HousingPANIC Stupid Question of the Day

March 02, 2007

HousingPANIC Stupid Question of the Day

Knowing what they know now, what percent of American homedebtors do you think wish they had sold their house in 2005, cashed out and rented?

And what percent who bought last year regret it now?

70 comments:

Anonymous said...: Answers:

All of them

All of them; March 02, 2007 7:44 AM
Frank R said...: You'd be surprised how stupid and naive they are. Most homedebtors I know here in Scottsdale AZ actually believe their houses are going to continue to go up and double in value in the next 1-2 years!!; March 02, 2007 7:47 AM
Anonymous said...: This site isn't kidding anyone. Most of you did not cash out and time things right, sitting on the sidelines to swoop in when prices come down. Most of you don't own, want to and resent that home ownership has become a game of greed and oneupmanship, pricing many out of the American Dream. And that's ok. That's valid.

But let's not pretend that even 5% of you saw what was coming and got out when the gettin was good.; March 02, 2007 8:02 AM
JR Junky said...: Vladimir Lenin's prediction that, "When it came time to hang the capitalists, the capitalists would compete for the contract to sell the rope." ...

I never understood the practical meaning of this, but now..WOW I sort of see...; March 02, 2007 9:27 AM
Anonymous said...: "This site isn't kidding anyone."

Here we have a homedebtor who's getting hammered. Hang in there because things will only get worse.

We have been on this housing bubble issue for years, including other blogs like Ben's, OCRenter's, etc. I think that you found us too late. Too busy using your home as an ATM, perhaps? But stick around to learn a thing or two, and perhaps save some money.

For instance, I bought my condo in 1998 for $140k and sold it in 2005 for $450k, at the peak, and now I'm renting another one for $900. Happily waiting to buy those McMansions for peanuts. There are many like us out there. Hell, there's a guy in my state who even formed a vulture's fund about 3 years ago.; March 02, 2007 9:46 AM
Anonymous said...: Face it...we are a minority here.

most of them don't read the news we do nor have an understanding of economic fundamentals.

They are still watching T.V. lounging around...and are so happy and proud of their "investment" that they haven't even checked the market lately.

Sooner or later...they'll either stop by a house and grab a flyer from the "for sale" sign post...or they will go into refinance...that is when they will start trying to guess when it is that they should have sold.; March 02, 2007 10:28 AM
Anonymous said...: I sold my 1 bd/1ba NY coop that I bought in 1997 in $27,500 for $45,000 in 2001. I put $2,750 down. I used only $13,000 of the proceeds and bought a 2 bd/2ba for $130,000 in 2001. I sold that in Sept of 2005 for $309,000. I am now renting and using my interest to pay nearly of all my rent. So roughly, because of this crazy housing bubble, I was lucky and managed to turn a $2,750 down payment into nearly a 75 fold increase of $200K in less than 10 years. What's even crazier is that I really "owned" nothing. When you "buy" a coop, you're just buying shares in a corporation that provide you with the right to occupy some space between walls. Complete insanity, but it's (read: was) the cheapest, albeit riskiest, way to "own" property in New York. I will probably never make that amount of money as quickly and easiest in my life ever again. For everytime I read a story about someone saying there's no bubble, I laugh and think to myself, who are they kidding? The crappy 1bd/1ba that I bought for $27.5K not even 10 years ago is now selling for $185K - and it's in a terrible neighborhood. No bubble? Yeah, right. I'm happy I'm renting now.; March 02, 2007 11:39 AM
Anonymous said...: Price of a new 4 bed 2 bath 2500 square foot shit box in Suburban Sacramento in 2006: $750,000

Price of same house now, one year later: $545,000 (and dropping)

The look on the FB's face when he figures out that his 'winning lottery ticket' just turned into the biggest financial mistake of his life: priceless.; March 02, 2007 11:42 AM
David in JAX said...: I sold on April 1st 2006 which was two months prior to the absolute price peak in this area. I didn't do it out of greed or a love of money. I did it because my wife and I saw what the market was doing and had to make the best decision for our family. Now we rent for much less and have cash to fall back on.

With that said. I believe less than 5% of people who didn't sell wish they did. I've had several friends tell me they wish they sold when we talk about my old home. But, I realize that a large group of people bought a long time before the bubble. I also realize that most FB's are completely clueless about economics. If they weren't, they wouldn't have bought when they did.; March 02, 2007 12:00 PM
Anonymous said...: ...let's not pretend that even 5% of you saw what was coming...

maybe so. personally, i got nervous back in '03 and sold - in toronto, a market that's topped out but still hasn't crashed.

