decent home here in DC Metro anyway.

Of the people I was not able to convince, one indicated that the there was not much left over each month after making payments on the 400K bungalow in Charlotte, NC, and the other that bought the condo in LA, well, I am not sure as of yet - but hey, it was purchased via probate and was "priced below market value."

Of the above, guess who always drives the BMWs?

Anonymous said...

To the Canadians out there, Canada will get creamed during the next recession, however, unlike the USA, it will survive and come out with an intact middle class even if it's on the dole (via Alberta oil sales to Asia) along with other natural resources. The US will emerge as an economic and cultural extension of Mexico afterwards, a third world nation.

pwnd said...

Started telling people prices were crazy starting in the summer of 2003. I looked like a fool for so long, and I got tired of the taste of crow. So, I just shut down. It actually put distance between me and my friends since so many not only owned homes, but owned multiple homes. Further, most even worked for the REIC -- homebuilders, contractors, mortgage, comm'l r/e broker.

Ironicallic the comm'l r/e broker was one of the biggest r/e bears I knew. We used to have long, heated discussions on why the r/e market was so ridiculously overvalued. And, how these idiot "investors" were going to, as he put it "ride a death spiral into a crater."

BAILYBOO said...

I learned to take the high road let people learn from there mistakes .I tried to tell the truth as I SAW IT . But now many people ARE MAD at me for it .The best way to lose people around you IS TO TELL THE TRUTH. They just can't take it. imho

BAILYBOO said...
This comment has been removed by the author.
Justin Thyme said...

Yay Brother! My hideous mother-in-law, a debt addict par excellence, ran up her HELOC beyond the point that she could service it on her meager income. She asked me to "help" her (i.e. pay off her HELOC so she could do it all over again). Instead (this is mid 2006) I made her sell her condo and move into a rental. Now she could take the proceeds of the sale and buy the same unit back, debt free if she wanted to. And its still falling.

Anonymous said...

I preached to 3. None have listened thus far.

Two of them are now sitting on properties that are underwater. And one of those two has been unemployed for 5 months now. His I/O is due to reset in 5 months. He will likely end in foreclosure.

My 3rd friend has good equity in his house and is now at least comtemplating the notion of selling and renting. Unfortunately, I think it is too late. Housing has already dropped 15% here and the buyers are rapidly dissappearing. My guess is he will try to sell, and basically not get any bites. I can only hope his (and his wife's) incomes can weather the storm.

Anonymous said...

"Just about every other person I know STILL, yes, STILL thinks real estate is a GREAT investment. What a bunch of retards."

51 + percent voted for Bush in 2004 that would be about every other person you meet.

Anonymous said...

To those bashing the Bay Area:

I almost hate to say it considering I live in the Bay Area, but I have to agree with much of what many posters have been stating here.

As much as many other elements of the country experienced their own housing bubbles, no place, and I mean NO PLACE matched both the idiocy and the smugness that I saw here in the Bay Area.

I cannot for the life of me fathom how such a large group of supposedly well educated individuals could be so completely and utterly BLIND to what I consider to be the blatantly obvious. And the fact that the housing bubble here literally began on the friggen heels of the dot com bubble just adds to the sense of disbelief I have.

I have to admit, there is a bizarre attitude around here. I can't place my finger on it (I emigrated from Toronto) but there is almost this aura of unfounded optimism without a single dose of realism. It is really baffling.

The culture that thrives on "startups" and "hit it rich with the right company" I think to some degree morphs into a sense of excessive risk taking and plans that are clearly based mostly on emotions and not facts.

I can't even recall how many discussions I had, even during the runup of the NASDAQ. I swear that I could have taken the sentences I said in those days and replaced "stock" with "house" and "day trader" with "flipper" and the rest of the text could have stayed the same.


But I digress. What is said is many individuals will be affected by this downturn. And I don't mean people just losing their homes. As the economy slows, layoffs increase. And considering this area subsists on high tech salaries, how long before companies begin to increase their efforts to send high paying jobs to India and China?

It's going to be a HARD ride down folks. Keep your cash reserve well funded. No telling where this will end.

Frank@Scottsdale-Sucks.com said...

"Seriously, I feel like I'm surrounded by f*cking zombies!"

