Why Aren't You Selling Now? (San Jose, San Francisco: ski resorts, home, buyers)

[JJonesIII]

Originally Posted by ryman554

Or you lost a job and your rental needs a new roof.
Or you AND your tenant lost a job and quit paying.
Or you lost a tenant AND you had a medical emergency.

Face it: A lot of people lost an awful lot in the 2008 crash, and while those who lost a job and had a big mortgage were hit hard, those that were leveraged to the hilt (whether in equities or real-estate) were hit absolutely the hardest.

Leverage is great when things are good. Leverage is horrible when times are bad. If you can leverage AND have a sizeable emergency fund to get you through bad times, then by all means. It has been my experience that most that use leverage use it extremely aggressively and do not understand the risks involved.

So you are absolutely right, if you didn't sell, you did OK. Better than OK, even. Lots of folks were forced to sell -- you have only to look up foreclosure rates to see evidence of this.

I love the quantitative terms like "an awful lot" and "lots of folks". And then we have, I only need to look up the foreclosure rates...blah, blah, blah. I have looked up the foreclosure rate...have you? And personally, I get tired of hyperbolic nonsense that gets bandied around on Internet sites that take on a life of its own. Of course, the media loves to quote things like a a half a trillion dollars of homes went into foreclosure. Oh dear...the sky is falling! Until of course we realize that the actual percentage of homes that went into foreclosure was roughly 2%. Yeah, so 98% didn't go into foreclosure. Oh my, but let's focus on that glass being 2% empty and not realize how many people actually weathered the crisis just fine.