5% sounds about right actually. as for the other 95%, they're the naive masses, baited and hooked for a life of impoverishment and destitution. if only we could capture their women and sell them to the chinese as slave workers for debt repayment.; March 02, 2007 12:03 PM
Anonymous said...: i saw it coming when a new married couple that makes well over the median income in their area cannot afford the median priced home.

i saw it coming when a "condo party" had a line of kids a mile long outside to pay 450k to 500k for overpriced downtown living.

i remember seeing the line and thinking "where the hell do those 20 somethings get 100k to put down on those units"?

answer: they didn't have 100k and most probably lied about their incomes.

i saw all of this and thought something had to be wrong. i got on the internet and started searching and found this site (and lots and lots of others).

i got ridculed at work for my thoughts. i do not discuss it anymore. my coworkers are still convinced it will all turn around this spring.

my wife and i are no longer looking for a home. it kinda sucks because we are in our late 30's and would like to start a family. i have decided that if we do have a child this year that we can raise him or her in our one bedroom condo for a year or two. my mother and father had alot less growing up in rural mississippi.

i knew it was coming and it has a long way to go.; March 02, 2007 12:32 PM
Anonymous said...: http://www.youtube.com/watch?v=hn5EP9StlVA
Stanley Johnson for one. Now Stanley is a successful Husband.

NOT

This is LOL funny. It is a Lending Tree Advertisement.....Enjoy.
aka FMW; March 02, 2007 12:50 PM
The Thinker said...: Hey Anon,
I don't think anyone on here is now denying that there has been a massive and unwarranted increase in property values caused by loose credit standards and speculative fervor.

Some of us call this a bubble, some of us call it a run-up. Where we may disagree is whether these high valuations will continue to inch up or come crashing down. Those of us who believe that prices will come down hard and fast prefer to talk in terms of a housing bubble, for the word bubble implies that there will be a pop.

My personal view is that unless there is a major economic catastrophe (which I do not expect), we are in for a very long period of stagnation. I have basically come to the conclusion that for the foreseeable future it will remain smarter to rent than to buy.

So this is simply not a matter of selling at the peak, sitting on your money and buying back in when the time is right. Most of us will be long retired when housing again becomes a worthwhile investment.

At least that is the lesson learned from Japan's real estate slump.; March 02, 2007 1:44 PM
Anonymous said...: The true believers
Thou shall be saved
Brothers and sisters, keep strong in the faith.
On the day of Rockoning
It's who dares, wins
You will see the jokers soon'll be the new kings

All we need is lightning
With power and might
Striking down the prophets of false
As the moon is rising
Give us the sign
Now let us rise up in awe; March 02, 2007 1:44 PM
Anonymous said...: The bottom of the month (I love this quote that someone gave to Lereah on this board) is again calling the bottom today.

http://money.cnn.com/2007/03/01/magazines/fortune/nar.fortune/; March 02, 2007 2:00 PM
Anonymous said...: not me. my mortgage is less than $1200 a month. To rent my home today would cost $2500.; March 02, 2007 2:28 PM
Anonymous said...: Who's in a better place:

Me: Bought home for $200K, was worth $700K and may fall back to $500K. Paying less than 1/2 in mortgage today than it would cost to rent.

You: Didn't buy anything, rented shitty ass apartment all along.; March 02, 2007 2:31 PM
Anonymous said...: This comment has been removed by a blog administrator.; March 02, 2007 2:41 PM
Anonymous said...: Hey anon 2:31, your house was never really worth $700,000 since you did not sell it at that price. And if it "drops to $500,000" let us know if they reassess your property taxes up, up, up.

Even if they don't reassess your taxes up, you are stuck. If you sell, your next place will have high property taxes....unless of course you rent a shitty ass apartment!; March 02, 2007 2:43 PM
Anonymous said...: This comment has been removed by a blog administrator.; March 02, 2007 2:49 PM
Anonymous said...: For instance, I bought my condo in 1998 for $140k and sold it in 2005 for $450k, at the peak, and now I'm renting another one for $900. Happily waiting to buy those McMansions for peanuts

Another example of HP bullshit. Thread after thread here is about how stupid people are for livin in McMansions. How better off you'd be be living in a small home or apartment and how you don't need 4000 sq ft of home.

