Randy_H's Discussions

Fair enough:In my area, Marin County, I expect to see about a 15-25% price correction over the course of about 18-24 months, as measured by median prices. Asking prices have already corrected by around 20% in many areas here, but the medians won't show that for a while because of the way the stats are measured.I think the upper end, $2.5mm and up, may be nearing the end of correction already.I think the lower end, under $1.0mm (yes, Marin has a median higher than a million dollars) will correct faster, maybe in the next 18 months or sooner. The mid range between $1.0mm - $2.5mm will be the slowest, stickiest and most stubborn, and might take over 24 months.These are minimum corrections in my estimation. Actual corrections could be worse by up to 2x if this turns into an all out crash scenario. But I think the time frames are less likely to change; it'll take that long for everything to work through the system.

I guess my position is I'm a harsh rationalist who was raised in the Midwest. So, when I find myself standing in a pile of bullsh!t I'm not afraid to actually admit that I'm standing in a pile of bullsh!t, despite the rosier outlook of those standing next to me.

DanielI got lucky; I wasn't shrewd, smart or clever. I just happened to have been born in the right year to ride that roller coaster in the right direction. I'm not buying back in yet because I'd rather not ride back down the wrong direction too. RE is cyclical, but historically some of those cycles ain't so pretty -- and this cycle is at least 5x bigger than any previous run up. That should scare anyone who's paying attention. Just like any other openly traded market. I can't think of any that saw run-ups not supported fundamentals that didn't run right back down.

I try to not get personal either, though my style is often provocative. But I am always civil to anyone willing to engage in honest debate; and I am very happy to admit when I'm wrong. Being wrong means I've learned something new.

>>Is real estate still the best investment for this average family?<<No. Real estate is the best forced savings plan for the average family. The problem is most Americans will *not* put the difference into a mutual fund. I've often thought it would be a good idea to create a savings-plan for renters that was structured like a mortgage payment and strongly channeled them into saving the rent-v-buy difference.The best savings investments for the average family are tax-deferred retirement savings plan placed in well diversified portfolios of growth, income and foreign stocks, and quality bonds. This is true by a multiple over owning a house or investing in other real estate for the *average family*. Rich people play by a different set of rules.

DanielYes and no. I will buy when I need to buy. But I don't need to buy when I can rent an equivalent place for less than 1/4 the cost and keep my equity safe and secure until the dust settles a little. I don't care where the bottom is. I don't care if I buy and the house loses value. I do care if buying puts a significant portion of my family's net worth at dire risk. Buying a house that gained 118% in 2.5 years is a dire risk. It asks me to believe that all houses are forever worth something at least somewhere near that, and I do not. Mainly because no one saw their incomes rise even a fraction of that level during those same 2.5 years. All that changed was the availability of suicide loans.Here's what I don't get. Seriously, I'm not being coy.When we bought our first house we were almost 30. That was normal because no one had enough money or salary history to qualify to buy until their late 20s. So, we had to wait. And when we bought wasn't just a function of our salaries and savings, but also of the price of the house we needed. If that house had cost 118% more then we'd have had to just waited a lot longer. Why isn't that considered timing?You buy what you can afford, and you don't buy if what you can afford is only about 22% of what you can rent. Maybe you're not familiar with how out of whack it is here, but we're talking about people making $250K-$300K per year buying 12x their salaries with 3% down. No thanks. We'll rent until those fools get their NODs and I can buy that same house for more like 5x our salaries.

What's "lurker trounced"? By my judgment you're making some of the more reasonable comments I've seen round here. Just keep in mind that blogging requires a thick skin. Iron or lead work well. Someday maybe I'll start a hall of fame of the best hate messages I've received, my own righteousness aside, lol.

The ECB has been infusing massive amounts of cash. They started when the first French bank ran into problems, then accelerated after the German banks started failing. All are subprime related.What has been occurring macroeconomically amounts to a gigantic exchange of euros for dollars at a discounted euro value, outside of the normal exchange rate mechanism. Why do you think Sarko is running around saying the ECB is out of control?

>>Buyer = Bitter RenterSeller = Bagholder<<Hmmm. And here I thought most home *sales* were to people who were *selling* their home and *buying* another one.I know a half dozen *buyers* who currently live in a perfectly fine house, but want to trade up or down, and they are very annoyed at the seller's unwillingness to be realistic, which forces them in turn to not be willing to drop their price either.Oh wait wait, I'm forgetting my realtornomics: It's _always_ a good time to buy and anyone who disagrees with the NAR must be an anti-American troglodyte. GMAFB

I doubt many houses (here at least) will return to 2003 prices. I'd say 2004 is about the max a reasonable person should expect. I'll buy at 2004, even if I'm wrong and it goes back to 01 or 02, I'll be happy with that.