Cali will become the world leader in households with negative net worth:)

inflation has not rippled thru the long term bond market yet. It seems like it eventually will. Todays 10yr, 20yr, 30 mortgage market is waiting for a crash imo. At least lock in your borrowing now if you're in a buying position.

Inflation does not hit all economic segments at the same time. Anybody using a variable rate has one foot on a banana peel and the other foot in the grave imo.

Well, that turned into 5 houses in a row for sale down the street.
They have all sold and new owners have moved in.

I think the prices might have relaxed a little bit but their still selling in Simi Valley. Six months ago there were a lot of homes for sale, today there are only a couple in this tract of a little over 200 homes.

I even spoke to a Gal that was out from the East coast looking for her retirement home. She was going around the neighborhood looking for a house and asked me if I knew of anybody selling. She was going to rent it until she retired in 5 years or so.

Just an update :)

einreb....YA!

Hi Richard,
How are ya?
sorry my visits have been weak, too much fun away from the box.

If you stay and lose $2KK, ouch.
If you sell, you make a profit and dont look back.
SELL.

Treat yourself to the nicest/fanciest condo on the rental market,
you'll be rich!

More money made in real estate than anything else.
buy low, sell high, easy.

I once did the exact same thing,
made a bundle.
Went and leased a downtown huge penthouse for one year while I planned my move to the next victimous area.

Just made over 1/2 Million buying and selling just last year alone.
Get on with it man.... SELL.

By the way, when are you going to return my wife? LOL
Don't send your wife to visit Richard :)

You're a great guy pal, Good luck with your sale.
PS: sell yourself too, dont hire the bandits!
Find the best on-line for sale by owner websites
a dozen sites will set you back a grand - MAX
Do up some nice pics and a good description.
Tell buyers to email you for more info...
set up 3 emails with 10 to 15 pics in each email that you can send to potential buyers that inquire. Include detailed info, room sizes, pics and floor plans.
You'll be moving in 30 days.

Need any help, give me a shout.
It's my BiZ and I love it.

Her name was Lynn, now send her home.... please.

Love the hair man, still cracks me up.
Merry Christmas to ya
Cheers
:D

Update. In my little bubble of the OC, the prices continue to rise. We just sold our Eastbluff, Newport Beach at 10% more than a similar one sold for last month just. Accepting an offer just barely below the asking price we sold at $674 per sq. foot. Not bad for paying $316 a sq. foot just a little more than 3 years ago.

If someone cannot afford to buy now, they never will absent a significant change in their financial status.

I had to look it up...

absent

If folks look at homeownership in terms of a fixed monthly payment on a long term residence, and right now that payment is reasonable to them... then fine.

Unfortunately, there are a lot of people that are thinking short term with ARMs. Assuming rates can't go down much, they are aquiring a fixed amount of debt and a variable amount of asset.

There was lots of talk in Tokyo that 'there's no more land' well, those prices dropped +60%. This was the booming economy that was kicking american ass in the 80's.

Amid substantial overhangs in the supply of property, the net effect of this real-estate boom was a precipitous downward cycle, which saw residential prices drop by 68 percent of their prior peak value and commercial prices by 82 percent, and which left property owners, many of them older people in the residential market, with high mortgage payments and little prospect of re-sale at competitive prices.

I dont think the drop is going to be that harsh... but the some of the same boomers that were buying Qualcom at 500 are the ones investing in real estate.

some guys are players, some are not.

In La Quinta lower value lots a few years ago are currently in big demand. Some contractors are sending a signed contracts to the owner offering 100k/lot. The area has extraordinary potential, I think? So some thinking is that if the contractors are that hungry it's probably ready for those next door/down the block $1-3 mill gated housing.

My close area has been seeing serious appreciation, in metro NY, because we're running out of space and have plenty of liquidity. La Quinta's appeal is 120 golf courses within 75mi ++.

So anyway.. Is Newport's re action similar to Manhattan Beach's ?

RE players win big and lose big imo. I think following the liquidity trail is key. Liquidity is fluid. It'll flow from one area to another. It'll flow from one industry to another.. it's always looking for fuel.
If liquidity exists.

all above is a prejudical rant.

MOTHER? Is that U?

That sounds just like what Mother told me when I first met her....