All along what you are really saying is you wish to god you could live in one and are hoping, crossing all your fingers and toes that prices will fall eough so that you can finally buy one.; March 02, 2007 2:54 PM
Anonymous said...: well, i knew and i tried but i was 2 months too late.

now i'm hunkered down.; March 02, 2007 2:55 PM
Anonymous said...: jeez, my girlfriend wants to buy a condo, all here friends and family think its a good idea, i'm out here alone trying to convince her but i think i got her thinking.

next thing i need to do is start printing some of these charts and stats. kids today know nothing about money.; March 02, 2007 2:58 PM
Anonymous said...: HPers:

Do you people actually intearct with anyone outside of this blog? I don't know anyone who thinks the housing market is still in 2005 mode.

Everyone knows it's slowed down. Some people think it will rebound quickly. Others think it won't. Some people realized this quicker than others, but at this point in time nobody thinks their home will appreciate 10% this year. Point you all miss is that most people aren't freaking out like you hysterical fools. They realize that markets go in cycles. Up then down then up. Unlike you single(or most likely divorced) basement apartment dwellers, they have other things to do than sit around for 12 hours a day reading blogs. They have jobs to go to, kids to raise and a life to live. They also don't have the luxury of moving every 6 months becaue they can save $50 a month in housing costs like you do.

So their once $500K home is now worth $400K. OK so be it. Shit happens. Life goes on. You people on the other hand act like 12 year old girls who think it's the end of the world because Johnie didn't ask them to the big dance.; March 02, 2007 3:09 PM
Anonymous said...: Once again Veritas Faust, I admire and agree with your comments 100%. No matter how one was positioned, we all will suffer the pain. Some more, some less. Regards.; March 02, 2007 3:13 PM
Anonymous said...: This comment has been removed by a blog administrator.; March 02, 2007 3:20 PM
Anonymous said...: Me: Bought home for $200K, was worth $700K and may fall back to $500K. Paying less than 1/2 in mortgage today than it would cost to rent.
++++++++
Did the same thing, exactly, and I hope you do not have a catastropic loss, and good luck collecting from your Home Owners Insurance if you do. You woun't be so smug.; March 02, 2007 3:26 PM
Anonymous said...: Well, I for one got out of the game late. Last week, in fact, I closed on the sale of my home. Broke even after 5 years and realawhore commissions. Oh well - glad to be renting for the time being.; March 02, 2007 3:29 PM
Anonymous said...: Well, they're you're wrong.

I got out in 2000 after my house doubled in value (Corona, California).

I bought in another nearby area where the housing inflation had not reached yet.

My new house has since tripled in value. I'd sell it and rent but I have some other constraints that make it not feasible. However, it was so cheap to begin with I'm not concerned.; March 02, 2007 3:52 PM
Anonymous said...: What's occurring in the lenders right now is worse than I imagined, and I'm pretty bearish.

There WILL be a massive collapse in he mortgage industry coming soon, within 2 months.

Right not the mortgage lenders are hanging on by a thread.; March 02, 2007 3:55 PM
Anonymous said...: blowfly wishes he had sold!; March 02, 2007 4:12 PM
Anonymous said...: the thinker - you are a contrarian troll, look it up.; March 02, 2007 4:43 PM
Anonymous said...: just so long, so long that 500,000 is not realy worth 100,000 in depreciating dollars?; March 02, 2007 4:47 PM
Anonymous said...: Sold a DC coop in a hi-crime neighborhood in Sept. 2005. Rented until I closed a deal on a used condo in February as my lease expires the end of March. The value of the unit I sold went up 25% since I sold in 2005 as that neighborhood was way undervalued, but there were too many muggers and semiauto gunfire at night. Made more than a 25% return in the stock market and found a larger unit in a wealthy suburb and paid cash for it. The problem is the stock market gain is subject to taxes. It seems the price I paid for the wealthier suburb condo was was similar to the prices in Sept. 2005. I got the neighborhood I wanted at a good price on all the hype about the real estate bubble. Currently the inventory of unsold used homes continues to fall in this area. There are new unfinished high rise condos up in the air, the traffic is horrible, just gald to own my own home. My landlord wanted a double digit rent increase. I said to myself its time to move before she raises the &$&*%^^& rent.

Now I think there is a dollar bubble, but they do not want to give out raises. Dam the preemptive war. Damn the lies and cruelty that causes war. Damn the false promises and the federal deficits. Bless the people that they might learn to be harmless and love one another.; March 02, 2007 4:48 PM
Bill said...: Well I own, and bought in 1993, I guess my $1000 a month with taxes 30 year fixed is terrible...shame on me. Sure I could have sold out and took my $300,000 plus profit and ran...na. my home is not an investment, it is a place to raise my kids and keep my ass warm at night...My wife and I are not the gotta haves we are savers, unlike the relitives, Levraged to the max...while I sit on a pile of EARNED cash...and they struggle to make credit card payments, never mind just keeping the lights on...sheesh good luck.; March 02, 2007 5:08 PM
Anonymous said...: The only view which is missing from this blog (and merits some investigation) is that House prices may never drop (or not by much). Sure they might fall from 700K to 500K, but that would still be too high for the family making the median income.

