Login
Subscribe
Recent Comments
- Lee Campbell on Uncovering the History of the Secret Garden
- Kelja on Uncovering the History of the Secret Garden
- Sylvia Walker on Irvine Housing by the Numbers - May 2012 Update
- Casual Observer on Irvine Housing by the Numbers - May 2012 Update
- Astute As It Comes on Open House Review: 35 Bella Rosa
- Sylvia Walker on Open House Review: 35 Bella Rosa
- Darin on Open House Review: 35 Bella Rosa
- Sylvia Walker on Investors Are Busy in Irvine's Low-End Housing Market
- Casual Observer on Investors Are Busy in Irvine's Low-End Housing Market
- irvine_home_owner on Tustin, but Irvine Schools
Recent Posts
- Open House Review: 34 Redwood Tree Lane
- Uncovering the History of the Secret Garden
- Closed Sales from 5/10/2012-5/16/2012
- Open House Review: 52 Secret Garden
- Irvine Housing by the Numbers - May 2012 Update
- Paired Living with Privacy in Woodbridge
- Beige Ruth Sisters
- Closed Sales from 5/3/2012 to 5/9/2012
- Open House Review: 35 Bella Rosa
- Investors Are Busy in Irvine’s Low-End Housing Market
Categories
Archives
- May 2012
- April 2012
- March 2012
- February 2012
- January 2012
- December 2011
- November 2011
- October 2011
- September 2011
- August 2011
- July 2011
- June 2011
- Rest of archives
Browse Homes
Irvine Homes
- Airport Area Homes
- El Camino Real Homes
- Northpark Homes
- Northwood Homes
- Oak Creek Homes
- Orangetree Homes
- Portola Springs Homes
- Quaill Hill Homes
- Rancho San Joaquin Homes
- Turtle Ridge Homes
- Turtle Rock Homes
- University Park
- University Town Center Homes
- West Irvine Homes
- Westpark Homes
- Woodbridge Homes
- Woodbury Homes
Newport Beach Homes
- Newport Coast Homes
- Crystal Cove Homes
- Corona Del Mar / Spyglass
- East Bluff / Harbor View Homes
- Lower Newport Bay / Balboa Island
- Balboa Peninsula Homes
- West Bay / Santa Ana Heights
- West Newport / Lido Homes
Other Cities
- Aliso Viejo Homes
- Anaheim Hills Homes
- Brea Homes
- Costa Mesa Homes
- Coto de Caza Homes
- Dana Point Homes
- Huntington Beach Homes
- Ladera Ranch Homes
- Laguna Beach Homes
- Laguna Hills Homes
- Laguna Niguel Homes
- Lake Forest Homes
- Mission Viejo Homes
- Orange Homes
- Rancho Santa Margarita Homes
- San Clemente Homes
- San Juan Capistrano Homes
- Santa Ana Homes
- Tustin Homes
- Villa Park Homes
- Yorba Linda Homes
Contact
.(JavaScript must be enabled to view this email address)
Foreclosures
Housing
- Talk Irvine
- IHB Forum Archive
- OC Housing News
- Coto Housing Blog
- Housing Kaboom
- Patrick.net
- Housing Chronicles
- Housing Doom
- Dr. Housing Bubble
- Manhattan Beach Confidential
- Burbed
- SoCal RE Bubble Crash
- Professor Piggington
- Real C'ville
- Westside Bubble
- Bubble Meter
- Portland Housing Blog
- Sacramento Land(ing)
- OC Register Blog
Econ/Finance/Other
- Calculated Risk
- The Big Picture
- Economist's View
- Mish's Blog
- Matrix
- Bakers' Stock
- ML-Implode
- Eschaton
- Best Mortgage Rates
- Crackerjack Finance
Latest REOs
- $199,900 :: 3125 Watermarke Pl, Irvine CA, 92612
- $349,900 :: 10 Greenleaf 16, Irvine CA, 92604
- $439,900 :: 61 Olivehurst, Irvine CA, 92602
- $889,900 :: 14 Upland, Irvine CA, 92602
- $429,900 :: 56 Great Lawn, Irvine CA, 92620
- $465,000 :: 212 Garden Gate Ln, Irvine CA, 92620
- $329,000 :: 1006 Terra Bella, Irvine CA, 92602
- $579,900 :: 8 Star Thistle, Irvine CA, 92604
- $398,900 :: 191 Lockford, Irvine CA, 92602
- $750,000 :: 69 Lakeview 6, Irvine CA, 92604
Is it really surprising that housing demand is at a low when affordability is at its best? We had housing demand at its peak when affordability was worst. Maybe people are not just using affordability and making rational decisions.
