I think giving advice to others is always difficult. What I admire about this blog is that you give analysis of why you think the way you do and then ultimately let the reader decide on his / her own.
I have avoided giving direct advice to others after getting into a very heated debate with an agent in Del Mar who even after he conceded that if prices continue to rise less than 2% of people could afford a home, still insisted prices would go up up and away. This is not a rational purchase—it is a very emotional one—just as many of the purchases in dot com companies became in the late 1990’s.
What I do now is simply give people links to the various sites and let them reach their own conclusions. So thank you for this site and your time—it has helped me and numerous others make more informed decisions. Ultimately we may be wrong—perhaps something from left field stops a fall in prices but as with anything in life, you can’t look for that certain bet—there are none—you play the odds and right now I feel the odds are well against the house (pardon the pun)
Posted by NanoWest on 06/30/07 at 06:19 AM
It is clear that if someone wants to sell a house in the next 3 months, they need to price 25% below 2005 comps. I would tell both of your friends this “opinion” and let them figure the rest out. ——-
Posted by SoCalWatcher on 06/30/07 at 08:41 AM
Great letter! This is interesting. When things were headed up and up, seems like everyone in SoCal was all having one big party and everyone was in the club. Now, things are heading down and friendships are souring over the mere mentioning of home prices heading down. I do not live in CA, but it is so obvious from everything I read. This is absolutely ridiculous that people are now getting pissed off at each other over EQUITY IN THEIR HOMES. Even if they are not selling right now, just pointing out that the home is heading down in value is an insult?? I guess that means they are pointing out that my home can HELOC a bigger Benz than your house can.
The psychology behind all of this is seriously interesting. I am considering heading out there for a while just to immerse myself in this current climate to study it from a midewesterners point of view. Maybe a basis for a future dissertation or something and it is great because it is heavily based in both economics and pure psychology.
Posted by SmartMoney on 06/30/07 at 09:12 AM
You are right that there is far more psychology at work than economics, SoCalWatcher. It is amazing to see how offended some people become and how quick they are to suggest you are insane to believe in something that is mathematically inevitable! It is almost like the world when they thought the Earth was flat: an utterly absurd idea. Even the ancient Greeks knew better, but people harbored the idea and killed folks who suggested otherwise.
What is interesting to me is how many people stick together in denial and ask as though any suggestion that the market may correct is a betrayal to all of their friends. A crash is only possible if you entertain the idea, they believe, and as long as everyone is united in talking up the market at all times, it WILL continue to climb at ridiculous rates in perpetuity.
If you point out that housing has outstripped affordability and prices have no where to go but down, you get labeled as a socialist. “Why do homes have to be affordable?” Well, technically they don’t if no one ever sells a home. But many of the people who own the homes right now can’t afford them! And many of us who can afford them even at their wildly inflated prices got completely out of RE a year or two ago. What does that suggest to you?
Did you see Southern California’s Cultural Pathology. As a Mid-Westerner you will particularly appreciate it. As a displaced Mid-Westerner myself, I am always amazed at the behavior I see here.
It reminds me of “The Secret.” There is a lot of Truth in “The Secret,” but there is also the strange misconception that somehow a financial market will respond to wishful thinking.
Posted by Major Schadenfreude on 06/30/07 at 11:15 AM
The letter is interesting in that it illustrates how impossible it was to “time” the top of the market.
The author says they bailed in April 2004. They probably thought the market couldn’t get any more insane. However, negam’s were introduced then and the party continued for another 2 years.
I wholeheartily agree with you that the internet is a great place to get information unbiased by parties with money/power (i.e., the NAR). I wonder how many financial lives would have been saved had the analyses available on this blog been available back then. I am not aware of any publications that use fundamentals to tie incomes to rentals to house prices as described in the analyses on this blog. Perhaps they are taught in city-planning courses.
Early in this bubble I had to use something else to determine that house prices are absurd: COMMON SENSE.
Or as Hemmingway used to say, a built-in BS detector!
Posted by BLT Bill on 06/30/07 at 12:31 PM
Some psycology and denial.
My business partner has a bunch of cash tied up in
www.rescapfunds.com Our CPA does too.
This is a REIT. Subprime CA. Second Mortgages.
11% Interest paid monthly.
When I mentioned that they may be in some danger
of losing their investment because some of those loans are
not secured buy the over inflated home values anymore.
And that the 10 month supply of homes is rising even further.
