This must be an honest person, they didn’t HELOC every last penny.

Yes, and they are getting screwed for their honesty…

My husband and I are in a similar situation.  We bought in early 2005 here in Irvine.  We knew it was a temporary move when we bought.  This home is not our “dream home” and we had always planned on putting the house on the market in 2009/2010 so we could “move-up” to a larger home. We knew we would have a guaranteed large increase in salary b/c of the professions we are in.  We put 20% down on our house and now it is 4 years later and we want out to buy a larger, nicer home.  We are not “distressed” at all but plan to probably put our house on the market this spring/summer.  We figure we will lose some of our down (hopefully not all!) and then rent for a year or two and then buy our dream home in Turtle Ridge/Newport Beach when the prices come down.  We know we are the minority but do not want to be stuck in this property for another 5-10 years!

Honestly, I don’t think that these realtors have sales agents telling them to write garbage descriptions like these.  I suspect that the realtors read nothing but other listings, and they’re copying the worst aspects of those other listings because they’re not smart enough to know better.  Back during the dotcom boom, I worked for several companies that spent considerable amounts of money on intranets and extranets, and those internal sites always looked terrible.  You could always tell if the designer (always some Cat Piss Man in the server room who wanted to claim that he was a Web designer on his resume) spent his off-hours visiting Star Trek sites or porn sites.  If the former, it was loaded with pilfered TV and movie photos without any concern about the company being sued for copyright infringement.  If the latter, it was usually black backgrounds, white text, multiple fonts, and lots of goofy animated GIFs.

Or, to put it another way, take a look at eBay.  Note all of the listings that include “L@@K!” in the description.  Does putting “L@@K!” in the description do any good?  Does it do anything other than impress upon the reader that the seller is anything other than the stereotype of the hillbilly eBayer selling broken junk to pay for his meth habit?  Does it actually lead to someone clicking on the link other than to get a laugh?  No, no, and no, but the seller sees every other idiot putting “L@@K!” in their descriptions, so they engage in a bit of magical thinking and figure “Maybe it’ll work for me.”  Yeah, it might, but the Dallas Cowboys have a better chance of winning the World Series than a realtor peppering a property description with such lame cliches.

It is sad that this crash is going to hurt you and/or cause you to change your plans. When prices are going up rapidly, I can understand becoming fearful that even with the increases in salary, you might be priced out in the future. A 4 or 5 year holding time is usually sufficient to recover your transaction costs, so even though you knew it was temporary, you weren’t flipping.

The economic distortions caused by these financial bubbles creates situations like yours. I imagine it is both irritating and very sad. Hopefully, we will find some good solutions to prevent these problems in the future. I wish you well.

Why not sell now?  You will probably get at least 10% more than if you sell this summer.

Anybody know what this size place might rent for? 
$3000/mo???

I remember in the 9/11 Twin Tower attacks, my wife worked in the US Bank building in L.A. She was at work that morning and called me at 7:40 am to say they were sending everyone home at 8am since it was the tallest building in L.A. and they didn’t want to take any risks. I told her to leave immediately. I asked, “What’s waiting 20 minutes going to change?”

My point is why wait until spring/summer to sell the depreciating asset? It’s value will only be going down every day you wait. Call IR2. He’ll write a listing that is actually readable. And if you price it to the market, you’ll get the albatross off your neck. And you can surely find a comparable rental for possibly a lower monthly expenditure. Good luck.

Actually you can still sell and buy a move house at the same time.  A friend is in exactly situation as your. He just sold a house bought in 2005 and takes $200K lose and move up to a much bigger one. He believes he has saved $300K if he brought the same new house in 2005.

I am in a similar situation.  I put a whopping 30% down on my property when I bought in 2005 (half of that was bubble money from the previous property I sold). 

Sometimes life throws you curveballs…I got divorced last year and still have the house.  I plan on putting it up for sale in the next few months.  To me it is a purely financial decision.  Now being single, renting an apartment for a few years will make the most sense.  I agree with most people in here that we haven’t seen the bottom yet and things won’t improve for a long time (I’m guessing 2015).

I can proudly say that I never HELOC’d out a dime of equity.  In hindsight, it would have been a smarter financial decison to put zero down and walk from my current house.  The ruined credit score would have been a joke knowing you have hundereds of thousands of dollars in the bank. 

Life is a constant learning lesson…

IR,  when are you going to start the weekend profiling the properties that make sense as investments?

We are still looking for the right property. It probably won’t be ready this weekend, but perhaps next.

IR, I enjoyed meeting you briefly at the IHB gathering this week.  I look forward to reading your book and seeing you again.

I am an investment manager who invested my personal money in a hedge fund in 2007/2008 that shorted the ABX indices with 10x leverage to profit from the declines in residential housing.  The fund was up over 1000%, but is now closed.