Willingness to buy is a huge factor. Think about the bubble. It took a willingness to believe that house prices would continue to rise, and devote an outsized portion of your income and/or take on a mortgage with unconventional payment terms.
At bubble’s peak, nearly 50% of transactions were for non owner-occupied homes. At that point, affordability is not really a significant point. That transaction volume has not returned, and requires a shift in sentiment on housing.
You also have the idea of whether people are willing to put a majority of their nest egg into one investment that has recently done poorly. Willingness and sentiment are important.
While your observation about 50% of transactions were for non-owner-occupied homes may be correct, you need to factor in WHERE that was occurring and who was making those RE loans.
Take metro Phoenix, please, as an example. Bcuz a “rental home” is taxed with a property/sales tax differently than a “residential home” which is not; almost all of those non-owner-occupied homes were listed for property/sales tax purposes as “occupied”. The GD lying tax cheats!
So, in the sand states - Cal, Nev, AZ & Fla; all of those very bad ARMs & subprime RE loans were made during the dead year - 2003-2007; by Countrywide, WAMU, Wichovia & New Century. And, at the same time “low-down-no-down” investors were buying anything and everything - everybody assuming that the prices would go up, they would pay out little or no money AND make their fortune.
While some of that may have occurred where you and the rest of U.S. live, most of it was in those four states, plus Georgia and Texas.
That was then, this is now. That was there, most of it is now gone. The rest of U.S. were different, now we are not.
But, you cannot - as in economically and morally should not - mix up apples from Eastern Washington with the oranges and other citrus “fruits” from Cal, Az and Fla.
See, what happenes in Nevada did NOT stay in Nevada.
I agree with you, and the other stat that I remember was 85% of Miami condos being non owner-occupied. I tried to convey to others in NC the madness of the sand-state RE markets during the bubble, but because things were not too overheated here, it was difficult to understand. I also tried to convey the size of the problem. CA & FL are quite large markets. You can still see the geographical dependence. The county I grew up in has 18% of loans >90 days past due. The neighboring county (Dade) has 22% 90+ days late.
One thing I thought of is geographically dependent mortgage rates. If home prices are going up 10%/yr, you will tolerate a higher interest rate than someone whose home price is flat. Then, banks are compensated for risk to collateral, and it serves as a natural dampening mechanism for prices.
I’m trying to sell two houses in rural Oregon within 25 miles of a Pac 10 University. One is on about 2 acres and one on abut 3/4 acre. We got them on the market in April, and we’ve gotten nada in the way of interest. We’ve priced them based on appraisals, but we’re not getting any traffic. My Wife thinks people are leery of living too far from town because of the surge in gas prices, but I think it’s bigger than that. There just isn’t a lot of confidence in the economy. And people aren’t chucking it all, cashing in their savings, dropping out and moving to the woods, either. But if any of you want to do that, just reply to this post.
Fortunately, I’m not indebted on either property. I have an old 78 rpm disc by Hattie Noel called “If I Can’t Sell It I’ll Keep Settin’ On It”. Maybe that’s what I’ll have to do.
Joe
Never mind “willingness” to buy. What people lack now is the ABILITY to buy.
Had credit standards been maintained for the past 20 years, most homebuyers in that period would have had to sit it out because they lack down payments. Most people in this country have lived paycheck to paycheck for years as middle and lower-middle incomes stagnated, and personal debt levels rose since 1980.
We are now in a deflationary climate, one of eroding asset values. The stock market remains levitated by the offices of the Fed, by pushing interest rates to absurd lows and destroying savers and fixed-income investors, and forcing them to take elevated levels of risk just to get a small return on their savings. But look out below- there has never been so much insider selling as in the past years and the equities markets look very, very fragile, at least to me.
Deflation results in lower asset prices but even lower incomes, which means that even though the price of housing may drop even more, homes could be even LESS affordable, not more; because incomes are dropping even more, and credit is tighter. We might be coming upon such a time.
You obviously have no experience or understanding of the upper crust of society. Maybe Chicago is pockmarked by the broad-backed under-educated masses, but here in Irvine, life is different. Unlike your swarthy destitute immigrants, in Irvine there is an infinite line of wealthy FCB’s clamoring for a slice of the good life: a home in Turtle Rock, and enrollment of their violin-virtuoso children in the unparalleled, world-renowned public school system.