They both told me I am out of my mind. And should not spread that
kind of bad information. My CPA was really mad at me for being
a bit bearish.
It is a funny thing how the emotional side of owning a home can have on someone. My best friend who recently got married needs to find a place or renew their lease in August. His wife really wants to own a place and I think they have been looking into it. When it came up in conversation a few weeks ago I told them no I will not allow you to buy a home right now. I said you would be better off just giving me a $100k because at least the money wouldn’t just disappear. The look of frustration on her face is the same look that I have seen for the last two years.
So I had told them about a very nice detached condo that was in foreclosure in eastside Costa Mesa. They went and checked it and said that it was really nice from the outside. A month later the bank took it back and I reminded them that it sold in 2003 for $630k and the bank wanted $520k for it at the auction. As long as the inside was decent it should have sold at that price but it didn’t. They were shocked and I think they will be renting for a while longer.
Posted by tonye on 06/30/07 at 03:00 PM
Even the HELOC may not be a killer. It depends on when it was opened and how much is owed.
We have a HELOC but even if we took all the money out, our home would have to crater by 50% before we got anywhere close to the original terms.
So your #1 friend may not be serious about selling. Is he selling because he wants to cash out or because he needs to.
Maybe he should think about putting a new coat of paint on the house, buying some nice cigars and kick back in his backyard for a few years.
Posted by tonye on 06/30/07 at 03:04 PM
I though SoCal was not just the ONE place. Las Vegas, Phoenix, Miami, etc…. those places were crazier, huh?
The negAmortization and 100% financing were spread all over too, huh?
I would guess that other markets started to crater earlier, now it our turn.
Posted by Saw it coming on 06/30/07 at 04:56 PM
You are probably (hopefully) right about the HELOC, if he even has one I would guess it is small. No new escalades that I am aware of.
I am pretty sure he is serious about selling. They want to relocate to another state and have visted/researched the new area. Since he will be definately trading down in price where he is going he should price this house to sell.
As tough as it is to watch I have decided, with wifes input, to just stay out of it. His house is in nice shape, well maintained, painted and clean but sitting. I am sure he is starting to figure it out.
Posted by TRock on 06/30/07 at 05:49 PM
I have a friend right now who is trying to sell his house in Corona. I told him initially to drop the price 100K as he was trying to sell it at the 2005 price. He got very defensive and said “No way, my neighbors would kill me! [as he would lower the comps].” Anyways, he lowered it by 25K last month. It has been sitting there for 5 months now with no sign of going into escrow. He has about 150K left in equity if he sells at his current price, but I hope he doesn’t end up losing it all.
Posted by SoCalWatcher on 06/30/07 at 08:25 PM
IR, I read that entry a while back and found it interesting. This seems like a complete case of groupthink combined with elitism. I don’t think paying too much for a house just mere because I got a loan approved means I have joined any special club other than getting IDIOT tatooed on my forehead and NOD taped to my door.
I realize the SoCal shallowness is one thing, but the combined with financial ignorance is going to cause the bottom of the state to fall in the ocean.
I think even the illegals are changing their last names to “Jones”.
Posted by SoCalWatcher on 06/30/07 at 08:33 PM
“No way, my neighbors would kill me! [as he would lower the comps].”
So what? He’s moving anyways. Besides, I would not let my neighbors throw me down the mountain that they carried me up to the top of…
Posted by CA on 06/30/07 at 10:24 PM
interesting reading this blog…i was one of those buying into the hype back in mid-2004, but I actually had a reason to live here vs. flipping (wife works in Irvine, i’m currently a graduate student at the local university). Our 6.5% ARM adjusts in 2011, we’ve successfully rented the other two bedrooms out to students (with plenty of demand for them) which covers half the mortgage… I understand the emotional side to things…it’s a bit painful hearing of the listings around here rolling back to ‘04 prices (i mean, when my friends buy this or that and got it for cheaper, a part of me goes “oooh ouch!”)
so as much as i respect this blog and enjoy reading it…maybe i should stop and wait until 2011 when we plan to refinance or sell. it’s tough disconnecting the current market craziness with the fact that i actually live in one of these units. this blog makes me feel like a loser! even though we have purpose/are happy/will be happy here for at least another 4 years.
Posted by TRock on 07/01/07 at 12:11 AM
I was thinking the same thing, but I didn’t say it because it seemed to me that he was looking to only defend his position at all costs. He probably would have gotten angry, so we just don’t talk about housing at all anymore.