How would this be possible? Simply by devaluing the US dollar (AS IT HAS BEEN DOING FOR THE LAST 5-10 YEARS btw).

If the dollar falls just 5% in value every year, in 10 years it would be worth half the value that it is today.

So... a loaf of bread costing $1 today would cost $2 ten years from now. $2 gas would cost $4. A 30K car would cost 60K. And had the Housing Bubble not happened, a 250K house would cost 500K.

But - since the price of houses is already too high - you can probably expect that they will just stay where they are or move down slightly over the next ten years as the American population becomes impoverished.

Think it can't happen? It already did here in Toronto! Back in the 70's-80's, house prices exploded from 40K to 350K in 15 years. This was followed by a recession which saw the median price fall back to 250K by the late 90's. With the current bubble, the prices have gone back up to 350-400K again.

Houses NEVER fell back down to 40K in Toronto.

The one fault I have with this blog is that it is so one sided. Everyone believes that when the pop happens then it will be most evident in the housing market - it could... but this doesn't necessarily have to be true.

Just as when you fire a gun - if the explosion of gun powder can't be channeled down the barrel, it can backfire unexpectedly in your face. Everyone here is looking over the barrel and onto the horizon expecting the bullet to go in a specific direction.

I haven't read anything on here that provides some contingency planning for some 'what if...' scenarios.

Such as...

- What if house prices stay flat, but the dollar loses its value or becomes worthless over the next decade?

- What if the money I made from selling my house at the peak (and is now collecting interest in a bank account) loses half it's value in ten years? Will I still be able to pay rent from the interest in a decade?

- What if this was an actual plan to impoverish the middle class in the US and make them debt slaves. I avoided the trap of buying a McMansion, but will my salary be able to make ends meet? Will my salary double over the next decade as the value of the dollar drops... IF it drops? Will I still be caught in this trap by not making contingency plans?

What if secondary effects come in to play such as more expensive gas? How would the combined effect of such rising oil prices and housing bubble affect the average Joe with a wife, a mistress, and 2.4 kids?

There's ALOT more which can be explored in this bubble besides: 'Oh look how Lereah lied!', or 'I can't wait for the prices to drop!', or 'When are the feds going to visit Casey?'

Just my two bits.

IB; March 02, 2007 5:23 PM
Anonymous said...: The bubble is only in Boston, DC, NYC, CA, Fla, NV, and AZ.

Texas, the Southeast, mid-west....no bubble.

My house was 117K in 1998 and is worth maybe 175K now.

1 acre, 3br 2 ba, brick house. Built 1994. I like it. On a hilltop surrounded by trees. In the spring/summer you feel like you're living in a tree house. Sweet breezes come in out of the forest behind my house. Very peaceful.

Same house in LA county on 1/10 an acre would be 700K.; March 02, 2007 5:23 PM
Anonymous said...: I don't know about all that renting stuff..I sold a townhouse in San diego for four hundred fity five thousand dollars in two thousand five, had bought it in ninteen ninety six for $132k in 2003 we bought a beautiful, new view lot home in the Coachella valley with cash from the refi of the town home and now have a paid for new home(no rent) and still pocked one hundred fifty five grand we think that is better than renting; March 02, 2007 5:47 PM
Anonymous said...: But let's not pretend that even 5% of you saw what was coming and got out when the gettin was good.

I did. But I got out too early in August 2004. I thought 2003 was about the cyclical peak and so I thought 04 would be a little late. Oh well. Spotting the trend is pretty easy but timing the peak (or trough) is really really hard.; March 02, 2007 5:52 PM
Anonymous said...: it kinda sucks because we are in our late 30's and would like to start a family.

Why on earth do you think you have to have a mortgage to have kids? That's daft. Just rent a place and be smart about it. I raised my entire family in a rented house (I refuse to take on unnecessary debt). I just had to do my homework and find a landlord who I knew would not sell from under me. Just do your homework. The place is still a rental.; March 02, 2007 5:57 PM
Anonymous said...: Who’s in a better position? Hmmm, some of us realized early that this housing bus was about to go off the edge of a cliff and got off. Some of us chose not to get on. Many people are still on the bus saying that it’s not so bad so far….Maybe it isn’t (yet). I’m glad that I didn’t get on this bus and can now watch it from a distance. Sure, this thing will throw shrapnel at all of us, but it seems a bit silly to point fingers at the spectators and laugh while you’re going down fast. Good Luck. Those who saw this very predictable crash coming will likely be in the best position. Are you one of us? If not then visiting this blog will probably just piss you off. Sorry...; March 02, 2007 5:58 PM
Anonymous said...: Who's in a better place?