Perhaps you might consider leaving your sinking, rat-infested ship along the “Great” Lake Michigan and move out west, but I hesitate to suggest this considering you are likely far from becoming Irvine material. If you don’t have a medical or engineering degree, and are too old/unintelligent to start that track, you might have luck marrying a Chinese engineer and beginning the slow process of moving up toward the upper echelon of Irvine living. No guarantees, mind you, but even the glimmer of hope of someday living in Irvine—deluded a hope as it may be for folks like you—may be enough to get you through a slightly less dismal life.
Failing that, feel free to come visit the IRVINE SPECTRUM CENTER anytime, where every day is like Christmas and Halloween, and the professional classes clink glasses brimming with delicious extravagance at world-class restaurants like P.F. Chang’s and Rubio’s Fresh Mexican Grill.
Cheers!
Hilarious!
Indeed, the feet of the Irvine classes never touch the ground - the hot asphalt would just burn their tootsies anyway. Husband, wife, and high-achieving Asian children - such are adopted if the couple is unable to produce Asian children naturally - enter the attached garage each morning, gliding past the doctoral, engineering, and medical diplomas lining the end of the hallway. SUVs float them through the streets of the Divine City, to their high-six-figure engineering jobs or schools of high achievement.
Whether on the weekdays or the weekend, the doors of said SUVs never open until the concrete parking garage or the Spectrum is attained. The windows? Only to take in the collations offered by that exclusive Irvine institution, Starbucks, or other products offered in such drive-through emporia as can be found only in the City Where the Real Estate Market is Different Here This Time.
I had the pleasure of meeting P.F. Chang himself. A rare man of much discernment, he made no secret of his desire to keep his creations exclusive to Irvine. Only those of high moral fiber and worldly achievement unheard of elsewhere will ever enjoy such repasts.
Between the astute observations of Planet Surreality and HydroCabron, I can’t stop laughing….
California house prices are still insanely high in absolute terms.
I know the spendthrift American Way is to only look at monthly payment amount (same with cars), but when it takes dual incomes and 30 years to pay off a mortgage, prices just don’t make sense.
Bank lending officers are being complete pricks with mortgage applications in the Bay Area, so expect dwindling transaction volume.
BTW, love the flames pic above.
You need to open your eyes outside of the premium bay area.
90% of America does not require dual incomes or a 30 year mortgage.
Also open your eyes to what is around you. Plenty of stay at home moms in Pal Alto with their VC working husbands.
Your generalizations are completely ridiculous. When you get the chance can you let everyone know the optimal square footage and San jose apt complex everyone should set their sights on so they don’t live seeking to quench their vanity?
“Your generalizations are completely ridiculous.”
and
“90% of America does not require dual incomes or a 30 year mortgage.”
http://www.prb.org/Articles/2003/TraditionalFamiliesAccountforOnly7PercentofUSHouseholds.aspx
http://www.mybudget360.com/the-middle-class-two-income-trap-–-two-breadwinners-plus-extra-money-to-support-the-banking-industry-how-middle-class-americans-are-losing-ground-by-supporting-the-financial-sector/
http://www.doctorhousingbubble.com/the-fallacy-of-cheap-home-prices-dual-income-trap-home-prices-over-valued-by-25-percent/
Cry me a river with that blogging analysis. My household is not dual income is yours? housing expense is 15% of my income. I’m not special.
I understand that you are more comfortable with exaggerations, “Cry me a river”, than facts, but ...
The facts are that the average US houshold spends 34% of their annual income before taxes on their paycheck and most of them are two income households.
http://www.usnews.com/opinion/articles/2009/07/13/the-average-american-consumer-over-30-percent-of-income-spent-on-housing
Check out the NYTimes Interactive census map. This link is to Irvine mortgages consuming > 30% of income. Lots of tracts where more than half of households spend > 30% on housing.
I’d guarantee you’re not the only one-income household spending 15% of your income towards housing, but that does not mean that you are closer to the norm than a two-income household paying 30% of their income.
Analysis by anecdote is not real analysis.
Once again, all we get from Planet Realty is conjectures. Please show us the stats for:
- “90% of America does not require dual incomes or a 30 year mortgage”
- “Plenty of stay at home moms in Pal Alto with their VC working husbands”
You continue to make these and other statements that are counter to any actual statistical data without ever providing any real data that supports your claims. Maybe if you actually provided some data that support your claims, you’d actually have some converts. This - and the fact that you continue to degrade and attack the respondents rather than just stating your objections - is the reason you are taken here as nothing more than a troll.
