Comments on: “Make the splurge, you won’t regret it now, you won’t regret it later.” http://www.burbed.com/2008/01/26/make-the-splurge-you-won%e2%80%99t-regret-it-now-you-won%e2%80%99t-regret-it-later/ SF Bay Area Real Estate, Home Price and Mortgage Insanity Blog - Burbed.com Thu, 09 Sep 2010 08:36:09 -0700 hourly 1 http://wordpress.org/?v=3.0.1 By: New NUVIGIL follows Modafinil http://www.burbed.com/2008/01/26/make-the-splurge-you-won%e2%80%99t-regret-it-now-you-won%e2%80%99t-regret-it-later/#comment-60847 New NUVIGIL follows Modafinil Mon, 07 Jun 2010 10:55:28 +0000 http://www.burbed.com/2008/01/26/make-the-splurge-you-won%e2%80%99t-regret-it-now-you-won%e2%80%99t-regret-it-later/#comment-60847 <strong>Why NUVIGIL builds on the success of Modafinil...</strong> General Information on Nuvigil and Provigil I think many of us have already experienced conditions of recurring sleepiness during the day...... Why NUVIGIL builds on the success of Modafinil…

General Information on Nuvigil and Provigil I think many of us have already experienced conditions of recurring sleepiness during the day……

]]> By: Richard D. LeCour http://www.burbed.com/2008/01/26/make-the-splurge-you-won%e2%80%99t-regret-it-now-you-won%e2%80%99t-regret-it-later/#comment-14232 Richard D. LeCour Fri, 14 Mar 2008 18:12:13 +0000 http://www.burbed.com/2008/01/26/make-the-splurge-you-won%e2%80%99t-regret-it-now-you-won%e2%80%99t-regret-it-later/#comment-14232 <blockquote>"Make the splurge, you won't regret it now, you won't regret it later.</blockquote> I agree, and I've put my money where my mouth is. I'm in the process of buying two foreclosed homes. A 4/2.5 and 4/3, both ~2200 sqft, newly constructed, within 500 feet of decent schools (not 900s, mind you), with rents in the area over $2000. I go in expecting at least another 10% drop, but am holding on to the homes long term. Even if prices drop another 20%, I'm still decently covered by the fact that I paid 79 cents on today's dollar. Granted, it's not easy, and can be quite stressful, but ask me in 2-3 years if I regret it, and I anticipate my answer will be a resounding "No way!" Rent your home if it makes sense to you, but go out there and snatch up a bargain investment or two in the meantime.

“Make the splurge, you won’t regret it now, you won’t regret it later.

I agree, and I’ve put my money where my mouth is. I’m in the process of buying two foreclosed homes. A 4/2.5 and 4/3, both ~2200 sqft, newly constructed, within 500 feet of decent schools (not 900s, mind you), with rents in the area over $2000. I go in expecting at least another 10% drop, but am holding on to the homes long term. Even if prices drop another 20%, I’m still decently covered by the fact that I paid 79 cents on today’s dollar. Granted, it’s not easy, and can be quite stressful, but ask me in 2-3 years if I regret it, and I anticipate my answer will be a resounding “No way!” Rent your home if it makes sense to you, but go out there and snatch up a bargain investment or two in the meantime.

]]> By: Pralay http://www.burbed.com/2008/01/26/make-the-splurge-you-won%e2%80%99t-regret-it-now-you-won%e2%80%99t-regret-it-later/#comment-12880 Pralay Mon, 11 Feb 2008 21:21:21 +0000 http://www.burbed.com/2008/01/26/make-the-splurge-you-won%e2%80%99t-regret-it-now-you-won%e2%80%99t-regret-it-later/#comment-12880 Mr. Big, Just have a look at this graph for Monthly Mortgage Rate Resets: http://consumerist.com/340334/monthly-mortgage-rate-resets-2007+2016 As you can see, 2007 was only the beginning. The whole year of 2008 is ahead with much higher level of resets. So, whatever the subprime crisis you have seen in 2007, that's only the tip of the iceberg. You will get far far better picture in the beginning 2009. Then of course, there are huge amount of option ARM and Alt-A resets in 2010 and 2011. It will be interesting to see how the RE market looks after 2011. Anyway, long story short. If you - badly want to own a house - can afford monthly mortgage payments very easily (not much difference from renting on equivalent home). - want to live in this house for longer term. - have good downpayment (10-20%) in bank account. - have contingency plan for at least 6 months. - don't care about falling price in future. - don't consider home as an investment (but a stable place for living). Then, go ahead and buy your home. I would like to stress falling price (and your question about hitting bottom). There is no way to exactly know the bottom, unless it is already past. In general real estate market takes many years to correct and many years to stabilize, due to the fact that it is not a liquid asset like stock. And 2008 is is the only beginning. So, if you think the home price is reasonable, go ahead and buy it. But if you think that you are not in hurry, then it's better to wait and watch the market. Last but not least, don't take Realtor's financial advise. They are just real estate agents who get commission from home sale transactions. In general they are incapable for giving financial advise. They don't care about your financial health. They just want commission. Mr. Big,

