posted on August 13, 2005 02:23:00 PM
Fenix, 72% is insane. California and insane, nah, couldn't happen
Bizzy, buying 2 & 3 apartments at a time (by amateurs) is a sure sign that we're at or near the top. Those people's calculations assume significant capital appreciation of the property to come out right. They swallow negative, neutral, or minimal cash flow because they're assuming that the underlying asset will appreciate 5%, 10%, 15% per year. A few months of a vacant apartment, and prices that stay flat (or heaven forbid, go down ), and they're under water.
If I didn't love my house so much, and if my wife would go along with it, I'd sell my house (for crazy money), rent for a few years, and then buy it or a comparable house.
We're the opposite of the over-leveraged / interest only mortgage types. We had a 30 year mortgage a few years ago and some money in the bank/investments. Once we realized that our investments were doing no better than okay, and that we couldn't even get the full benefit of the mortgage deduction on our taxes (don't get me started on the Alternative Minimum Tax (AMT) deception being foisted on the middle class), we paid off the mortgage. So, we have a lot less liquidity in our accounts, but the house is OURS! Feels kinda nice
posted on August 13, 2005 02:48:22 PM
Well, maybe it can be looked at this way. People will be relying on internet shopping, because with the high prices of fuel they won't want to get in their auto to search for bargains.
posted on August 13, 2005 03:38:33 PM
Davidsmom...You are absolutely correct. A smart shopper will park his car in the garage, grab a bargain on Ebay from one of us, and let us burn OUR gas taking it to the P.O. or FedEx.
A $75.00 solid state device will always blow first to protect a 25 cent fuse ~ Murphy's Law
posted on August 13, 2005 05:25:32 PM
But how much disposable income will be left to shop on Ebay for things one does not have to have? Groceries and other household items will certainly rise in cost since they have to be trucked to the store. Electricity produced by oil generating plants has to rise in cost. Even if you leave the Toyota Tundra in the garage and take the bus to work, it will cost more. That is what I meant by the trickle down effect.
buyhigh
posted on August 13, 2005 06:32:31 PM
paloma you must of just had an extra space before the last [/url] which is why it shows up on the next line under.
posted on August 13, 2005 06:47:44 PM
I thought the real estate 'bubble' would have burst over a year ago. We bought for $280,000 in 2001, sold 18 months later for $385,000 and moved over to the Eastern Shore. This house has gone up over $100,000 since we've been here.
I'd love to sell it right now and take the money and run. But, the problem is - where do you run to? You can't touch anything decent near DC where my husband works for under $500,000. 1/2 a million dollars!!!
I think this winter we're going to definitely see a 'market correction'.
~~~~~~~~~~~~~~~~~~ Caroline
posted on August 13, 2005 07:36:12 PM
There is a lot of impulse buying on Ebay, people not thinking about groceries or rent when they do that. Let's just hope they are not dead beat bidders.
posted on August 14, 2005 06:29:19 AM
I am hoping Ebay is considered enough of a discount outlet that it wont be affected that much.
My exboyfriend used to run an antique market/flea market. If the economy was in bad shape, is seemed like business would pick up - people felt like they were saving money by shopping there.
Let's hope Ebay is the same way.
~~~~~~~~~~~~~~~~~~ Caroline
posted on August 14, 2005 08:10:51 AM
Caroline, re "I'd love to sell it right now and take the money and run. But, the problem is - where do you run to?"
In yesterday's NY Times, there was an article about real estate that gave an example of what Bizzy was talking about. Park Place, in San Diego, has one-bedroom condos going for $719k, which means mortgage payments of $3,775 per month, PLUS maintenance fees. That condo would rent for $2,400 per month.
If you can deal with the lack of ownership, sell and rent. Keep your powder dry for a later purchase. Just be sure to segregate the real estate windfall from your other monies; you don't want to dip into it. If it were me, I would deposit the difference between your mortgage and your rent into that account also... I really am a savings kind of guy
posted on August 14, 2005 10:23:04 AM
My husband could do it, but I sure couldn't - I would take all the profit and throw it in to something - antiques, a business idea, etc. I had him handle the money we made from the last sale, he's not allowed to let me touch it!
He's definitely the saver of the family. I don't know that I could handle renting for the next few years. I wouldn't mind moving to a lower cost area and buying a cheaper, small house then we have now - like some areas of Virginia - middle to Southern Virginia - are still fairly reasonable. But, he needs to be within 1 hour of DC.
I'd love to get to the point of owning the home outright with no mortgage - must be a great feeling!
~~~~~~~~~~~~~~~~~~ Caroline
posted on August 14, 2005 11:22:08 AM
Caroline, it IS a great feeling. I guess I always felt it was OURS, even when it really belonged to the mortgage company, but now I feel it more strongly. Having said that, the property taxes and insurance around here are so high that it feels like we're still paying a mortgage.
posted on August 14, 2005 11:52:55 AM
Cash - Park Place is a luxury building that happens to be right down the street from me. No one is buying those as rentals. It's filled with well heeled retirees, and very smart buyers who got in during construction before everything exploded down here. Downtown exploded with new construction, all luxry buildings, once the Ball Park construction resumed. You can't really find anything down here now for under $1000 a month but no one would even think about getting a place in that building for under 2K.
If you want to see why..check this out
http://www.sandiegodowntown.info/slideshow/Park%20Place/html/0.htm
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No, I'm saying -- I'm merely -- I'm saying what I'm saying. I don't know why I'm always having people say, are you trying to say -- you know what you can do if you want to know what I'm saying is listen to what I'm saying. What I'm saying is what I said ...
posted on August 14, 2005 12:47:52 PM
Fenix,
Do you live in Downtown San Diego or the town of San Diego?
I was just in Downtown San Diego for the Comicon in July and was quite surprised with the redevelopment of the downtown area. We all thought that if we had the money, it would be a stunning place to live.
posted on August 14, 2005 01:46:23 PM
I live downtown. I'm just a couple blocks from the ballpark, takes me maybe 10 minutes to walk to the convention center.
You should have seen this place a couple years ago. The day after the judge threw the lawsuit that put the ballpark on hold out the cranes and construction equipment started rolling in and construction began on nearly every corner. Not only are there are the new building you saw but most of the older ones, like the SRO hotels have been renovated from the inside. They just gutted them, left the facades and built lofts inside.
I like being down here because eveything is so close but the cost is getting on my nerves so I'm leaving at the beginning of the year. Time to explore new territory.
posted on August 14, 2005 02:57:04 PM
I doubt there is many for rent there. The big problem downtown is that it EXPLODED since work started on the Ballpark again and has just kept going. About a year ago I got newletter from the downtown partnership that laid out all the construction projects started or scheduled to start (big backlog on those - not enough crews to meet the demand) and there were 10,000 new residential units coming in. If I remember correctly, one of them was low income, the vast majority are high end. I looked at it and thought... well that's bad planning...where are you going to find 10,000 people looking to spend 500K or 2k a month in rent to live in the middle of downtown... and where the hell are they going to park? I'd say give it another year or so and prices are going to start coming down because there simply is too much growth in an area that really is not family friendly. I think the problem is going to be that those that can afford to live down here don't neccesarily want to and those that want to, can't neccesarily afford it.
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An intelligent deaf-mute is better than an ignorant person who can speak.
), and they're under water.
Caroline