Bubble Meter is a national housing bubble blog dedicated to tracking the continuing decline of the housing bubble throughout the USA. It is a long and slow decline. Housing prices were simply unsustainable. National housing bubble coverage. Please join in the discussion.
My first thought was "disgusting", but upon further contemplation it is "pity." Do bubbleheads really feel themselves so "victimized" by not being able to buy at the level that they feel themselves entitled to buy at that they are willing to show the jealous and so ugly side of their natures?
Yes, you'll get want you want by wishing distaster on others. .... Bubbleheads really are a pitiful lot. And not nice people ...
The best quote is of course "I got into it not knowing too much about homeownership." ... It so epitomizes the BHs' predicament. They don’t know too much about homeownership and rather than listening to those who have been successful at what they themselves want to do, they wish them harm instead in the convoluted thinking that that harm will somehow help the BHs. It’s truly sad and pitiful.
"They don’t know too much about homeownership and rather than listening to those who have been successful at what they themselves want to do, they wish them harm instead in the convoluted thinking that that harm will somehow help the BHs."
Let me guess "lance" you think you have been "succcessful" because you took out a giant interest only loan right?
Just because you aren't rich is no reason not to spend like you are huh?
Lance said... “My first thought was "disgusting", but upon further contemplation it is "pity." Do bubbleheads really feel themselves so "victimized””…..
Not victimized “Lance”. We’ve seen inventory go through the roof in the last couple of years. In the very least, we’ve got hundreds of homes to choose from. Now Mr. seller, what’s my incentive to buy from you?
“The best quote is of course "I got into it not knowing too much about homeownership."”
No. I’ve got one that beats that hands down:
Lance said... there is never a bad time to buy July 28, 2006 3:14 PM
This is funny! This is EXACTLY what my broker told me last October when we were searching in Cape Cod! She told me: "You just have to get into the game. If you're not in the game, you're never going to get ahead."
Ha!
Funny thing is, my broker, for all her wisdom, is $60K to the bad in her home, which she purchased in 2005.
There is a bad time to buy. And I think it is now.
Robert said: "Lance said... there is never a bad time to buy July 28, 2006 3:14 PM"
That's right Robert, there never is a bad time to buy, only incapable people --- such as yourself --- who must depend on luck vs. skill to buy. I do acknowledge that for folks like you who really don't understand that "a bad time to buy" really doesn't exist, you probably also can't find your way out of a paperbag ... never mind making a good home purchase in a competitive market as the one we recently came out of. You see, people like me realize that it's not market conditions that determine when it's a good time to buy and when it isn't ... It's your own hard effort and skills. And if you are either unable or unwilling to put in that effort. Then yes, there are "good" and "bad" times for you to buy ... By necessity, people like yourself must rely on market conditions vs. skill and effort.
By the way, readers here may want to check out www.realestateabc.com . It's a much better source for real estate values than zillow.com. I ran my numbers today and am proud to announce that the value of my house is 36% more than what I paid for it slightly over 2 years ago ... giving me roughly 45% equity in the house. Of course in Robert's world that couldn't be since only averages and medians and other "facts" matter. He couldn't begin to understand that skill matters most of all ... and that there really isn't ever a bad time to buy ... only stupid people who don't know how to buy ...
Lance said; "My first thought was "disgusting", but upon further contemplation it is "pity." Do bubbleheads really feel themselves so "victimized" by not being able to buy at the level that they feel themselves entitled to buy at that they are willing to show the jealous and so ugly side of their natures?
As a previous owner of 2 homes in the last 15 years, I do not feel "victimized" by not owning a home since July of 2004. I saw we were in a huge bubble, so I decided to cash out, made about 100K on both deals after owning during that time, reasonable. I can still buy a new one at any time.
It wasn't rocket science to see that we were in a massive bubble, except for people like Lance, who were the cheerleaders and cattle drivers of the masses, for the REIC.So the masses are getting burned now, thanks to people like Lance. BooHoo.
Anyone with enough intellectual skills can study history, and see how massive this past bubble was, and find out how long they take to shake out. The absolute historical minimum on the down side is 4 years, and we're not even into the 2nd year of this current bust. Given the magnitude of the past bubble, I say we have at least 3 years more of falling prices. The amount of wealth destruction will be massive. Lance doesn't have the intellectual skills to even see that we were in a bubble. Yo go Lance. I enjoy the entertainment.
"That's right Robert, there never is a bad time to buy, only incapable people --- such as yourself --- who must depend on luck vs. skill to buy."
LOL... hey lance... here are a couple "capable people."
"Bolivian immigrants Marcelo Ortega, a dump truck driver, and his wife, Jenny, who cleans houses, bought a brick-front Colonial in Herndon for $549,000 in February 2006. The payments are $4,200 a month, which grew unbearable as residential construction work slowed and Ortega's income dropped.
The couple tried to sell the house, but the value has fallen to $499,000, and they can't refinance without paying a steep prepayment penalty, something Ortega says they did not know or understand." (from the washington post, don't we all wish we were that capable?)
"By the way, readers here may want to check out www.realestateabc.com . It's a much better source for real estate values than zillow.com. I ran my numbers today and am proud to announce that the value of my house is 36% more than what I paid for it slightly over 2 years ago ... giving me roughly 45% equity in the house. Of course in Robert's world that couldn't be since only averages and medians and other "facts" matter."
Good thing your house isn't an "investment" huh lance?
You flip flop so fast we all lose track what you are saying on a given day.
BTW, I hate to burst your "bubble" on all the imaginary money you think you have made... but there are big problems with using that site to try to calculate your "gains."
Try these addresses:
1504 s George Mason Dr #2 Arlington, VA 22204 website's estimate: $284k list price: $230k
2108 NELSON ST ARLINGTON, VA 22204 website estimate: $598k list price: $360k
5435 8TH ROAD S ARLINGTON, VA 22204 website estimate $395K list price $310k
203 GRAYSON PL STERLING, VA 20164 website estimate $438k list price $300k
114 WOODGATE CT STERLING, VA 20164 website estimate $460k list price $220k
The list goes on and on and on.
