While I wouldn’t agree that it’s a great time to buy, it sure beats the hell out of buying in 2005. Holy cow, people (the I borrowed too much crowd) are just getting slaughtered right now. I’m starting to see banks get downright aggressive with their REO’s, obviously trying to dump them. It’s curtains for re-sellers. Might as well just pull that overpriced lipstick covered pig off the market. Quit embarrassing yourself. What with the banks and the builders dealing, you’re looking absurdly foolish.

I’m starting to see properties which are worth a second look, and things are just warming up. Thinking about the foreclosures in the pipeline, oh man is this getting interesting…

DERRICK posted:

“starting to see properties worth a 2nd look”? Gee bantering bear .. could you be echoing my thoughts?”

No, DERRICK, I couldn’t. We are nowhere near the bottom, IMO. You and me, we’re not similar by any wild stretch of the imagination. Nice try though.

very true bantering bear.. I’m 27 and almost retired.. and you? thats what I thought!

Mike- I have to back up your sentiments; the personal attacks really diminish the integrity of the blog…and blogging in general.

Those videos are hilarious and frightening at the same time. Particularly enlightening, however, is the overzealous nature of a certain contingent in the YouTube video that SmartMoney references…it makes me think about the difference between “positive” and “pompous”.

Good stuff.

In 2004, my brother was (and I stress “was”) a mortgage broker. He attempted to talk my wife and I in to an interest only 5 year loan on a house we could not really afford because “on average people sell their home in less than 5 years and prices aren’t going down.” Much like the gentleman in the video to which MIke Van H linked, my brother (his economics degree metaphorically in hand) laughed when I explained that I believed that the market was unsustainable and that prices would eventually drop dramatically. He thought I was foolish for not taking such a great opportunity because of my “unrealistic fears.”

Now I admit, had I bought the house in question in 2004 and then sold it before mid 2006, we might have made around $50k to $75k based on the 2006 comps. However, had we bought the house and then not sold it until today, for example, we would be over $100k in the hole. I suspect quite a few otherwise financially capable buyers took a riskier loan because of the “irrational exuberance” of the pundits and their own mortgage brokers. We all talk about sub-prime loans and ARMs resetting, but what about all the people with interest only loans, or balloon payment loans, who owe much more than the property is now worth?

On a side note, my brother is now the sales manager of a car dealership and decries all the foolish people who purchased homes they could not afford, some of whom were, no doubt, his clients.

“On a side note, my brother is now the sales manager of a car dealership and decries all the foolish people who purchased homes they could not afford, some of whom were, no doubt, his clients.”

This is precisely the sort of hypocrisy which I loathe. The same people who were hyping the market, proclaiming values would never fall, have now completely switched their positions, like shameless chameleons (one particular poster comes to mind). These empty suits are the dregs of society, stepping on anyone and everyone in the name of greed and selfishness. The “Karma Police” will catch up with them.

Hi Phil. It sounds like you are quite happy with your purchase, so good for you. I have a few questions though:

If you knew beforehand that you would have saved more than $100k by waiting a year or so to purchase, would you have rented and waited it out? Is the inconvenience of moving worth several hundred thousand dollars to you? I too believe that a home is a home and not an investment, but this makes the price ever the more important. Are you so wealthy that a few hundred thousand extra dollars sitting around today wouldn’t make a difference in your life? I’m just trying to get my head around how end users like yourself justified paying those hysterical prices. Perhaps you can share a bit more?

I was getting a great buy even at the so called hysterical prices (I came from San Jose).

Todays market would make me even more happy and that is for sure.

Now as for throwing away the money, the money was already tied up in a previous home which also has seen some depreciation and would be almost impossible to sell now. Which house has depreciated more? Probably this home.

And which home do I enjoy more? This one by far and that is worth something.

But what I have to say is I have the enjoyment of my home now, and not 2-3 years from now. I feel invested in my community, something I never felt when I rented when younger. I live in a home, and rented a house.

I am on the fence of if it would have been better to wait. Even with all the negitive financial reasons. There is a lot more to life than money!