You: Went in lifetime debt for a shitty crapbox 1100sf sutcco house for $700K and now it's worth $400K

Me: Sold my stucco box to a moron like you for $700K and now rent a 2000sf house for less than half of your PITI; March 02, 2007 6:41 PM
Anonymous said...: Almost right...

One problem. If you sold your house and put the money into a bank which then loaned your money out into a sub prime loan. The bank goes under and you loose money too. You did have skin in the game.

The real winners: those who buried the gold in their backyards and or who moved to a cheaper area and put 100% down.; March 02, 2007 6:58 PM
Anonymous said...: I bought a condo in May 2005. A 875 sq ft 2br 2ba new construction (shitbox) in the city. Cost me $180K and I paid cash liquidating my life savings.

Now I don't pay any rent (besides a $100 monthly service fee) have a nice pool, secure parking, etc. The bonus is I get a housing allowance of about $3400 per month. In addition to my $230K / yr salary plus 50% annual bonus.

Buying in 2005 was the best thing I could have ever done. And this is no troll, just the truth.

Since I bought I managed to save up $300K (not sure how just many bonuses all came in at once)

So maybe I'm a contrarian but the sky ain't falling where I am.; March 02, 2007 7:12 PM
Anonymous said...: Who's in a better place?

Me: Built Home for $225K, was worth $375K sold for $925K.

You: Sitting on a rapidly depreciating asset.; March 02, 2007 7:38 PM
Bill said...: A Disgraceful Bunch…
March 2nd, 2007

http://quiggleme.com/

So, the sub-prime lending industry is falling to pieces. It’s about time. Because what that group of charlatans brought to the party was a disgraceful bunch of predators and hacks the likes of which care only about lining their own pockets. The worst offenders were the biggest players – the guys who started the whole thing.

While I am not going to focus on management at sub-prime companies I will say that if upper management at any company is operating with high ethical standards and projecting that philosophy downward amongst the ranks, then the ranks will follow. Unfortunately that was not the case with Sup-Prime lenders. But we’ll leave that for another post. What I am going to talk about is the lowly loan officer and his or her employing broker. These were the people who did the most damage at the consumer level. I do need to remind everyone though that the majority of mortgage brokers are upstanding professionals – however, there was an entire army of newly spawned brokers that followed in the wake of Sub-Prime lending. These are the guys I’m aiming at.

Let me start with a group of guys in
Anaheim I came across who were just keen on sucking every penny out of every unsuspecting borrower they could get their hands on. Their aim, simply put, was to find credit challenged borrowers who they could easily convince that due to their bad credit did not have many options and by the grace of God this loan officer was there to save the day.

The first thing the loan officers at this hack shop were taught was to never ever talk to borrowers about interest rate, only payment. In other words, find out how much a borrower would save by consolidating all of their revolving debts into a new mortgage thereby resulting in one low monthly payment. It sounds good when I say it like that. It also sounded good when companies like Ameriquest put out national commercial spots spewing the same garbage. Here’s the problem though. What this broker was doing was withholding proper Good Faith Estimate and Truth-In-Lending disclosures, being very vague about rate and costs and only focusing on the payment savings with the borrower. In reality, they were setting the borrower up for the kill.

By putting the borrower into a 2 Year ARM (fixed for 2 years then converting to a disgustingly high margined LIBOR adjustable – a volatile index by the way that I would never offer to my worst enemy) the broker could offer what seemed to be an attractive payment to the borrower. Here is where it gets interesting. In reality what the broker was doing was offering the shortest term instrument to the borrower in return for the highest compensation from the lender. Furthermore, they would sell the maximum prepayment penalty allowed by law again guaranteeing the highest commission from the lender.

Another little tidbit that gets lost on even conventional borrowers is that this broker had what is known as an ‘Affiliated Business Arrangement’ with a title and escrow provider. What that means is the broker gets compensated for using the title and escrow services when a borrower’s loan closes through those services. This broker, as do the majority of brokers who utilize ABA’s as revenue streams, never disclosed these compensation arrangements up front as they are require by federal mandate. What they would do is withhold the disclosures until the borrower was signing final loan documents and then bury the ABA disclosures in the pile of paper. The borrowers never asked about the disclosures and if they did – they were explained away as if the broker used the ABA to negotiate better fees from escrow and title. In reality ABA’s cause higher fees from escrow and title.