Although the website appears to have data from 2007, it doesn't appear to actually use it in its estimates. Seeing as the last 6 months have been a pretty big deal in the local market, I consider that a serious ommission.
Also, you probably didn't notice it but... there is a little "slider" that you can adjust to account for whether the market is "hot" or "cold." Somehow I doubt you used it...
So yeah, I am glad the website makes you feel better about having bought at the top of the bubble with an interest only loan. I am sure you will fail to mention what your house is "worth" once the website is updated with some sales newer than last year.
Anon 6:08, you are making my point ... Why would a "dump truck driver, and his wife, Jenny, who cleans houses" commit themselves to mortgage payments of $4,200/mo. Like the BHs posting on here, they don't know how to buy ... since buying intelligently means buying within ones means. Thanks for giving a example of what I am talking about. And like I said to Robert, it sure sounds like you have no clue as to what it means to be a smart buyer and not have to depend on lucky "timing" to make your home purchase. Good luck figuring things out. Until you understand the basics of making an intelligent purchase AND understand the a competitive or non-competitive market plays only a small part in the process, you will be no better off than the folks in the article you cited.
Nothing determines ones standard of living as to when you buy in a real estate cycle.
As to wishing ill? No. But there is no reason to have pity on people who didn't think before investing hundreds of thousands of dollars.
The correction hasn't even started... look at the Bond markets. They always lead by six months. Starting last week they've fallen apart. Note: I'm not talking mortgage bonds. I'm talking all bonds except for treasuries. (Those are still fine. )
I'm sad to see friends are going to lose their homes. Multiple coworkers cannot sell their homes and are thus geographically locked and unable to pursue improved opportunities.
But as my grandfather advised, only buy real estate when its tough to get a loan. We've seen these cycles before... this one is just of epic proportions.
As I told my father in law, if I bought today I would lose over $400k of equity (for the type of homes I would purchase).
And Lance... Good luck selling your home for that value. I agree Zillow is off...
But Merrill Lynch can no longer sell their $20 billion of CMBS's/month that they used to. Its down to $3 billion.
I was always taught to follow the money... and the bond market is the money. Its stalling... choking. That is what matters...
Inventory everywhere is really high. Nothing is local in the bond market... defaults in Florida and California will rock DC. Cest la vie.
There is no skill in buying. Only money... No reason to buy now. Not when properties are at such a high historical price to income. That always corrects... patience. Its correcting in the homes I want to buy at the rate of $500/day. :) But I'll wait.
For I see the number of coworkers fleeing to lower cost areas. Amusingly, its far worse for two of our competitors... Can we replace the people? So far yes. But its getting harder. Since our profits are just finally back to industry norm... we cannot raise wages. (Customers demand price cuts... no toleration of a price increase.) Cest la vie.
This will be really bad by Christmas... No point in denial then. I do not wish this on anyone. The vastness of this bubble makes me sad. But its here and is about to collapse.
Anon 6:25 said: "Also, you probably didn't notice it but... there is a little "slider" that you can adjust to account for whether the market is "hot" or "cold." Somehow I doubt you used it..."
I sure did ... I conservatively put it on a bit less than average. And I say conservatively because sales in my area are still far above average. No, it is not the "hot" market that you had a few years ago, but it is still better than longterm average. If I had left it on average, approximately another $180,000 was added to the value of the house ... which would put the value of my home at about 45% higher than when I bought it and give me close to %50 equity in it. Now as a smart seller, I probably could easily realize that ... But I have no plans to sell. I bought it to live in ... and lock in my costs. And besides, anything else I would want to buy would have similarly increased in cost. Buying to buy a home that is yours ... and locking in the costs to keep that home that is yours is something that is lost on bubbleheads ... Just like their closely-related friends the people who stupidly DID buy more than they could afford. No, smart buyers will always do well ... irrespective of "market conditions" ... And smart people realize that rather than wasting time waiting for prices to drop, it's just a lot smarter to do your due diligence and buy something you know you can afford today and into the immediate future. To bet everything you have on prices dropping is just ludicrous. And don't believe that isn't what you are doing by "holding off". Ask anyone who's held off since 2000 if they think they did the right thing in "waiting for prices to drop back to normal. Normal is what normal is ... and stupid is what stupid is.
Lance said... “I ran my numbers today and am proud to announce that the value of my house is 36% more than what I paid for it slightly over 2 years ago ... giving me roughly 45% equity in the house. Of course in Robert's world that couldn't be since only averages and medians and other "facts" matter. He couldn't begin to understand that skill matters most of all ... and that there really isn't ever a bad time to buy ... only stupid people who don't know how to buy ...”
So it’s worth 36% more? I challenge you to put your money where your mouth is. Put it on the market.
For all others:
I apologize. I am a stickler for facts and figures. Check out zip 20009 at:
http://www.mris.com/reports/stats/zip_stats.cfm
and see what “Lance” is all up in arms about.
And one other tid-bit to leave you with tonight:
Lance said... whitetower said: "So, you are saying that a person who has a mortgage should ignore the total amount paid for his house?"
now you're getting it! yes, yes, and yes July 25, 2006 11:09 PM
Lance said... “Anon 6:08, you are making my point ... Why would a "dump truck driver, and his wife, Jenny, who cleans houses" commit themselves to mortgage payments of $4,200/mo. Like the BHs posting on here, they don't know how to buy ... since buying intelligently means buying within ones means. Thanks for giving a example of what I am talking about.”
So, the “no bad time to buy” example is inductive of how easy it was for a dump truck driver to obtain a mortgage. Thus, you miss the point of the current housing debacle. There’s no more easy money to be had. Why “Lance”, have there been a rash of lenders folding? Why are foreclosures rising? Why are the DOM up? Why is inventory up? Why has there been talk of a moratorium on foreclosures?
“And like I said to Robert, it sure sounds like you have no clue as to what it means to be a smart buyer and not have to depend on lucky "timing" to make your home purchase. Good luck figuring things out.”