There are ‘plenty’ of sahms in my neighborhood, and my neighborhood also has 27 homes under construction (out of 286 total lots, with roughly 150 homes completed).
However, I’m smart enough not to extrapolate from that limited data to the conclusions: most mom’s don’t have to work, and there’s a construction boom going on.
“Your generalizations are completely ridiculous. When you get the chance can you let everyone know the optimal square footage and San Jose apt complex everyone should set their sights on so they don’t live seeking to quench their vanity?”
I never imagined I would be accused of being vain for buying in Foothill Ranch. I can only imagine what I would be called if I moved back to Newport Beach!
PR:
1) This blog (IHB) is not about 90% of America ... it’s about Irvine. The Bay Area has comparable prices and is in the same state, so I don’t mind comparing the two.
2) Palo Alto is a very small town in the Bay Area with especially high prices in a flood plain. Not sure why people keep referring to it as representative of the Bay Area.
3) Don’t confuse my objection to loanowner excuses (claiming rental parity when it’s silly to do so) with jealousy ... I wouldn’t move to Irvine even if you gave me a free house there.
I like this reply because its opinion without attacking someone else.
@ Walter - YES, without a doubt it was vanity buying in Foothill Ranch. You could have purchased in Santana or Garbage Grove, or Mission Pendejo(accomplished).
F.R. does have access to the Whiting Ranch and other areas to hike, bike, etc. I make it a habit a few times a week to go up on those hills and piss in the direction of all the homes (I do change the direction I’m pointed to be equal opportunity). Ahhhhh… gotta luv the outdoors
Hello SJR! I am not sure the two areas are that comparable; surely Palo Alto has the incomes to support the prices, in many cases. I agree that the house prices are ridiculous, but I don’t think that PA is the same epicenter of sub-prime and Alt-A loans that Irvine is.
Let’s see who can pay the incomes needed for these prices:
Irvine: UCI, Broadcom, TIC, Hyundai and others I don’t know about.
Palo Alto: Stanford, Oracle, Intel, Apple Google Nvidia etc etc etc.
Do we have any statistics on HELOCs in the Bay Area? That would be interesting.
I’ve lived in both areas, so would find direct comparisons of apples to apples interesting.
The sweet spot up here for FCBs in trophy school districts (Palo Alto/Cupertino/Saratoga/Los Altos/Menlo Atherton) is $2M-$3M. sub $1M is a bloodbath of HELOCs and foreclosures - just take a spin through FR or Trulia to see what I mean.
I kind of like this SanJoseRenter vs. Planet Reality match up. This could develop into to a NoCal, SoCal rivalry.
Some of their points make sense, some are just unsubstantiated blah, blah, blah.
OK, I will get back to being vain in my Foothill Ranch track house.
. It reminds me of the speech they give incoming freshmen in college. Look at the person sitting to your left and to your right. One of those people will not graduate.
Can I just say that I remember this pitch word for word. I was 17 at the time and felt incredibly deflated. You didn’t happen to be at Cal Poly SLO did you? They gave this speech everywhere???
Yep, they did. I am not really sure why they do this (what it is supposed to achieve), but it’s completely boilerplate.
LOL. At my spouse’s law school they told each incoming class at orientation: “Look at the person sitting to your left. Look at the person sitting on your right. At least one of you is looking at your future spouse.”
Oops. The last sentence at SLO was…“two of you won’t be here at the end of your freshman year.”
Holy financial clusterFark, Batman!!!
PMI = $516
correct me if I am wrong, but my understanding is that the PMI associated with FHA financing requires that it be paid for a minimum of 5 years. Also, you cannot make extra payments to build equity in order to shorten the lifespan of the PMI. Add to that $516/mo the HOAs and you could easily spend $750+/mo on nothing! Well, at least with the HOAs you get a little….pool, amenities, structure maintainence, etc. The total PMI after 5 years is almost 31K. Young families will have a very difficult time coming up with that kind of monthly expense when they have to pay the mortgage/rent and daycare.
I’ll offer $179,000 for the home pictured. They can take it or leave it.
The PMI on FHA loans is now 1.15%. It’s higher than property taxes in many places including California. It pushes a 4.5% interest rate to an APR of 6%. FHA is the replacement for subprime, and the risk is being prices appropriately.