Just have a look at this graph for Monthly Mortgage Rate Resets:
http://consumerist.com/340334/monthly-mortgage-rate-resets-2007+2016

As you can see, 2007 was only the beginning. The whole year of 2008 is ahead with much higher level of resets. So, whatever the subprime crisis you have seen in 2007, that’s only the tip of the iceberg. You will get far far better picture in the beginning 2009. Then of course, there are huge amount of option ARM and Alt-A resets in 2010 and 2011. It will be interesting to see how the RE market looks after 2011.

Anyway, long story short. If you
- badly want to own a house
- can afford monthly mortgage payments very easily (not much difference from renting on equivalent home).
- want to live in this house for longer term.
- have good downpayment (10-20%) in bank account.
- have contingency plan for at least 6 months.
- don’t care about falling price in future.
- don’t consider home as an investment (but a stable place for living).

Then, go ahead and buy your home. I would like to stress falling price (and your question about hitting bottom). There is no way to exactly know the bottom, unless it is already past. In general real estate market takes many years to correct and many years to stabilize, due to the fact that it is not a liquid asset like stock. And 2008 is is the only beginning. So, if you think the home price is reasonable, go ahead and buy it. But if you think that you are not in hurry, then it’s better to wait and watch the market.

Last but not least, don’t take Realtor’s financial advise. They are just real estate agents who get commission from home sale transactions. In general they are incapable for giving financial advise. They don’t care about your financial health. They just want commission.

]]> By: Mr.Big http://www.burbed.com/2008/01/26/make-the-splurge-you-won%e2%80%99t-regret-it-now-you-won%e2%80%99t-regret-it-later/#comment-12796 Mr.Big Sat, 09 Feb 2008 06:08:23 +0000 http://www.burbed.com/2008/01/26/make-the-splurge-you-won%e2%80%99t-regret-it-now-you-won%e2%80%99t-regret-it-later/#comment-12796 Hello, I have read through all the comments, started from #1 and just finished #207. But I am afraid that after all that reading, I am still a bit confused about what to do. Is it a good idea to buy a house now, or is it not? It seems the general consensus is that the prices have not hit bottom and it is not a good time to buy. However, the prices in, say, Brentwood, are pretty low right now. I can buy a house there with a mortgage that will be equal or maybe even a little lover than my current rent, which is $2K a month. Will the prices in Brentwood go even lower? I do not know, I think they will, but nobody really knows how low they can go. What do you guys think? As for “real Bay Area,” I would love to buy a house there, but I doubt $1.5M homes will come down in price to, say, $500K, which is the going price right now in Brentwood for a rather large, brand new house. I have stopped by about 10 houses in Burlingame, O.M.G.! 2,000 Sq. Ft. or less and they are about $2M or more, it is just insane. Hello,

I have read through all the comments, started from #1 and just finished #207. But I am afraid that after all that reading, I am still a bit confused about what to do. Is it a good idea to buy a house now, or is it not? It seems the general consensus is that the prices have not hit bottom and it is not a good time to buy.

However, the prices in, say, Brentwood, are pretty low right now. I can buy a house there with a mortgage that will be equal or maybe even a little lover than my current rent, which is $2K a month. Will the prices in Brentwood go even lower? I do not know, I think they will, but nobody really knows how low they can go. What do you guys think?

As for “real Bay Area,” I would love to buy a house there, but I doubt $1.5M homes will come down in price to, say, $500K, which is the going price right now in Brentwood for a rather large, brand new house. I have stopped by about 10 houses in Burlingame, O.M.G.! 2,000 Sq. Ft. or less and they are about $2M or more, it is just insane.