Timing, in this case, has equaled savings. Homes on the market this year are selling for less than last year.
“Until you understand the basics of making an intelligent purchase AND understand the a competitive or non-competitive market plays only a small part in the process, you will be no better off than the folks in the article you cited.”
Please “Lance”, I have asked several times before. If you’ve got facts/figures to back up your position please post them. Enlighten us. Help us understand the market. Alas, all we hear once again, is the “no bad time to buy” matra.
"And like I said to Robert, it sure sounds like you have no clue as to what it means to be a smart buyer and not have to depend on lucky "timing" to make your home purchase."
lance, what is really amusing about this is that I currently own land. I have in the past owned houses.
Your little attempt to act as if you are somehow superior to me is quite sad in light of that.
"I sure did ... I conservatively put it on a bit less than average. And I say conservatively because sales in my area are still far above average. No, it is not the "hot" market that you had a few years ago, but it is still better than longterm average."
LOL
Check out the May MRIS statistics for 20009. (your zip code)
Average sales prices are down 13.39% YoY.
Median sales prices are down 6.25% YoY.
Total sold dollar volume is down 15.33% YoY.
You think that is "conservatively" a "bit less than average?"
You need a brain transplant. The average selling price has dropped from $572k to $496k in one year.(down from $480k to $450k median)
You think that is "better than the longterm average?"
"I ran my numbers today and am proud to announce that the value of my house is 36% more than what I paid for it slightly over 2 years ago ... giving me roughly 45% equity in the house. "
I find it funny that while trying to brag about his "equity" lance has just revealed how little money he has put into his own house.
Ignoring the completely BS estimate on the value of his house... that means that even now two years after purchase he has virtually no equity at all in his interest only rental. A 10% drop will put him under water... no wonder he is on this blog like a bad rash.
I here a lot of people talk about interest only loans in a bad way on this board. Interesting because a fixed 30 with the OPTIONAL interest only for the first 10 I think is the best loan no matter what.
Lets see if you pay over the payment drops automatically. If you pay over each month the loan will act just like a 30 year fixed. So why take a IO vs a standard loan. Well lets say 3 years down the road, you have a lot of extra cash. If you put it towards you house in a standard loan it only helps on the back end. In a IO it automatically readusts the loan (Pretty much refinances on the fly for the first 10). So if you are responsible with your money you can use the IO to your advantage. Just make sure its a fixed 30 IO and not a arm.
LOL. You've just illustrated one of the problems many Bubbleheads have ... They don't know how to do numbers.
I started off with 25% equity ... I.e., I put 25% down on the purchase. Because I purchased wisely and because values in my area for single family homes have been rising in the double-digits for each of the last couple of years since I bought, I now have somewhere between 45% and 50% equity in the home. (And no Robert, zip code data covering several neighborhoods, and condos and co-ops as well as single family homes, does not give you a clue as to what a single family home in a specific neighborhood did value-wise.)
Now, Anon, please don't tell me you really took the 45% equity and substracted the 36% rise in value to come up with your statement " A 10% drop will put him under water...
Even by bubbleheads standards, if you did that, I am embarrassed for you ... Very embarrassed.
Lets say your house started out at $700k.(close to what you said you paid)
You said you put down 25%, so that is $175k.
That means you are paying the interest on something like a $525k loan just to live in your house. (plus all your other costs)
There is no way around the fact that you are paying a great deal of money simply to cover interest payments on an overpriced house.
Despite what you WISH were happening, your house is losing value. Cry and complain all you want, but the whole area is dropping, including yours.
Why don't you explain again how a website that does price estimates using numbers from last year and the year before is a good measure of your house's current value when homes in your neighborhood have lost 6+% in value already this year.
So much hostility towards Lance, I don't get...I think Lance said this somewhere on this blog and he's right "All real estate is local". Real Estate wise, I lived in what I think is the most safest zip code (22207)for 30yrs and on the whole I think it's weathered the storm pretty well. Of course there are neighborhood pockets that have taken at hit, but what disconcerting is stuff like this:
You know, Lance, you're almost entirely full of bluster, rhetoric, and a profound lack of even the most rudimentary grasp of the economics involved with the housing market, but I'll agree with you on this:
"a bad time to buy" really doesn't exist
That's true. Macroeconomics do not necessarily pertain to micropurchases of any given commodity. If you find a place that's priced correctly, and you want it, and you can afford it, then you should buy it. The definition of "priced correctly" is certainly subject to debate, but really that's all there is to it.
There is something to be said for buying in such a rapidly cooling market - - places that have been on the market for 6 months? Talk about negotiating power!
This is also why you don't have the equity you think you do right now. If you put your place on the market at your desired value, there is plenty of competition which would undercut you. It just wouldn't sell. Since you say have no plans to sell, it's immaterial.
Really, it doesn't make sense for you to keep on coming back here and spitting in the faces of people who choose to rent and who reasonably expect to see housing affordability in the region renormalize.
Lance said... “And no Robert, zip code data covering several neighborhoods, and condos and co-ops as well as single family homes, does not give you a clue as to what a single family home in a specific neighborhood did value-wise.”
Yes “Lance”, we know, we know:
Not on NoVA… Not in DC… Not in DC proper… Not in your zip code… Not on your street… Not on your block… And now of course, not your home.
Out of touch with realty reality Thursday June 21, 2:31 pm ET By Les Christie, CNNMoney.com staff writer
Despite turmoil in the housing markets that includes record foreclosure numbers, mortgage rate increases and home price depreciation, homeowners don't believe there's a real estate slump, according to a new poll.
Most - 55 percent - are confident that their homes continued to increase in value compared with a year ago, according to a nationwide telephone survey conducted this month by The Boston Consulting Group (BCG), a business and management strategy firm.
The overconfidence of homeowners doesn't jibe with the findings of most home-price indices, which point to lower median single-family house prices of about 2 percent nationwide.