IR, how do you assess rental parity for Irvine? Based on the properties I’ve looked at, there is rental parity if you assume that the buyer puts 20% down and the opportunity cost for the downpayment for a buyer on the sidelines is the equivalent of putting money into a bank CD i.e. 1%.
You can use the same Monthly Cost of Ownership formula as IR, just recalculate for 20% and leave off the PMI.
+ Monthly Mortgage Payment
+ Property Tax (@1.04%)
+ Special Taxes and Levies (Mello Roos)
+ Homeowners Insurance (@ 0.25%)
+ Homeowners Association Fees
+ Lost Income to Down Payment (net of taxes)
+ Maintenance and Replacement Reserves
- Tax Savings (% of Interest and Property Tax)
- Equity Hidden in Payment (Amortization)
Not sure I’d agree with using a rock-bottom risk free investment return as the op cost of down payment though. Very tiny percentage of americans are debt free; think credit card balances and auto loans. Plus I imagine a lot of those saving for a down payment are forgoing investments like 401K, etc that would average better than risk-free.
Actually, I did use the monthly cost of ownership formula as IR in my comparisons. BTW, this might be an opportunity to thank IR for that calculator, which I’ve used many times. The reason I used a 1% investment return is from the perspective of a prospective buyer today - who would like the flexibility of being able to buy within a year, but cannot put it into riskier investments that run the risk of return of principal rather than the return on principal. Personally, my opportunity cost is higher than the 1% since I’ve been moving the down-payment in and out of bonds. Whether people have other debt is not important in comparing rent vs buy. Also, those who are saving for a downpayment are not going to put that money into 401K anyway since it’s not like they can suddenly decide to divert it for a downpayment and expect to have sufficient funds. Therefore, I don’t believe that equation should affect the opportunity cost.
BTW, I agree that things look more tenuous if you assume 10% downpayment and PMI and/or Mello-Roos, which is why I asked IR what his assumptions were. And whether that has been an appropriate metric to use for previous cycles.
In the formula I developed for assessing opportunity costs, I make the assumption that the interest rate of liquid assets someone would use for a down payment is earning less than mortgage debt. Intuitively this makes sense because the same bank that pays interest on deposits is loaning that money out in mortgages, and there needs to be a spread for the bank to make money. My current opportunity cost is low because interest rates are so low.
For people who are savvy investors who can make better returns, the opportunity cost is much higher. For those who can consistently outperform the cost of mortgage debt, they should actually minimize their down payments and tie up as little of their investment capital as possible. Of course, to consistently outperform mortgage interest rates without significantly higher risk is easier said than done.
IR, the mythical banking titan you imagine has some other characteristics. If they’ve been outperforming mortgage rates, then they probably have a lot of cash or liquid assets to use for a DP. Also, they know that you can’t outperform risk-free assets (GSE mortgages are default-risk free no matter what people tell you) without taking on additional risk. It might be hidden and not pop up for a while, but the risk is there. The idea of can’t miss investments should have died with the ‘home prices only go up’ myth.
” ... they should actually minimize their down payments and tie up as little of their investment capital as possible.”
I dunno. Maybe they should, maybe they shouldn’t. I have a difficult time telling those who are good with money what they should or shouldn’t do.
Personally, the purchase of a home will be an expenditure, not an investment and the idea of borrowing money for an expense is not appealing. So, we will probably use a 100% down payment.
IR,
Thanks - I in fact assumed an even lower return on downpayment (1%) than you did in your calculator. The assumption was indeed that was for a prospective buyer, the risk is high to achieve higher returns than bank CDs in a low-interest market period -I’m doing modestly better but that’s as much risk as I’m willing to take with the downpayment.
“Personally, the purchase of a home will be an expenditure, not an investment and the idea of borrowing money for an expense is not appealing. So, we will probably use a 100% down payment.”
Personally, I will pay down my mortgage even if I can get a better return than the mortgage interest rate in a competing investment. There is a peace of mind that comes from owning real estate without a mortgage that has benefits that outweigh any small difference in financial return I may otherwise achieve.
Personally, I think the opportunity cost is huge. It is literally the ONLY reason we have not purchased a home yet.
I agree that if you were to assume that house prices were to continue to fall, your opportunity cost is certainly high and the above is moot. However, I imagine prospective buyers are making the kind of calculations I mentioned above in rent vs buy decisions. One would think that the market would find a floor somewhere in the vicinity of that region of parity. Rate increases can quickly change this equation for Irvine, though the national market has enough leeway for rates to rise and still maintain a price momentum once things turn around.