Posted by SmartMoney on 07/01/07 at 12:13 AM
Ah yes, the “Secret.” That’s a great analogy, IrvineRenter, and Californians with our new age philosophies love to think that we can control the universe and that we are entitled to infinite appreciation and market returns by virtue of our mental exertions alone, by force of will, bending the economy to our whims.
What happens, though, when hundreds of thousands of people are willing themselves out of Southern California because they are so sick of the pollution and insanely tiny property lots and ridiculously crowded neighborhoods and streets? What happens when more people are envisioning a housing crash than are envisioning infinite growth? What happens when Mitt Romney and Hillary Clinton are both using the full force of their divine wills to cause something specific to happen, like them getting elected as President of the United States?
People out there are “willing” the universe to do inconsistent and mutually exclusive things. Only one person becomes president in 2008. Either the market continues to drop or it reverses and returns to the irrational exuberance of 2004. Both cannot happen. Perhaps the crash of the dotcom bubble occurred because too many people learned “The Secret” and used it against others using it as well! (wink)
Posted by sunsetbeachguy on 07/01/07 at 05:20 AM
Many bearish market observers think 2011 will be near the bottom of the housing market for this cycle.
My advice is to think about your situation now! Don’t delay.
Posted by awgee on 07/01/07 at 06:02 AM
What is “The Secret”? I clicked on the link, but it was just an ad with no explanation.
Part of the purpose of this blog is to make people aware of the market situation and help them make decisions that are in their own best interest. If you are not currently underwater, you may want to consider selling while you can. In 2011, when you need to refinance, you may be unable to do so which may cost you the home if you cannot make the new payment. Of course, by then you may have a new, high-paying job and everything will be OK.
You just need to consider the possible outcomes in 2011. Most of us at this board are under the opinion that prices will be lower then. Don’t bury your head in the sand because you may not like what you see when you start to look around again. Don’t feel like a loser. Many people fell victim to the hype and hysteria of the bubble. Make good decisions now, and everything will turn out OK.
Posted by SoCalWatcher on 07/01/07 at 09:17 AM
And that is sad the people are getting worked up over something like RE. Another relationship strained… :(
Posted by firsttimer on 07/01/07 at 09:51 AM
awgee,
Here is the wikipedia on it: http://en.wikipedia.org/wiki/The_Secret_(2006_film) .
It seemed like a well marketed self help film that was didn’t offer any real “help.”
Posted by No_Such_Reality on 07/01/07 at 12:06 PM
I was going to say that I thought Awgee’s comment: “but it was just an ad with no explanation.” was rather accurate.
Posted by tonye on 07/01/07 at 02:51 PM
If his wife is working and he’s still in school, in four years he ought to be able to bring in more money. After all, grad students are considered to be slave labor by the faculty. So his current loan payment might be doable when it indexes out of the teaser rate.
If they’re currently getting half the mortgage paid, and money is not really currently an issue, then a good idea might be to run -don’t walk- and see if the lender might want to refi into fixed terms today.
The bottom line is that by selling now they would lose money too. Perhaps it might be better to reason with the lender and renegotiate while the “market price” has yet to drop. That and the fact that they are in good terms with the lender payment wise might prompt the lender to remove this issue off their books now.
Posted by CA on 07/10/07 at 09:58 PM
ok i couldn’t resist coming back and i dug up my old comment! thank you tonye, IrvineRenter, and and sunsetbeachguy for your comments and insight. you’re right, i shouldn’t bury my head in the sand with all this info. I will surely read on…I’m thinking of getting my RE broker license and acting as my own broker, or a buyer’s agent for my friends and not charge much. It seems easy enough.
My wife and I really like living where we are and the mortgage is fine for us, even with just one room rented out. In all likelihood, we will refinance sometime in ‘09, ‘10, or ‘11 to a regular fixed rate and stay put indefinitely. I’m *hoping* my income will ramp up within the next 2-3 years. We both love the 10 minute drive to work (sure beats driving down the 405 from huntington beach/westminster to irvine).
after that nasty commute, we’re more than willing to give up having a lawn/yard/detached “normal” home if it means not having intense road rage twice a day. Perhaps in the next run up on housing we’ll sell and take off! We really have our eyes on a detached home along the 73 corridor in south county…perhaps if there are kids at that point.
Posted by Bob on 06/30/07 at 01:37 PM
I think giving advice to others is always difficult. What I admire about this blog is that you give analysis of why you think the way you do and then ultimately let the reader decide on his / her own.