"There is something to be said for buying in such a rapidly cooling market - - places that have been on the market for 6 months? Talk about negotiating power!"
I went to a series of open houses in my area this weekend. Of the 6 I attended... there was one that was a great house at a respectable price in the current market. It sat on a circle on top of a small rise and had a bigger lot than normal for the neighborhood. (.33 instead of .25)
It was small, but it had a great yard, great deck and a great interior. I suspect this house will sell quickly because it really was head and shoulders above the other five houses we looked at while being the cheapest we looked at.
The other 5... wow... all were vastly over priced. In three cases the agent told us quite honestly that the house was over priced but that they would welcome any offer we decided to make.
(Really drove home the point that realtors aren't really working for the seller, they are working for the commission. In one case a realtor actually pointed out to us that her client's house had been on the market for 200+ days and that the owners had been living in a new house and paying two mortgages for most of that time in an effort to get us to give her a low-ball offer. The house was $100k more than the first house I described and though larger, was not nearly as desirable in my opinion...unless you like living NEXT to 267 with about 40 feet and some hedges to keep the road out of sight but within earshot.)
There was one house that was just a dump. Nothing more can be said. The realtor didn't even seem to be trying to sell it. It was large, but had been very poorly expanded. It was a warren of small dark rooms with doorways opening to other small dark rooms without windows... The owner must have priced it by the square foot.
The last house we went to was a mcmansion built in a neighborhood of early 50s track houses. Giant, with a huge basement and huge everything. Something like 6k square feet. Shoddy work throughout however... I have been in some really nice Mcmansions that though not my style, were well built and tastefully done.
This one had visible cracks in numerous locations even though it was a brand new house. They used crappy fake-wood patterned plastic pieces in places. It had three giant marble fireplaces that just looked silly and out of place.
They wanted ~1.5 million for it. It had <1000 square foot houses on each side with an apartment complex across the street.
Not on NoVA… Not in DC… Not in DC proper… Not in your zip code… Not on your street… Not on your block… And now of course, not your home."
Remember... "average rowhouses" doubled in price from $1million to $2million in his area over the last twelve months... even if he can't find an example of that or anything... he has been to multiple open houses for those houses.
Lance and VA_Investor are both perfect examples of internet nobodies that honestly seem to believe that simply claiming to be an expert is the same thing has actually being one.
unique alias said: "Really, it doesn't make sense for you to keep on coming back here and spitting in the faces of people who choose to rent and who reasonably expect to see housing affordability in the region renormalize."
Yes, there is. I take offense not at those who "choose to rent and reasonably expect to see housing affordabilty in the region to renormalize" but instead at those who think that in order to buy there must be some general economic calmity that will redistribute properties from their current owners to them for "pennies on the dollar". "Blood in the streets" as they call it. These people aren't looking for anything to renormalize, they are meerly venting their peevish --- and ugly --- envy.
Look at the numbers before you comment. Single fam houses in DC have continued to appreciate throughout your so-called collapse. I know you're trying to zing Lance, but you just ended up zinging yourself:
i normally disagree with lance...but i will agree with him here....this post does show a not so nice envious side of some posters as they take joy and laugh at working class people losing their homes and savings.... i hope you all are as financially savy in every single aspect of your life (401, investments, etc) as you are in housing and don't get upset if your life savings evaporate while others cheer it on.
No one wants to see anyone lose their homes, but when prudent fiscal sense gets tossed out the window and is replaced with a shop-til-you-drop-mentality, a-house-is-an-ATM mentality, borrow-against-your-house-it-will-always-go-up mentality, spend-today-worry-about-the-bill-tomorrw mentality, then there is nothing to do but watch as so many get burned when the "house of cards" comes crashing down.
Their have always been bubbles inflating in some sector or other(stocks, collectables, art, junk bonds, tulip bulbs, etc.)
When the so called investors ignore or disregard the risk buy into the bubble, who see the bubble as the path to instant riches and expect to end up millionares in the end, it is those who were prudent with their money who shake their heads as the bubble insanity inflates and then bursts, leaving investors, speculators and the last one into the party holding the bag.
A co-worker once told me that she had to return to work, the reason: the dot com bubble burst, taking most of her money with it. A prudent person does not risk all on one bet, and a wise person does not invest in something they don't understand or do not know all of the risks that are involved.
Sadly, financial wisdom is not taught in the schools anymore nor in the home. Madison Avenue has brainwashed most into believing you can have it all, but fail to mention you will work the rest of your life to eventually pay off the debt for it all.
Agreed. It gives a certain satisfaction to see arrogent Madison Avenue MBAs be wrong...but thing is, most of the people being taunted in the video probably don't even know where Madison Avenue is located. It's kind of like laughing at the handicapped. The person laughing may be as right as the handicapped person is disabled....but it is still childish. In short, watching rich investors come down to earth can be entertaining....but kicking those that were down to begin with is pathetic envy.
My first thought was "disgusting", but upon further contemplation it is "pity." Do bubbleheads really feel themselves so "victimized" by not being able to buy at the level that they feel themselves entitled to buy at that they are willing to show the jealous and so ugly side of their natures?
ReplyDeleteYes, you'll get want you want by wishing distaster on others. .... Bubbleheads really are a pitiful lot. And not nice people ...
The best quote is of course "I got into it not knowing too much about homeownership." ... It so epitomizes the BHs' predicament. They don’t know too much about homeownership and rather than listening to those who have been successful at what they themselves want to do, they wish them harm instead in the convoluted thinking that that harm will somehow help the BHs. It’s truly sad and pitiful.
A little long. But i like the idea.
ReplyDeletehahahahaha
ReplyDeleteFU NAR!
GREAT soundtrack. I mean, really, great stuff.
ReplyDeleteYawn.
ReplyDelete"They don’t know too much about homeownership and rather than listening to those who have been successful at what they themselves want to do, they wish them harm instead in the convoluted thinking that that harm will somehow help the BHs."
ReplyDeleteLet me guess "lance" you think you have been "succcessful" because you took out a giant interest only loan right?