RGJ posted:

“Phil, don’t even bother with BB, he is perpetually grumpy as you can probably tell by his countless other snotty posts…I too purchased in this market in 2006…”

Well, well, well, if it isn’t the resident Reno Realty Blog policeman RGJ again! Feeling a little defensive , are you? I know, I know, all that equity hemorrhaging is quite painful. Funny how all of the haters seemed to be locked into a nastily depreciating asset, isn’t it? After all, I was speaking to Phil so it’s quite peculiar to find that you’ve just taken it upon yourself to go right ahead and answer for him. But I digress.

Thank you for answering my questions Phil. I do agree that there is much more to life than money, but these aren’t small figures. Personally, I take tens of thousands of dollars quite seriously, not to mention figures in the hundreds of thousands. I don’t know what you paid for your house, but just wanted to hear how you arrived at your decision. I have been reading more and more accounts of people who desperately wish they would have waited to buy as their recent home purchases have turned out to be the worst decisions of their lives. When you mention that you are “on the fence” as to whether or not waiting would have been better, it shows that you have had contemplations. I hope it works out for you.

With all due respect, Smarten, you’re way off base with your assumptions about me. I don’t know where you come up with this stuff!

You posted:

“Stated differently, how does BB justify having NOT sold his Reno home in 2006; not become a renter; with the intent of buying back his home once prices have stopped dropping?”

What Reno house, Smarten?

Then:

“If we were talking about Derrick’s favorite playground [the stock market], we’d call BB a “player” and Phil a “long term investor.””

Again, what in the world are you talking about?

Further:

“Even BB has admitted that over the long haul, real property owners will be amply rewarded by holding onto their homes.”

I defy you to show me where I ever stated this.

Then:

“Now Phil can become a winner [in BB’s eyes], even in this market.”

BZZZZZZZZT!! Wrong answer again!

And finally:

“In retrospect would Phil have been better off [financially] by selling his San Jose home, renting in Reno, sitting on the sidelines and then jumping in now or later on this year at a lower price? Perhaps. But as most of us know, it’s difficult to call any market.”

Difficult, huh Smarten? I’ve been blogging about the bubble since late 2004, and wearing peoples ears out since well before that. Don’t group me in with the myopic types who were too greedy to see what was clearly happening. This market wasn’t “difficult to call” by any stretch. Your assumptions about me are troubling, or at best, naive. You should remember to speak from a position of knowledge, because you’re truly starting to sound a lot like our Oracle of Sparks.

I think Everyone is missing Phil’s points.
1. You don’t always have to make the perfect investment in life every time. There are other things that are more important to some people.
2. There is a significantly different mindset with owning a home than renting one for many people. For many people, including me, with renting comes a feeling of uncertainty, the inability to what you want to your own living space, lack of motivation to improve whatever property you are renting etc. With owning a home, at least I control my home’s environment. If I want to rip out central AC to put in a more efficient swamp cooler, I can. If something breaks, I dont have to wait for my landlord to call someone, I can call someone. If I want to paint my interior walls beehive yellow, I can without ‘getting in trouble.’ If I want to get a dog, I can, without getting landlord approval.
3. Read Phil’s posts closely. He has such a pride of home ownership which I admire, from explaining what he’s doing in his backyard to just talking about his house. It makes it very clear why he didnt want to rent.

To a lot of people, including myself, a home just doesn’t feel like a home when you are renting. It’s your landlord’s home not yours. Why improve it? Why put equity into their home and not yours? Etc etc.
Now to be fair, some people have the opposite mindset, and to them a house is just a roof over their heads. A place to sleep, between working, travelling or whatever else. A married couple I know has been renting houses for decades for this reason. They think “why bother with property taxes, CCR’s, House Insurance, etc etc.”

That being said, I am gonna go do some yard work. Phil inspired me, LOL.

BB is just a grumpy old man, give him a break folks.. its quite obvious he sits around ALL day long.. and posts on here..

more than likely doesn’t have a job either or retired, which would explain why he needs something to take up his time with..

BB should I post the days,times of all your posts? it would become increasingly clear you have no life. then again I am posting at 2:45am so Im sure you will use that to your defense. Predictable you are!

