Housing Bubble 2.0 unraveling (Los Angeles, San Diego, San Francisco: sales, 2013, foreclosures)

[JJonesIII]

Originally Posted by duke944

The problem with the bottom falling out of the housing market, even though temporary, is getting stuck in a hugely upside down mortgage. In this situation, their choice to move is gone and if their income changes for the worst they are looking at a forclosure rather than selling.
The real problem with these out of control housing prices not stopping is, of course, practically an entire generation is being into life long renting slaves.

Well Duke, that's called taking some person responsibility. And let's clarify a couple of points:

1) I owned 2 homes during the financial crisis in 2008. How much money did I lose? Nothing. You only lost money if you sold. And if you were living check-to-check and had no savings or a 401k, then who's fault is that? I wasn't overly concerned because people still have to live somewhere, so the rent kept coming in and the mortgage payments were still made. Had I had problems getting either rented, my wife and I had enough to cover things for at least 4-5 years (and I suspect there would have been an opportunity to sell at a better time over that time frame).

It's funny to hear so many people crow about how great the beach and the weather is in California. And for some a downturn is no problem at all. So I say good for them, enjoy yourselves. For others, they barely get by, but are hell bent on staying in the state and roll the dice. Then you have a downturn and they're bankrupt or have to start their financial lives over (not too smart). If you're in a situation like the latter, the time to move is not in the midst of a downturn. And in that case, yes, people should get out now, and go buy a home free and clear in another state. They'll have no mortgage and some change in the bank.

2) I don't buy for a second that a whole generation are renting slaves. About the only place that really holds true are high COL areas, like many of the metropolitan areas of California. You sure like to sensationalize things.

People make choices in life and take risks. Some throw caution to the wind, some are more measured, and some take no chances whatsoever. Those people that scream the sky is falling are typically the ones that are bitching and moaning because they missed out by not pulling the trigger. Those that throw caution to the wind typical win big or lose big. And those that are measured take some chances but try to have hedges in place if things don't go as planned. That's life. I'm pleased at what my wife and I have been able to accomplish on very modest means and not listening to people like yourself that constantly predict Armageddon.

[Pyramidsurf]

I've been hearing the bubble is going to pop in some form or another since 2012. Since then, I've bought and sold a house for a 100K profit and rolled the proceeds into another house that is near the beach where I plan to hunker down for the long term. Fortune favors the bold.

[BB_210]

Originally Posted by duke944

Yeah, it's everybody's dream to make income for someone else your entire life on housing, never gaining a dime in equity. If it's not a problem, why don't you just rent a car your whole life too? c'mon, that isn't a serious question was it?

If your dream is to own a home this place is too expensive, then move somewhere else where you can afford it. Or live here and rent.

A car is a depreciating asset, it has limited use. But likewise, you want a BMW but can't afford it, you can lease (rent) or buy something cheaper (move), instead of wishing for the car industry to collapse to BMWs are cheap.

Wishing for a housing collapse so you can afford a home is pretty sick.

[JJonesIII]

Originally Posted by Teckeeee

Some of the big banks JP Morgan and Goldman Sachs predict a recession in 2020 and I agree based on how overheated everything is getting from housing to job market.

A burst of the bubble no, but that housing balloon is going to deflate by 10-15% IMO by 2020. Beach cities won't.

It can drop by 25-30% since this Henny Penny nonsense has been going on since at least 2015. If the next recession hits in 2020, the median home price in San Francisco will probably be going from a height of $1.8 million (it's $1.6 million right now). And then they can all jump in and buy that discounted house at the incredibly low price of $1.35 million (wow, what a bargain!). Ultimately, had they had the wherewithal to buy in 2015 or earlier, they should have just done it then as they would have gained nothing by waiting, and would have had some equity instead of throwing away the money on rent.

[duke944]

Originally Posted by max210

If your dream is to own a home this place is too expensive, then move somewhere else where you can afford it. Or live here and rent.

A car is a depreciating asset, it has limited use. But likewise, you want a BMW but can't afford it, you can lease (rent) or buy something cheaper (move), instead of wishing for the car industry to collapse to BMWs are cheap.

Wishing for a housing collapse so you can afford a home is pretty sick.

Its even sicker to enjoy watching the masses turn into lifelong rent slaves either because your house value is going up or because you make income on rental properties. At least when you buy a depreciating asset like a car you have something to show for it after a few years, renting is simply throwing money out the window. But if you have no choice, you have no choice. I do want to see this market pop, because I have empathy for my fellow man. If you are the sort of person who couldn't care less that the dream of home ownership is becoming more and more a fantasy for many people, you are a sick individual.

[Cardiff Kook]

If the market tanks I'll be buying a second home. I can see prices leveling but I don't think we are going to see the meltdown of 2008 anytime soon

[aslowdodge]

Originally Posted by duke944

The problem with the bottom falling out of the housing market, even though temporary, is getting stuck in a hugely upside down mortgage. In this situation, their choice to move is gone and if their income changes for the worst they are looking at a forclosure rather than selling.
The real problem with these out of control housing prices not stopping is, of course, practically an entire generation is being into life long renting slaves.

So pick your poison, you can't have your cake and and eat it too. Buy and probably get appreciation with a gamble you could lose money, or rent and forever be exposed to rising rents.
If your income changes for the worse you will probably be in bad shape renting or owning if you haven't set aside a cushion.

[aslowdodge]

Originally Posted by duke944

Its even sicker to enjoy watching the masses turn into lifelong rent slaves either because your house value is going up or because you make income on rental properties. At least when you buy a depreciating asset like a car you have something to show for it after a few years, renting is simply throwing money out the window. But if you have no choice, you have no choice. I do want to see this market pop, because I have empathy for my fellow man. If you are the sort of person who couldn't care less that the dream of home ownership is becoming more and more a fantasy for many people, you are a sick individual.

No you have no empathy, just greed for yourself and an extreme naievete.

If the market pops something else is wrong. Most likely the economy is heading south which means job loss. Is that what you wish for, your fellow man barely getting by looses his job and his family goes homeless and hungry? It seems you're the one with the sick fantasy.

Here's a suggestion, stop throwing money out the window on rent. That will show them. Go live on the street. A suggestion is to look for that extra large double door refridgerator box.

[JJonesIII]

Originally Posted by aslowdodge

No you have no empathy, just greed for yourself and an extreme naievete.

If the market pops something else is wrong. Most likely the economy is heading south which means job loss. Is that what you wish for, your fellow man barely getting by looses his job and his family goes homeless and hungry? It seems you're the one with the sick fantasy.

Here's a suggestion, stop throwing money out the window on rent. That will show them. Go live on the street. A suggestion is to look for that extra large double door refridgerator box.

He claims he owns a house, Dodge. Admittedly, I wasn't buying that from the start of his comments. And no, he sure as hell doesn't appear to have any empathy but is great at ranting and throwing out his Armageddon-like predictions.

[CA4Now]

Originally Posted by Pyramidsurf

I've been hearing the bubble is going to pop in some form or another since 2012.

What? In 2012, we were just beginning to climb out of a low after the previous housing market bubble popped in 2008.