I have avoided giving direct advice to others after getting into a very heated debate with an agent in Del Mar who even after he conceded that if prices continue to rise less than 2% of people could afford a home, still insisted prices would go up up and away. This is not a rational purchase—it is a very emotional one—just as many of the purchases in dot com companies became in the late 1990’s.
What I do now is simply give people links to the various sites and let them reach their own conclusions. So thank you for this site and your time—it has helped me and numerous others make more informed decisions. Ultimately we may be wrong—perhaps something from left field stops a fall in prices but as with anything in life, you can’t look for that certain bet—there are none—you play the odds and right now I feel the odds are well against the house (pardon the pun)
Posted by NanoWest on 06/30/07 at 06:19 AM
It is clear that if someone wants to sell a house in the next 3 months, they need to price 25% below 2005 comps. I would tell both of your friends this “opinion” and let them figure the rest out.
——-
Posted by SoCalWatcher on 06/30/07 at 08:41 AM
Great letter! This is interesting. When things were headed up and up, seems like everyone in SoCal was all having one big party and everyone was in the club. Now, things are heading down and friendships are souring over the mere mentioning of home prices heading down. I do not live in CA, but it is so obvious from everything I read. This is absolutely ridiculous that people are now getting pissed off at each other over EQUITY IN THEIR HOMES. Even if they are not selling right now, just pointing out that the home is heading down in value is an insult?? I guess that means they are pointing out that my home can HELOC a bigger Benz than your house can.
The psychology behind all of this is seriously interesting. I am considering heading out there for a while just to immerse myself in this current climate to study it from a midewesterners point of view. Maybe a basis for a future dissertation or something and it is great because it is heavily based in both economics and pure psychology.
Posted by SmartMoney on 06/30/07 at 09:12 AM
You are right that there is far more psychology at work than economics, SoCalWatcher. It is amazing to see how offended some people become and how quick they are to suggest you are insane to believe in something that is mathematically inevitable! It is almost like the world when they thought the Earth was flat: an utterly absurd idea. Even the ancient Greeks knew better, but people harbored the idea and killed folks who suggested otherwise.
What is interesting to me is how many people stick together in denial and ask as though any suggestion that the market may correct is a betrayal to all of their friends. A crash is only possible if you entertain the idea, they believe, and as long as everyone is united in talking up the market at all times, it WILL continue to climb at ridiculous rates in perpetuity.
If you point out that housing has outstripped affordability and prices have no where to go but down, you get labeled as a socialist. “Why do homes have to be affordable?” Well, technically they don’t if no one ever sells a home. But many of the people who own the homes right now can’t afford them! And many of us who can afford them even at their wildly inflated prices got completely out of RE a year or two ago. What does that suggest to you?
Posted by IrvineRenter on 06/30/07 at 09:49 AM
SoCalWatcher,
Did you see Southern California’s Cultural Pathology. As a Mid-Westerner you will particularly appreciate it. As a displaced Mid-Westerner myself, I am always amazed at the behavior I see here.
Posted by IrvineRenter on 06/30/07 at 09:51 AM
It reminds me of “The Secret.” There is a lot of Truth in “The Secret,” but there is also the strange misconception that somehow a financial market will respond to wishful thinking.
Posted by Major Schadenfreude on 06/30/07 at 11:15 AM
The letter is interesting in that it illustrates how impossible it was to “time” the top of the market.
The author says they bailed in April 2004. They probably thought the market couldn’t get any more insane. However, negam’s were introduced then and the party continued for another 2 years.
I wholeheartily agree with you that the internet is a great place to get information unbiased by parties with money/power (i.e., the NAR). I wonder how many financial lives would have been saved had the analyses available on this blog been available back then. I am not aware of any publications that use fundamentals to tie incomes to rentals to house prices as described in the analyses on this blog. Perhaps they are taught in city-planning courses.
Early in this bubble I had to use something else to determine that house prices are absurd: COMMON SENSE.
Or as Hemmingway used to say, a built-in BS detector!
Posted by BLT Bill on 06/30/07 at 12:31 PM
Some psycology and denial.
My business partner has a bunch of cash tied up in
www.rescapfunds.com Our CPA does too.
This is a REIT. Subprime CA. Second Mortgages.
11% Interest paid monthly.
When I mentioned that they may be in some danger
of losing their investment because some of those loans are
not secured buy the over inflated home values anymore.
And that the 10 month supply of homes is rising even further.