https://www.statista.com/statistics/...sure-rate-usa/

U.S. Foreclosure Market Data by State - 2009 Totals

Total
Properties
with %Housing 1/every % Change % Change
Rate State Name Filings Units X HU from 2008 from 2007
Rank -------------- ---------- ---------- ------- ---------- ----------
U.S. 2,824,674 2.21 45 21.21 119.67
-------------- ---------- ---------- ----- ---------- ----------
30 Alabama 19,896 0.93 107 156.26* 257.07*
-------------- ---------- ---------- ----- ---------- ----------
31 Alaska 2,442 0.87 116 25.49 83.33
-------------- ---------- ---------- ----- ---------- ----------
2 Arizona 163,210 6.12 16 39.60 323.17
-------------- ---------- ---------- ----- ---------- ----------
23 Arkansas 16,547 1.29 78 15.90 158.30
-------------- ---------- ---------- ----- ---------- ----------
4 California 632,573 4.75 21 20.81 153.52
-------------- ---------- ---------- ----- ---------- ----------
10 Colorado 50,514 2.37 42 0.23 28.20
-------------- ---------- ---------- ----- ---------- ----------
21 Connecticut 19,679 1.37 73 -10.24 65.93
-------------- ---------- ---------- ----- ---------- ----------
35 Delaware 3,034 0.78 128 20.59 203.70*
-------------- ---------- ---------- ----- ---------- ----------
District of
Columbia 3,235 1.14 88 -22.64 316.34*
-------------- ---------- ---------- ----- ---------- ----------
3 Florida 516,711 5.93 17 34.10 212.61
-------------- ---------- ---------- ----- ---------- ----------
7 Georgia 106,110 2.68 37 24.46 79.67
-------------- ---------- ---------- ----- ---------- ----------
15 Hawaii 9,002 1.78 56 182.64 831.88
-------------- ---------- ---------- ----- ---------- ----------
6 Idaho 17,161 2.72 37 101.61* 371.46*
-------------- ---------- ---------- ----- ---------- ----------
9 Illinois 131,132 2.50 40 31.81 103.91
-------------- ---------- ---------- ----- ---------- ----------
18 Indiana 41,405 1.49 67 -9.87 47.98
-------------- ---------- ---------- ----- ---------- ----------
43 Iowa 5,681 0.43 234 5.50 38.46
-------------- ---------- ---------- ----- ---------- ----------
36 Kansas 9,056 0.74 135 45.64 272.06*
-------------- ---------- ---------- ----- ---------- ----------
40 Kentucky 9,682 0.51 197 33.66* 89.66*
-------------- ---------- ---------- ----- ---------- ----------
39 Louisiana 11,750 0.63 158 64.82* 196.12*
-------------- ---------- ---------- ----- ---------- ----------
41 Maine 3,178 0.46 219 11.47 1,011.19*
-------------- ---------- ---------- ----- ---------- ----------
13 Maryland 43,248 1.87 54 33.74 129.08
-------------- ---------- ---------- ----- ---------- ----------
22 Mass. 36,119 1.33 75 -18.54 103.64
-------------- ---------- ---------- ----- ---------- ----------
8 Michigan** 118,302 2.61 38 11.54 35.65
-------------- ---------- ---------- ----- ---------- ----------
20 Minnesota 31,697 1.38 73 56.28 174.27
-------------- ---------- ---------- ----- ---------- ----------
42 Mississippi 5,402 0.43 232 135.59* 283.39*
-------------- ---------- ---------- ----- ---------- ----------
28 Missouri 28,519 1.08 93 -8.75† 21.40†
-------------- ---------- ---------- ----- ---------- ----------
44 Montana 1,373 0.32 317 10.19 19.39
-------------- ---------- ---------- ----- ---------- ----------
46 Nebraska 1,845 0.24 423 -42.16 -49.26
-------------- ---------- ---------- ----- ---------- ----------
1 Nevada 112,097 10.17 10 44.28 225.70
-------------- ---------- ---------- ----- ---------- ----------
26 New Hampshire 7,210 1.21 82 8.65 482.39*
-------------- ---------- ---------- ----- ---------- ----------
14 New Jersey 63,208 1.81 55 1.11 103.43
-------------- ---------- ---------- ----- ---------- ----------
32 New Mexico 7,212 0.84 120 93.51* 140.88*
-------------- ---------- ---------- ----- ---------- ----------
38 New York 50,369 0.63 158 0.67 30.19
-------------- ---------- ---------- ----- ---------- ----------
37 North Carolina 28,384 0.69 145 -16.07 -2.46
-------------- ---------- ---------- ----- ---------- ----------
49 North Dakota 390 0.13 796 5.12 56.00
-------------- ---------- ---------- ----- ---------- ----------
12 Ohio 101,614 2.01 50 -10.53 12.93
-------------- ---------- ---------- ----- ---------- ----------
34 Oklahoma 12,937 0.80 125 3.79 56.70
-------------- ---------- ---------- ----- ---------- ----------
11 Oregon 34,121 2.12 47 89.55 303.27
-------------- ---------- ---------- ----- ---------- ----------
33 Pennsylvania 44,732 0.82 122 20.21 173.11
-------------- ---------- ---------- ----- ---------- ----------
27 Rhode Island 5,065 1.12 89 -23.06 175.57
-------------- ---------- ---------- ----- ---------- ----------
25 South Carolina 25,163 1.24 80 67.81* 492.49*
-------------- ---------- ---------- ----- ---------- ----------
47 South Dakota 765 0.21 467 90.30* 3,087.50*
-------------- ---------- ---------- ----- ---------- ----------
17 Tennessee 40,733 1.49 67 -7.75†† 57.19††
-------------- ---------- ---------- ----- ---------- ----------
29 Texas 100,045 1.06 94 4.04 18.44
-------------- ---------- ---------- ----- ---------- ----------
5 Utah 27,140 2.93 34 82.93 264.88
-------------- ---------- ---------- ----- ---------- ----------
50 Vermont 143 0.05 2178 4.38 393.10*
-------------- ---------- ---------- ----- ---------- ----------
16 Virginia 52,127 1.59 63 6.36 219.66†
-------------- ---------- ---------- ----- ---------- ----------
24 Washington 35,268 1.29 78 35.34 132.27
-------------- ---------- ---------- ----- ---------- ----------
48 West Virginia 1,479 0.17 597 115.91* 221.52*
-------------- ---------- ---------- ----- ---------- ----------
19 Wisconsin 35,252 1.38 73 78.99* 190.55*
-------------- ---------- ---------- ----- ---------- ----------
45 Wyoming 717 0.30 338 5.91 101.40
-------------- ---------- ---------- ----- ---------- ----------
..