Back to our borrower and the 2 Year ARM with outrageous fees, a fat prepayment penalty, and crappy margin and index – what a respectable broker would have delivered to the client actually makes much more sense from a business model perspective. They could have taken the same borrower and put them into a 30 Year Fixed Rate with no prepayment penalty and most likely saved the borrower almost as much money. By taking less commission on the back end from the lender the broker could have offered a relatively competitive 30 Year Rate to the borrower (based on the challenged credit of course) and still saved them money by consolidating their debt. The result would have been a much happier borrower with a fixed payment structure that did not explode after two years. Furthermore, the broker would have created an opportunity to refinance the borrower if rates dropped or the borrower’s credit score improved. This practice is a key to repeat client and referral building in our business. The broker is in essence preparing their borrowers to take advantage of market swings or improved credit and equity positions.

What am I thinking? That whole ‘respectable broker’ thing in the preceding paragraph would have fallen on deaf ears with these predators. They were looking for the quick kill, a fast fat meal then on to the next one. They exploited every weakness of their borrowers. They charged max fees, ignored federal disclosure regulations, and virtually lied through their teeth about the risks involved in the crappy 2 Year ARM product they were cramming down borrower’s throats. And what’s even is worse is that they were doing these things to people who could least afford this mistreatment. What these people needed was help.

Sadly, this was the model sub-prime lending created.

!!!!!!!!!!!!! SCUM OF THE EARTH !!!!!!!! Public Hangings are in order!!!!!!!!; March 02, 2007 7:44 PM
Anonymous said...: In the Bay Area Housing prices will continue to taper off for the next several years but there will be no crash. Buyers here are still purchasing downtown condos for $1000 per square foot. As many have noted the decline will be a relatively slow process in the major urban areas. Unfortunately, it’s going to be the poorer people who have little or no savings, didn’t have enough information, and were ill advised to purchase that are going to be ruined financially. It’s certainly no reason to rejoice!; March 02, 2007 8:06 PM
Anonymous said...: The welfare state exists for the welfare of the corporations. The U.S. is bankrupt because of the MIC and the corporate fascist lifestyle, not because of food stamps or SS. Don't be a baffoon.; March 02, 2007 8:06 PM
Anonymous said...: @anon March 02, 2007 2:31 PM:

"Who's in a better place:"

Actually the person who sold at $700K, gets a cozy apartment with the interest on $500K for the next few years, and then trades the principal for the same house less the mortgage beats us both.; March 02, 2007 9:11 PM
Anonymous said...: "This site isn't kidding anyone. Most of you did not cash out and time things right, sitting on the sidelines to swoop in when prices come down. Most of you don't own, want to and resent that home ownership has become a game of greed and oneupmanship, pricing many out of the American Dream. And that's ok. That's valid.

But let's not pretend that even 5% of you saw what was coming and got out when the gettin was good."

My hat is off to those who actually did. Why? Because they probably got burned in a previous bubble and learned their lesson. The vast majority of idiots will keep drooling "it's different this time" through bubble after bubble.; March 02, 2007 9:29 PM
Anonymous said...: "if you like your house, can afford, and aren't moving what's the dif?"

The difference is that the majority of homeowners have been using their homes as an ATM machine or have mortgages that are too high, even though it gets accommodated in an over stretched household budget. The people you refer to are a tiny group who never get a HELOC, probably high income earners who are wealthy already.

I've posted these stats many times before, so let it go again.
Check these impressive graphs to see how the majority of homeowners are in trouble, regardless if they bought long time ago or will retire in the house:

http://tinyurl.com/2quby2

Now check these stats below about savings. There's a misconception that homeowners are investing in retirement accounts. People always rationalize that when savings rates come up negative over and over again in the MSM. Nothing could be further from the truth:

"A recent study by the nonprofit Employee Benefit Research Institute found that 51 percent of workers are falling behind in their retirement savings because of the high expenses of daily bills, child care and medical costs.

With pensions in peril and middle-class families squeezed by flat wages and rising costs, the savings rate has declined from 10 percent in 1980 to just 1 percent in 2004. Today is negative.

Only half of U.S. workers participate in employer-sponsored retirement plans, and 80 percent of small business employees have no plan at all. Nearly 40 percent of all households have no retirement savings accounts of any kind beyond Social Security. Half of the households headed by a worker aged 55 to 59 have $10,000 or less in a 401(k) or in an IRA. Of that age group, 36 percent have no 401(k) or IRA savings.