They both told me I am out of my mind. And should not spread that
kind of bad information. My CPA was really mad at me for being
a bit bearish.
Posted by graphrix on 06/30/07 at 02:20 PM
It is a funny thing how the emotional side of owning a home can have on someone. My best friend who recently got married needs to find a place or renew their lease in August. His wife really wants to own a place and I think they have been looking into it. When it came up in conversation a few weeks ago I told them no I will not allow you to buy a home right now. I said you would be better off just giving me a $100k because at least the money wouldn’t just disappear. The look of frustration on her face is the same look that I have seen for the last two years.
So I had told them about a very nice detached condo that was in foreclosure in eastside Costa Mesa. They went and checked it and said that it was really nice from the outside. A month later the bank took it back and I reminded them that it sold in 2003 for $630k and the bank wanted $520k for it at the auction. As long as the inside was decent it should have sold at that price but it didn’t. They were shocked and I think they will be renting for a while longer.
Posted by tonye on 06/30/07 at 03:00 PM
Even the HELOC may not be a killer. It depends on when it was opened and how much is owed.
We have a HELOC but even if we took all the money out, our home would have to crater by 50% before we got anywhere close to the original terms.
So your #1 friend may not be serious about selling. Is he selling because he wants to cash out or because he needs to.
Maybe he should think about putting a new coat of paint on the house, buying some nice cigars and kick back in his backyard for a few years.
Posted by tonye on 06/30/07 at 03:04 PM
I though SoCal was not just the ONE place. Las Vegas, Phoenix, Miami, etc…. those places were crazier, huh?
The negAmortization and 100% financing were spread all over too, huh?
I would guess that other markets started to crater earlier, now it our turn.
Posted by Saw it coming on 06/30/07 at 04:56 PM
You are probably (hopefully) right about the HELOC, if he even has one I would guess it is small. No new escalades that I am aware of.
I am pretty sure he is serious about selling. They want to relocate to another state and have visted/researched the new area. Since he will be definately trading down in price where he is going he should price this house to sell.
As tough as it is to watch I have decided, with wifes input, to just stay out of it. His house is in nice shape, well maintained, painted and clean but sitting. I am sure he is starting to figure it out.
Posted by TRock on 06/30/07 at 05:49 PM
I have a friend right now who is trying to sell his house in Corona. I told him initially to drop the price 100K as he was trying to sell it at the 2005 price. He got very defensive and said “No way, my neighbors would kill me! [as he would lower the comps].” Anyways, he lowered it by 25K last month. It has been sitting there for 5 months now with no sign of going into escrow. He has about 150K left in equity if he sells at his current price, but I hope he doesn’t end up losing it all.
Posted by SoCalWatcher on 06/30/07 at 08:25 PM
IR, I read that entry a while back and found it interesting. This seems like a complete case of groupthink combined with elitism. I don’t think paying too much for a house just mere because I got a loan approved means I have joined any special club other than getting IDIOT tatooed on my forehead and NOD taped to my door.
I realize the SoCal shallowness is one thing, but the combined with financial ignorance is going to cause the bottom of the state to fall in the ocean.
I think even the illegals are changing their last names to “Jones”.
Posted by SoCalWatcher on 06/30/07 at 08:33 PM
“No way, my neighbors would kill me! [as he would lower the comps].”
So what? He’s moving anyways. Besides, I would not let my neighbors throw me down the mountain that they carried me up to the top of…
Posted by CA on 06/30/07 at 10:24 PM
interesting reading this blog…i was one of those buying into the hype back in mid-2004, but I actually had a reason to live here vs. flipping (wife works in Irvine, i’m currently a graduate student at the local university). Our 6.5% ARM adjusts in 2011, we’ve successfully rented the other two bedrooms out to students (with plenty of demand for them) which covers half the mortgage… I understand the emotional side to things…it’s a bit painful hearing of the listings around here rolling back to ‘04 prices (i mean, when my friends buy this or that and got it for cheaper, a part of me goes “oooh ouch!”)
so as much as i respect this blog and enjoy reading it…maybe i should stop and wait until 2011 when we plan to refinance or sell. it’s tough disconnecting the current market craziness with the fact that i actually live in one of these units. this blog makes me feel like a loser! even though we have purpose/are happy/will be happy here for at least another 4 years.
Posted by TRock on 07/01/07 at 12:11 AM
I was thinking the same thing, but I didn’t say it because it seemed to me that he was looking to only defend his position at all costs. He probably would have gotten angry, so we just don’t talk about housing at all anymore.
