I am panicking

[jtabeb]

Re: I am panicking

In my area there are a good number of empty homes - they are for sale or lease - how do you think over supply will affect the price of homes VS Inflation created by the Federal Reserve and Govt Stimulus?

All housing (and remember LOCATION LOCATION LOCATION) is NOT the same.

For instance comparing Detroit to SFBA would not be a good comparison. So you have to be aware what the market is like in YOUR area and ALSO what the JOB market is like in your area.

I could give you specifics on Eugene OR, and San Antonio TX. but that's it, because I actually know these markets. (Find a local expert, bite my tongue *cough* realtor that YOU TRUST, NOT ONE THAT IS NICE TO YOU). IMHO it makes sense to use a realtor when markets are going down not up, just make sure your bullshit filter is set very high, and don't go with the first realtor you talk to. I have, and have friends that have litterally INTERVIEWED several prospective realtors before choosing to work with one, I STRONGLY reccommend doing the same.

[FRED]

Re: I am panicking

google site:itulip.com housing bubble

iTulip.com - Housing Bubbles Are Not Like Stock Bubbles

iTulip.com - Housing Bubble Correction

iTulip.com - Housing Bubble Correction Update: Geographic

Housing Bubble Correction - iTulip.com

Negative "Positive Feedback Loop" of Employment and Housing

Housing Bubble Correction Update: Here comes the jobs crash

[serge_oc]

Re: I am panicking

I have friends in San Francisco, they just bought a house near GoldenGate park for about 1.5 million (yup, but it's 2 residences really).

The situation there is reverse: he wants to buy a house, while she doesn't. The reason why he wants is that his parents have a bigger house and they look down upon him for not over-achieving them (sounds silly when I write it, but it's real).

She told me that she did it over her objections, that she is very nervous about it. He doesn't know it, but she may walk away from the loan and marriage and take their their kids with her.

Don't get me wrong, but I think you need to stand up in a way that's constructive. SF is not the only place in the world to live and work. You can do better elsewhere (much better if you have 30% to put down).

She may get her wish to buy a house, but your family may fall apart even if you promise yourself to stick it out and suck it up.

As for xxx-flation, it's irrelevant. People in the States will be POORER. Whether it's because deflation or inflation it doesn't matter. It's like writing a software program which will do great many things, but as time goes on, it just runs slower and slower.

Maybe inflation will kick in. So your regular-stuff-for-living-bill may be so big you can't afford your mortgate, regardless of how much has inflation eaten it away. Or maybe deflation will do. I know a person here in OC (good solid professional working for Fortune 100 for over 20 years) who had to accept 50% pay cut (I kid you not). Another friend of mine living in extra-expensive place just lost hist job after 25 years with the company. So your house may goe bye bye.

Or maybe your positive projections will pan out. God willing, I wish you best of luck.

As for precious metals, never forget that Gold is money. There will not be a repeat of gold falling from $850 to $250 as it did after US went off gold standard. The reason for it was that discipline and wealth created under gold standard was converted in once-in-near-history credit event of maniacal bubbly proportions that is now popping. There is nothing here and now (and there won't be in our lifetimes, say if you're 40) to make that happen again. Not without a black swan event that would make dilema tiny in comparison.

Precious metals are a different game now.

I personally believe in Real Estate as the ultimate hold of value, much like gold is. I will buy a house (probably more rural) but not now.

My friend here is OC just bought 900K house, but they are so wealthy it's not really a stretch. People like that buy now, but for them buying 900K is like buying 200K for me. If I had to go for 900K because my woman wanted me to, she wouldn't be my woman any more. Some things need to be kept real. But that's just me.

I wish things work out for you, for your house and your marriage.

[globaleconomicollaps]

Re: I am panicking

As of today there are 915 houses in the San Francisco area under $100,000.

http://www.realtor.com/realestateand...=1&pgsz=3&ml=4

This has got to produce downward pressure on even the most expensive areas.

Also, I was living in San Francisco during the 2001-2002 dot.bomb collapse. That was a true depression. You could get a table at any restaurant without a reservation. There were no traffic jams at any time of the day or night. huge numbers of people left the area. Something else happened that I never saw discussed on the news. I lived in one of the nicer neighborhoods in SF, and there where many arson fires. It doesn't take much to turn a nice area into a slum. My mother was from the south Bronx. At that time it was a nice residential neighborhood. subsequently it turned into this:



I think things in SF have not even started to move in that direction yet.

[Glenn Black]

Re: I am panicking

I would suggest negotiating the very best price you can get face to face, then ask for premium (or discount) to rent with option to buy. May want to do reverse order. Try rent to own as well. House prices will probably drop considerably in near future, as we are still in beginning of depression.

