Total value of U.S. homes is $31.8 trillion – Los Angeles homes now valued at $2.7 trillion, the size of the U.K. economy.  Chinese home buyers in the U.S.

Housing values in the U.S. have reached a new peak.  In total, U.S. homes are valued around $31.8 trillion according to Zillow.  That is 1.5 times the GDP of the U.S. and close to three times the GDP of China.  Crap shacks in Los Angeles are now worth $2.7 trillion, which is more than the United Kingdom’s GDP. What is very telling is that real estate values across the country in virtually every large metro area are near peak values.  In places like San Francisco, they are in a new stratosphere.  The allure of real estate is now fully engulfing the nation and flipping rates are at decade highs.  People want to get a piece of the action.  You also have many ex-pats now taking their money abroad and retiring in more affordable countries where they can stretch those Taco Tuesday dollars while money from China is flowing the other way and boosting prices in some areas dramatically.

The housing market is peaking again

Money from China is rushing back into the U.S. via real estate purchases, businesses being bought out, and overall investment.  So it is no surprise that hints of trade war will send the stock market into a dive.

Here is the growth of real estate values in the U.S.

total-market-final-cbe644

Source:  Zillow

Home values are once again near a peak.  And this growth has occurred in nearly all metro areas.  Yet money from abroad is flooding the market:

china-factor-real-estate-1445465099217-master495

Those that live in places like San Francisco or even parts of SoCal understand the power of this money on local real estate values.  It is very clear that buyers from China are buying in prime areas.  Taco Tuesday baby boomers like to believe their crap shack in a marginal area is suddenly going to be worth $1 million but alas, that is not the case.  In some areas however $1 million will get you a tiny box as zip code chasers are out in mass in this market.

The question becomes, are prices inflated?  Bubbles are hard to spot but it is clear that real estate is now a boom and bust industry.  There was a time when real estate was a boring hedge that barely kept pace with inflation.  Now, the amount of house horny euphoria courtesy of HGTV shows and infomercial math is making the public delusional on home prices yet again.

25 percent of homes in SoCal are still being bought with all cash:

Absentee-CashBuyers

Compare this to nearly 10 to 15 percent in more “calm” times but of course this is anything but calm.

Sales volume continues to be low because home builders are not building new homes since they know that broke Millennials are looking for rentals, not single family homes.  High income households and foreign money in some markets is all that is needed to keep prices inflated on low inventory.  But that doesn’t really explain why places in marginal areas are priced so high.  These are the markets to monitor when the inevitable correction arrives because there is always a price to pay for a party (the hangover).

While real estate values nationwide hit a peak, sales volume continues to be weak.  The homeownership rate continues to trend near generational lows.  And foreign money flooding into the market is at record levels.  But at least we have social media to distract us and once again people are flocking to housing cheerleaders like moths to a light.  This always ends well.

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394 Responses to “Total value of U.S. homes is $31.8 trillion – Los Angeles homes now valued at $2.7 trillion, the size of the U.K. economy.  Chinese home buyers in the U.S.”

  • “The question becomes, are prices inflated?…25 percent of homes in SoCal are still being bought with all cash”.

    As long as the rentier class is buying, inflate away!

    Gotta have some place to put all the SoCal homeless and spend those vouchers!

    • The current appreciation from the great recession just isn’t the same as the run up from 2001-2007. Tons of cash and all purchases are based on income. In the great housing bubble run up in prices all you had to do is fog a mirror to buy a house with 0% down. People were paying for mortgages with HELOCs.

      We won’t see a true bubble until those people are allowed to buy again.

    • Thomas Verlain

      All these morons on here acting like they know when the market is going to crash so they can finally afford to buy. It is supply and demand folks. Simple as that. There are so many damn people in this world. If you did not or do not buy while interest rates are below 5%, you will look back in 10-20 years and wonder while you had your head stuck up your ass and didn’t take advantage of 5000 year low mortgage rates. Wake up morons. Real estate in Los Angeles is actually undervalued. Mortgage application restrictions have never been tighter. Supply has never been less, and demand has never been greater. So many companies are in the business of owning single family homes and renting them out for year. Invitation Homes – case and point. You are all living in the past if you think we are in a housing bubble. Enjoy renting for the rest of your life!

      • Thomas,
        Artificial low interest rates push house prices higher. Higher interest rates put pressure on prices- a great thing if you want to buy half off
        And The prop13 scam pushes house prices higher.
        Also, the housing market is about cycles and we are nearing the end of the current cycle.
        Most people who follow the RE market know that house prices move in cycles and will go down after artificial inflation.
        I don’t blame you for not knowing these things. If you continue being on this blog you will learn this very quickly.
        If you are in the market to buy and you don’t care about educating yourself-please go ahead and buy. Every bubble needs suckers to buy at the height of the bubble.

      • cynthia curran

        Well, I read a liberal demographer that wrote about an interesting trend, places like LA are growing at a sail pace while somewhere in the south or Midwest population is growing more rapidly since its cheaper to live. Also, Trump supported tariffs on China which will turn off Chinese from the US,watched San Gabriel Valley and Irvine get hit,

      • You are drunk.

  • son of a landlord

    This Santa Monica townhouse seeks over a $1 million markup (over 100%) after 5 years: https://www.redfin.com/CA/Santa-Monica/829-14th-St-90403/unit-2/home/6772302

    Sold in 2013 for $989,000.

    Offered in 2018 for $1,999,000.

    I know it’s been remodeled, but still, it’s a townhouse. A condo. No land. And built in 1979.

    • That Santa Monica townhouse is an awfully nice place, with beautiful upgrades. It’s spacious, too. I daresay that something like this would sell for nearly the same price in Chicago’s prime zip codes. People are getting awfully steep prices, from $1.2M to $2M, for 120-year-old A-frame worker’s cottages in neighborhoods like LIncoln Park, Bucktown, or Wicker Park. Lincoln Park I understand- that is a totally top tier neighborhood, but Bucktown and Wicker Park still have elevated crime profiles, and, IMO, are totally lacking in charm, and the architectural distinction I expect in a city like Chicago.

      • Leave it to a dingbat from Shitcongo to proclaim that townhouse is an awfully nice place.

        It’s a freaking 1970’s era poorly built stucco townhouse. Look at that tiny concrete patio with a view of a wooden fence/concrete retaining wall with the neighboring apartment building looming above which blocks out the sun.

        Almost $2M and $529 monthly association fees for that 1970’s era dump in the Peoples Republic of Santa Monica with hordes of homeless right outside your door? No thanks.

    • It is ultra premium location. It does not have to play by regular economics rule
      Whoever bought it for a mil 5 years ago obviously did not listen to anyone on blog like this
      Will come out like a champ – it will go for asking

      • son of a landlord

        That townhouse makes no sense financially. But I realize that some buyers can afford not to care about financial sense. They look for a nice place to live, and care not about price.

      • I would say a premium is in order if that townhome is close to work and everything that a person wants to do so they spend time living, not commuting. The 2013 price could be considered somewhat reasonable based on that. Now, not so much. But maybe someone who made a bunch of money from the China/QE/ECB inflation of all assets wont trip – easy come easy go and they’re buying a lifestyle for right now and not worrying about growing their assets.

    • Facts and Feelings

      Just back from a beautiful Saturday in Santa Monica with a friend raised there who wants to return but finds prices too high. I told her how even a water-damaged unit in an oceanfront building sold recently for $506K, 27 percent over it’s asking price of $399K! She then said that a little known fact is that the Northridge earthquake didn’t just do great damage in the Valley but that buildings lining Santa Monica’s Ocean Avenue along the California Incline were mightily damaged too….but, of course, such facts don’t seem to be readily disclosed and now I’ve got a feeling it’s probably better to live farther inland away from that bluff.

      https://www.redfin.com/CA/Santa-Monica/101-California-Ave-90403/unit-103/home/6781167

      • son of a landlord

        I live in Santa Monica and was here during the earthquake. Damage was extensive throughout the city. I saw one four storey building with its entire front fallen away. You could see the apartments inside.

        Rent control was partially to blame. Landlords didn’t want to invest in retrofitting older buildings. But now the city is forcing them.

        Santa Monica also sits on a prominent fault, named for it.