]]> By: Jim D http://www.burbed.com/2008/01/26/make-the-splurge-you-won%e2%80%99t-regret-it-now-you-won%e2%80%99t-regret-it-later/#comment-12740 Jim D Thu, 07 Feb 2008 16:03:16 +0000 http://www.burbed.com/2008/01/26/make-the-splurge-you-won%e2%80%99t-regret-it-now-you-won%e2%80%99t-regret-it-later/#comment-12740 <i>When you get down to it, figuring out how local house prices are expected to be disconnected from local wages must be an impossible endeavor: they only fully connect if each resident’s expense is fully and only covered by his monthly cash flow from a local job, which is less likely the wealthier the neighborhood is.</i> That's an interesting theory, but history tells me that during normal times in the bay area, houses sell for somewhere very close to what they bring in in rent. I'm expecting that day to come back shortly. (Even leaving aside that less than 1% of the buyers aren't going to move the market.) Now, the Bay Area is Special - normally, houses do sell for just a little more than rental income, instead of like the rest of the country where they sell for a little less. We're just not as Special as you think. There's a house in Sunnyvale I've been watching. Originally listed at $700k, now down to $550k. Still hasn't sold, though. I wonder if they can go lower, or if they owe too much? It's already a short sale... When you get down to it, figuring out how local house prices are expected to be disconnected from local wages must be an impossible endeavor: they only fully connect if each resident’s expense is fully and only covered by his monthly cash flow from a local job, which is less likely the wealthier the neighborhood is.

That’s an interesting theory, but history tells me that during normal times in the bay area, houses sell for somewhere very close to what they bring in in rent. I’m expecting that day to come back shortly. (Even leaving aside that less than 1% of the buyers aren’t going to move the market.)

Now, the Bay Area is Special – normally, houses do sell for just a little more than rental income, instead of like the rest of the country where they sell for a little less. We’re just not as Special as you think.

There’s a house in Sunnyvale I’ve been watching. Originally listed at $700k, now down to $550k. Still hasn’t sold, though. I wonder if they can go lower, or if they owe too much? It’s already a short sale…

]]> By: DreamT http://www.burbed.com/2008/01/26/make-the-splurge-you-won%e2%80%99t-regret-it-now-you-won%e2%80%99t-regret-it-later/#comment-12714 DreamT Wed, 06 Feb 2008 23:33:27 +0000 http://www.burbed.com/2008/01/26/make-the-splurge-you-won%e2%80%99t-regret-it-now-you-won%e2%80%99t-regret-it-later/#comment-12714 Jim, Rather than evaluating the % of foreign money used to purchase the house it would have to be the % not tied to present and future local income. That's the whole downpayment plus income from stocks, rental properties, savings moved from a US or foreign bank, financial gains from (re)financing, etc. Another indicator is indeed the % of foreign nationals. When you get down to it, figuring out how local house prices are expected to be disconnected from local wages must be an impossible endeavor: they only fully connect if each resident's expense is fully and only covered by his monthly cash flow from a local job, which is less likely the wealthier the neighborhood is. As for the duct work + air filter + humidifier, our vacuum cleaner picks up almost no dust on carpets now on a weekly basis. We suspect leaks in the attic's heating duct and return flow under the house would gather and project dust inside(the house is 52y old, was leaking 45% of the heat). In that sense, home ownership gives you both the opportunity and incentive to manage your living environment beyond what you can do as a renter. Jim,
Rather than evaluating the % of foreign money used to purchase the house it would have to be the % not tied to present and future local income. That’s the whole downpayment plus income from stocks, rental properties, savings moved from a US or foreign bank, financial gains from (re)financing, etc. Another indicator is indeed the % of foreign nationals. When you get down to it, figuring out how local house prices are expected to be disconnected from local wages must be an impossible endeavor: they only fully connect if each resident’s expense is fully and only covered by his monthly cash flow from a local job, which is less likely the wealthier the neighborhood is.

As for the duct work + air filter + humidifier, our vacuum cleaner picks up almost no dust on carpets now on a weekly basis. We suspect leaks in the attic’s heating duct and return flow under the house would gather and project dust inside(the house is 52y old, was leaking 45% of the heat). In that sense, home ownership gives you both the opportunity and incentive to manage your living environment beyond what you can do as a renter.