Recently, I learned that Dr. Robert Shiller co-founded Macroshares.com and has registered with the SEC to open 2x leveraged short (DMM) and long (UMM) exchange traded funds (ETFs) that track changes in the Case/Shiller house price composite index.

This may be another way for IHB readers to bet and profit from further declines in housing prices to help grow their downpayments.

This is a condo on a lot smaller than many houses.  Wake me up when it sells for $250,000.

Based on this prices, now, everyone brought this model lose money except phase 1st and 2nd buyers.
But there are a lot of lies and secrets in how the builder determines the priorities back to 2003-2004. If what I heard is true, you have to be IAC top executive’s friends/relatives or builder’s employees to qualify as top priorities.
This thing that definitely illegal is that at begin of the game the builder said the priority is first come-first-server (that’s why I wait in front of my computer and fill out the form at the time is open for registration) and then changes to finical strength at middle of the game and then changes the game at grand opening day say the priorities is by lottery. However, it seems only a few “selected” persons can be in that pool.

“Losing $170,600 of your own money must really suck. Day after day when I profile $250,000 bank losses the number seem surreal and impersonal. When you imagine a real person actually losing this money, the amount seems very tangible, very large and very personal—at least to me…”.

Well stated.

My husband would be interested in talking shop with you. He has been shorting financials since early 2007. 2008 was a very good year for us financially.  We missed both IHB parties but hope to go to the next one.

A sad day on the IHB when there’s no schaudenfreude to be had….

“Dallas Cowboys have a better chance of winning the World Series”

ROFL

“Life is a constant learning lesson…”

Yes and that includes your divorce.

$170k is nothing. Why don’t we ask all the nice folks who truly believe the ANALysts who kept proclaiming the “buy and hold” mantra on stocks and stock MFs (including index funds).

Don’t tell me all of you folks who are commenting have an increase in your investment in 2008 because you were smart enough to be on CD/MM/Treasurys/GNMA at 100%.

This is great advice. I am in a similar situation wanting to move up and am considering listing my current home in FEB. I will just rent for 2 years and then buy.

People are putting big downpayments (even greater than 20%) now a days because otherwise they would not be able to afford the monthly expenses. A sign that homes are still very expensive.

Absolutely correct.  My ex and I bought the house thinking it would be a great place to raise a family.

The events from the past five years have really put a strain on people who are in that phase of life (getting married and starting a family).  Most people I know were either priced out or bought at the wrong time and are now underwater in a big way.

My advice to anyone ever considering purchasing a home would be to plan on staying there at least 10 years to ride out any potential bad times.  All bets are off when there is job loss, job transfer, health issues, divorce entered into the equation. 

Good luck to everyone.

Short selling Indy Mac, New Century and anything else that you could predict would tank, would lead to a healthy increase in your investment. Risky…might make you feel like vomiting sometimes…but my husband has got SOME cajones. Otherwise known as balls.

No increase - but I moved every dime out of stocks and into money market accounts in November of 2007.  I haven’t made money; but I haven’t lost any, either. 

Buy and hold is an idiotic strategy.

Cramer and Obama’s peeps are already talking about outlawing leveraged ETFs due to the perceived volatility they foster.

Why not $150K, $50K, or free?

Or perhaps a sign that there are many people (not IHB readers, of course) who have money and have determined that considering everything, an Irvine home at current prices is a better place to spend their money than the alternatives.

Cramer is a buy and hold guy…I also find him incredibly annoying. If its outlawed, and I do believe it fosters volatility, then I am just glad we took advantage while we could. SKF will always have a special place in our hearts.

people put down 20% down just because banks require that. The banks require that since
they know it is gonna drop another 20% in Southern California

SRS has made me very happy… and very sad… :(

It’s great to have new data points on the “I’m going to sell because I know prices are going down further” bandwagon.

Otherwise called capitulation.

I was thinking about these recently, and they probably should be outlawed. Someone is going to put their entire retirement portfolio into these things and get wiped out in a market correction. Of course, then they will ask for a bailout because they did not know the risk they were taking on…

Yes, I will be wide awake if it hits $475,000.

Bailouts…everyone gets a mulligan. What societal shift has occured that makes it socially acceptable to ask for a bailout for poor decision making? I was always taught that when you mess up, you own up to your mistakes and learn from it. It has been upsetting to watch these fools on TV saying that they were rushing around buying up property on their lunch hour, not reading the fine print before they signed, and now asking for a gimme. You f’ed up. Own it and move on.

It’s interesting to note that margin in a portfolio already cannot exceed 50% by law (you need $2 in assets for every $1 margin). Leveraged ETFs seem to be a loophole around that.

“...but my husband has got SOME cajones. Otherwise known as balls.”

You do too, since his loss would have been your loss.  Right?