        You’ll note from this map that ocean front buildings lie in a high risk zone for landslides: http://gismap.santa-monica.org/GISMaps/pdf/geohaz.pdf

      • Facts (of some probability of risks) are presented to supress feelings of missing out

    • Lets not forget, that townhouse is in the Franklin School District, a coveted school where the wealthy move to just to send their children to a good school. Therefore it is one of the neighborhoods that will stay somewhat isolated from market crashes as well.

      https://www.niche.com/k12/franklin-elementary-school-santa-monica-ca/

    • Looks nice. Ive seen people buy worse in not as nice a ne8ghborhood for about that. On the other hand I see rentals in that area for 4-5k/mo so…

    • At least it had grounded wiring in 1979.

  • Many make the generational mistake of not purchasing a home early in their life. These people often point to a declining stock market as the trigger which will bring the house market crashing down … a housing crash is their wet dream.

    However, if you look at history, you will find that sometimes when the stock market declines, the housing market declines. Lest often, when the stock market declines, the housing market “DOES NOT” decline.

    So what will happen this time? If the economy and the job market stays on solid footing, and at this time there does not appear to be a problem, then the housing market will stay strong. If the economy slips into recession, then the housing market will fall.

    My opinion is it will be regional. I could see some areas weakening while most do well. I think Southern California will do just fine because of the big big military spending component in the budget signed Friday … a lot of that $$ will flow into aerospace. I think the Bay Area could see some trouble if the shine comes off of the tech sector, and it appears to be coming off fast. Just look at Facebook. Something like that slows venture capital and down goes the bay area housing market. I think the east coast will do very well, with the exception of DC which is getting a lot of government job cuts.

    • “a lot of that $$ will flow into aerospace.” – This isn’t 1983.

      • He way overstates the aerospace sector’s impact on SoCal. Semi and Internet tech like the Bay Area is playing a bigger role than ever before.

      • How about ‘ a lot of that money will flow into Silicon Beach’ rather than aerospace.

        It could be aerospace R&D but not manufacturing. Manufacturing left in the 80’s for Seattle, St Louis, Dallas, etc.

      • I just checked … it appears Southern California is still the largest beneficiary of defense spending in the nation.

      • From what is on the web, it appears the the south bay of Los Angeles has the highest number and percentage of aerospace engineers in the nation. The only other area that was in the same category was an area up in Washington state. A whole lot of what is going on in the Bay area is startups building stuff that makes no sense and on only getting built because the central banks have been wastefully printing money and investors have been wastefully investing that on startups that do not pencil out. Now that the central banks are pulling back, watch how a lot of those junk bay area startups fold. On the other hand, aerospace is real and since Obama came in it was cut so far back this county was putting itself in danger. Trump gets it and the money for aerospace is being restored to what it needs to be. Los Angeles will benefit from the return to sanity.

        Sometimes I wonder how a few people on this board are. A few months ago, I mentioned the stock market was headed for rough waters. Many jumped all over that post and said I was nuts. You have to admit, that was a great call. Some people can’t see what is gong on and they follow everyone like lemmings.

      • Thanks for checking. Yet there remains no guarantee in sight that defense spending makes or breaks the RE market in SoCal.

      • you’re right it’s not 1983……..and the defense budget just past is $700,000,000 ….think about that for a seconds. The USA has no real enemy and yet we are going to spend almost $1 trillion dollars on defense…….this is corporate welfare on a grand scale.

        good work, if you can get it.

      • son of a landlord

        interesting: and the defense budget just past is $700,000,000

        It’s passed, not past.

      • It is 700 Billions with a “B” not millions.

      • Surge,
        “Millie, have you actually tried to get a loan yourself? In 2018. I mean actually try to get it. Not feed us a history lesson from 2005-2007 era?”

        I was in escrow in 2014 and backed out. Thank god. The process opened my eyes. Happy to share the story/details. Since then I understand the scam/game.
        Have I “tried” since then? Oh please, are you one of these people pretending it’s somewhat hard to get a loan? Lol. It’s the easiest thing in the world. Why would it be? Banks/lenders can give out loans to virtually everyone since they have no risk. They simply sell the loans to fanny and Freddie. The risk is on the tax payer side.

        In 2014, we had already no rental parity and the loan officer told me that “You can afford a much bigger house”.
        Now, I understand how this works. They would sell you a house that’s way over your head. Because they can. Nothing has really changed compared to 2005-2007.

        They are in business to sell you the biggest house and sell the risk to Fannie and Freddie right after. People get in way too much debt and run online to the housing bubble blog to justify their purchase and convince everyone else to do the same!
        They hate the idea that the RE market could go down again and millennial buys next door for half off.

    • There is an incredible wealth transfer happening. Millennials are going to inherit all that wealth eventually. So, you can wait a number of years to inherit? Of course you can. But inheritance aside you can easily buy a nice house half off during the next crash. The RE housing bubble game is pretty simple to play and win. All you need to do is save money and have patience. Those who get suckered into buying at the height of the bubble will be screwed financially. Just ask those 7 millions who lost their homes due to foreclosure during the last crash. Today, People are up to their ears in debt. Easy to see that during the next crash we will easily get more than 7 million foreclosures.
      So, if you don’t care about money and love to be in financial trouble you buy now. All others who care about money and can perform simple math will wait for the upcoming RE crash.

      • son of a landlord

        Millennials are going to inherit all that wealth eventually.

        No. Only lucky millennials (like you) will inherit. Unlucky millennials will inherit only debt.

        Unless those unlucky millis vote to confiscate your inheritance, forcing you to “share the wealth.” Which, should the unlucky outnumber the lucky, could happen.

      • “Those who get suckered into buying at the height of the bubble will be screwed financially.”

        How exactly? Lending standards are appropriate now, unlike the last time. If you can afford the mortgage of an overpriced home now, you’ll still be able to afford it when the home’s value is down 30%.

        I know, you think lending standards are a joke. Banks are in the business of making money, they know a qualified buyer when they see one, and for the most part, the small shady lenders are using the big bank standards now. Someone with a back end of 40% and a conventional mortgage is not going to default unless they walk away. Those are the foreclosures you’ll be seeing in the next crash.

        “Today, People are up to their ears in debt.”

        Not the ones who are qualifying for a mortgage.

        Yes, there will be a lot of foreclosures. At least get the reasons right.

      • John,
        I am glad you asked.
        “ Lending standards are appropriate now, unlike the last time. If you can afford the mortgage of an overpriced home now, ”

        What makes you think they are appropriate? What makes you think you would know? And what makes you think you have any idea how an appropriate standard would look like?

        You have the mindset of most sheeple. You think that if a lender tells you that you can afford it you actually think you do! The reality is that most people can’t even come up
        With a 1000 bucks in savings but somehow they “know” what house they can afford?

        Buying a house that is 6-10 times of your annual household income is not affordability it’s insanity. Lenders will tell you, you can afford it, you believe it and during the next recession you lose the house, your job and reality will hit you.

        As you said, lending standards are a joke. They can give an insane loan to almost anybody and they know these people have a high risk of default. These lenders make money and sell the loan to fanny Mae and Freddie Mac. No risk on the lenders part. It’s the tax payers risk that’s behind fanny and Freddie. You don’t believe me? I know you want to the research so Just wait for the next recession and see for yourself.

        Bottom line, just because lenders tell you standards have changed and you afford it does not mean that’s true. Not at all. They are not here to help you…they are here to make money. Once you learn that you are way ahead in life.

      • Hey Milli Vanilli guess what will happen in the next crash…. the investors, all-cash buyers and flippers will come out of the woodwork and snatch up all those homes, like they did in 2008-2009 probably all the way to 2015. When I purchased a home in 2012, homes that I were interested in had multiple all-cash offers the day of the open house. I did get lucky though. Anyway, normal loan-approved buyers had their dream homes snatched out from under them every step of the way. I am not including the back-room bank deals either, in which companies like Blackstone bought tens of thousands of homes sight unseen. If you are waiting for the next crash… when will it start, when will it end… how will you position yourself?

      • Millie, have you actually tried to get a loan yourself? In 2018. I mean actually try to get it. Not feed us a history lesson from 2005-2007 era?

      • QE Abyss,
        Buying a house is not rocket science. Buying a house for 55% below today’s prices is not rocket science either. Saving lots of cash and having patience is not rocket science. Waiting for a crash (who cares when exactly it will happen) is not rocket science.
        If you are overwhelmed by the market or if it strsss you out too much maybe let your wife handle it?
        I got cash and I got patience. All I need to do is wait and be entertained on this blog until it happens. Every bubble pops. Again, not rocket science.