]]> By: Jim D http://www.burbed.com/2008/01/26/make-the-splurge-you-won%e2%80%99t-regret-it-now-you-won%e2%80%99t-regret-it-later/#comment-12672 Jim D Tue, 05 Feb 2008 19:29:59 +0000 http://www.burbed.com/2008/01/26/make-the-splurge-you-won%e2%80%99t-regret-it-now-you-won%e2%80%99t-regret-it-later/#comment-12672 <i>I am interested to know where you collected the date for the 1% figure you quoted on houses bought with foreign money. With rampant inflation I am also interested to find out about the trend year over year. I am personally convinced that the Cupertino area prices have been maintained with the help of foreign money but have no hard data to back this.</i> There was an entry in the BusinessWeek Hot Property blog not too long ago. It said that total US foreign money in RE was around $110 billion - IIRC, that included Commerical RE. It was up by, I think, almost 10%. That sounds like a lot, but when you include NYC, LA, Miami, Jackson Hole, etc, etc, it's not that much. 1000 houses in the bay area at $500k each is $500 million. That's not even a month of sales in a down market. Now, it may be that it's larger, since that doesn't include residents of the US who are foreign nationals - and that's who's been buying in places like Cupertino. But that's not 'foreign money', that's US money in foreign hands. As for "intangibles" of home ownership. I'm *very* willing to pay for those intangibles. I'm willing to go as much as 20% higher. Sadly, it's right now 75% or so higher. Spending that much on intangibles is just dumb money. But hey, don't be glum! Only last year, the price of intangibles was 100%! It's certainly headed in the right direction. As for renting in a crime ridden neighborhood - if you think that's bad, try *buying* in a crime ridden neighborhood. Now that *really* stinks. (I have both water filters and air filters installed in my rented apartment, it wasn't hard to do. They're not as nice as yours probably are, though.) I am interested to know where you collected the date for the 1% figure you quoted on houses bought with foreign money. With rampant inflation I am also interested to find out about the trend year over year. I am personally convinced that the Cupertino area prices have been maintained with the help of foreign money but have no hard data to back this.

There was an entry in the BusinessWeek Hot Property blog not too long ago. It said that total US foreign money in RE was around $110 billion – IIRC, that included Commerical RE. It was up by, I think, almost 10%.

That sounds like a lot, but when you include NYC, LA, Miami, Jackson Hole, etc, etc, it’s not that much. 1000 houses in the bay area at $500k each is $500 million. That’s not even a month of sales in a down market.

Now, it may be that it’s larger, since that doesn’t include residents of the US who are foreign nationals – and that’s who’s been buying in places like Cupertino. But that’s not ‘foreign money’, that’s US money in foreign hands.

As for “intangibles” of home ownership. I’m *very* willing to pay for those intangibles. I’m willing to go as much as 20% higher.

Sadly, it’s right now 75% or so higher. Spending that much on intangibles is just dumb money. But hey, don’t be glum! Only last year, the price of intangibles was 100%! It’s certainly headed in the right direction.

As for renting in a crime ridden neighborhood – if you think that’s bad, try *buying* in a crime ridden neighborhood. Now that *really* stinks.

(I have both water filters and air filters installed in my rented apartment, it wasn’t hard to do. They’re not as nice as yours probably are, though.)

]]> By: East Palo Alto fire leaves 14 without a home - 2393 Glen Way [Burbed.com] http://www.burbed.com/2008/01/26/make-the-splurge-you-won%e2%80%99t-regret-it-now-you-won%e2%80%99t-regret-it-later/#comment-12657 East Palo Alto fire leaves 14 without a home - 2393 Glen Way [Burbed.com] Mon, 04 Feb 2008 22:48:44 +0000 http://www.burbed.com/2008/01/26/make-the-splurge-you-won%e2%80%99t-regret-it-now-you-won%e2%80%99t-regret-it-later/#comment-12657 [...] proof that when you rent, you put your lives at risk!  Just like DreamT recently posted in this comment: I am happy for you for making it safely in your neighborhood in the past two years. My experience [...] [...] proof that when you rent, you put your lives at risk!  Just like DreamT recently posted in this comment: I am happy for you for making it safely in your neighborhood in the past two years. My experience [...]