[JJonesIII]

Originally Posted by aslowdodge

I agree.
Using leverage wisely can make you a lot of money. One has to run the numbers to see if it's wise to do so.
Having a catastrophic financial situation like job loss with no hope of getting another means you might lose your house whether leveraged or not.

Exactly but some people just can't seem to realize this.

[bobby_guz_man]

Originally Posted by joey_mcmarbles

The Bay Area from San Jose to San Francisco is the "center of the world" in some respects, it's more than just a place to live.

Fixed it for you, homie. Santa Clara the City is a cute charming little village, but San Jose is the center of the South Bay in everything. There's a reason it's called the "San Jose forum" and not the "Santa Clara the Village forum" LOL

I like your subtle diss, but I gotta set you straight homeboy. You're welcome.

[bobby_guz_man]

Anyways, for the OP's question, my answer is simple:

Bay Area is the best place on the planet. And I am still here because I can.

[mossly]

My in-laws don't live in the Bay Area, but they do own a house near another big city. They'd make a pretty penny if they sold it, even considering the tax implications.

And there are other reasons to move, too. None of their children live nearby anymore. Their area gets harsh winters and my MIL has osteoporosis - one bad fall could wreck her. She spends half the year afraid to walk outside. The house is expensive to heat and repair, and is far larger than they need.

But still they hang on. Part of it is social structure. All their lifelong friends are there. Unlike my generation, my in-laws and all their friends were able to grow up somewhere, find a job in that place, and settle down for life. Which I think hits on a another piece of the puzzle: my in-laws are afraid to move. They could cash out and buy something nice in a cheaper and warmer place. Financially, it makes a lot of sense. And my in-laws usually do the financially sensible thing. But they're scared. Moving is old hat for me and my husband, it's follow the jobs or perish for us. But the in-laws have never needed to move cities before and they certainly don't want to start when they're in their 70s.

Part of it is the house itself, too. My in-laws don't even want to move to a smaller home in the same city. I think this is another artifact of never having to move before - they so deeply associate their house with family and happiness and security that the emotional tie overrides their financial and logistical realities. Plus, I think for them moving out has an element of giving up, a definitive move into the last phase of their lives.

Bay Area folks their age have all of the same emotional attachments, plus nice weather. Of course they don't want to move!

My MIL will probably come to regret hanging on to the house for so long if she ever, God forbid, slips on the ice. But there's no ice here. And between Prop 13 and housing values going ever-higher by the second, everything points to clutching that house as hard as you can for as long as you can. Every neighborhood here has at least one house owned by an old-timer who cannot keep up with it. You can spot it from a mile away, with overgrown weeds and broken stuff in the yard and sagging eaves. And yet despite all the neglect, the house will net the owner more on the market tomorrow than it did today. As long as he's physically able to live there, and the roof is not actively caving in, every day is more money.

[Moddedintegra56]

Originally Posted by joey_mcmarbles

The Bay Area from Santa Clara (City, not County) to San Francisco is the "center of the world" in some respects, it's more than just a place to live.

you should change it and include Santa Clara COUNTY,not just the city. Have you seen the rent and home prices at the edge of Santa Clara County? Morgan Hill, Gilroy. It isn't any more affordable I'll tell you that. You get more for your money but its not any cheaper. Same goes for rent.

edit: Santa Clara is like Milpitas, little small towns who hang on to the coat tails of San Jose.

[joejerryronnie]

Originally Posted by ryman554

Or you lost a job and your rental needs a new roof.
Or you AND your tenant lost a job and quit paying.
Or you lost a tenant AND you had a medical emergency.

