This government supported market is really*****ing me off.

The wife wanted to go out to open houses on Sunday. First place was a empty short sale. There were two realtor and a lending rep. I talk to them about the market. They understand that there is a lot of shadow inventory, but were 100% confident that the govt and banks could keep dripping them out into the market without affecting prices. Of course the realtard said prices would probably go up.

The house we like is in a good neighborhood, 4/2, 1800sf, remodeled, with a pool. They were asking 385k, and will likely get it since there is no supply. That price puts it at over 7 times the median household income for the town, probably 5 times for the neighborhood.

My wife is getting really angry about this. She tells me I have been telling her that prices will come down for years now, but they don't. In fact they have gone up as compared to 2 years ago. She thinks I am crazy.

This is complete bull****. I know we can go out and get approved for 400k loan, but it would financial suicide. However with the government sponsoring financial suicide, there have been no shortage of willing idiots to step up and take them up on it.

I am going to be an old man before the government loses this battle. I should have just bought a house in the bubble with an interest only arm. Stayed in it with low interest payments, than strategically defaulted, and stayed in the home for 3 years without paying. I would have come out ahead in this scenario as opposed to being smart and waiting for the bubble to bought. All these foreclosures were supposed to cause a cash flow problem for the banks. In today's world of banking you can apparently carry billions (if not trillions) in non performing loans on your books, and it is no big deal.

We live in the ****ing Twilight Zone.

The civilian government is buying huge amounts of ammunition. You're not crazy.

You need to factor in ALL variables when deciding if and when asset prices rise or decline...

I guess I forgot to factor in all the lawlessness and corruption in our government and monetary system.

Your wife wants the 400K house....

Or more.

Don't forget you will have to remodel it after you get it cuz there is no way it is gonna be what she wants 'as is'.

If it's ALL on your dime, go buy a house without her, move her in and if she stays, good, if not, well...guess what you learned?

Make sure you save enough on the mortgage to pay for a good PRIVATE school.

1418 West JUANITA Ave
San Dimas, CA 91773 Might at least put you nearer LA where prices seem to hold and SD is gloomy (beats me why the sun misses that area, often) but it used to be darn nice overall as a city.

Check for poway like school bonds though

A famous rapper once said...... "I don't chase them, I replace them"...

Let the wife know that there is only one Captain on this ship, and if she doesn't like then she can jump over board.

Hold firm on not getting that house Eaglewwit.

As Sd79 pointed out above, new house, new and more expenses, especially when a woman is involved.

Eaglewwit
I completely sympathize with you and your wife.

We FINALLY found a house that will fit our needs and are in the process of closing.

Getting here was nothing short of maddening and we are spending more than we originally wanted to spend but we had specific needs— mainly boat parking which is in scarce supply in my city, particularly in this specific neighborhood. We are buying a 1998 home at 2000-2001 price with a 3.5% loan and I feel like we scored.

{ LOL to all my SoCal friends that said I would never be able to afford to buy in CA ever again }

Our monthly fixed expenses are going to drop 600+ a month compared to what we spend renting right now and our down payment is not doing anything in the bank anyway

Also, a Rent Vs Buy calculator http://www.nytimes.com/interactive/busin....
said it was better to buy before I hit the SECOND year

The sale is organic and let me tell you Eaglewwit— I read the exemptions in the title insurance —— they DO NOT cover you from fraudulent conveyance or fraudulent transfer so caveat emptor on the short sales or foreclosures


Anectodtal:
—— Husband told me that 4 other people at his work have purchased in the last month
——once abandoned lots (commercial and residential) are now being worked on out here with heavy equipment, just started in the last 3 weeks

Look, I knew we were in a housing bubble in 2004 before there were ANY housing bubble sites on the internet and I moved our 401 K out of the S&P in Feb 2007 prior to the first crash before TF was born.

right now, this economy feels like inflation/stagflation in the 70s to me

the banks can hold the houses for a long time and trickle them out over the years— why sell an asset at a loss now, when you know it will be worth more later via inflation?—— I would think if the banks thought we were going into some great deflation they would be liquidating and raising cash right now

I feel this is as good as they are going to let it get price-wise (which is another reason we bought now)

It is not that I don't agree with Karl's assessment— he talks of what SHOULD happen in a ethical, proper and just economy

unfortunately, we don't live in that world and to ignore that fact is as big as ignoring a company's cash flow statement

no one has gone to jail and many illegal operations are openly going on to prevent what logically should have happened to the economy.

—don't fight the Fed comes to mind

SoCal is slow to get price declines— screw open houses, go online 3 or more times a day and have your realtor ready to put a solid offer in when you find something you like—— apparently the sellers are going for 'one in the hand' rather than waiting for 'two in the bush' right now—— it worked for us.

Buy what you can afford and to hell with the 330 million morons out there.

Plus...this is still selling season so prices should soften towards winter a tiny bit.

Buying happens in waves/spurts. This one will die out as did all others. Trust yourself. She is just following groupthink stupidity.