Just because you aren't rich is no reason not to spend like you are huh?
Lance said...
ReplyDelete“My first thought was "disgusting", but upon further contemplation it is "pity." Do bubbleheads really feel themselves so "victimized””…..
Not victimized “Lance”. We’ve seen inventory go through the roof in the last couple of years. In the very least, we’ve got hundreds of homes to choose from. Now Mr. seller, what’s my incentive to buy from you?
“The best quote is of course "I got into it not knowing too much about homeownership."”
No. I’ve got one that beats that hands down:
Lance said...
there is never a bad time to buy
July 28, 2006 3:14 PM
"Lance said...
ReplyDeletethere is never a bad time to buy"
This is funny! This is EXACTLY what my broker told me last October when we were searching in Cape Cod! She told me: "You just have to get into the game. If you're not in the game, you're never going to get ahead."
Ha!
Funny thing is, my broker, for all her wisdom, is $60K to the bad in her home, which she purchased in 2005.
There is a bad time to buy. And I think it is now.
Robert said:
ReplyDelete"Lance said...
there is never a bad time to buy
July 28, 2006 3:14 PM"
That's right Robert, there never is a bad time to buy, only incapable people --- such as yourself --- who must depend on luck vs. skill to buy. I do acknowledge that for folks like you who really don't understand that "a bad time to buy" really doesn't exist, you probably also can't find your way out of a paperbag ... never mind making a good home purchase in a competitive market as the one we recently came out of. You see, people like me realize that it's not market conditions that determine when it's a good time to buy and when it isn't ... It's your own hard effort and skills. And if you are either unable or unwilling to put in that effort. Then yes, there are "good" and "bad" times for you to buy ... By necessity, people like yourself must rely on market conditions vs. skill and effort.
By the way, readers here may want to check out www.realestateabc.com . It's a much better source for real estate values than zillow.com. I ran my numbers today and am proud to announce that the value of my house is 36% more than what I paid for it slightly over 2 years ago ... giving me roughly 45% equity in the house. Of course in Robert's world that couldn't be since only averages and medians and other "facts" matter. He couldn't begin to understand that skill matters most of all ... and that there really isn't ever a bad time to buy ... only stupid people who don't know how to buy ...
Lance said;
ReplyDelete"My first thought was "disgusting", but upon further contemplation it is "pity." Do bubbleheads really feel themselves so "victimized" by not being able to buy at the level that they feel themselves entitled to buy at that they are willing to show the jealous and so ugly side of their natures?
As a previous owner of 2 homes in the last 15 years, I do not feel "victimized" by not owning a home since July of 2004. I saw we were in a huge bubble, so I decided to cash out, made about 100K on both deals after owning during that time, reasonable. I can still buy a new one at any time.
It wasn't rocket science to see that we were in a massive bubble, except for people like Lance, who were the cheerleaders and cattle drivers of the masses, for the REIC.So the masses are getting burned now, thanks to people like Lance. BooHoo.
Anyone with enough intellectual skills can study history, and see how massive this past bubble was, and find out how long they take to shake out. The absolute historical minimum on the down side is 4 years, and we're not even into the 2nd year of this current bust. Given the magnitude of the past bubble, I say we have at least 3 years more of falling prices. The amount of wealth destruction will be massive. Lance doesn't have the intellectual skills to even see that we were in a bubble. Yo go Lance. I enjoy the entertainment.
"That's right Robert, there never is a bad time to buy, only incapable people --- such as yourself --- who must depend on luck vs. skill to buy."
ReplyDeleteLOL... hey lance... here are a couple "capable people."
"Bolivian immigrants Marcelo Ortega, a dump truck driver, and his wife, Jenny, who cleans houses, bought a brick-front Colonial in Herndon for $549,000 in February 2006. The payments are $4,200 a month, which grew unbearable as residential construction work slowed and Ortega's income dropped.
The couple tried to sell the house, but the value has fallen to $499,000, and they can't refinance without paying a steep prepayment penalty, something Ortega says they did not know or understand."
(from the washington post, don't we all wish we were that capable?)
"By the way, readers here may want to check out www.realestateabc.com . It's a much better source for real estate values than zillow.com. I ran my numbers today and am proud to announce that the value of my house is 36% more than what I paid for it slightly over 2 years ago ... giving me roughly 45% equity in the house. Of course in Robert's world that couldn't be since only averages and medians and other "facts" matter."
ReplyDeleteGood thing your house isn't an "investment" huh lance?
You flip flop so fast we all lose track what you are saying on a given day.
BTW, I hate to burst your "bubble" on all the imaginary money you think you have made... but there are big problems with using that site to try to calculate your "gains."
Try these addresses:
1504 s George Mason Dr #2
Arlington, VA 22204
website's estimate: $284k
list price: $230k
2108 NELSON ST
ARLINGTON, VA 22204
website estimate: $598k
list price: $360k
5435 8TH ROAD S
ARLINGTON, VA 22204
website estimate $395K
list price $310k
203 GRAYSON PL
STERLING, VA 20164
website estimate $438k
list price $300k
114 WOODGATE CT
STERLING, VA 20164
website estimate $460k
list price $220k
The list goes on and on and on.
Although the website appears to have data from 2007, it doesn't appear to actually use it in its estimates. Seeing as the last 6 months have been a pretty big deal in the local market, I consider that a serious ommission.
Also, you probably didn't notice it but... there is a little "slider" that you can adjust to account for whether the market is "hot" or "cold." Somehow I doubt you used it...
So yeah, I am glad the website makes you feel better about having bought at the top of the bubble with an interest only loan. I am sure you will fail to mention what your house is "worth" once the website is updated with some sales newer than last year.
Anon 6:08, you are making my point ... Why would a "dump truck driver, and his wife, Jenny, who cleans houses" commit themselves to mortgage payments of $4,200/mo. Like the BHs posting on here, they don't know how to buy ... since buying intelligently means buying within ones means. Thanks for giving a example of what I am talking about. And like I said to Robert, it sure sounds like you have no clue as to what it means to be a smart buyer and not have to depend on lucky "timing" to make your home purchase. Good luck figuring things out. Until you understand the basics of making an intelligent purchase AND understand the a competitive or non-competitive market plays only a small part in the process, you will be no better off than the folks in the article you cited.