]]> By: burbed http://www.burbed.com/2008/01/26/make-the-splurge-you-won%e2%80%99t-regret-it-now-you-won%e2%80%99t-regret-it-later/#comment-12649 burbed Mon, 04 Feb 2008 19:22:51 +0000 http://www.burbed.com/2008/01/26/make-the-splurge-you-won%e2%80%99t-regret-it-now-you-won%e2%80%99t-regret-it-later/#comment-12649 Not when you own the site. :) Not when you own the site. :)

]]> By: DreamT http://www.burbed.com/2008/01/26/make-the-splurge-you-won%e2%80%99t-regret-it-now-you-won%e2%80%99t-regret-it-later/#comment-12648 DreamT Mon, 04 Feb 2008 19:13:17 +0000 http://www.burbed.com/2008/01/26/make-the-splurge-you-won%e2%80%99t-regret-it-now-you-won%e2%80%99t-regret-it-later/#comment-12648 Burbed, but since when A implies B is equivalent to non-A implies non-B? Doesn't effective sarcasm respect basic induction and deduction logic? Burbed, but since when A implies B is equivalent to non-A implies non-B? Doesn’t effective sarcasm respect basic induction and deduction logic?

]]> By: burbed http://www.burbed.com/2008/01/26/make-the-splurge-you-won%e2%80%99t-regret-it-now-you-won%e2%80%99t-regret-it-later/#comment-12646 burbed Mon, 04 Feb 2008 18:34:35 +0000 http://www.burbed.com/2008/01/26/make-the-splurge-you-won%e2%80%99t-regret-it-now-you-won%e2%80%99t-regret-it-later/#comment-12646 >>Long story short, your personal experience or mine are of little relevance, best keep it to statistics that you can extract off the MView Voice to back my assertion that renting generally exposes one to higher-crime areas. Amen. That's why right now is a great time to buy in East Palo Alto! >>Long story short, your personal experience or mine are of little relevance, best keep it to statistics that you can extract off the MView Voice to back my assertion that renting generally exposes one to higher-crime areas.

Amen. That’s why right now is a great time to buy in East Palo Alto!

]]> By: DreamT http://www.burbed.com/2008/01/26/make-the-splurge-you-won%e2%80%99t-regret-it-now-you-won%e2%80%99t-regret-it-later/#comment-12645 DreamT Mon, 04 Feb 2008 18:28:16 +0000 http://www.burbed.com/2008/01/26/make-the-splurge-you-won%e2%80%99t-regret-it-now-you-won%e2%80%99t-regret-it-later/#comment-12645 Jim D., Thank you for the response. We'll have to agree to disagree on your first statement. Comparing renting to buying, you are only looking at tangibles, but we are not. For example we just replaced our heating duct and also installed a humidifier and air cleaner, because air and water are investments into one's family's health. You cannot do this if you rent unless you are a dazzling negotiator as you say. Renting vs owning is not just about money. I am interested to know where you collected the date for the 1% figure you quoted on houses bought with foreign money. With rampant inflation I am also interested to find out about the trend year over year. I am personally convinced that the Cupertino area prices have been maintained with the help of foreign money but have no hard data to back this. I am happy for you for making it safely in your neighborhood in the past two years. My experience is different. We were renting in the MView triangle, ripe with drugs, car thefts and a murder all within or nearby our condominium complex. We moved and bought into a SFR just for safety reason. Long story short, your personal experience or mine are of little relevance, best keep it to statistics that you can extract off the MView Voice to back my assertion that renting generally exposes one to higher-crime areas. Finally in a discussion of renting vs owning you'd want to go beyond a snapshot of the current situation to justify not buying. That's a somewhat reactive way to approaching real estate isn't it? Jim D.,
Thank you for the response. We’ll have to agree to disagree on your first statement. Comparing renting to buying, you are only looking at tangibles, but we are not. For example we just replaced our heating duct and also installed a humidifier and air cleaner, because air and water are investments into one’s family’s health. You cannot do this if you rent unless you are a dazzling negotiator as you say. Renting vs owning is not just about money.

I am interested to know where you collected the date for the 1% figure you quoted on houses bought with foreign money. With rampant inflation I am also interested to find out about the trend year over year. I am personally convinced that the Cupertino area prices have been maintained with the help of foreign money but have no hard data to back this.

I am happy for you for making it safely in your neighborhood in the past two years. My experience is different. We were renting in the MView triangle, ripe with drugs, car thefts and a murder all within or nearby our condominium complex. We moved and bought into a SFR just for safety reason. Long story short, your personal experience or mine are of little relevance, best keep it to statistics that you can extract off the MView Voice to back my assertion that renting generally exposes one to higher-crime areas.
Finally in a discussion of renting vs owning you’d want to go beyond a snapshot of the current situation to justify not buying. That’s a somewhat reactive way to approaching real estate isn’t it?