      • Why do you continue to miss the painfully obvious? If you read this with actual comprehension in mind, you might learn something.

        “What makes you think they are appropriate? What makes you think you would know? And what makes you think you have any idea how an appropriate standard would look like?”

        Because I can do math. Because I’ve been through multiple purchases and refis. Because banks don’t grant loans expecting to lose money. Because they are specifically designed to ensure only those with low debt, long and stable careers, and good credit will qualify, and only for a mortgage that they can afford based on a set of rules that have been demonstrated to have a positive outcome literally millions of times. Do you even know what it takes to qualify for a conventional loan? Or do you just stare at crypto candlestick charts all day long?

        There are two aspects to qualifying – affordability and credit. They are two very different things.

        The back end ratio ensures your income and debt responsibilities will enable you to make the payments. Again, this ratio has been proven in practice by thousands of lenders and millions of mortgages.

        The credit requirements show that you have spent years being responsible with debt, and because it takes so long to build up good credit, the bank will know that you will most likely continue to be responsible AFTER the loan closes.

        Because the income requirements went out the window in the runup to the last bubble, buyers were able to take out loans they could not afford, which means that even with good credit they would get in trouble.

        Lenders are once again enforcing both requirements, making this a very different time for buyers.

        “They can give an insane loan to almost anybody and they know these people have a high risk of default.”

        NO, THEY CANNOT. It is against the law.

        “These lenders make money and sell the loan to fanny Mae and Freddie Mac. No risk on the lenders part.”

        They have to follow the law. The lenders don’t decide the minimum requirements – but they frequently modify them to make them MORE strict.

        “The reality is that most people can’t even come up With a 1000 bucks in savings…”

        These are exactly the people who WOULD NOT QUALIFY FOR A MORTGAGE. Is this clear to you yet?

        “Buying a house that is 6-10 times of your annual household income is not affordability it’s insanity. Lenders will tell you, you can afford it…”

        They will only tell you if you meet the qualifications, and if you do, it does mean you can afford it in your CURRENT situation AND are likely to continue making the payments afterward. Your example doesn’t include a vital piece of information, which is the down payment. If it’s enough, you’ll meet the back end requirement, which means yes, you can afford it. The lender will also want to know exactly where you got that down payment, and will follow the paper trail until they do. Getting pre-qualified is easy. The actual underwriting process can take weeks and make you feel like you’ve been through a financial blender.

        The people who get in trouble are those who HELOC the crap out of a house AND run up credit card debt AFTER the purchase. Considering the strict qualifications these days, that’s a lot less likely to happen with modern buyers.

      • John,
        You seem Very disconnected from reality.
        “Because banks don’t grant loans expecting to lose money. ”

        Banks can give out insane loans because they have zero risk. They simply sell the loan to Fannie Mae and Freddie Mac. Behind Fannie and Freddie’s is the tax payer. The notion that somehow loans are given to people who can afford overpriced crapshacks is total BS. You will see that once we hit a recession and will see similar foreclosures than last time around. We saw 7 mio foreclosures during th last bubble. Since this bubble is much bigger we will probably see 10 million foreclosures. Don’t buy now. Don’t be one of them. Wait until prices are down 55-75% from today’s prices.

      • John D.

        I don’t think you are totally right. Most banks are not making loans for themselves to hold on their books…the real lender is Fannie and Freddy. The banks are just servicing the loans and do not have any skin in the game. Also…many home buyers now are the boomerang home buyers. These are the ones who were foreclosured on in 2008 and 2009 but 7 years have past and they have good credit ratings again

      • “Banks can give out insane loans because they have zero risk.”

        My God you are thick-skulled. Banks have to follow the requirements laid out by the law, period, whether they plan to immediately sell the loan or not.

        There is no other way to word it that will make it more clear, so now I know you’re either special needs or trolling.

      • John d.
        Just look at RU82’s post. He is spot on.
        Also, these requirements you are talking about allow the lenders to give out insane loans that will cause a crisis. Somehow, you think that requirements mean the system works in a healthy way. The system is designed the way it is for a reason.

        I know you like to disregard facts and try to pretend everything is awesom so I will help
        you out.

        Low interest rates. Easy credit. Poor regulation. Toxic mortgages.

        These were just a few reasons regulators gave for the collapse of the US housing market a decade ago. Since then, regulators have improved the standards that lenders use when Americans apply for mortgages.

        But today increasing danger lurks in the mortgage market, and economists say it could put the financial system at “even greater risk” when the next recession strikes or too many borrowers fall behind on their mortgage payments.

        A growing segment of the mortgage market is being financed by so-called non-bank lenders — financial institutions that offer loans to consumers but don’t provide saving or checking accounts.

        Borrowers with poor credit have increasingly turned to these alternative lenders instead of traditional banks. The alternative lenders are subject to far less regulation and have fewer safeguards when borrower defaults start to pile up.

        http://money.cnn.com/2018/03/08/news/economy/housing-economics-nonbank-lenders-brookings/index.html?iid=EL

      • Ru82 – Many, if not most, lenders turn around and sell your loan within a few weeks of closing. You still have to qualify for the loan, which is a lot harder this time. No “stated income”.

      • You didn’t even read the whole thing, did you?

        The point of the article was this – “non-banks may have fewer resources to weather economic shocks to the mortgage market, like a rise in interest rates or a decline in house prices.” In other words, it’s about the danger to the non-bank lenders, with a bit of sensationalistic nonsense thrown in for page views.

        I did enjoy how you included the part that seems to back up your argument, except it doesn’t – those “borrowers with poor credit” mentioned still need to meet the minimum requirements. Look up the loan requirements for Fannie Mae and Freddie Mac. I dare you.

        THERE ARE NO MORE STATED INCOME LOANS.

      • “THERE ARE NO MORE STATED INCOME LOANS.”
        As if that would mean much. And it doesn’t mean more by yelling it either.

      • It means everything if you’re a strawberry picker with an annual income of $14k and you qualified for a $720k house. That actually happened in the last bubble, and you’re trying to convince us that things are the same now.

      • That’s bs. The strawberry picker making 14k a year did not buy a house. He did not have to. He is here illegally, does not even have a bank acct and drives around with an expired driver license from Mexico. Met many of those guys. Those guys did not buy and foreclosed. The avg joe bought into the lie buy now or be priced out forever. It was a mania. Similar to nowadays. The majority of foreclosures were actually on conventional loans. That 14k income buying a 720k house is a myth to make us believe this time is different. It’s no different at all. People buy high, are way over their head loaded with debt and are just one recession away from losing their job and the house. Just wait, save and watch. Be ready and buy when the tide has turned.

      • I’ve never encountered anyone with their head buried so deep in the sand.

        http://www.doctorhousingbubble.com/yearly-income-14000-purchase-of-house-720000-have-we-all-lost-our-minds/

        “It’s no different at all”

        https://en.wikipedia.org/wiki/Dodd%E2%80%93Frank_Wall_Street_Reform_and_Consumer_Protection_Act

        See Subtitle B – Minimum Standards for Mortgages.
        “In effect, this section of the Act establishes national underwriting standards for residential loans.”

        Grow up.

      • Millennial really lives up to the stereotype doesn’t he? He thinks he knows everything about everything and only his opinion matters. I wonder how old he was when stated income, interest only loans were the norm in the last bubble, 15 maybe? He really doesn’t have a clue about what happened and only sees it through his narrow minded view that supports his 55%-75% crash.

        I distinctly remember seeing ads for homes in crappy parts of the Bay Area (San Leandro, Union City, Pittsburg, Antioch) for homes in the $600k-$700k range showing payments of less than the rent of our two bedroom apt. These payments were based on interest only no down loans and the ad stated that.

        You know why I remember this? I remember showing my wife the ads and telling her these people were going to get burned when the payment resets and they have to pay principal as well. Sure enough, we all know what happened.

        After the crash there were lots of articles about questionable people obtaining loans for homes way out of their range and then defaulting. Instead of being narrow minded go do some research.

        I used to be just like you until I realized that things this time around are different. I thought we were doing ok financially until I realized there were way more people here in the Bay Area willing to spend a ton of money to live here. We’re talking tech folks making $200k to $400k combined salary as well as ones with deep pocketbooks at the bank of Dad to fund the down or the entire purchase. I personally know a few of these types.

        Your 55% to 75% crash may happen but there will be a lot of collateral damage. Don’t expect to get off unscathed dude. Plan for the best but be prepared for the worst.