ReplyDeleteInteresting video...
ReplyDeleteNothing determines ones standard of living as to when you buy in a real estate cycle.
As to wishing ill? No. But there is no reason to have pity on people who didn't think before investing hundreds of thousands of dollars.
The correction hasn't even started... look at the Bond markets. They always lead by six months. Starting last week they've fallen apart. Note: I'm not talking mortgage bonds. I'm talking all bonds except for treasuries. (Those are still fine. )
I'm sad to see friends are going to lose their homes. Multiple coworkers cannot sell their homes and are thus geographically locked and unable to pursue improved opportunities.
But as my grandfather advised, only buy real estate when its tough to get a loan. We've seen these cycles before... this one is just of epic proportions.
As I told my father in law, if I bought today I would lose over $400k of equity (for the type of homes I would purchase).
And Lance...
Good luck selling your home for that value. I agree Zillow is off...
But Merrill Lynch can no longer sell their $20 billion of CMBS's/month that they used to. Its down to $3 billion.
I was always taught to follow the money... and the bond market is the money. Its stalling... choking. That is what matters...
Inventory everywhere is really high. Nothing is local in the bond market... defaults in Florida and California will rock DC. Cest la vie.
There is no skill in buying. Only money... No reason to buy now. Not when properties are at such a high historical price to income. That always corrects... patience. Its correcting in the homes I want to buy at the rate of $500/day. :) But I'll wait.
For I see the number of coworkers fleeing to lower cost areas. Amusingly, its far worse for two of our competitors... Can we replace the people? So far yes. But its getting harder. Since our profits are just finally back to industry norm... we cannot raise wages. (Customers demand price cuts... no toleration of a price increase.) Cest la vie.
This will be really bad by Christmas... No point in denial then. I do not wish this on anyone. The vastness of this bubble makes me sad. But its here and is about to collapse.
http://financial.seekingalpha.com/article/39817?source=d_email&u=90235
or tinyurl:
http://tinyurl.com/2kr5lv
Now the 4th of July is a quiet week for Bonds... so no knew news next week... Unless... naaa...
Got popcorn?
Neil
Anon 6:25 said:
ReplyDelete"Also, you probably didn't notice it but... there is a little "slider" that you can adjust to account for whether the market is "hot" or "cold." Somehow I doubt you used it..."
I sure did ... I conservatively put it on a bit less than average. And I say conservatively because sales in my area are still far above average. No, it is not the "hot" market that you had a few years ago, but it is still better than longterm average. If I had left it on average, approximately another $180,000 was added to the value of the house ... which would put the value of my home at about 45% higher than when I bought it and give me close to %50 equity in it. Now as a smart seller, I probably could easily realize that ... But I have no plans to sell. I bought it to live in ... and lock in my costs. And besides, anything else I would want to buy would have similarly increased in cost. Buying to buy a home that is yours ... and locking in the costs to keep that home that is yours is something that is lost on bubbleheads ... Just like their closely-related friends the people who stupidly DID buy more than they could afford. No, smart buyers will always do well ... irrespective of "market conditions" ... And smart people realize that rather than wasting time waiting for prices to drop, it's just a lot smarter to do your due diligence and buy something you know you can afford today and into the immediate future. To bet everything you have on prices dropping is just ludicrous. And don't believe that isn't what you are doing by "holding off". Ask anyone who's held off since 2000 if they think they did the right thing in "waiting for prices to drop back to normal. Normal is what normal is ... and stupid is what stupid is.
Lance said...
ReplyDelete“I ran my numbers today and am proud to announce that the value of my house is 36% more than what I paid for it slightly over 2 years ago ... giving me roughly 45% equity in the house. Of course in Robert's world that couldn't be since only averages and medians and other "facts" matter. He couldn't begin to understand that skill matters most of all ... and that there really isn't ever a bad time to buy ... only stupid people who don't know how to buy ...”
So it’s worth 36% more? I challenge you to put your money where your mouth is. Put it on the market.
For all others:
I apologize. I am a stickler for facts and figures. Check out zip 20009 at:
http://www.mris.com/reports/stats/zip_stats.cfm
and see what “Lance” is all up in arms about.
And one other tid-bit to leave you with tonight:
Lance said...
whitetower said:
"So, you are saying that a person who has a mortgage should ignore the total amount paid for his house?"
now you're getting it! yes, yes, and yes
July 25, 2006 11:09 PM
Lance said...
ReplyDelete“Anon 6:08, you are making my point ... Why would a "dump truck driver, and his wife, Jenny, who cleans houses" commit themselves to mortgage payments of $4,200/mo. Like the BHs posting on here, they don't know how to buy ... since buying intelligently means buying within ones means. Thanks for giving a example of what I am talking about.”
So, the “no bad time to buy” example is inductive of how easy it was for a dump truck driver to obtain a mortgage. Thus, you miss the point of the current housing debacle. There’s no more easy money to be had. Why “Lance”, have there been a rash of lenders folding? Why are foreclosures rising? Why are the DOM up? Why is inventory up? Why has there been talk of a moratorium on foreclosures?
“And like I said to Robert, it sure sounds like you have no clue as to what it means to be a smart buyer and not have to depend on lucky "timing" to make your home purchase. Good luck figuring things out.”
Timing, in this case, has equaled savings. Homes on the market this year are selling for less than last year.
“Until you understand the basics of making an intelligent purchase AND understand the a competitive or non-competitive market plays only a small part in the process, you will be no better off than the folks in the article you cited.”
Please “Lance”, I have asked several times before. If you’ve got facts/figures to back up your position please post them. Enlighten us. Help us understand the market. Alas, all we hear once again, is the “no bad time to buy” matra.