]]> By: Jim D http://www.burbed.com/2008/01/26/make-the-splurge-you-won%e2%80%99t-regret-it-now-you-won%e2%80%99t-regret-it-later/#comment-12644 Jim D Mon, 04 Feb 2008 17:17:48 +0000 http://www.burbed.com/2008/01/26/make-the-splurge-you-won%e2%80%99t-regret-it-now-you-won%e2%80%99t-regret-it-later/#comment-12644 <i>The discussion about renting versus owning, and the one about buying property for investment (as landlord) is completely separate.</I> Don't be silly, they're part of the same market for SFRs. And if it doesn't make sense to buy to rent, it doesn't (usually) make sense to buy for any purpose. <I>Home prices don’t have to be a function of solely local income, when foreign investors buy with mid-term horizon. </I> Oh, that's funny. Do you know what percentage of houses are bought with foreign money? Less than 1%. <i>past returns are not an indication of future results.</i> At least we can agree on this. History doesn't repeat, but it does rhyme. After every runup, with one exception, prices have gone back down. The exception corresponded with the introduction of the 30-year fixed. <i>When you have wife and kids, living in a safe, homely neighborhood with long-term residents around is a must.</i> So rent - and with the money you save over the interest payments, you'll be able to afford an ivy league school. And no, I'm not making that up - I've saved six figures in the last 2 years by not buying, and investing the difference. And all that without being raped, murdered or mugged. Lots of good houses in good neighborhoods for rent, at 1/2 the price of buying. It's a great time to be a renter in SF Bay. Just look at Craigslist for a feel of it. I also find it pretty funny that we're arguing about how the Real Bay Area will never go down. How old are the people posting here. Has everyone forgotten the early 90s? The discussion about renting versus owning, and the one about buying property for investment (as landlord) is completely separate.

Don’t be silly, they’re part of the same market for SFRs. And if it doesn’t make sense to buy to rent, it doesn’t (usually) make sense to buy for any purpose.

Home prices don’t have to be a function of solely local income, when foreign investors buy with mid-term horizon.

Oh, that’s funny. Do you know what percentage of houses are bought with foreign money? Less than 1%.

past returns are not an indication of future results.

At least we can agree on this. History doesn’t repeat, but it does rhyme. After every runup, with one exception, prices have gone back down. The exception corresponded with the introduction of the 30-year fixed.

When you have wife and kids, living in a safe, homely neighborhood with long-term residents around is a must.

So rent – and with the money you save over the interest payments, you’ll be able to afford an ivy league school. And no, I’m not making that up – I’ve saved six figures in the last 2 years by not buying, and investing the difference. And all that without being raped, murdered or mugged. Lots of good houses in good neighborhoods for rent, at 1/2 the price of buying. It’s a great time to be a renter in SF Bay. Just look at Craigslist for a feel of it.

I also find it pretty funny that we’re arguing about how the Real Bay Area will never go down. How old are the people posting here. Has everyone forgotten the early 90s?

]]> By: Winston http://www.burbed.com/2008/01/26/make-the-splurge-you-won%e2%80%99t-regret-it-now-you-won%e2%80%99t-regret-it-later/#comment-12643 Winston Mon, 04 Feb 2008 17:11:30 +0000 http://www.burbed.com/2008/01/26/make-the-splurge-you-won%e2%80%99t-regret-it-now-you-won%e2%80%99t-regret-it-later/#comment-12643 The problem with "owning" (how much do you really own a home when you have no equity in it) in the bay area is that the intangibles of "owning" are far more expensive than the tangible benefits of owning. You can get all the real benefits of owning a house by renting it if you're a decent negotiator (pets, paint, small architectural mods, gardening) for less than half the price of owning. I don't really see the upside of buying a place, even though I have a wife and dogs (with kids coming soon). The problem with “owning” (how much do you really own a home when you have no equity in it) in the bay area is that the intangibles of “owning” are far more expensive than the tangible benefits of owning. You can get all the real benefits of owning a house by renting it if you’re a decent negotiator (pets, paint, small architectural mods, gardening) for less than half the price of owning. I don’t really see the upside of buying a place, even though I have a wife and dogs (with kids coming soon).