Face it: A lot of people lost an awful lot in the 2008 crash, and while those who lost a job and had a big mortgage were hit hard, those that were leveraged to the hilt (whether in equities or real-estate) were hit absolutely the hardest.

Leverage is great when things are good. Leverage is horrible when times are bad. If you can leverage AND have a sizeable emergency fund to get you through bad times, then by all means. It has been my experience that most that use leverage use it extremely aggressively and do not understand the risks involved.

So you are absolutely right, if you didn't sell, you did OK. Better than OK, even. Lots of folks were forced to sell -- you have only to look up foreclosure rates to see evidence of this.

Yes, you need to run the numbers and have a plan. You can't just leverage everything, have no backup funding, and invest it all in an asset you know nothing about because everyone else is doing it or you heard it from some "guru". The people who got hit the hardest in 2008 were those who bought highly speculative properties in areas that couldn't support all the housing being built (Miami, Arizona, Vegas, etc). People who planned well and purchased long-term buy and hold real estate in established markets did just fine. In fact, they may have done better after the crash as many of those people who lost their homes suddenly needed a place to rent.

Look, if you want to get ahead, you need to take a little risk. Whether that's stretching yourself to learn about and invest in assets you haven't had previous experience with or moving to a new town to boost your career path. The risk won't always pay off but in most cases you'll learn valuable lessons for next time. Most people won't get ahead like this, not because they have a low tolerance for risk, but because they don't want to put the work in to learn about opportunities which match their risk profile.

Everyone can make some money in a bull market, but the real money is made after a crash. If you've lined up your finances and assets properly, know when to not follow the crowd, do your research, and can pull the trigger when good assets are severely under valued, you'll make a killing.

[ryman554]

Originally Posted by joejerryronnie

Yes, you need to run the numbers and have a plan. You can't just leverage everything, have no backup funding, and invest it all in an asset you know nothing about because everyone else is doing it or you heard it from some "guru". The people who got hit the hardest in 2008 were those who bought highly speculative properties in areas that couldn't support all the housing being built (Miami, Arizona, Vegas, etc). People who planned well and purchased long-term buy and hold real estate in established markets did just fine. In fact, they may have done better after the crash as many of those people who lost their homes suddenly needed a place to rent.

Look, if you want to get ahead, you need to take a little risk. Whether that's stretching yourself to learn about and invest in assets you haven't had previous experience with or moving to a new town to boost your career path. The risk won't always pay off but in most cases you'll learn valuable lessons for next time. Most people won't get ahead like this, not because they have a low tolerance for risk, but because they don't want to put the work in to learn about opportunities which match their risk profile.

Everyone can make some money in a bull market, but the real money is made after a crash. If you've lined up your finances and assets properly, know when to not follow the crowd, do your research, and can pull the trigger when good assets are severely under valued, you'll make a killing.

I 100% agree with everything you said.

[joey_mcmarbles]

Originally Posted by bobby_guz_man

Fixed it for you, homie. Santa Clara the City is a cute charming little village, but San Jose is the center of the South Bay in everything. There's a reason it's called the "San Jose forum" and not the "Santa Clara the Village forum" LOL

I like your subtle diss, but I gotta set you straight homeboy. You're welcome.

I wasn't dissing San Jose, just like I wasn't dissing Fresno, or Kabul, Afghanistan by leaving them out. None of those places are important to the tech industry, that's not a diss, it's a fact.

Santa Clara is actually important to the tech industry, it is home to Intel, Nvidia and AMD, among others. Nothing in San Jose even comes close, not even close.

[silverkris]

Originally Posted by Lanienguyen

The reasons I don't want to sell are:
- I am still working.
- My friends and my relatives are around here.
- My kid attend school here.. and I don't want to change her enviroment, her friends...
- Taxes after selling.
- Save it for my kid if he/she wants to leave around here.

Yes to all of the above.

Also, potentially higher property taxes in a new place after selling.