[jtabeb]

Re: I am panicking

As of today there are 915 houses in the San Francisco area under $100,000.

http://www.realtor.com/realestateand...=1&pgsz=3&ml=4

This has got to produce downward pressure on even the most expensive areas.

Also, I was living in San Francisco during the 2001-2002 dot.bomb collapse. That was a true depression. You could get a table at any restaurant without a reservation. There were no traffic jams at any time of the day or night. huge numbers of people left the area. Something else happened that I never saw discussed on the news. I lived in one of the nicer neighborhoods in SF, and there where many arson fires. It doesn't take much to turn a nice area into a slum. My mother was from the south Bronx. At that time it was a nice residential neighborhood. subsequently it turned into this:



I think things in SF have not even started to move in that direction yet.

Your search is TOTALLY MISLEADING!!

Including mobile homes ( INCLUDING THOSE that have NO LAND, just the trailer)?

Including all ghetto areas (w/in 20 Mi of SA no LESS). Oakland anyone?

That's NOT an accurate picture, try to be a little more realistic please.

[jimmygu3]

Re: I am panicking

After this week's bombshell, I've told my wife (who's been bugging me to buy a house) that if she wants to, we can start seriously looking for a house to buy.

Earlier, I kept telling her prices are going to keep dropping and we don't want to just throw away money. Here in the SF bay area, in the more desirable parts, prices haven't yet dropped much yet (maybe 10%ish). Recession is only beginning to hit the job market here. But I am so scared the massive expansion of the Fed balance sheet and the monetization of treasuries is going to blow up in everyone's face.

Half of me wants to wait and see and hold PMs. The other half wants to go out and borrow as much as I can at these rates I'll likely not ever see again in my lifetime. The loan rates above the GSE limits, last I checked were only decent if they were ARMs (5%ish). 8% if 30 year fixed. Not sure if the recent news has dropped them any.

My wife and I are planning to move to Los Angeles after we sell our house in Atlanta. We will rent for a year or more while we monitor the housing market and decide on a neighborhood. It is currently falling at a rate of about 2% a month and SF is in a similar boat. Houses in the areas we are looking at rent for $4000 and sell for $1M+. Even at 6% with $300k, that's $4200/mo P&I PLUS taxes and insurance. And don't forget the $20k/mo you lose in equity.

Why try to catch a falling knife? Will other people suddenly have more money to spend on housing, more access to credit, lower rates and looser lending standards? Or will the reverse be true? I think I know the answer.

Jimmy

[Guest]

Re: I am panicking

Jimmy - keep in mind you are referencing a higher than average market segment in LA metro at one million. What's the average home price there? $370K?

I'm down the street in San Diego, which hit the upturn first and the downturn also first, before LA, and has also had a (slightly) steeper rise and fall - I'm seeing smaller but livable 3 bedroom homes in central neighborhoods (maybe 1500 sq. feet?) with the best school districts in the city, and there are short sales and distress sales of homes down in the $250K - 270K range if one really shakes the bushes.

They pop up among homes not for sale with values still up close to $400K *nominal*. The nominal prices are soft, but these distress sale prices look mighty durned cheap to me right about now.

Decent properties to be found too, with nice big eaves on the home, corner lots, good proportions and nice deep lawn setbacks off the street - that sort of thing. Streets look solidly like San Diego's trademark sleepy but well kept inner suburbia. Ten blocks from San Diego State, and the center of the city's municipal rail system, downtown post office, shops, major city shopping mall, and so forth.

I bought such a corner lot 3 bedroom for $230 back in mid 2000, and I'm seeing things that are *approaching* (not there yet but getting quite close) comps of that today in the very same neighborhood, (e.g. as nearby as four blocks away). This cookie cutter type of property in that zip code topped out between 550K and 600K back in 2006. We are a solid three years into the decline here, with 40% going on 50% declines in many intermediate neighborhoods.

This zip code is nearly the geographic center of San Diego metro, with likely the best secondary schools south of Poway and La Jolla. It's an older part of the city, with one or two very attractive little downtowns dating back to when these parts of the city were neighboring separate and unincorporated towns in the early 1900's with their own downtown's and municipal centers. So no, La Jolla it isn't, but it's got all the ingredients of a desirable and very rentable long term property, or residence.

The high end of San Diego prices arguably has not cracked as badly, which fits the description you provide of LA's higher end market. Most of the coastal area remains not a bargain, but the properties here in the decent old center-city neighborhoods are beginning to look like really quite good value. Try $50K down, and a 30 year fixed mortgage of $1200 per month? That'd be your bill to own one of these puppies and be living rent-free down in "Old San Diego".

The only trick is to find a street with one of those that had some quite decent looking neighbors. ... Then, buy that sucker with $30K-40K down and wind up with a mortgage of what? $1300 per month? That's about the rental cost of a condo down here. Don't know about you, but I like shopping for property in the parts of town that are bracketed towards the average income of the middle 75%.