My girlfriend commented today that until she started doing customer service in my business and dealing with people all over the country, she had NO idea how scheming and conniving people are and just how many "looters" are out to steal something for nothing.

It explains how Hillary and Obama actually have a chance at being President simply by promising free sh*t to people who refuse to work for it.

"I despise the Bay Area ALMOST as much as you do! Let 'em crash and burn, couldn't happen to a more deserving group."

I'll second that one. And let's not even talk about the skyrocketing violent crime in elitist SF....

Peter T said...

I convinced my wife that we shouldn't buy and that was what matters most - lucky us. I spoke privately with some people like coworkers who wanted to buy and offered them a second, more bearish opinion, but I don't know how successful I was - one coworker planned to buy, and I send him some bearish pictures and arguments, and he bought anyway. All in all, I think it is better to keep money discussions out of small talk and, especially, not to rub it in anyone's face "I told you so".

Peter T said...

Danny, you wrote:
> Just about every other person I know STILL, yes, STILL thinks real estate is a GREAT investment. What a bunch of retards. (...)
> I am almost giving up now.

"If you have lemons, make lemonade": Use them as your bottom signal - when most of them capitulate and agree with you that RE can be a bad investment, the bottom is near and you could look for a house to buy.

Peter T said...

By now, it shouldn't be necessary anymore to actively warn anybody about real estate: The MSM are full of the decline and, if asked, someone could just point to them and say that they get it sometimes right.

Lady Di said...

I've reached some (my cousin, my sister, my neighbor)

Others went ahead and walked off that cliff.

Denial is a very strong state of being for many people.

Anonymous said...

I have to admit, there is a bizarre attitude around here. I can't place my finger on it (I emigrated from Toronto) but there is almost this aura of unfounded optimism without a single dose of realism. It is really baffling.

It's time to come home... eh?

Leave those crazy 'mericans alone.

And your pint is still waiting for you at the pub...

Norwegian Bloke said...

My parents finally got it a year ago, but my friends from Business School all have the same opionion today that they had 4-6 years ago.

Some see it, others don't, but it feels like arguing against religion.

It has to be said though, that prices have only come down slighly here in Norway, so far.

Frank@Scottsdale-Sucks.com said...

"I cannot for the life of me fathom how such a large group of supposedly well educated individuals could be so completely and utterly BLIND to what I consider to be the blatantly obvious."

You just answered your own question. The "education" these people received were from extreme leftist elite colleges like Berkeley where everyone comes out with the attitude that they're smarter and better than everyone else. They can do no wrong because they think they're in some sort of elite ivory tower. As a result they neither listen to nor believe anyone but themselves and each other.

Anonymous said...

No, I've given up trying to enlighten sheeple, and here's why:

(Reuters) -- The dumbest ever quiz answers

From regional radio shows to "Who Wants To be a Millionaire?" and "University Challenge," people make fools of themselves.

Here are leading contenders for the "Dumb Down" gold medal:

Presenter: What happened in Dallas on November 22,1963?

Contestant: I don't know, I wasn't watching it then

Presenter: Which American actor is married to Nicole Kidman?

Contestant: Forrest Gump

Presenter: In which country is Mount Everest?

Contestant: Er, it's not in Scotland is it?

Presenter: Name a film starring Bob Hoskins that is also the name of a famous painting by Leonardo da Vinci

Contestant: Who Framed Roger Rabbit?

Presenter: In which European city was the first opera house opened in 1637?

Contestant: Sydney

Presenter: How long did the Six-Day War between Egypt and Israel last?

Contestant: (after long pause) Fourteen days

Presenter: Where did the D-Day landings take place?

Contestant: (after pause) Pearl Harbor?

Presenter: What is the currency in India

Contestant: Ramadan

Presenter: Johnny Weissmuller died on this day. Which jungle-swinging character clad only in a loin cloth did he play?

Contestant: Jesus


Peter Duke said...