    • “Many make the generational mistake of not purchasing a home early in their life”

      Most people make the major mistake of choosing poor parents, therefore not getting a house given to them in their teens while parent’s ‘move up’ to bigger house.

      It’s easy to believe that jt doesn’t belong to this group.

      • The only people I know who have a house that are in their 30’s either A: have a government job or B: inherited the house.

        p.s. I sure which there was an edit functionality on this site. Many like to jump an each and every typo.

      • Well we own house at our 30’s not because we have wealthy parents nor government jobs. We both are software engineers. I believe there are many people.own their house not getting one cent of freebies, like us.

      • @interesting Well we own house at our 30’s not because we have wealthy parents nor government jobs. We both are software engineers. I believe there are many people.own their house not getting one cent of freebies, like us.

      • Dude I owned my first house at 22 but I wasn’t stuck in an overpriced area such as SoCal at the time. But I know people in their 30’s that bought in SoCal in the past ten years without gummet jobs nor help from parents. Bottom line it’s a relatively shitty place to be a normal income earner and also want to buy a decent property. Been that way for a long time yet people still want to believe it’s the center of the universe and suffer as a result of such dim witted thinking.

    • Millie, maybe “they” are in the biz of selling you a bigger home, but ultimately you control how large of a home and how much you spend.

  • Millennials hatred toward Prop 13 is completely baffling to me.

    He is expecting prices to drop 55% yet he doesn’t want to benefit and be protected with Prop 13???

    If you look at actual data points for Prop 13, 2% annual increases produce minimal discrepancies in real life.

    For people who bought in 1990 they may be paying $6000 per year versus the new buyer who is paying $9000 per year. Not to mention the fact that most people who bought in 1990 have likely already sold the house and bought another house.

    If you get Millennials 55% per drop the new buyers will actually be paying less than the people who bought in 1990 and be locked in…. so why would Millennial want to eliminate Prop 13? It’s because he has never lived anywhere and owned a home where taxes can go up at the will of the government. I have, trust me it’s not fun.

    The most extreme example of Prop 13 inequities are from purchases in the 1960-1970s.

    But these people are either dead or about to die… and guess who may benefit from Prop 13??? That’s right the Millennial inheriting the house.

    Millennials thought process is completely baffling and misguided. Unless he doesn’t actually believe prices will drop 55%…. and he is ready to buy at a 20% drop…. Nah… no way!

    • It’s not about him. It’s about you. You want to keep your handout at his expense. You need new blood like him to capitulate in order to keep your subsidy. They’re getting tired of carrying your cargo. It’s fine to relocate or fight the government if you feel overtaxed, but you can’t expect other people to subsidize you for long without them pushing back at some point.

    • Well of course you are pretending you don’t understand the prop13 scam. You are a beneficiary of prop13 so you don’t want it to change. Prop13 can easily be explained in two sentences. Prop13 is designed to screw younger generations by putting the property tax burden on them so that older people don’t have to pay their fair share. If a millennial buys a small condo the property tax burden is ten times higher than for the old fart next door in his big mansion. If prop13 will be repealed most boomers will say, wow I can’t believe we got away with this scam for so long.
      For those who don’t like paying their fair share or can’t maybe it’s time to GTFO of here? Screwing younger generations out of greed should not be your way of life.

      • Millennial, I pay market rate taxes.

        I’m only a beneficiary of Prop 13 in the rationale sense that my property taxes can’t go up at the will of the government. I have seen this before owning homes in other parts of the country. You are a complete fool if you think repealing Prop 13 is good. Move somewhere and experience property taxes going from 2.5 to 3% when the local government decides it wants to spend more money.

        Also every thing I said about the 1990s purchases versus you buying at your 55% dip is absolutely true. If that happened you would be paying less taxes than the person who bought in 1990.

        The vast majority of homes are bought and sold within 5-8 year time frames. As I said the most extreme examples of Prop 13 inequality are those who bought in the 1960s / 1970s.. Let’s try not to forget that they paid property taxes for 50-60 years and built the damn community you benefit from paying no property taxes. Now some Millenial benefits by inheriting with Prop 13. Wasn’t that your backup plan?

      • Sometimes we say the same thing! The gall of these freeloaders. It’s like hitting a dog and being surprised when it bites back in defense.

        You should reconsider the idea of moving out of the insane asylum. These people aren’t going down without an ugly fight where everyone suffers collateral damage. No matter which side you choose, it’s not going to end nicely.

      • That is the definition of a baby boomer, take all you can and send the kids the bill.

      • Millennial:
        Very well said ! Yes, Prop 13 is a scam. It does hurt the younger generations. Two houses on my street. Both 1200 square feet and very comparable in every way. New (2014) buyer pays over $7k/year in property tax. Old buyer pays about $1700. #timesup!

      • NoTanKInSight,
        As you can see from the responses…..younger generations will catch up on the prop13 scam and we will change it. The time of free lunches for boomers is over. You boomers who pay next to nothing in property taxes can scream all you want, prop13 has to be repealed and replaced. I am fine with boomers paying more and younger generations paying less so that you meet in the middle. How is that not that right thing? If you don’t even pay what younger generations have to pay you shouldn’t even have such a big mouth. 😉

        You and John D are masters in making up sob stories why boomers need to continue paying next to nothing in property taxes. The truth is YOU are just geeedy and see no issue with screwing younger generations and taking government subsidies as long as you can. If property taxes for older owners increase they will finally downsize and House prices will go down as well!

      • Your property taxes on a $1m house (today’s prices) with prop 13: $11,000

        Your property taxes on a $700k house (prices after a 30% correction on the coast) without prop 13 or any other protection: $21,000

        Your property taxes on a $700k house with a prop 13 REPLACEMENT including a .5% cap: $3,500

        Take your pick.

      • Marc C
        That is 5k/year or roughly $450/month.
        If this makes you wave a hashtag flag, you are not ready for home ownership, both financially and psychologically.

      • AMEN. Prop 13 favors people who bought long ago at the expense of the young/new residents. Time to go!

      • John D. Is losing his mind. Lol. He must be one of the beneficiaries of prop13 and does not want to change it. He is fine will boomers paying next to nothing while the tax burden is solely on new buyers. Can you blame him? His entire generation lived life like that by Blowing up the debt based bubble on the expense of younger generations. Enough is enough. Repeal prop13 and end the free lunch for boomers!

      • You gotta love freeloaders like John D. Says you should take your pick although you can’t make a pick because scroungers like him already have the lack of your choice set in their favor. Your only option as a first time buyer TODAY is to pay multitudes the amount of tax in return for the exact same level of services and benefits with the hope that the scheme lasts long enough for you to recover the difference (it won’t last).

        He knows it’ll be coming to an end. They all know. They’re desperate to continue to freeload off of you even though they won’t admit it. Just like you’re not confident that prices will “crash” they aren’t confident the gravy train won’t come to an end soon enough. That’s why you’re both here. To convince each other that you’re going to be right because you’re both afraid of being wrong.

        And you want to stay in California in the company of these scroungers all over the place? Good lordt.

      • Prop 13 isn’t perfect but think of it another way. How much do you like your taxes going up by a few thousand dollars every year even if your income stays flat? Because that is what places like Dallas Texas are going through right now. Their property taxes are high and they can adjust up by 10% on a homestead every year depending on a yearly reassignment.

        In those situations older people on fixed incomes can get forced out of their homes simply because property values beyond their control are rising to fast. It is reasonable to attempt to prevent this.

        Property tax in California even for new buyers is really low as a percentage of value. The true point of contention here is that prices are too damn high. Property tax has prevented no one from buying a home in California. We need to fix our prices, a small part of that may be improving taxes on property so that they don’t inadvertently discourage home sales.

        Beyond that, could it be considered fair to have younger workers pay more into taxes than retirement age folks? Absolutely. Why? Because everyone was young once and had their turn at contributing to the labor market and paying the bulk of their taxes. As people move out of the work force and their tax burden goes down there is nothing wrong with avoiding extracting more taxes from people on fixed incomes.

        You need to look at a life time share of taxes paid, not at a particular age groups current tax burden.

      • “You need to look at a life time share of taxes paid, not at a particular age groups current tax burden.”