"And like I said to Robert, it sure sounds like you have no clue as to what it means to be a smart buyer and not have to depend on lucky "timing" to make your home purchase."
ReplyDeletelance, what is really amusing about this is that I currently own land. I have in the past owned houses.
Your little attempt to act as if you are somehow superior to me is quite sad in light of that.
"I sure did ... I conservatively put it on a bit less than average. And I say conservatively because sales in my area are still far above average. No, it is not the "hot" market that you had a few years ago, but it is still better than longterm average."
ReplyDeleteLOL
Check out the May MRIS statistics for 20009. (your zip code)
Average sales prices are down 13.39% YoY.
Median sales prices are down 6.25% YoY.
Total sold dollar volume is down 15.33% YoY.
You think that is "conservatively" a "bit less than average?"
You need a brain transplant. The average selling price has dropped from $572k to $496k in one year.(down from $480k to $450k median)
You think that is "better than the longterm average?"
LOL
"I ran my numbers today and am proud to announce that the value of my house is 36% more than what I paid for it slightly over 2 years ago ... giving me roughly 45% equity in the house. "
ReplyDeleteI find it funny that while trying to brag about his "equity" lance has just revealed how little money he has put into his own house.
Ignoring the completely BS estimate on the value of his house... that means that even now two years after purchase he has virtually no equity at all in his interest only rental. A 10% drop will put him under water... no wonder he is on this blog like a bad rash.
I here a lot of people talk about interest only loans in a bad way on this board. Interesting because a fixed 30 with the OPTIONAL interest only for the first 10 I think is the best loan no matter what.
ReplyDeleteLets see if you pay over the payment drops automatically. If you pay over each month the loan will act just like a 30 year fixed. So why take a IO vs a standard loan. Well lets say 3 years down the road, you have a lot of extra cash. If you put it towards you house in a standard loan it only helps on the back end. In a IO it automatically readusts the loan (Pretty much refinances on the fly for the first 10). So if you are responsible with your money you can use the IO to your advantage. Just make sure its a fixed 30 IO and not a arm.
Anon 5:07,
ReplyDeleteLOL. You've just illustrated one of the problems many Bubbleheads have ... They don't know how to do numbers.
I started off with 25% equity ... I.e., I put 25% down on the purchase. Because I purchased wisely and because values in my area for single family homes have been rising in the double-digits for each of the last couple of years since I bought, I now have somewhere between 45% and 50% equity in the home. (And no Robert, zip code data covering several neighborhoods, and condos and co-ops as well as single family homes, does not give you a clue as to what a single family home in a specific neighborhood did value-wise.)
Now, Anon, please don't tell me you really took the 45% equity and substracted the 36% rise in value to come up with your statement " A 10% drop will put him under water...
Even by bubbleheads standards, if you did that, I am embarrassed for you ... Very embarrassed.
"Lets see if you pay over the payment drops automatically. If you pay over each month the loan will act just like a 30 year fixed."
ReplyDeleteThe problem is, as lance has just revealed... he is doing no such thing.
Instead he is simply renting his house from the bank and hoping appreciation will bail him out before his mortgage requires him to pay principal.
Lets say your house started out at $700k.(close to what you said you paid)
ReplyDeleteYou said you put down 25%, so that is $175k.
That means you are paying the interest on something like a $525k loan just to live in your house. (plus all your other costs)
There is no way around the fact that you are paying a great deal of money simply to cover interest payments on an overpriced house.
Despite what you WISH were happening, your house is losing value. Cry and complain all you want, but the whole area is dropping, including yours.
Why don't you explain again how a website that does price estimates using numbers from last year and the year before is a good measure of your house's current value when homes in your neighborhood have lost 6+% in value already this year.
So much hostility towards Lance, I don't get...I think Lance said this somewhere on this blog and he's right "All real estate is local". Real Estate wise, I lived in what I think is the most safest zip code (22207)for 30yrs and on the whole I think it's weathered the storm pretty well. Of course there are neighborhood pockets that have taken at hit, but what disconcerting is stuff like this:
ReplyDeletehttp://www.europac.net/externalframeset.asp?id=9036
It will be interesting to see what happens w/ mortgage industry
You know, Lance, you're almost entirely full of bluster, rhetoric, and a profound lack of even the most rudimentary grasp of the economics involved with the housing market, but I'll agree with you on this:
ReplyDelete"a bad time to buy" really doesn't exist
That's true. Macroeconomics do not necessarily pertain to micropurchases of any given commodity. If you find a place that's priced correctly, and you want it, and you can afford it, then you should buy it. The definition of "priced correctly" is certainly subject to debate, but really that's all there is to it.
There is something to be said for buying in such a rapidly cooling market - - places that have been on the market for 6 months? Talk about negotiating power!
This is also why you don't have the equity you think you do right now. If you put your place on the market at your desired value, there is plenty of competition which would undercut you. It just wouldn't sell. Since you say have no plans to sell, it's immaterial.
Really, it doesn't make sense for you to keep on coming back here and spitting in the faces of people who choose to rent and who reasonably expect to see housing affordability in the region renormalize.
Lance said...
ReplyDelete“And no Robert, zip code data covering several neighborhoods, and condos and co-ops as well as single family homes, does not give you a clue as to what a single family home in a specific neighborhood did value-wise.”
Yes “Lance”, we know, we know:
Not on NoVA…
Not in DC…
Not in DC proper…
Not in your zip code…
Not on your street…
Not on your block…
And now of course, not your home.
Out of touch with realty reality
Thursday June 21, 2:31 pm ET
By Les Christie, CNNMoney.com staff writer
Despite turmoil in the housing markets that includes record foreclosure numbers, mortgage rate increases and home price depreciation, homeowners don't believe there's a real estate slump, according to a new poll.
Most - 55 percent - are confident that their homes continued to increase in value compared with a year ago, according to a nationwide telephone survey conducted this month by The Boston Consulting Group (BCG), a business and management strategy firm.