I've advised a few friends not to buy. Two couples stand out - one is living in a house they paid over $500/sq. ft. for in 2006, straining to make payments and sweating out the coming reset. I don't discuss the topic much, because it is a sore point. The others decided not to buy , got their deposit back, and then learned the builder (Engle) is going Chapter 11. They want to take me out to dinner! On a different note, I went to look at a foreclosure today. 4/2/ pool 1,737 sq. ft. - sold in 2005 for $172k. Bank is asking $49,900. I think I'll offer $25k. Ouch... many more like that to come, much of that neighborhood has boarded up homes (bank) or homes missing A/C's, lawns overgrown, etc... (waiting for bank)

Anonymous said...

I preached to all my relatives and friends. No one gave me an ounce of credit. The closest I came to a compliment was when my cousin made a joke on the phone to me recently, laughing horrendously and saying: "Real Estate Prices Only Go UP". Now I'm telling them Unemployment is going way up!!

robbie dobbie said...

I only get stares to the floor when I speak of the crashing home prices. Those who wrere advised to wait and did not listen and have lost what took years to save up, a down payment. Entirely wiped out along with more. I bright fellow bought and quickly sold just after the peak. He is one of the fortunate few who got in early and got out with big profits, now waiting for the next kill.

Anonymous said...

This blog sucks on the highest level, but these pointless, self-congratulatory questions of the day are the tipping point.

Would it be too much to ask all of you to commit mass suicide? Please?

Anonymous said...

Today, of the few people I've kept in touch with, most are struggling big-time to make the payments and one is in foreclosure (some have lost their jobs - the smart ones who rented were able to move out of state for new jobs).

And they all went to liberal Blue States, like you, right Frank? Geez, you conservatives can't make a living in your own POS red states and then come crowing and begging for jobs from Blue States. Stay in your POS red states praying for Jesus to get you a job, while the Blue states carry the country on their backs. That includes you, Frank. Republican hypocrites abound!

Let me guess, when Keith comes back to the US, he'll move into a blue state. If he's not living in one already.

Anonymous said...

We sold our house at peak in 2005 for about $700k, moved into a luxurious oceanfront condo rental for 1/5 of its mortgage cost, and then used the profits to buy some properties overseas and invest in commodities. My wife's family thought we were nuts and told us to not do it. Now, just with the exchange rate alone we're getting a huge return on our investment. Lately, they stopped calling us as often and never talk about real estate anymore.

Then some months after moving into the rental, I was inside the elevator with my neighbor, as some immigrant girl was doing an artistic faux paint job on the interior walls. My neighbor asked me if I liked the new colors just to break the odd elevator silence. I replied to him that it was very nice job but I wasn't sure if I liked the previous color better. The immigrant artist overheard the conversation, got offended, and immediately asked me in a broken English if I was a renter or an unit owner. She probably was trying to insult me because, according to her and many others around the country, renters are seen as low lives. I just ignored her and carry on talking to my neighbor.

Make no mistake about it, some sheeple still look at us with disgust for renting or having a 10 year old car. I just laugh and keep watching my Net Worth grow exponentially, while enjoying financial security.

brian t said...

My first epiphany, such as it was, was seeing average house prices here (Dublin) rocket to 11x average salary, while standard advice on mortgages is 3X salary, maybe 4X max. We're talking about a "housing ladder" that starts at the 5th floor.

My second epiphany was a friend who started the process to "buy to let" a new apartment in Edinburgh, just over a year ago. It was offered to him, by an agency, as guaranteed income for a minimal outlay. I briefly pondered doing something like that myself... but realised that if I could consider it, on my limited means, then everyone could do it, and probably was.

That's a recipe for a bubble, in a nutshell (?): when sub-prime Joe gets involved in speculation, who's left to be buyers and sellers with a long-term view? And here I was all along, thinking that a house was somewhere to live, hopefully for as long as I live. I should check up on my friend, to see if he listened to me or not, and try to avoid "I told you so"!

HOUSE2008 said...

Spoke to several only two seems to undestands once certain Facts were pointed out to him & her. The third told me she "wished she would have waited another year". You can only do so much.

Anonymous said...

My husband and I tried to speak to family and friends about not buying OR refinancing their fake equity away. Nobody listened. One only person, who has an ARM, finally said, "It is probably a good idea that you're renting". We still get pressure all the time about when are going to buy.

Part of the problem is that we are "renters", what would we know? We drive used cars that are paid off, have nearly all our debt paid off, and plenty of money in the bank.