This property has almost $200 association fee (not sure if mello roos is separate or not).  So I doubt this is going to sell for the listed price.  I feel sorry for the guy loosing all that down payment.

I spoke with a friend yesterday who has had his home for a while and was interested in a refi out of his 10 year ARM (which has about 5 years left before reset).

The lender wanted no more than a 60% ltv.  This guy is prime credit, lots of income.

Correct. His loss would have been my loss. But to preserve my femininity, I will let him claim the balls.

I’m getting a little of it out of the thought that Chris, who wants us to think he is so rich that “170k is nothing” and likes to rub divorced peoples’ face in it, appears to have lost big bucks in the stock market.  Ahhhh yeah, there it is….

I’m talking about 170k loss, mind you, and not what I have in net worth. There are a lot more folks who lost more than 170k on their 401k/IRA/brokerage paying attention to the Updegraves and Bogles who are telling them to “buy and hold”...yeah look at 1987, yeah look at 2002, yadi, yadi, yada.

Nope, as a matter of fact, I didn’t lose on stocks and stock MF because I stopped believing those ANALysts back in ‘02 and never looked back. Of course, I lost some on other more conservative investments but my percentage loss would make most people blush with envy.

Of course, I don’t have the cajones that irvinemommy’s hubby has as I don’t believe in shorting and buying puts.

With rates close to 0% and CD/MM making less than 2% (unless you go for the long term route on CD), there’s really no point in borrowing 5% for your house since your investment won’t have a 5% return if all the naysayers are correct (and if you have the cajones to short). You might as well cash out whatever you have save for 401k and traditional/rollover IRAs and simply pay into a home if your family so desires a home rather a rental at this point.

If I were that guy, I’d cut that LTV to less than 50% which is what I did back in ‘06 with my townhouse (which I gladly sold back in ‘07 with a few grand loss).

Your performance should be judged at the end of your lifetime.  Big risk bets look good when they pay off, but it only takes one of those going wrong to destroy you.  If anyone’s going to brag about investment performance they should lay out their whole history with buys, sells and rationale so that we can tell whether they’re smart or just lucky.  I think most people just brag about their wins and don’t tell the whole story.  If, on the other hand, you’re into investing and not gambling, widely diversified, low cost porfolios will outperform increasing percentages of actively managed accounts over longer time periods.  Will there still be some small number of people at the end of 30 years who’ve beat the intelligent, patient buy-and-hold strategy?  Yes, but there will have been no way for anyone to tell ahead of time who this would have been.  And, those people will be standing in a wasteland of failed actively managed accounts.  I’ll take a 100% chance of doing well over 10% chance of doing better and 90% chance of doing worse any day of the week.

Just to be clear. I am not suggesting to be so aggressive with every investment account. Our retirement accounts were slashed like everyone else’s but we are young. Young enough to live through decades of more change in the market. We put into retirement each paycheck. We are financially conservative when it calls for it. Our good fortune came with accounts that aren’t involved with our downpayment for a house or retirement. You always have to know what you can afford to risk. And even then, hard earned money, in any amount, isn’t easy to stomach losing. The volatility got to us eventually (not in our account balance, but our anxiety levels) and we decided to quit while we were ahead. Gamblers would be more reckless.

Does your husband have laminated formica or solid wood cajones?

It’s COJONES!!

CAJONES are the drawers in your furniture.

;-D

As others said those that abused or gamed the lending system could walk away with money in their pocket and free rent for 1/2 to 2/3 of a year.

The system rewards those who gamed the non-recourse and 100% or more financing.  They have no financing risk, fee rent and cash back.  Too bad those that didn’t default—those paying on time and those that didn’t borrow, i.,e., renters, are paying for the party.

Remember:  Your tax dollars at work and only in America

Muchas gracias, tonyE. Perhaps I should not be commenting on my hubby’s balls (or his drawers for that matter) on a blog.

All of you little people that pass judgment on all of the masses that went with the flow,  can kiss my ass. Ilove how your loser audiance likes to leave ther comments about how smart they are. (funny they congrigate here Douche bags that won’t act until mommy says it’s o.k.)If one more of you start talking shit about the market it only proves my point.Irvine guy get a life, you can’t have a job.  Great book {not}

You must be a realtor, because that was awfully hard to read and comprehend.

@ Mark
Many of us have been frequenting blogs like this one long before it was en vogue. So tough $hit if you’re just pissed that you screwed yourself over while ‘going with the flow’

Having gone through this ourselves… if you can handle the loss… I would think about selling as soon as you can. The low rates right now help out prospective buyers but I don’t think waiting until spring/summer is going to net you a better selling price.

Rental parity is still skewed in Irvine and we are currently renting a house we would probably have to pay $2000 more per month if we tried to buy it. Instead of move-up buying… we move up rented… for less.