For single women, the problem is even worse. Only 38 percent have 401(k) plans from a past or current job, with a median balance of just $8,000, as opposed to married females, who participate at a 54 percent rate with a median balance of $27,000."; March 02, 2007 9:31 PM
Anonymous said...: "Who's in a better place:"

I'll take "thank god I'm not a retard REIC troll for $1000", Alex.; March 02, 2007 9:33 PM
Anonymous said...: This comment has been removed by a blog administrator.; March 02, 2007 9:40 PM
Bill said...: "This site isn't kidding anyone. Most of you did not cash out and time things right.

----- HAHAHAH ya ok anonopuss; March 02, 2007 10:01 PM
witzend said...: "Me: Bought home for $200K, was worth $700K and may fall back to $500K. Paying less than 1/2 in mortgage today than it would cost to rent."

HA! you probably wouldn't be "wasting" your time here, if that was the case.

Also, you probably wouldn't be hostile enough to lump everyone here into the "looser" catagory.

oh, it's just basic psychology man.; March 02, 2007 10:25 PM
Anonymous said...: Funny how all the renters here all of a sudden sold at the peak yet 3-4 months ago they were posting how thei rent hasn't increased in the past 5 years.

So you've been renting for 5 years and also sold in April 2006.

Sure you did. And I also went back in time with my Delorian to 1955 and made sure my parents kissed at the school dance.; March 02, 2007 10:28 PM
Anonymous said...: Sold my house and Im renting in renton its all good; March 02, 2007 10:43 PM
Anonymous said...: "My hat is off to those who actually did. Why? Because they probably got burned in a previous bubble and learned their lesson."

Lost $6,000 in 2000 and 2001. Considered myself lucky compared to some but none the less, I don't make a king's ransom in salary so $6,000 is real money to me. I question everything now - maybe a little too much but I have managed to avoid the losers.

Smug; March 02, 2007 10:52 PM
Anonymous said...: I like this blog because even with the sometimes outlandish tone, it does provide an interestng point of view on housing. However many of you wrongly assume everyone is in over their head and wishes they could go back and sell. My mortgage payment is $1000 a month. It has been that much for for 10 years. In my neighborhood today $1000 a month might rent a garage. OK not quite that bad but I am definitely not goig to rent a home anywhere around here for that much, maybe a studio apartment.

I saw the writing on the wall in 2005, didn't take a financial genius to figure out that gains of 15% a year in house prices were not sustainable forever. Don't pat yourselves on the back too much for seeing what was obvious. I was debating whether or not to sell. I didn't because I didn't want to move. I liked where I lived, great neighbors and a 10 minute drive to work. Had I sold, there's no way I could have afforded to rent in that area and didn't want an hour commute or to live in a studio apartment. I bought the home in '97 for practically nothing and my mortgage payment was and is very low. So I decided to stay.

Home prices in my neck of the woods are now selling for about 5-7% less than 18 months ago when I was debating whether to stay or sell. Assuming I would have had to pay 5 or 6% comission to sell plus another 2-3% in closing costs. I'm still better off having stayed put for now.

Prices will most likely fall some more and by the end of this year or next year I will probaly end up worse off on paper. So did I make the right decision? I suppose judging solely on dollars and cents, no I will have lost money. But given the choice of not losing some money and moving to a studio apartment or out to the boonies, it's not that much of a loss. I'm not losing any sleep over it either way.

You win some, you lose some. But holy shit, I'm not about to jump off a bridge because I lost out on a little money by not timing the housing market perfectly.; March 02, 2007 11:00 PM
Anonymous said...: This comment has been removed by a blog administrator.; March 02, 2007 11:18 PM
Anonymous said...: "Check these impressive graphs to see how the majority of homeowners are in trouble, regardless if they bought long time ago or will retire in the house:"

I bought right at the peak in SoCal. Non-toxic mortgage, 30 yr fixed and my payment is $1400. One car payment , 2 small kids. I make 90k, wife make 30. After all is paid every month we barely have enough left over after saving for retirement and kids college. And that is just us who bought pre-bubble with a 130k income. Can you imagine people who recently bought and make less? I even feel for those who buy after the crash. Even if prices drop 50% some areas will still be overpriced and a big chunk of the paycheck will go the the housing. I hope everyone here is making over 150K. Everyone.; March 02, 2007 11:59 PM
Anonymous said...: "But holy shit, I'm not about to jump off a bridge because I lost out on a little money by not timing the housing market perfectly."