Posted by SmartMoney on 07/01/07 at 12:13 AM
Ah yes, the “Secret.” That’s a great analogy, IrvineRenter, and Californians with our new age philosophies love to think that we can control the universe and that we are entitled to infinite appreciation and market returns by virtue of our mental exertions alone, by force of will, bending the economy to our whims.
What happens, though, when hundreds of thousands of people are willing themselves out of Southern California because they are so sick of the pollution and insanely tiny property lots and ridiculously crowded neighborhoods and streets? What happens when more people are envisioning a housing crash than are envisioning infinite growth? What happens when Mitt Romney and Hillary Clinton are both using the full force of their divine wills to cause something specific to happen, like them getting elected as President of the United States?
People out there are “willing” the universe to do inconsistent and mutually exclusive things. Only one person becomes president in 2008. Either the market continues to drop or it reverses and returns to the irrational exuberance of 2004. Both cannot happen. Perhaps the crash of the dotcom bubble occurred because too many people learned “The Secret” and used it against others using it as well! (wink)
Posted by sunsetbeachguy on 07/01/07 at 05:20 AM
Many bearish market observers think 2011 will be near the bottom of the housing market for this cycle.
My advice is to think about your situation now! Don’t delay.
Posted by awgee on 07/01/07 at 06:02 AM
What is “The Secret”? I clicked on the link, but it was just an ad with no explanation.
Posted by IrvineRenter on 07/01/07 at 07:02 AM
CA,
Part of the purpose of this blog is to make people aware of the market situation and help them make decisions that are in their own best interest. If you are not currently underwater, you may want to consider selling while you can. In 2011, when you need to refinance, you may be unable to do so which may cost you the home if you cannot make the new payment. Of course, by then you may have a new, high-paying job and everything will be OK.
You just need to consider the possible outcomes in 2011. Most of us at this board are under the opinion that prices will be lower then. Don’t bury your head in the sand because you may not like what you see when you start to look around again. Don’t feel like a loser. Many people fell victim to the hype and hysteria of the bubble. Make good decisions now, and everything will turn out OK.
Posted by SoCalWatcher on 07/01/07 at 09:17 AM
And that is sad the people are getting worked up over something like RE. Another relationship strained… :(
Posted by firsttimer on 07/01/07 at 09:51 AM
awgee,
Here is the wikipedia on it: http://en.wikipedia.org/wiki/The_Secret_(2006_film) .
It seemed like a well marketed self help film that was didn’t offer any real “help.”
Posted by No_Such_Reality on 07/01/07 at 12:06 PM
I was going to say that I thought Awgee’s comment: “but it was just an ad with no explanation.” was rather accurate.
Posted by tonye on 07/01/07 at 02:51 PM
If his wife is working and he’s still in school, in four years he ought to be able to bring in more money. After all, grad students are considered to be slave labor by the faculty. So his current loan payment might be doable when it indexes out of the teaser rate.
If they’re currently getting half the mortgage paid, and money is not really currently an issue, then a good idea might be to run -don’t walk- and see if the lender might want to refi into fixed terms today.
The bottom line is that by selling now they would lose money too. Perhaps it might be better to reason with the lender and renegotiate while the “market price” has yet to drop. That and the fact that they are in good terms with the lender payment wise might prompt the lender to remove this issue off their books now.
Posted by CA on 07/10/07 at 09:58 PM
ok i couldn’t resist coming back and i dug up my old comment! thank you tonye, IrvineRenter, and and sunsetbeachguy for your comments and insight. you’re right, i shouldn’t bury my head in the sand with all this info. I will surely read on…I’m thinking of getting my RE broker license and acting as my own broker, or a buyer’s agent for my friends and not charge much. It seems easy enough.
My wife and I really like living where we are and the mortgage is fine for us, even with just one room rented out. In all likelihood, we will refinance sometime in ‘09, ‘10, or ‘11 to a regular fixed rate and stay put indefinitely. I’m *hoping* my income will ramp up within the next 2-3 years. We both love the 10 minute drive to work (sure beats driving down the 405 from huntington beach/westminster to irvine).
after that nasty commute, we’re more than willing to give up having a lawn/yard/detached “normal” home if it means not having intense road rage twice a day. Perhaps in the next run up on housing we’ll sell and take off! We really have our eyes on a detached home along the 73 corridor in south county…perhaps if there are kids at that point.