]]> By: DreamT http://www.burbed.com/2008/01/26/make-the-splurge-you-won%e2%80%99t-regret-it-now-you-won%e2%80%99t-regret-it-later/#comment-12638 DreamT Mon, 04 Feb 2008 09:54:09 +0000 http://www.burbed.com/2008/01/26/make-the-splurge-you-won%e2%80%99t-regret-it-now-you-won%e2%80%99t-regret-it-later/#comment-12638 Guys, your exchange stopped being funny many posts ago. A few comments I'd like to throw in there: #1. The discussion about renting versus owning, and the one about buying property for investment (as landlord) is completely separate. The former takes a long-term view with all the intangibles of home ownership, the latter takes a short- to mid-term view with only cold hard financial facts. Please keep both discussions separate. #2. Home prices don't have to be a function of solely local income, when foreign investors buy with mid-term horizon. As long as people from outside the Bay buy real estate into the bay, you'll have to take this factor into account and accept that home prices will stay somewhat disconnected from media local income. #3. Anybody looking at the past to make predictions about the future (it's always appreciated that way so it'll continue being that way) failed to understand the first rule of investing: past returns are not an indication of future results. #4. Why does nobody mention the risk of earthquakes? The risk of terrorist attacks? The rising sea level? Etc. Shouldn't these be factored in as well in considering Bay Area real estate, live-in or rent out? #5. Is everybody single on this board? When you have wife and kids, living in a safe, homely neighborhood with long-term residents around is a must. The areas with concentrated rents tend to correlate with higher crime and resident turnover... even when they are half a mile from Google. Guys, your exchange stopped being funny many posts ago.
A few comments I’d like to throw in there:
#1. The discussion about renting versus owning, and the one about buying property for investment (as landlord) is completely separate. The former takes a long-term view with all the intangibles of home ownership, the latter takes a short- to mid-term view with only cold hard financial facts. Please keep both discussions separate.
#2. Home prices don’t have to be a function of solely local income, when foreign investors buy with mid-term horizon. As long as people from outside the Bay buy real estate into the bay, you’ll have to take this factor into account and accept that home prices will stay somewhat disconnected from media local income.
#3. Anybody looking at the past to make predictions about the future (it’s always appreciated that way so it’ll continue being that way) failed to understand the first rule of investing: past returns are not an indication of future results.
#4. Why does nobody mention the risk of earthquakes? The risk of terrorist attacks? The rising sea level? Etc. Shouldn’t these be factored in as well in considering Bay Area real estate, live-in or rent out?
#5. Is everybody single on this board? When you have wife and kids, living in a safe, homely neighborhood with long-term residents around is a must. The areas with concentrated rents tend to correlate with higher crime and resident turnover… even when they are half a mile from Google.

]]> By: Pralay http://www.burbed.com/2008/01/26/make-the-splurge-you-won%e2%80%99t-regret-it-now-you-won%e2%80%99t-regret-it-later/#comment-12636 Pralay Mon, 04 Feb 2008 06:01:54 +0000 http://www.burbed.com/2008/01/26/make-the-splurge-you-won%e2%80%99t-regret-it-now-you-won%e2%80%99t-regret-it-later/#comment-12636 >> "Did it ever occur to you that this is an election year? Economy just doesn’t go sour during an election year. We got at least 10 more months of sunshine ahead of us." Ha ha ha! This is most ignorant comment I ever heard about politics + economy. Let me give some clue to the answer. There are not many former US presidents living today. Just ask ALL OF THEM except Bill Clinton. Others indeed have bitter taste (or "sour" if you want to call it) about economy on election year. >> “Did it ever occur to you that this is an election year? Economy just doesn’t go sour during an election year. We got at least 10 more months of sunshine ahead of us.”

Ha ha ha! This is most ignorant comment I ever heard about politics + economy. Let me give some clue to the answer. There are not many former US presidents living today. Just ask ALL OF THEM except Bill Clinton. Others indeed have bitter taste (or “sour” if you want to call it) about economy on election year.