        Pathetic. That’s easy to say for old farts who did not pay tution fees (and if they did it was a joke compared to now. Back in the day California’s universities were tution free).
        Also, when boomers bought houses the prices back than were not ten times the avg household income. Back than you could easily buy a house with ONE income.
        Boomers never had to pay as much property taxes as millennials because houses were way cheaper back than. The tax burden is solely on millennials.
        Don’t pretend boomers somehow paid their fair share. They created the biggest mess/debt burden in history. 20 trillion in debt that millennials need to pay back. Prop13 needs to go and taxes for these old farts needs to be dramatically increased.

      • “John D. Is losing his mind. Lol. He must be one of the beneficiaries of prop13 and does not want to change it.”

        “You gotta love freeloaders like John D.”

        I bought last year, paying the full amount on a 4,100sf house, and I’m a freeloader? Nope, just smarter than you, in that I recognize the long-term benefits that you can’t admit are there for new buyers too. I notice you didn’t reply to my post encouraging you to do the math – afraid prop 13 will benefit you? Because it definitely will – by as much as several hundred thousand dollars over your lifetime. I would prefer you never buy, though. I’d rather see you whine for years about how unfair it is.

        “Repeal prop13 and end the free lunch for boomers!”

        Will never happen without a suitable replacement. Prop 13 is a sacred cow. Even talking about it is bad for a politician’s career. (And of course, you get the free lunch, too – the second you buy. You need to be able to see further into the future than the next Xbox release, though.)

        Changes needed:
        1. Eliminate inherited benefits. Tax gets reset at assessed value.
        2. Eliminate commercial property benefits (this should get on the Nov 2018 ballot and has a chance of passing).
        3. Eliminate benefits for rentals and second homes.
        Number 3 will be tough to pass. There are a lot of people with a lot of money who enjoy this.

        Nice to have:
        Tax based on assessed value, but cap it at .5% for everyone.
        OR
        Tax based on purchase price, and limit annual increases to something higher than it is now – e.g., 3-4%. Cap it at .7% (or whatever) of assessed value.
        ^These are the tough sell. I can’t see either one happening anytime soon.

        They’re actually trying to expand it:
        https://ballotpedia.org/California_Proposition_13_Tax_Transfer_Initiative_(2018)
        (I’m sure all you senior-haters will have a stroke over that)

        Remember that Californians base their voting decisions on emotions and advertising, not facts, which means the group with the most blatant lies and the biggest wallet wins. See “browndoggle” for a perfect example.

      • John D – I’m sorry, you’re an aspiring freeloader. Too bad Prop 13 won’t be around long enough for you to achieve the dream. As for my personal situation, I’ve been a real estate owner for two decades while not so dim witted to realize that gravy trains are counterproductive, so you can suck on that fat dick, pal.

    • son of a landlord

      Milli won’t benefit financially by repealing Prop 13. But he will benefit emotionally.

      Milli’s property taxes won’t decrease. But your taxes will rise to Milli’s level. You will suffer as much as Milli does. This will provide Milli with enormous emotional satisfaction.

      It doesn’t matter that Prop 13’s repeal will require Milli to pay a bit morethan he would have in the long run, because you will pay a lot more in the long run.

      Milli will happily suffer more, provided that no one suffers less than he does.

      • Nailed it

      • Property tax parity across the board would raise revenues which should put downward pressure on property prices. In that regard he could potentially benefit financially because guess what – he would be paying full freight on taxes anyway and to the extent that prices go down, his tax basis would be lower. He could also benefit on the consumption and income side if Prop 13 repeal took upward pressure off of these other taxes and fees. It’s a leveling out. That’s why the freeloading beneficiaries are so against a change in this status quo – they get higher prices on the profit side and lower taxes on the expense side. I mean who the hell wouldn’t love that deal?! Problem is someone else is paying for it and inequities like this always have a short shelf life.

      • son of a landlord

        Lordt B: Property tax parity across the board would raise revenues which should put downward pressure on property prices.

        Wrong. If Prop 13 were repealed, any “downward pressure” on property taxes would be more than offset by “upward pressure” from California’s huge government employee retirement health & pension liabilities.

        Any “leveling” of property taxes would come solely from raising everyone’s taxes to an equal level. Everyone‘s property taxes would rise, including recent buyers’, because the 2% cap on annual increases would also be off.

        California has enormous “upward pressure” to raise every and any tax to the highest level possible. Any “downward pressure” is swallowed and disappears into nothingness.

        California’s debt obligations are a giant tsunami heading eastward. You think that by standing on the beach with your toy paddle, splashing little waves westward, you can offset the coming tsunami.

      • Lordt B is one of the smartest posters here. Reminds me of prince of heck and Hotel California.

      • Millennials who pine for the repeal of Prop 13 are blinded by their desire for instant gratification. Rational young people can see that if they buy and remain in their residence, after ten they will enjoy the same benefits and peace of mind that comes with knowing their property taxes will remain under control. I’ve been in my home for 20 years now and I was paying more taxes than my neighbor back then — now I pay less than my new neighbors. Time marches on, but many Millennials are incapable of recognizing that fact.

      • John D he didn’t nail anything.

      • What is a Gen X? 🙂
        Prop13 favored older people who are already benefitting from the gousung bubble. It’s s Scam that weds to be repealed. Boomers in big 7 bed room houses pay next to nothing in property taxes compared to a millennial who bought a small condo next door. It’s a joke.

        Boomers are free loaders who don’t want to pay their fair share. That will stop now. They tell millennials: “you can’t save for a downpayment because you buy too much avocado toast.”
        How about we tell them, let’s see if you finally downsize once you have to pay in property taxes what a millennial has to pay today?

      • GenX and John D.
        Unfortunately, you don’t understand what prop13 is. Let me explain it in a simple example.
        A millennial buys an overpriced condo during the current housing bubble for 400k. His property taxes are over 4K. (1.1-1.2% of purchase price).

        Next door lives an old fart in a 6bedroom mansion and pays 2300 dollar for his million dollar home. His property taxes were locked in when he bought a loooong time ago. Thanks to the prop13 scam.

        The tax burden is on new buyers no matter how small their houses are.
        Older farts don’t downsize because their property taxes are a joke. They don’t pay their fair share.

        You can easily change this. The millennials should probably pay 1k per year and the million dollar home owner should pay like 10k-20k.
        The state would have more tax revenue and the tax burden would be allocated in a fair way. (Based on size and value)

        Right now, older farts get a free lunch for no reason. If they can’t afford to pay their fair share that would be even better. They would finally be selling their million dollar homes and get out of here. House prices would fall. What’s not to like? Luckily time is on our side. Boomers get older and older 🙂

      • Millie, one thing you utterly fail to recognize is that NO homeowner benefits from a housing bubble. If you bought for 100k 20 years and now it is worth 1mil -> there is no benefit. Because if you sell for a mil, yes you get 900k in profit, BUT the only thing you can buy is just another similar home.
        I would argue that crypto holders are the ones greedy ones, because you can really invest 1 house worth into crypto (way back) and get 10 houses out of it.

        This is why:
        1) prop13 is genius as it protects people who own homes as utility.
        2) Exemption from capital gain tax (up to 500k) on home price gain -> Genius, protects people’s capital if they have to sell due to moving, etc…

        In fact, if you would display more foresight, you would target federal interest tax deduction. This one is most questionable one to me (even though I benefit from it) and this is the one drives home values up more as if compared to prop13.

      • Surge, pssss don’t say that too loud…I totally agree with this:
        “Millie, one thing you utterly fail to recognize is that NO homeowner benefits from a housing bubble. If you bought for 100k 20 years and now it is worth 1mil -> there is no benefit. Because if you sell for a mil, yes you get 900k in profit, BUT the only thing you can buy is just another similar home.”

        However, most older RE cheerleaders here and everywhere else tell you how they are millionaires on paper thanks to the housing bubble. When it comes to property taxes though they scream “poor grandma”. All I am saying is, great you like to brag about being a millionaire and retired with the age of forty. That means you can easily afford higher property taxes. At least as much as millennials pay already. 1.2% of the current “value”. So for all these millionaires here it should be a piece of cake to pay 10k and more in property taxes.

      • “Luckily time is on our side. Boomers get older and older”

        What you’re STILL NOT GETTING is that it isn’t just the boomers. People buying today get the same benefits. In 40 years, the idiot 20-somethings of that era will be voicing the same complaints about the millennials who bought in the 2010’s. “Why should we have to pay $2,000/month when the freeloader millennial next door only pays $500??”

