Randy_H's Discussions

You cracked it. We're busted. It was all that simple, evil bubble bloggers are just looking for a discount. It has absolutely nothing to do with people borrowing $2mm at 18x their income with zero-down, cash out at close. Nothing to see here, move along.

>>Why renters feel the need to patrol the bubble blogs all day is beyond me. During the boom years, I do not remember seeing owenrs and sellers starting blogs to increase their property values as renters are starting blogs to bring down values.<<You have to be kidding, right? How many flipper blogs were there anyway? There are still at least 5x more out there than so called "bubble blogs". And I've yet to see a television show dedicated to the practice of "bubble blogging". Where are the traveling road shows of "bubble blog" self-proclaimed gurus teaching others how to "blog about bubbles"?Anyway, everyone who doesn't buy the NAR bullsh!t hook, line and sinker is labeled a "bubble blogger". My blog is about economics. All economics, not just asset bubbles. When I dared to point out that housing borrowing had come uncoupled with fundamental support I was immediately added to the "bubble blogger list".I happen to think that a large number of hardcore "bubble bloggers" are extremists. HousingPanic is over the edge. But you guys don't win anyone over when you broadly categorize anyone who questions your realtornomics immedately as a "bubble blogger", or "renter", as if one should spit as they utter that dark, vile word.

>>Well good luck trying to get them to accept an offer for 2004 prices. <<They won't. I blogged extensively about price stickiness. And, despite making no friends among the so called "bubble bloggers", I held that downward prices in prime areas would be painfully slow, uneven, and unpredictable. No quick fix.But, many of these people here in prime Marin are on the edge. The number of NODs has skyrocketed. Seems not everyone is so rich as we were led to believe. They can try to keep up with the Joneses all they want, right up until the time DeutscheBank takes over their home. That just means I'll have to negotiate with a rational banker instead of an irrational wannabe socialite.

Casey Serin. Ugh.I could buy a nice home with cash outright today, though probably not in Marin county. I could qualify today for a standard non-jumbo loan with a phone call, and buy a home in Marin. I could even still get a jumbo with our credit and employment history, and buy a Marin home at these fictional asking prices.I choose not to.I would not have sold in 2005 if not for a necessary move. I advised people not to sell just to time the real estate market. But I also advised that if they had to move for other reasons, then they should wait to buy back in.My entire extended family now rents. It is a pain. No one is happy with it. But my wife agrees that a little pain now will save a lot of pain later.

Oh, and we're debt free except for one car loan, which we have because they insisted on offering us 0.9% 3 year financing so I took the $60K and put it into a 3 year CD earning 7.5x that amount. I do so love arbitrage.

@aldrethThe stickiness will be coming unstuck, even in prime areas, over the next 12 months.I was arguing stickiness 2 years ago when hardcore "bubble bloggers" were predicting an instacrash. I said that, even with the writing on the wall (which it clearly was 2 years ago), sellers would be stubborn unto the bitter end.Bittersweet, some might say.

@aldrethIt is odd, indeed. The one blog you could probably call a "bubble blog" where I author occassional articles is full of a huge range of opinions, backgrounds and ideas. We have apartment brokers, a couple realtors, real estate lawyers, prospective buyers, bitter renters, bitter owners, f'd buyers, baby boomer housing lottery winners, and even a couple hardcore socialists who want to nationalize housing.All I see in the pro-real estate blogs is a set of talking points. The biggest disagreements center around what kind of cookies to bake for the open house, or why all those evil, bitter, renting scumbag bubblehead bloggin meanies don't just go away now.

>>you would be better off renting it out instead of just basicly giving it away and just try to hang in there then when this roller coster comes to a stop then sell. <<Be prepared if you follow that advise. In Northern Cali, if you'd tried this in 1988, you would have been waiting until 1997. And then you would have lost nine years to inflation.There will be no quick fix to this. Look at the history of real estate cycles. It's just been a while since the last one, so young realtors who don't know better don't think this downturn is real.

Rich people use debt as financial planning instruments and as tax shields.They do not have negative net worths. The true rich (being the top 0.8% of the US wealth distribution) generally have about 20 times more liquid assets available than debt. When tax shields are removed or interest rates become unfavorable, as in the late 1970s/early 1980s, the rich quite suddenly have no debt. How much debt load were the rich carrying in 1980? How many of them owned their houses outright?Even today people in really big mansions, like $10mm+, usually own them outright because of AMT tax rules deteriorating all their tax shield benefit.

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