Anyway....When one asset classes risk to reward ratio becomes to great...Liquidity finds another asset class where the risk to reward ratio is more favorable....I do think that is a more succint way of putting it Ronin....

Ok...Bond prices have been on the rise for 20 years or so...RE as a refelection of lower interest rates has risen in value dramaticaly....now that interest rates are RISING, Bond prices and housing prices will start to soften....THus lots of risk for little reward....

So what else is there to invest your money in.. Collectables...again the price of collectables has risen dramaticaly in the past 6 years as well. .

And lastly the Stock Market...what has happened to it in the last 4 years......DOWN DOWN DOWN and still DOWN....lower risk to reward ratio...

Rob - Your email is cracking me up, Dude!! Please tell me you were under the influence just a bit.. lol.

Well, its time to sell, and I JUST CAN'T DO IT. sob, sob. If I sell, I'll never be able to replace this beautiful home in a beautiful location in a beautiful town, as David Byrne says. So, I had an alternate game plan: Pay down the mortgage a couple hundred Gs and get the payment down to a condo rental payment. WRONG. My adjustable is at 4.125% currently (5 year fixed, 2 years left of being fixed). If I throw 200k at the balance and re-fi to a 30 year fixed, my payment only goes down around $400 per month. Ouch. I will need to re-fi to get on a 30 year fixed plan, since I've decided to just keep the damn house, but hell, its going to take some serious cash to get the payment wayyyyy down. Better to do that and sit on this equity or put it back into the real estate market? Not sure.... I have some thinking to do.

BTW... house prices in my neighborhood are down around 10% from 6 months ago and things are still tough. Homes are taking forever to sell - 4-5 months. I think we ran up too much during the last 2 years and this is just a little adjustment period. I think they'll be heading back up - a little more slowly this time - soon.

a $400 / mo. savings even after $200K applied to the balance? for some reason the math doesn't make sense? Should me more than that even raising rates to almost 6% from where you're at? Must be a pretty big balance, but if that is "a small condo payment" afterwards, ouch!

Considering that your mortgage money is *still* cheap maybe reinvest it somewhere else, buying down a cheap rate mtg doesn't make sense IMHO. If you can handle the payment simply refi the balance to fixed if you're worried about the rates in the next few years.

or-

Ride out the remaining term of the ARM and refi into another arm when it's term is up. Even if you go adjustable after the term is over there's no guarantee it'll rise up and if so, it's at a slower pace. It still may be cheaper to hold on-

after your $200K has had a chance to appreciate elsewhere? Then if you need to dump, buy down your balance then. Even if you stick it in a CD for the next few years you're still better off than paying down now.

Just a thought

rjp

Get a Texas Instrument BA35 (or equivalent, mine is 11 years old). It allows you to try different scenarios re: present value (amt of loan), interest rate, monthly payment (or any periodic payment arrangement) and number of payments. Entering datum for any three permits you to calculate the fourth.

The thing that is fascinating me recently is the proliferation of "interest only" loans. Talk about betting on increased property values!!! What happens if the property value drops below the loan amount? Will the banks come after the individual like stock brokers do for folks who buy on margin?

Just some idle ramblings....

The interest only loans are definitely geared for the overextended crowd. They usually are based on shorter term adjustable loans such as a 2/28 or 5/25) - so you have the option to pay I/O anywhere from 2 to 5 years, which is exactly the term which they are fixed. Never seen an I/O that was a true 30 fixed.
They also count on you wanting to refi in 4 years to bail out the lender.

Usually the lenders limit the Loan To Value on an I/O loan typically to 80 - 85% so basically the value of the property has to depreciate over 20% in 3-5 years for the lender and borrower to get into trouble.

Next thing which is really a funky loan is the 1.95% Neg - AM option. That's the one on TV they're talking about a "payment" based on 1.95%.

That's the payment, not the interest charged against the loan, which is adjustable month to month (presently floating on the average around 6%) , and can potentially caused dererred interest to be accrued on the balance. If you're screwing with this type of loan you had better be one hell of a stock broker or serious investor to make this work in your favor. Once you exceed the orignal balance you borrowed by 15% due you constant deferrment then the lender will amortize the remaining balance into the remaining term at the prevailing interest rate, with no more option to defer payments.

It's not for the average guy who just wants to pay off his house.

rjp