        “Unfortunately, you don’t understand what prop13 is. Let me explain it in a simple example.”

        LOL. Get lost, troll.

      • Yea, that couldn’t be further from the truth. Millennial who buy today pay 1.1-1.2% of the purchase price. The prices are artificially inflated and so is the property taxes. So a new buyer has all the tax burden while the old fart next door pays next to nothing for the same house and same services. Prop13 was designed to screw young buyers and put the tax burden solely on them. Pretty selfish by old farts who benefited from the housing bubble. Prop13 needs to be repealed and taxes for seniors need to be increased by at least 4-7 times.

      • Funny how you prefer 2-3% on current value instead of 1% on purchase price.

        Regardless of how financially impaired you are, it will never be repealed. Enjoy your benefits when you finally do buy 🙂

    • Prop 13 is basically rent control for homeowners. You’re paying less taxes the same way renters pay less rent because they got in first. It doesn’t take a genius to figure out rent control isn’t a good thing unless you are the lucky one to get in first.

      It just inflates the cost for everyone else.

    • “But these people are either dead or about to die… and guess who may benefit from Prop 13??? That’s right the Millennial inheriting the house.”

      Millenials are the grandchildren of these people, not children. So the benefits, if any, goes to previous generation, not millenials.

      Also saying 2% annual increases “stop the huge disrepancy” is laughable when prices (and therefore taxes for new buyers) raise 15 to 25% annually.

      Basically it guarantees tax free housing for those who bought in 70s, the old people, while dumping the burden of paying taxes to millenials. You know, _someone_ has to pay them taxes.

      • “while dumping the burden of paying taxes to millenials.”

        So… a millennial paying 1% has a burden, but a millennial paying 2-3% does not have a burden, as long as everyone is suffering equally.

  • Millenial Buyer

    After 3 years on this site, the many agonizing sleepless nights, probably 100s of open houses, getting outbid by cash buyers, was offered some ok places in late 2015, passing on housing in q4 of 2015 because I thought it was the top, regretting it…I am in escrow on a house in Los Angeles. Had I bought in 2015 I would be sitting on 150k of equity or more. Got scared because of rising interest rates and outbid everyone else on a home in a blue chip neighborhood…wondering if I am making a big mistake, sort of feels like 2006. Hate renting, and my payment will be about 1200 a month more than my rental. Still feel like this is not a great time to get into the market….

    • I would never endorse buying over rental parity.

      When you say $1200 over your current rent, are you comparing apples to apples? Or are you buying a 4 BR house with a yard and it will cost you $1200 more than a 2 BR apartment?

      Buying $1200 over a comparable rental would be a mistake.

      On the other hand if you are buying at rental parity you are making a good decision. The “Millennial” who post here constantly wouldn’t know rental parity if it smacked him in the freaking head.

      • Buying at parity (in strictly cash flow sense) is impossible.
        You need to put 40-50% down
        If you go by this rule, 15year mortgages are stupid.
        Rental parity Never was except in 2009-2013 timeframe
        As in any investment, you will suffer some “negative” cash flow initially
        No way around it

    • Fear only if you are really stretching your finances or if you have to move/sell (or if your job is unstable
      1200 more a month more compared to rental is nothing. It does not include tax deduction and the fact that you are also paying principal. Plus over time rents will catch up
      My guess you bought at 850-950k range
      Do not worry if you are can/willing to go long term in this neighborhood

      • OP could have said payment will be $12000 more and Surge would say oh that’s nothing here’s some tax benefit even though he knows nothing of your tax situation.

      • If this was $12,000 more and all of it was principal (and affordable) – then yes, it would still be Ok. As long as you can maintain monthly payments.

        People do take out 10 year mortgages and there is no way there is rental parity there.
        And about tax situation, don’t be stupid. If you take out mortgage you have a taxable income and write-off. Different rates of course, but write off is there and likely in 25% range total.
        Please do not be stupid and provide hypothetical alternate situations – they do exist but so rare they are irrelevant.

        Please be a little more intelligent than this.

    • Your mortgage payments don’t change but guess what does? Property taxes, insurance, and maintenance costs. At some point they’ll dwarf your mortgage payment because they rise with the local cost of living.

      • Yes, but it will take 20years for taxes/maint/insurance to exceed mtg.
        But yes, makes a bigger case for long term RE ownership

      • “Your mortgage payments don’t change but guess what does? Property taxes, insurance, and maintenance costs. At some point they’ll dwarf your mortgage payment because they rise with the local cost of living.”

        You’re not a homeowner, are you? Property tax increases are capped at 2%/year in California. Homeowners insurance is very cheap and doesn’t rise anywhere close to the rate of health or car insurance. Maintenance varies depending on area, climate, square footage, lot size, and quality of big ticket items, but generally goes up with inflation. Averaged out, $2,500/year for a small SFH is typical, which might be something like $3,500/year in 30 years.

        If all these items “dwarf” your mortgage at any point in the next 30 years, congratulations, you’ve got a tiny mortgage.

      • Seen this all before, Bob

        I’ve owned the same house for over 20 years,
        My property taxes are 2500/yr, insurance 800/year, and maintenance about 2500 /year. That is about 6K per year or 500 per month.
        When the mortgage is paid off, I expect the costs to be about the same.

        I can survive for the next 50 years on 500/month even if it goes up with inflation.

        My poor neighbor is now paying 3K /month in rent. Rent has been going up faster than inflation.

      • Yes John, I am a property owner in other states. My parents’ house took about 15 years for the repairs + taxes + insurance + landscaping to overtake the mortgage. Indeed inflation nearly doubled in that time, but it is something to be aware of (most new buyers don’t think about it).

      • Dan, these guys are full of grade A horse shit. There are tons of beach close so-called desirable areas full of deferred maintenance hovels. I’ve lived amongst them for years. People who can’t afford to move within the same area. Roofs and foundations in huge need of basic repair. Freeloading neighbors who are being subsidized BIG TIME by technocrat newcomers no thanks to the unsustainable prop 13 mess. They buy these shit shacks and have to sink tons of cash into modernizing them if a flipper already hasn’t. Gut rehabs in many cases. Best thing any of these holdouts could do is take the money and run to a more reasonably priced locale lest they want to live out their lives in increasing overcrowdedness and social strife. Nothing says desirable like proximity to homeless people pooping on sidewalks.

    • If over those 3 years you thought carefully and came to the decision that it was best for you to buy, then don’t lose any sleep over it. The most important thing is that you can make your payment/prop tax/maint and still have enough left over to support yourself, including building a 6-12 month emergency fund in case of financial difficulty.

  • jt, good point RE the spending bill…however, regardless of military spending/jobs/handouts, the vast majority of households are WAY over burdened with debit. This is a very big difference between Bubble 1 and Bubble 2. Add to that the fact that the average starter home is unattainable price wise (and trashed) and the stagnation of ‘move-up buyers’ one could easily assumethe property ladder is cracking…and we are overdue for a recession..

    https://www.zerohedge.com/news/2018-03-23/peter-schiff-theres-big-problem-economy-americans-are-broke

    https://www.zerohedge.com/news/2018-03-23/new-home-sales-tumble-3rd-straight-month-worst-streak-4-years

  • The comparison of GDP to the value of houses is a non sequitar. GDP is a measure of income whilst the value of housing is a measure of wealth.

    • Exactly. It’s like comparing a balance sheet to an income statement, when in fact the two have absolutely nothing to do with each other. But I hear people confuse the two often, even by supposed “finance” reporters in the MSM. And people wonder why nobody trusts the news anymore…..

  • Is my math off? We, California, have 12% (40mil/326mil) of the total US population, but our homes are valued at only 8% (2.7tril/31.8tril) of the total US home values? If our real estate is so overvalued, why do these numbers not reflect that? My only guess is that the number of homes we have per person is a lot less than other states.

    • $2.7 trillion is JUST LA area not the entire state. Now do you see how crazy this market is?

    • Fair Economist

      The 2.7 trillion is only for the Los Angeles (area I assume) which has about 5% of the US population, depending on how exactly you draw the boundaries. Even with that the ratio is a little less skewed than I would expect as well.

  • Based on this article, Chinese money play a large role in CA prime areas. With the new trade war and possible hot war around Taiwan and China Sea, how is that going to impact SoCal RE prices????…..

    With continuing interest increases (3 this year), how is that going to impact RE prices?

    With QT in full swing, how is that going to impact RE prices?