Also....when I say "afford" I mean 40 pct down or more and $75K in the bank leftover.

Do you mind if I ask what you are paying a month in rent?

Fontana has two 4/2
Ontario has one 4/2 and I found them on RedFin using 250K as the max amount

Remember though, private schools may be important to price in, no matter where you go.

Edit: oh they have pools too. If you dont' want a pool, probably find many more

Sd, you need to look at some of those neighborhoods. That house in San Dimas. Are you kidding me, postage stamp lot, no backyard, 378K. That is joke. The house prices and income metrics are still way out of whack, even for Socal.

It's close to LA and jobs = cost a lot more for less.

You want acres, you gotta look further inland. Or pay millions.

How picky are YOU, Eagle? What do you want and won't buy without?

31381 CONTOUR Ave Nuevo, CA 92567

10590 56TH St
CA 91752

6720 SUNNYVALE Ave
Riverside, CA 92505

Do you really think we have crashed so far that LA homes are the same prices with land as these?

Eaglewwit

leave that hell hole of SoCal and come up here to NorCal
— is is like OC used to be when I was growing up before it was over-run by illegals and gangs

you will get more for your money and have a higher quality of life

If I am leaving Socal, I aint staying in Californicated.

Also the point is that how can housing be worth twice as much as it was in 2000, when in the last 12 years we have seen the worst recession since the depression and real incomes have not grown at all. Even with the bust, housing in socal is still far above CPI adjusted numbers or income growth numbers. You know what Karl says about those pesky exponential function.

It's not everywhere. My place is worth less than when I moved in, in 1990.

I'm not close enough to jobs to be worth more now. I'd guess down from peak by 75% at least.

Two things I see holding up the cities are:

There are some jobs.

They still have bubble minds-prices are down off the highs but not low like my area simply due to the city 'rep'. San Diego-not near what they were in 1990. Cuz it's San Diego.

Same for LA and OC areas, IMHO

Why are you so upset? You one of the few with a good paycheck but not good enough to buy the dream mansion?

That place in San Dimas has a big pool taking up the back yard. From my POV it's a nice big home, near LA, in what should be a pretty good area. Look up crime stats and see.
The others I posted have bigger yards, no pool and lower prices.
You can check the crime stats.

You are not gonna get BH homes at Hemet prices. Evar. People with money are gonna keep the prices up much higher forever. Face it, Hemet kinda sucks.

Living in low-rent areas so that someday I can buy a sprawling ranch and leave all this ****-all behind. Screw the home-ownership bull**** in built-up metro areas... ugh.

There's an insanity about "home ownership" - and it's not that much cheaper than renting, in the end. At least not every time I run the numbers. Keep resisting - keep saving.

Sd, the point is people don't have the money. They only have it cause the government will loan it to them. And the only reason the govt is loaning it is to help the banks. A large percentage of these 3.5% down loans are gonna be in default within 5 years and the taxpayer will be on the hook again.

Probably true but since we don't know the future, can't you just enjoy the next 5 years with a loan like that and live where you want?

If you find yourself dying in 4 yrs, what will you have wished you did?

Where will you have wished you lived?

Yeah, you probably won't, but it's good to find balance between the two.

I try to live for now in many ways, while planning for a future just in case I live. And yes, it's an always work at balance thingy.

That place in Nuevo seems like it would have room for a pool, a horse and a garden. And still have weeds to fight every spring. What more can a man ask for?

SD look at that place in Nuevo, up $45,000 in value, a 25% increase in 18 months. That screams of mini bubble.

Yeah, I noticed prices going up here, at least asking prices. And not that long ago, the house my dad rents went into pre-foreclosure and a guy came by explaining a group of investors were buying the homes to rent them out. He tried to tell my dad if they bought his place he would have 30 days to leave, so I looked up the law and it says 90 here in Cali.

Then they landlord got it together and the house no longer shows that way and my dad is happy to stay where he is.

In May when we first looked there were a lot of homes for sale and prices were lower....now, prices are up and less homes for sale and they go fast. Mini bubble due to the investors? Maybe....

I think one trick is going to be not to get attached to any house you see. Put in a low offer. If it's rejected, move on to a different one. At some point you will find someone who says yes, prices will come down or shoot so high you know you have to stop looking and just save for a retirement home instead.

That's not a joke. When jobs can move you across country or you have to move to find a job....owning a home is a bit of a burden at times. Owning somewhere to retire might make more sense in todays world.

in 1999 rates were at 7%

the fed is propping up price by keeping rates low

in 1999 a 200K loan @ 7% would give you a PI at $1330.60
today , a 300K loan @ 3.5% will give you a PI at $ 1347.013

so while on average home prices dropped 50% from the peak — low rates are preventing them from dropping back to 1999 2000 levels

my thought process was that I could probably wait to buy for a few more years just to be sure we are at the bottom but the amount I pay in rent would negate any savings

YMMV