Okay BB, I’ll take your bait. Perhaps I was confusing you with RI [and if so, I apologize] - you must admit [or maybe you don’t] that it’s difficult keeping the two of your straight.

So Allen brings up a good point. Why exactly are you a contributor to this blog?

You don’t own a house in Reno? Is this because you saw the downturn coming and [prematurely] bailed in 2004? Or have you never been anything other than an arm chair observer?

You’re not of the opinion that over the long haul, Reno SFR owners will be [financially] rewarded by holding onto their homes?

Given Phil is [happily] wed to his current Reno SFR, you don’t agree he can improve his position by refinancing at a lower mortgage interest rate/loan term?

What exactly is your standing insofar as Reno SFRs are concerned [do you even reside in Reno]?

And since you think it’s so easy to call financial markets, why don’t you go on record so we can look back and see how accurate you were. Please don’t tell us how clairvoyant you were because you called the real estate bubble in 2004. By no means were you the only one [even you admit the writing was clearly on the wall], and even if you were, you really DIDN’T call it because your timing was off by a year or more.

Allen, Derrick and I have predicted that around this month we will have reached the bottom [insofar as sales volume is concerned] of the Reno SFR market. Disagree? If so, tell us when that bottom will be reached.

Allen and I have predicted that around January of next year, we will have reached the bottom [insofar as median pricing is concerned] of the Reno SFR market. Disagree? If so, tell us when median prices will reach their low point.

I have predicted that before the Feds are done, 15 year conventional fixed rate SFR mortgages will drop to 4.5%. Disagree? If so, tell us when real estate mortgage rates will reach their low point.

Not that I personally care much about the stock market, why don’t you share your wisdom here? Why don’t you call the lows by numbers and dates?

Now have I neglected to include a relevant topic that you’d care to share a prediction [if so, please feel free to chime in]?

Those who think they’re the only ones who speak from a position of knowledge are [just like Mr. Spitzer] narcissistic. Is that the myoptic group you’re a part of?

Thanks for the hopeful cooperation, clarification and courtesies.

Smarten:

No, I do not admit that it’s difficult keeping RI and myself straight. While we have shared similar sentiments regarding housing prices, our writing styles are profoundly different. RI might even find this insulting, since he is most certainly considered more gentlemanly. Had you been paying more attention to others’ posts, and less to your own long winded ones, you wouldn’t have made such an error. It’s not wise to go around misquoting people. Smarten up. If you want answers to all of your questions, go read my blog entries over the course of the past 3+ years.

RGJ: Why don’t you contribute some information or something valuable to the blog? I’ve yet to read one single post from you that doesn’t involve attacking me. If it makes you happy, go for it. But it’s kind of creepy, really.

“On a side note, my brother is now the sales manager of a car dealership and decries all the foolish people who purchased homes they could not afford, some of whom were, no doubt, his clients.”

I just had to wonder: has he been selling a lot of SUVs and full-sized pickups to his new customers?

Hay, Bandering Beare, yew donut no nothing aboud mee, ime a ritch mealyunair and almost cudd retyre if I wantid to sow go taeke yur fife hundrid dollers paychek puer weeke yuo bidder rentur and go envee me beecauze ime yure superier. LOOL! Thats maeanz ime laffing out loudly.

Yes, I second the motion. Please stop the personal attacks.

Final points,

I have a 10 year fixed mortgage. Didn’t real need one but cash isn’t a bad thing to have. Have to love that bay area real-estate! I have over 10% of it already paid off.

Moving is a P A I N! I did it way too much when I was young when I could actually lift all day and not feel it. This move was done by the company, and they paid for it.

Yes I lost money, but as someone said it was on paper. If I never sold my other house, I would not have seen the gain.

I did pull out some money. Although my investments have not seen the gain I would like. And lately the outlook is looking even worse.

Sure looking back it was not a financialy wise decision. BB is right if all you look at is the bottom line. I don’t think he was too harsh, but I wonder if he has or had any skin in the game. He has to realize MOST of home owners are NOT real-estate investors, just people wanting to live in a home of their own (the so called “american” dream).

I did not invest in a secondary property, although many real-estate agents said it would be a good time to invest. Well I am gald I didn’t listen to them. hehe