    With a softening stock market and venture capital market (more risk adverse investors) what is the impact on RE prices going to be?

    Lots of questions and I don’t claim I can assess the full impact of all of them combined. I just pose them as food for thought.

    • Interesting question, nobody knows for sure
      Intuitively, trade wars create instability and US real estate has been a great hedge for overseas money. Of course, capital controls might tighten on both sides. We will see

  • Read my posts for the past few years and it’s on track. Housing NEVER went down as I predicted. And I am very certain SoCal will ever be below the lofty levels we see today. In 10 years expect them to be 50-100% higher than today in prime areas. The growth will slow but the lack of inventory and number of buyers grows by the day. But waiting for a price drop to buy is a fools gamble.

    I’m not a realtor, but I know better than to listen to the foolish advice of Jim Taylor. He is a permabear or likely a slumlord looking for lower prices.

    The facts are simple, no inventory, no plans to build. Wealthy buyers, foreign investment, multi family, and stable economic growth.

    Nothing short of a war and a global crisis will be able to move the SoCal market down in the future. In which case you will just be happy to be safe.

    The hard part now is catching up with all of the wealthy people who can buy these homes like candy. If you are not in the top 5% or you don’t earn enough money then walk away with the others leaving. Don’t worry you will be back filled by someone with enough money as there is no shortage of rich people who decided LA is the new place to be. You can thank social media for making SoCal far more glamorous then the movie industry ever could.

    This may sound harsh and most people hate to hear the truth. It sucks missing out or being priced out when you had a chance to buy low. But that train has left the station. Question if you can afford a ticket on the current train? Or if you need a bus ride to flyover country.

    • it’s different this time.

      And buy your measure a Frisco home will be $3,000,000 in 10 years? If I thought like you did I would be buying RE as fast as i could.

      And this is the 4th “bubble” I’ve seen in socal RE and during that time all the same arguments were made at every bubble peak.

      • I used to go hang out in Venice when I was a teen to watch the freak show. Then I left before dark so I didn’t get stabbed or shot. Now I see 3 million dollar homes everywhere in Venice/Mar Vista with people rolling around in lambos. It’s still full of homeless camps and people living in RVs who dump their waste into the streets. But Snapchat moved in and things went nuts.

        Los Angeles has billions of dollars of investments pouring in… I don’t know if we’ll ever be as big as Silicon Valley but Silicon Beach has room to grow.

      • Maybe it will, maybe it won’t.
        But, 20 years ago if someone would have told that condo in Frisco would cost 1.2mil in 2018, most would have thought you were nuts.

        In reality, it does not matter how much the housing will be in 20 years. It matters how much it will be in 3-5 years from moment you buy (for downside equity protection).

        Your problem is that you are fixated on absolute gains…1.5mil to 3mil OR 1.5mil to 700k. This is a very narrow and short term view for housing. But in the end, no matter how much you sell your home for in X number of years, you will be able only buy similar type of home.
        This really limits your thinking and outcome range. I am not saying you should or should not buy, but when you think only in absolute gains, the tendency is to be way more bearish than you need to be.

      • Surge,

        I’m not focusing on any “gain” i’m focusing on the insanity of it all. My problem is I haven’t had a fucking raise in 20 years…..that’s the problem with these prices.

    • Jim Taylor aka Millennial Jr, has been repeating the same line over and over for the past 7 years and each year he has been deadly wrong. He hasn’t posted on here in a while and I believe if memory serves that he was actually doubting his faith in tanking a little while ago.

      Curious if he still believes in the hard tank. If he had bought around the same time he started saying there was going to be tanking he would be up a significant amount and have a huge amount of equity.

  • Trying to time any market (RE, stocks, etc) is next to impossible. When buying RE, stick to a few simple rules:

    1. Buy a place you can comfortably afford.
    2. Minimum 20% down.
    3. Plan on owning for at least 10 years.
    4. Have a nice rainy day, emergency savings fund.

    Stick to the simple rules, enjoy your home and tune out the noise.

    • Precisely. This stuff isn’t rocket science and virtually anybody can do it.

      Same with investing in stocks. Don’t try to chase performance or time the market. Keep it simple. Bi-weekly investments into ultra low cost index funds, with dividends re-invested. Set up an automatic investment schedule and forget about it. Then in 30 years you’ll wake up one day with several million dollars.

      • Yeah it’s so simple there’s this blog. Let me guess you’re only here for the entertainment like Millennial.

    • It’s mind boggling to me how liberals here hate rich Asians coming to America and buying homes, paying taxes and contributing to society. Yet they have nothing but love for poor Mexicans / Central Americans coming here who pay no taxes (since they work illegally), consume welfare at astoundingly high rates (especially ones with US born kids) and contribute nothing to society.

      It’s a weird phenomenon.

      • “It’s mind boggling to me how liberals here hate rich Asians coming to America and buying homes, paying taxes and contributing to society. Yet they have nothing but love for poor Mexicans / Central Americans…”

        No, it’s very simple: Increase in rich people rises the prices for everyone and poor do the reverse.

        Of course that’s not the only thing happening but very easy to see it that way. Especially when it fits into ideology.

    • When giving advice about buying RE, stick to a few simple rules:

      1. Use vague subjective parameters that vary wildly depending on the person.
      2. Define a minimum DP that’s only reasonable for most people outside of expensive coastal areas while being a promoter of expensive prime areas.
      3. Provide a expected ownership timeframe that’s beyond the average.
      4. See number one.

      • The original advice basically minimizes the need for accurate crystal ball.

      • “1. Use vague subjective parameters that vary wildly depending on the person.
        2. Define a minimum DP that’s only reasonable for most people outside of expensive coastal areas while being a promoter of expensive prime areas.
        3. Provide a expected ownership timeframe that’s beyond the average.
        4. See number one.”

        1. They weren’t the least bit vague or subjective, and of course the numbers will vary depending on the person.
        2. If you can only afford 20% down in alligator country, that’s the only place you should be buying.
        3. An average is just that – an average. Those who sell sooner may be trading up, and if that’s the case, it’s usually because they can afford it. If they don’t plan on staying long-term, what’s the point in buying, other than speculation? If it’s an investment, CA is not currently the best bet.

      • John D is quite the comedian. Wants us to believe that “afford” and “comfortable” aren’t vague nor subjective! And he proves my first point by dithering on details for points 2 and 3. John D would now like his reach around, Lord Blankmind!

    • Yep.
      Very good advice.
      I would also avoid starter home (something you plan to sell in few years to take advantage of appreciation). There might not be too much appreciation left this cycle, but long term this is a best advice

    • Very true, this is the guide I followed.

      Only comment is on #4, what do you consider a sizeable emergency fund? 12 mos reserves? 18? 24?

      • Lord Blankfein

        Dan, I think a minimum 12 month liquid reserve fund is the way to go. Back in the old days 3 to 6 months was normal…way too risky today!

        It’s funny seeing some of the responses to my original post. What Millie and others never mention is that they likely won’t have a job, will be scared to death or won’t get financing if the 50-70% doomsday drop comes. Ultra strong hands call the shots in any market. And there are plenty of them out there as stated that 25% of socal RE sales were all cash.

      • I just bought. I maintain 6 months cash liquid reserve and this does not include severance of few months if I get laid off
        I understand for many it is much more difficult and more stretching is required. At some point it wil become too risky and not worth it

      • My personal take:
        6 months of liquid reserves (housing + everything), and not counting severance I would get (few months) if I lose my job. 12 months is a target. But I have family and would like to stay where I am.
        I understand this might not be achievable by everyone. So higher risk might be taken if one wishes to buy.

        Above all, the key is to be able to CONTINUE to accumulate liquid funds after the purchase (grow emergency fund, etc…). If you are always break-even, you are always at liquidity risk. I think this is the most critical thing.
        I would recommend at least 4:1 rule -> For every 4 months of work, you increase your liquid funds pool by 1 month worth of expenses.

        Ways to mitigate this:
        1) Stick to 1/3 rule mortgage/income rule (the more you earn, the easier it is, since it is easier to maintain cost of comfortable living without overspending)
        2) Rent out a room (Lifestyle hit) – but practically passive income.
        3) Earn more

        2 largest risk to home ownership:
        1) Forced to sell (in case of forced move, plan to rent out, even if at cash flow loss)
        2) Inability to consistently grow liquid reserves after the purchase (house poor)

      • Lord,

        Here is the thing with Mille; he’s a doomsdayer so even if the unlikely of events happen and properties dropped 50% overnight; he would be on here cheering for 20% more, meanwhile all the cash buyers and house horny organic buyers would be buying hand over fist pushing prices right back up to the cliff from which they fell. Then he would be on here saying; they’ll drop 80% next time and then he’ll buy!

