Missile Command...

[tomtom]

calling.

[olyclimber]

UpoWoZnm4Bw

[chucK]

It's only the folks that confuse the results of good fortune with good analysis that I find tiresome. Pretty easy to tell who belongs in the former camp and who belongs in the latter category when you hear them lay out the analysis that supported the decision to buy at a particular time.

 

Personally, I'm happy to be the person who is richer by $100k in equity.

 

That ability to differentiate who was lucky and who was smart among all the folks who are $100k richer than you is a bit overrated I'd say.

 

[JayB]

Being free to leave town without bringing lots of money to the closing table to cover a decline in a property's value, before even factoring in commissions, closing costs, maintenance, repairs, non-tax deductible interest and taxes, the aggregate value of the tax-adjusted rent/own disparity that's persisted for as long as we've been here has a value. $100K worth? Probably somewhere between that and $50K, but I haven't bothered to do the calculations because I haven't been sweating over a spreadsheet and wondering how we're going to get out of the hole we're in. Hopefully your equity gives you the same peace of mind.

 

For your part, I strongly encourage you to extract your equity immediately and use it to buy more real estate.

[KaskadskyjKozak]

Being free to leave town without bringing lots of money to the closing table to cover a decline in a property's value, before even factoring in commissions, closing costs, maintenance, repairs, non-tax deductible interest and taxes, the aggregate value of the tax-adjusted rent/own disparity that's persisted for as long as we've been here has a value. Hopefully your equity gives you the same peace of mind.

 

Keep singing that tune. It just doesn't ring true for the wise home owner/investor (not it is not a matter of luck).

 

[Peter_Puget]

Re-write!

 

Being free to leave town without bringing lots of money to the closing table to cover a decline in a property's value, before even factoring in commissions, closing costs, maintenance, repairs, non-tax deductible interest and taxes, the aggregate value of the tax-adjusted rent/own disparity that's persisted for as long as we've been here has a value.

[JayB]

Being free to leave town without bringing lots of money to the closing table to cover a decline in a property's value, before even factoring in commissions, closing costs, maintenance, repairs, non-tax deductible interest and taxes, the aggregate value of the tax-adjusted rent/own disparity that's persisted for as long as we've been here has a value. Hopefully your equity gives you the same peace of mind.

 

Keep singing that tune. It just doesn't ring true for the wise home owner/investor (not it is not a matter of luck).

 

I agree.

 

 

 

 

[KaskadskyjKozak]

Being free to leave town without bringing lots of money to the closing table to cover a decline in a property's value, before even factoring in commissions, closing costs, maintenance, repairs, non-tax deductible interest and taxes, the aggregate value of the tax-adjusted rent/own disparity that's persisted for as long as we've been here has a value. Hopefully your equity gives you the same peace of mind.

 

Keep singing that tune. It just doesn't ring true for the wise home owner/investor (not it is not a matter of luck).

 

I agree.

 

 

 

 

BTW, a funny anecdote. When we bought our first home in 1998 we were very limited in what we could afford. When we met with a loan officer at our bank we asked what we could afford with 10% down and a 30-year fixed loan. The response was XXXX, but we can be loose on the standard guidelines about 28%-38% of your income on a home loan, and also you could go with an ARM and get something bigger, that's what she did!! What's an ARM? She explains it. Even to a dumb first-home buyer that didn't sound like a good idea. My rate can go up an unknown amount in 5 years. Not. I called my Dad. "Stay away from an ARM - get a fixed rate".

 

 

[chucK]

We bought in 1998 too!

 

I don't think they hawked an ARM but they did indicate they'd be willing to offer us a loan that would have had payments more than we were taking home after our fixed expenses. They didn't want to hear anything about our very predictable fixed things like daycare.

[olyclimber]

Being free to leave town without bringing lots of money to the closing table to cover a decline in a property's value, before even factoring in commissions, closing costs, maintenance, repairs, non-tax deductible interest and taxes, the aggregate value of the tax-adjusted rent/own disparity that's persisted for as long as we've been here has a value. $100K worth? Probably somewhere between that and $50K, but I haven't bothered to do the calculations because I haven't been sweating over a spreadsheet and wondering how we're going to get out of the hole we're in. Hopefully your equity gives you the same peace of mind.

 

For your part, I strongly encourage you to extract your equity immediately and use it to buy more real estate.

 

why buy when you can help pay someone else's mortgage!

 

seriously though, i didn't actually buy my place as an investment...it was just marginally less to rent than monthly payment on the target value of the home i bought. i bought the place to live in and had a nice surprise.

 

i think the rent vs. own argument is easy to make in a sound, rational environment/market, but its obvious that it isn't so in a market driven by irrational lending practices and foolish people that participate in them. and of course, there were those not-so-foolish that made a killing flipping houses and using ARMs to keep their options open. even with the downturn they would be losing only on a couple deals if they're paying attention. I wouldn't confuse "normal market conditions" with what has happened in the real estate market in the past 10 or so years.