Actually , for those of us in California (homeowners) who didnt sell will have missed a once in a lifetime opportunity to make a huge amount of profit in one swoop. Those opps are rare. I am talking 250k profit.
But when you have kids, a wife whos attached to the home, a job 10 minutes away, and (part I like the most) a mortgage payment that is less than what it would rent for..no thanks, I am fine.

Reality is, I could still sell my home to almost last years price. 2 neighbors just unloaded on 2 suckers for 12k less than last years price. Sad. HAHAHAHAHAHA; March 03, 2007 12:05 AM
Anonymous said...: A realtor I was talking to said prices will never go down in seattle . We shall see,; March 03, 2007 12:13 AM
Anonymous said...: You really trust your bank??

First Bank to go under since 2.5 years:

After nearly 21/2 years without a bank failure, a small Pennsylvania bank collapsed this month.

Metropolitan Savings Bank of Pittsburgh was closed by its state banking department. About $12 million in deposits were assumed by Allegheny Valley Bank of Pittsburgh.

The Federal Deposit Insurance Corp. said Metropolitan had about $1.2 million in deposits in 70 accounts that could exceed the federal insurance limit.

The last bank failure occurred in June 2004, the longest period without a failure since the FDIC was formed in 1934.

A Miami bank analyst had suggested earlier that bank regulators would strive to save Bradenton's troubled Coast Bank of Florida so it wouldn't break the no-failure streak.

The last bank failure in Florida was Miami's Hamilton Bank in 2002.

The bank, which had a branch in Sarasota, was liquidated by the FDIC, but some large depositors didn't get all their money back.

Hamilton's chairman was sentenced to 30 years in prison for a fraud scheme that falsely inflated the bank's earnings to bolster its stock price.; March 03, 2007 1:06 AM
Anonymous said...: The sky ain't falling for a single guy making $230K/yr with a 50% bonus?

That must mean the average American family is doing fine, because we know $230K is the average salary and most people bought their home with cash.

BTW - Howard Hughes did fine during the Great Depression, so everything must have been fine back then too.; March 03, 2007 5:33 AM
Anonymous said...: Bought for $242K, sold for $750K in mid 2006.
A little past the top, but we're OK.
We rent now. We'll be looking to buy something for around $300K in the next 4 or 5 years (or 6 or 7).
Renting is fine. Some bills have gone away. And there's a pool/Jacuzzi.; March 03, 2007 7:49 AM
Anonymous said...: Wow Anon, a realtor told you prices would never go down in Seattle?

That's a pretty hot tip from a real trustworthy and informed, intelligent, professional.

Better buy something now.; March 04, 2007 6:11 AM
Anonymous said...: March 2 11:59:

I'm so sick of this I make $100K and I'm poor bullshit. YOU choose to live in NorCal where $100K is the equivalent of $40K in Dallas or Atlanta. YOU choose to live in a state that taxes the shit out of you and where excessive regulation makes everything more expensive than the rest of the country. YOU choose to live in an area where housing prices are insane. YOU freely choose that life for yourself.

If you don't like it, very simple solution; move somehwere else. And don't respond with the typical answer of I can't get a job anywhere else. That's total bullshit too. Your job probably won't pay as much but hell even if you took a 30% pay cut, your effective pay would increase given the much much lower cost of living.

Either stay in NorCal and live like a pauper or move and live better. YOUR chocice. But no matter what you do, please for the love of god shut the fuck up with the whining.; March 04, 2007 4:37 PM
Anonymous said...: To: You are a moron, 5:33am.

No need to get snarky. I merely said my comment on this thread. I was renting before and I bought in '05. My condo appreciated in value and is still holding that today but I don't care since the savings I get from not paying rent is very nice.

Having a nice income is a bonus but the point is buying in '05 was a good deal, period.; March 04, 2007 6:48 PM
Anonymous said...: To anonopussy March 2 11:59:

So I take it you have an income below 100K? Not sure where you live but let me inform you, 100k per household is average income in SoCal. Anyone making below that is living paycheck to paycheck probably (if they own a home and have the standard bills, car, etc.)
I am also one of those lik ethe poster.

The guy said he lives in SoCal. The point the guy was making if he, one who makes 100k, bought a pre-bubble home, can put away money for 401k and college kids fund, barely has left over cash....what does that mean for the douche bags who make 40k and bought a 400k home??

You dont have to get your panties all bunched up because you read about people's situations that may make your's look pale in comparison. Chill-ax bitch.; March 04, 2007 10:36 PM

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March 02, 2007

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