The overconfidence of homeowners doesn't jibe with the findings of most home-price indices, which point to lower median single-family house prices of about 2 percent nationwide.
http://biz.yahoo.com/cnnm/070621/062107_housing_
perception_gap.html?.v=1&.pf=real-estate
"There is something to be said for buying in such a rapidly cooling market - - places that have been on the market for 6 months? Talk about negotiating power!"
ReplyDeleteI went to a series of open houses in my area this weekend. Of the 6 I attended... there was one that was a great house at a respectable price in the current market. It sat on a circle on top of a small rise and had a bigger lot than normal for the neighborhood. (.33 instead of .25)
It was small, but it had a great yard, great deck and a great interior. I suspect this house will sell quickly because it really was head and shoulders above the other five houses we looked at while being the cheapest we looked at.
The other 5... wow... all were vastly over priced. In three cases the agent told us quite honestly that the house was over priced but that they would welcome any offer we decided to make.
(Really drove home the point that realtors aren't really working for the seller, they are working for the commission. In one case a realtor actually pointed out to us that her client's house had been on the market for 200+ days and that the owners had been living in a new house and paying two mortgages for most of that time in an effort to get us to give her a low-ball offer. The house was $100k more than the first house I described and though larger, was not nearly as desirable in my opinion...unless you like living NEXT to 267 with about 40 feet and some hedges to keep the road out of sight but within earshot.)
There was one house that was just a dump. Nothing more can be said. The realtor didn't even seem to be trying to sell it. It was large, but had been very poorly expanded. It was a warren of small dark rooms with doorways opening to other small dark rooms without windows... The owner must have priced it by the square foot.
The last house we went to was a mcmansion built in a neighborhood of early 50s track houses. Giant, with a huge basement and huge everything. Something like 6k square feet. Shoddy work throughout however... I have been in some really nice Mcmansions that though not my style, were well built and tastefully done.
This one had visible cracks in numerous locations even though it was a brand new house. They used crappy fake-wood patterned plastic pieces in places. It had three giant marble fireplaces that just looked silly and out of place.
They wanted ~1.5 million for it. It had <1000 square foot houses on each side with an apartment complex across the street.
"Yes “Lance”, we know, we know:
ReplyDeleteNot on NoVA…
Not in DC…
Not in DC proper…
Not in your zip code…
Not on your street…
Not on your block…
And now of course, not your home."
Remember... "average rowhouses" doubled in price from $1million to $2million in his area over the last twelve months... even if he can't find an example of that or anything... he has been to multiple open houses for those houses.
Lance and VA_Investor are both perfect examples of internet nobodies that honestly seem to believe that simply claiming to be an expert is the same thing has actually being one.
unique alias said:
ReplyDelete"Really, it doesn't make sense for you to keep on coming back here and spitting in the faces of people who choose to rent and who reasonably expect to see housing affordability in the region renormalize."
Yes, there is. I take offense not at those who "choose to rent and reasonably expect to see housing affordabilty in the region to renormalize" but instead at those who think that in order to buy there must be some general economic calmity that will redistribute properties from their current owners to them for "pennies on the dollar". "Blood in the streets" as they call it. These people aren't looking for anything to renormalize, they are meerly venting their peevish --- and ugly --- envy.
Anon 5:17 -
ReplyDeleteLook at the numbers before you comment. Single fam houses in DC have continued to appreciate throughout your so-called collapse. I know you're trying to zing Lance, but you just ended up zinging yourself:
http://www.gcaar.com/statistics/2007-home-sales/dcsf0507.pdf
Anonymous said...
ReplyDelete“Look at the numbers before you comment. Single fam houses in DC have continued to appreciate throughout your so-called collapse.
http://www.gcaar.com/statistics/2007-home-sales/dcsf0507.pdf “
Yes, anon, look at the stats. Did they finally match up their numbers to the source they cite?
i normally disagree with lance...but i will agree with him here....this post does show a not so nice envious side of some posters as they take joy and laugh at working class people losing their homes and savings....
ReplyDeletei hope you all are as financially savy in every single aspect of your life (401, investments, etc) as you are in housing and don't get upset if your life savings evaporate while others cheer it on.
To Anon July 3 2007 1:4 PM
ReplyDeleteNo one wants to see anyone lose their homes, but when prudent fiscal sense gets tossed out the window and is replaced with a
shop-til-you-drop-mentality,
a-house-is-an-ATM mentality, borrow-against-your-house-it-will-always-go-up mentality,
spend-today-worry-about-the-bill-tomorrw mentality,
then there is nothing to do but watch as so many get burned when the "house of cards" comes crashing down.
Their have always been bubbles inflating in some sector or other(stocks, collectables, art, junk bonds, tulip bulbs, etc.)
When the so called investors ignore or disregard the risk buy into the bubble, who see the bubble as the path to instant riches and expect to end up millionares in the end, it is those who were prudent with their money who shake their heads as the bubble insanity inflates and then bursts, leaving investors, speculators and the last one into the party holding the bag.
A co-worker once told me that she had to return to work, the reason: the dot com bubble burst, taking most of her money with it.
A prudent person does not risk all on one bet, and a wise person does not invest in something they don't understand or do not know all of the risks that are involved.
Sadly, financial wisdom is not taught in the schools anymore nor in the home. Madison Avenue has brainwashed most into believing you can have it all, but fail to mention you will work the rest of your life to eventually pay off the debt for it all.
anti-lance,
ReplyDeletethat doesn't explain or excuse your glee at the prospect of homeowners losing their shirts. you people are disgusting.
Agreed. It gives a certain satisfaction to see arrogent Madison Avenue MBAs be wrong...but thing is, most of the people being taunted in the video probably don't even know where Madison Avenue is located. It's kind of like laughing at the handicapped. The person laughing may be as right as the handicapped person is disabled....but it is still childish.
ReplyDeleteIn short, watching rich investors come down to earth can be entertaining....but kicking those that were down to begin with is pathetic envy.
Hey, everyone shut their mouths right now about this video. People make wise and unwise decisions. Banks do too. BIG DEAL?
ReplyDelete