Uh-uh. Even if house prices stabilize or even appreciate a bit, the opportunity cost for us is huge. That is why I said personally.
No one seems to believe me, but when we buy a home, I doubt that I will care what home prices do. We will buy a home to live in and we will not find it less livable if home prices decline.
Opportunity cost = price housing in gold and silver.
Transfer most of PMs to real estate when DOW : Oz of Gold ratio is 1 : 1, depending on foreign sentiment regarding US sovereign default and the effects on faith in the Dollar.
I do think getting one of these 3% down Gov loans will be effectively reduced by continued debasement of US currency.
Better to have both or better to stick with PMs?
I hear ya.
I have an investment bankroll which earns enough to cover most of my rent. If I dipped into it for a down payment, I would no longer be paying rent, but I would lose much of the earning power of my liquid assets.
Even if I didn’t see the gloomy specter of shadow inventory which darkens every neighborhood I like, I see my down payment cash not as the amount which it is, but as what it earns. Only when the pile is 3x a down payment will I feel comfortable cutting out a slice of it.
Good discussion. I think that “rental parity” is a actually a pretty complicated subject. There’s a lot of wiggle room in deciding what to include, what not to, and how to calculate various factors. Personally I feel that we should examine rental parity inductively, not deductively. In other words, we should ask what has been the typical historical relationship between rental payments and monthly ownership costs during non bubble times for like properties. Is buying more expensive now relative to renting than the historical norm, even taking into account today’s low interest rates? If there is a big deviation from the historical norm, how sustainable is that?
All that being said, your typical would-be buyer when comparing rent vs own is probably doing a rough “monthly nut” comparison that leaves out down payment opportunity cost, maintainence, and principal amortization.
Excellent point, rental parity in Irvine is not a myth.
Check it out, it’s called The Groves
No FCB action here.
One would expect these much older (built in ’75) and secondary (non-premium) areas of Irvine to be priced significantly lower than $331/ft.
Mortgage rates drop for 7th straight week,
http://finance.yahoo.com/news/Fixed-mortgage-rates-drops-apf-3862609979.html
Interesting first chart there in today’s blog. Though I’m not sure I can recall what each line represents, it doesn’t look promising for sellers this year.
Seeking help from real estate sales-people here:
Must a short sale be listed as a “Short Sale”?
e.g. Redfin provides info on some listings identifying the property as a short sale. A listing just went on the market in our neighborhood for 10% below two other comps on the market for ~30 days, but it isn’t identified as a short sale.
I am not a real estate sales person, but I want to show off and see if I am correct.
If the intention is to sell short, then it must be listed as such. BUT, if the seller tells his/her agent that even though they owe more than the asking price, the seller will be paying the difference to make the loan whole, then the agent is not required to say it is a short sale, because it isn’t.
BTW, just cuz a listing is less than others does not mean it is a short sale. It may just mean that the seller is in touch with reality.
Interesting statistic that explains where the HELOC money really went:
“In 1985, 12% of personal disposable income came from savings, while just 1% came from home-equity lines, according to the Federal Reserve and Congressional Budget Office.
By 2007, 10% of personal disposable income came from housing credit: second mortgages, home-equity lines and so on. Less than 1% came from savings.”
When the Value of Housing Ruins the Home
I’m not sure these folks will be eating the bitter bread of HELOC foolishness. Obviously some of that money went into a parquet floor in their kitchen.
And you know, it’s always possible that they took that $250K in HELOC and bought Apple or Google stock with it. For their sakes I hope so, although such prescience would be unusual.
IR presents 1 HELOC abuse case per day, and I haven’t seen a lot of upgrades.
There have been some anecdotes about HELOCs being used (and lost) to start or shore up personal businesses, but again few stories about big stock buys.
(I do know 1 guy who bought his million-dollar house from speculating on YHOO in the 90s, but that wasn’t using HELOC money.)
dont you know? Everyone read the bear astute posters and found out the end was coming but they weren’t 100% sure because PR and tenmagnet kinda sound like they sort of might have maybe had some points. So they took the Heloc, bought gold with it.
If shit hit the fan, then they make out with gold. They make their gains money and squat for 24 months and then in 5 years, they can buy again for 50% off. If shit didn’t happen, then they simply sold gold and deducted interest on their Heloc.
It was a goldman sachs kind of all bets covered no way to lose smart way to play the foresight of the “been calling since 2005 crowd”.
You mean you didn’t do that? Jeez.