 

truth is i'm pretty sure you would be even happier with yourself Jay if you HAD invested in the Seattle market and then rented and farmed out the management while you're on the east coast. a smart guy such as yourself could have found a gem in the market that would rent for your payment in 2002 (well, perhaps after 1 year or so), though perhaps not in that nieghborhood you are dreaming of (though we did look at a STEAL up on Phinney when we were looking, but it need to much work for a family with a new baby). perhaps your cash on hand situation didn't suit the timing, but that is another thing.

 

i'd be interested to hear your analysis of what happens to the rental market during a time such as this. it seems like there would be more people looking to rent and less rentals available. but then, with the end of the real estate market problems perhaps not in sight, is it really time to buy? so you pay more and more to rent? of course, i'm sure you found a grandma to rent you a house for $400.

[archenemy]

That is exactly what is happening in Seattle right now. I could raise my rents by a pretty good % and my renters wouldn't leave. I'm not going to do that, but I could.

[olyclimber]

i just got my property tax notice in the mail, they are taxing me a full $100,000 more than I paid for the house based on the TAX ASSESSED VALUE. When I bought the house that number was $30,000 LESS than what I paid for the house (market value). Thats a $130,000 increase in 6 years! It will be interesting to see what happens with the relationship between those two values as the market changes. As I understand it you can contest the assessed value, perhaps I should do that based on the real estate market value struggles

[archenemy]

I feel your pain. And for all the shits who bitch about homeowners' subsidy for mortgage interest write-off, fuck you. This is what we get in return. Everyone pays. Everyone.

[KaskadskyjKozak]

for all the shits who bitch about homeowners' subsidy for mortgage interest write-off, fuck you.

 

Tell us how you really feel. Don't be shy!

[archenemy]

My problem is that I am just not clear enough.

[Dechristo]

Scientology may be your answer

[tomtom]

i'd be interested to hear your analysis of what happens to the rental market during a time such as this. it seems like there would be more people looking to rent and less rentals available. but then, with the end of the real estate market problems perhaps not in sight, is it really time to buy? so you pay more and more to rent? of course, i'm sure you found a grandma to rent you a house for $400.

 

In general, the rental market goes with median income. People don't borrow money to pay the rent (or not for very long), they pay out of current income. Supply is also a factor, but by they speed at which they've been throwing up houses, condos, townhouses as well as rental properties, there are plenty of places to live.

 

Here's someone else's opinion:

 

http://www.seattlecondoreview.com/2007/11/so-right-now-we.html

 

An increase in rent from 935 to 1160 over 6.5 years only represents a 2.7%/year increase. Which is pretty much in line with inflation.

[olyclimber]

yeah, i wasn't sure. they are definitely throwing up condos and townhomes like it is going out of style. now they are starting in with "high rises" in west seattle, so the population over here seems to be almost doubling in density.

[Hugh Conway]

yeah, i wasn't sure. they are definitely throwing up condos and townhomes like it is going out of style. now they are starting in with "high rises" in west seattle, so the population over here seems to be almost doubling in density.

 

flat market with tons of supply coming on line. hmmm

[sexual_chocolate]

I know how to levitate!

[jon]

I was reading on the bus coming home from work tonight that there is a major push in Congress to now come to the aid of owners and bail them out. Please correct me if I'm wrong in my thinking here, but in bailing out the people who made poor financial decisions for themselves by, and this is no matter how you slice this, getting into a mortgage that they _ultimately_ can't afford, aren't you in reality punishing the people who made the RIGHT decision and not buying when they could barely afford it? It's true if something isn't done that people will be losing their homes, but did they really deserve them in the first place? True that a number of markets have lost an incredible amount of value in the last few months, but they have been increasingly over inflated for the last 3 years as mortgages were given away. Now we are experiencing the correction that everyone wanted to pretend wasn't going to happen and we are going to rescue the idiots. Obviously too many people have had their head in the sand because it was obvious it was going to come to this for about 2 years now.

[chucK]

How exactly are people who made the right decision being punished?

 

The only thing I can think of is by higher taxes (or less services) because govt. money is going toward the dumbshits. In that case, everybody who pays taxes or gets govt. services is being punished. The basic idea, I think, is to prop up the struggling economy so we don't all pay a lot more due to a catastrophic crash (though it could just be election-year pandering). Sort of the reason they bailed out Bear-Stearns, a lot of people had money tied up in Bear-Stearns, and if they went broke those people's money would be tied up for years in bankruptcy procedings (which could be really fucked for retired people using those investments for income).

 

It's counterproductive to think that all of us who didn't make a stupid investment are being punished. It's more like those who did aren't getting punished as much as some would like. There's a difference.

[tvashtarkatena]

To all those who bought Esplanades, vacations, home additions, cabins, and boats with their equity: Fuck You. Sell it at a loss. Go bankrupt. Fuck off.

 

To Obama: Fuck you, too. We're not helping 'the poor keep their homes'. We're helping speculating, overconsuming assholes, rich and poor. The rest of us don't want to pay for these fucksticks and their excesses. So some of them have to cram into a cheap apartment for a while? Couldn't happen to a more deserving group of folks.

 

And, BTW, all stimulus packages are bullshit. That's like your right hand borrowing from your left hand. Zero stimulus.

[dberdinka]

Word

[Hugh Conway]

I love how everyone can understand housing stimulus plans but nobody can understand corporate stimulus plans (Bear Sterns)