$1300 a month rental for a young family that has a couple of kids that want to enjoy a yard, with good schools, for the same cost as renting the condo? In beach town San Diego? Sounds like 9/10'ths of a winner to this rube (not that I want to plant myself here for the next 20 years)!

OK, so now we can all go back to our fingernail chewing here. :p

[rachits]

Re: I am panicking

Don't get me wrong, but I think you need to stand up in a way that's constructive. SF is not the only place in the world to live and work. You can do better elsewhere (much better if you have 30% to put down).

I don't know where people had the opinion that we had marriage problems (not just you). She does realize that I make very convincing arguments and she cannot make the buy vs. rent work on paper.

Moving is a little out of the question due to some golden handcuffs at both our companies. They aren't huge, but they make you think twice. Also, looking for a job elsewhere is probably not a great idea since we have stable careers at our current jobs. No matter how good you are, if you start out at a new company, and there are layoffs, you will likely be the first to go.

[unlucky]

Re: I am panicking

The house you live in has a big impact on your quality of life. Bigger than most other things. This is somehing that women seem to know better than men. If you can find a house that you are confident you can afford, and that offers the living experience you want from a permanent home, I would say go ahead and buy it. You may lose some money by doing so, versus waiting another year or two. But it's OK to spend money to acquire quality of life. That's what money is for. The alternative is to spend a year or two of your life to save money when prices fall. How many years have you got left?

Just remember it's a buyer's market out there - don't compromise. If current prices are still forcing you to compromise on things you really care about, then you can afford to wait.

[bill]

Re: I am panicking

Neighborhoods are full of homes with no equity, payment default, foreclosure freeze and waiting for the cram down managers help. People are living in homes for months without making payments and the foreclosure process has not even started. Its hard to get a firm number on that statistic, agents tell me its overwhelming .
We are still in a down trend. Don’t count on prices to stabilize any time soon.
Unwinding of toxic paper and real estate liquidation should be your greatest fear when making your decision.
don’t panic ,,research, take your time.
found this tool the other day.
http://www.redfin.com/home

[cjppjc]

Re: I am panicking

I would suggest negotiating the very best price you can get face to face, then ask for premium (or discount) to rent with option to buy. May want to do reverse order. Try rent to own as well. House prices will probably drop considerably in near future, as we are still in beginning of depression.

With all due repect, renting with an option to buy, is a terrible idea for the buyer.

[cjppjc]

Re: I am panicking

My wife and I are planning to move to Los Angeles after we sell our house in Atlanta. We will rent for a year or more while we monitor the housing market and decide on a neighborhood. It is currently falling at a rate of about 2% a month and SF is in a similar boat. Houses in the areas we are looking at rent for $4000 and sell for $1M+. Even at 6% with $300k, that's $4200/mo P&I PLUS taxes and insurance. And don't forget the $20k/mo you lose in equity.

Why try to catch a falling knife? Will other people suddenly have more money to spend on housing, more access to credit, lower rates and looser lending standards? Or will the reverse be true? I think I know the answer.

Jimmy

Perfect. Rent for a while, and pick a neighborhood you want to own a home in.

[cjppjc]

Re: I am panicking

The house you live in has a big impact on your quality of life. Bigger than most other things. This is somehing that women seem to know better than men. If you can find a house that you are confident you can afford, and that offers the living experience you want from a permanent home, I would say go ahead and buy it. You may lose some money by doing so, versus waiting another year or two. But it's OK to spend money to acquire quality of life. That's what money is for. The alternative is to spend a year or two of your life to save money when prices fall. How many years have you got left?

Just remember it's a buyer's market out there - don't compromise. If current prices are still forcing you to compromise on things you really care about, then you can afford to wait.

Brilliant first paragraph.

[jimmygu3]

Re: I am panicking

Jimmy - keep in mind you are referencing a higher than average market segment in LA metro at one million. What's the average home price there? $370K?

I'm down the street in San Diego, which hit the upturn first and the downturn also first, before LA, and has also had a (slightly) steeper rise and fall - I'm seeing smaller but livable 3 bedroom homes in central neighborhoods (maybe 1500 sq. feet?) with the best school districts in the city, and there are short sales and distress sales of homes down in the $250K - 270K range if one really shakes the bushes.

Lukester,

Thanks for the reply. Wish we could get those prices in LA. From a quick Zillow search, I see prices like those you describe in East San Diego, City Heights & Oak Park. In LA $300k gets you into Inglewood.

A search of San Diego from Bay Park to Lemon Grove, including the areas around the 5 & 8 freeways, yields a median asking price of $375k. The same sized area in Los Angeles from Woodland Hills to East LA has a median asking price of $950k. Expand the search window to the 2 hour+ commuter towns and the median is still $490k.

It's shocking.

Jimmy