]]> By: RealEstater http://www.burbed.com/2008/01/26/make-the-splurge-you-won%e2%80%99t-regret-it-now-you-won%e2%80%99t-regret-it-later/#comment-12634 RealEstater Mon, 04 Feb 2008 04:44:12 +0000 http://www.burbed.com/2008/01/26/make-the-splurge-you-won%e2%80%99t-regret-it-now-you-won%e2%80%99t-regret-it-later/#comment-12634 Pralay: Did it ever occur to you that this is an election year? Economy just doesn't go sour during an election year. We got at least 10 more months of sunshine ahead of us. Pralay:

Did it ever occur to you that this is an election year? Economy just doesn’t go sour during an election year. We got at least 10 more months of sunshine ahead of us.

]]> By: Pralay http://www.burbed.com/2008/01/26/make-the-splurge-you-won%e2%80%99t-regret-it-now-you-won%e2%80%99t-regret-it-later/#comment-12628 Pralay Sun, 03 Feb 2008 20:17:34 +0000 http://www.burbed.com/2008/01/26/make-the-splurge-you-won%e2%80%99t-regret-it-now-you-won%e2%80%99t-regret-it-later/#comment-12628 >> "If the economy is really that bad, Wall Street should be dumping stocks. What we saw is that stock prices gained last week." I wonder how long that half point interest rate cut will help. And, tech sectors? The news of MS buying Yahoo and Motorola's spin off are only two good news which helped stock price to soar. Keep hoping that these two good news will somehow generate tremendous tech job growth in Bay Area :) >> “If the economy is really that bad, Wall Street should be dumping stocks. What we saw is that stock prices gained last week.”

I wonder how long that half point interest rate cut will help. And, tech sectors? The news of MS buying Yahoo and Motorola’s spin off are only two good news which helped stock price to soar. Keep hoping that these two good news will somehow generate tremendous tech job growth in Bay Area :)

]]> By: Pralay http://www.burbed.com/2008/01/26/make-the-splurge-you-won%e2%80%99t-regret-it-now-you-won%e2%80%99t-regret-it-later/#comment-12627 Pralay Sun, 03 Feb 2008 19:58:10 +0000 http://www.burbed.com/2008/01/26/make-the-splurge-you-won%e2%80%99t-regret-it-now-you-won%e2%80%99t-regret-it-later/#comment-12627 >> "Even the 99% figures you are showing is not too shabby is it?" It does not. But it shows that you are a liar. >> Where is the market crashing? Where is the downturn?" Just look at the inventory level and sale volume, dude! >> "Are you saying a market that goes from 100% SP/LP ratio in the summer to 99.9% is a downward trend? Ha ha ha ha…what a joke." Well, you started this topic by claiming that *virtually everywhere in Bay area* people are buying homes over listed price. Basically, you tried to give an impression that it is an indication of market doing better. But the number just shows are you are incorrect and it doesn't support your claim. Bottomline, SP/LP going down from 100+ to 99.9 is certainly NOT an indication of market doing better - atleast not as good as 2005. If you really want know the downward trend, you just need to look at sales volume and inventory level. >> “Even the 99% figures you are showing is not too shabby is it?”

It does not. But it shows that you are a liar.

>> Where is the market crashing? Where is the downturn?”

Just look at the inventory level and sale volume, dude!

>> “Are you saying a market that goes from 100% SP/LP ratio in the summer to 99.9% is a downward trend? Ha ha ha ha…what a joke.”

Well, you started this topic by claiming that *virtually everywhere in Bay area* people are buying homes over listed price. Basically, you tried to give an impression that it is an indication of market doing better. But the number just shows are you are incorrect and it doesn’t support your claim.

Bottomline, SP/LP going down from 100+ to 99.9 is certainly NOT an indication of market doing better – atleast not as good as 2005.

If you really want know the downward trend, you just need to look at sales volume and inventory level.

]]> By: Pralay http://www.burbed.com/2008/01/26/make-the-splurge-you-won%e2%80%99t-regret-it-now-you-won%e2%80%99t-regret-it-later/#comment-12625 Pralay Sun, 03 Feb 2008 19:43:59 +0000 http://www.burbed.com/2008/01/26/make-the-splurge-you-won%e2%80%99t-regret-it-now-you-won%e2%80%99t-regret-it-later/#comment-12625 >> "Does this make you a pathological liar?" Of course. Because you cherry pick the best data point, and then you try to give an impression that the number represents overall trend. That explains why you don't like to provide data reference when you claim something. >> “Does this make you a pathological liar?”

Of course. Because you cherry pick the best data point, and then you try to give an impression that the number represents overall trend. That explains why you don’t like to provide data reference when you claim something.

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