      • Throbert Girth

        Surge just bought but he’s hanging out at a housing bubble blog trying his damndest to feel good about his decision lol

      • Yeah, I just want to argue a bit about RE topics (in math) to get it out of my system (since it was a bit difficult decision to reach). Just to hear out what people are saying – listening to noise after the fact. And what are YOU doing here? Want to keep convincing yourself RE will crash?

      • Lord Blankfein,
        “What Millie and others never mention is that they likely won’t have a job, will be scared to death or won’t get financing if the 50-70% doomsday drop comes.”

        That’s my key point!
        Here is the difference between the two of us:

        Lord B: buy now, buy now. (Pssss I already bought long time ago but I love prop13 and the housing bubble prices as it inflated my book value )

        Milli: why should I buy an overpriced crapshack now? I might lose my job and house during the next recession? I rather rent a cheap apartment, save money and buy when prices drop after a crash. Way less stress, way less money and way less property taxes I have to pay.

      • Dan,
        What makes you think I am a doomsdayer?
        2017 was an incredible year in terms of investing. If we will have anything like this in 2018…boy that be sweet.

        Yes, I expect a crash in RE. But that’s not a doomsday. That’s like Christmas and birthday together. Crashes in stocks, crypto and RE are healthy. That’s when you buy back in. If you are young and sit on cash.
        How can a crash be a bad thing for someone who is desperate to invest his cash in?

        A crash is only bad for someone who bought high and struggles already making ends meet. And for realtards. They make more commission if the house value is highly inflated.

        That’s why you have so many realtards here on this blog along with people who just bought. Somehow they need to tell themselves it was okay to buy high otherwise they lose their sleep (mind).

      • Thro Gir,

        So what? I bought recently approximately 6 to 7 months ago and I hang out on this site so what’s your point?

      • Millennial,

        This line shows me you really don’t know the real market, “realtards push values to make more commission”. Actually it is a seller that determines the final sale price the realtor only makes recommendations and actually the opposite is true because the realtor wants to move the property as fast as possible the longer property sits on the market the more stale it becomes and the less likely it sells so if you haven’t unrealistically High listing price it will fit which means no sale and no Commission.

        Therefor a realtor always wants to list or Price the property competitively so that it moves quickly so what if it’s one to 2% below the high price you think they’re trying to list it for if the difference is it goes into Escrow in 2 days versus sitting 2 months. The commission on an $800,000 listing going into Escrow in 2 days is superior to the commission on an $825,000 listing that sits and sits and sits. Got it?

      • Dan, i totally agree with everything you said.

        The only thing I would add is that the realtard pushes a price based on a comparable sale. In your example the realtard will go with the 800k sales prices to sell it quicker. In my world, I am telling the realtard that 800k is way overpriced. I would pay 400k and will pay 400k during the next crash.
        Just because a sucker bought high next door does not mean I have to do the same. We are light years away from rental parity as you and surge prov over and over again.

        So, that’s what I meant. Will it sell for 800k eventually? Sure? As you can see on this blog there are many dumb people. The bubble goes on until the last sucker bought.

      • Dan, I agree with you on the comment on RE agents selling price and commission. I talked with countless RE agents and all think the same. Who cares about the commission on the additional $25,000 when you risk to lose the commission on $800k?!!!…If the property doesn’t sell fast, s/he risk loosing the listing to another agent who is more aggressive.

        On top of that, appraising is not an exact science. 3 different appraisers will come up with 3 different values (close but different). In a smaller town, the values oscillate even more, especially for unique higher value homes. In the end, the true market value is the meeting of the minds between buyer and seller. It is also true, that this “value” is also heavily influenced by the FED and government but the RE agents have almost zero influence on prices. People who say that, never worked in RE or never had someone close to them working in RE.

  • You buy a house when 1) You’re ready to put down roots (hard to do in today’s job market and 2) You can afford it. 1/3 income rule. Yes, that was a rule for 100 years before baby boomers Jazzercised their way into the housing market. Subsequent generations have followed suit.

    Even a heart surgeon would be priced out of some of these neighborhoods.

    We’ve had asset price inflation and there will be a correction. The median income in LA county is $55,000. Let’s say it’s double that. You still have problems.

    When even a quarter point Fed increase crashes new mortgage applications, you know the extent of the madness.

    A house you can’t afford is hell with granite counter tops. A hell of your own making.

    • $55K is median income for everyone. But that number is irrelevant. What you need to look at is the median income of home buyers, which is significantly higher than $55K. Non-English speakers making flipping burgers are counted in the $55K median, but they aren’t buying homes. Well at least not alone.

      And when did mortgage apps crash exactly?

      CNBC March 21:

      “Total mortgage application volume fell 1.1 percent last week from the previous week, according to the Mortgage Bankers Association’s seasonally adjusted report. Volume was 5 percent lower than one year ago.”

      A 5% drop YOY isn’t what I’d call a crash, especially given how high the number last year was. So much hyperbole is thrown around here.

  • After waiting for years, the CA real estate bubble has finally popped. It has been a long wait for us real estate bears. Within 30-60 months, prices should be down 30-50%, I am listing my rental property in Portland, OR as soon as possible. However, I am hesitant to sell my primary residence in South Orange Co., CA and rent because it is so much cheaper to own than to rent if one has no house payment and low property taxes.

    • son of a landlord

      After waiting for years, the CA real estate bubble has finally popped.

      Has it? Where’s your evidence?

      It has been a long wait for us real estate bears. Within 30-60 months, prices should be down 30-50%

      Well then, it hasn’t really popped yet. Not until we start to see this decline, which you predict to occur the next 30-60 months.

      • Son …, give me a break. Real estate prices are just now starting to drop. It will not show up in statistics until about August. Also, home prices drop very slowly because sellers only drop prices after they give up waiting for buyers to come. It takes time for sellers to give up and face the new reality. For those reasons, a real estate crash is always slow–about 1% per month or 12% per year. That is why it takes 30-60 months for the crash to occur.

      • “It will not show up in statistics until about August.”

        Curious why you say this. We have median sales numbers for each month after that month ends (e.g., we have data for February 2018). Month-to-month in CA, prices are WAY up in some areas (bay) down in others (LA). Definitely no downward trend yet, other than the usual winter thing, but that’s done.

        I want a crash as much as the next guy, but I don’t see it, or a reason for it, yet.

      • In that case, Gary, it wouldn’t be a crash.

    • I think we can wait 3 yrs before we move to CA, housing is all that really kept us from moving there. If you can pay cash for a house, CA is a very dessirable place to live, especially with so many people leaving, they just cant afford it and its better they leave and enjoy life else where.

      • By the time you arrive most of the productive middle class will have left and you’ll have tons more homeless camped out on the sides of freeways pooping on the sidewalks. At least the high taxes, amazing government, and poor infrastructure is there for the wealthy to enjoy inside their hilltop view sandwich. Oh the desirability!

      • “By the time you arrive most of the productive middle class will have left and you’ll have tons more homeless camped out on the sides of freeways pooping on the sidewalks. At least the high taxes, amazing government, and poor infrastructure is there for the wealthy to enjoy inside their hilltop view sandwich. Oh the desirability!”

        There are conservative cities that don’t have the infrastructure and homelessness issues. Oasis in a wasteland of liberal devastation. At some point the state taxes may become too annoying to bear, but at the moment it’s a minor complaint compared to the upsides. I love it here.

      • Conservative cities shrinking by the minute with homeless issues creeping in. Case in point, OC sups just tried to put homeless camps in Irvine, Laguna Nigel, and HB! Safe for now but the writing is on the wall. Lower taxes are nowhere in sight, it’s higher taxes written all over the same wall. Good luck you’re going to need all you can get.

      • Oh I know taxes will only go up. I’ll move when the kids go off to college.

        A properly run conservative town can keep out the riff raff indefinitely, and keep a balanced budget. Where I live, homelessness is not an issue, because we don’t let it be. Stand on the freeway exit and beg for money? Expect to get rousted by the first cop who sees you. You can drive the length of the city (about 20 minutes north to south) every day, and maybe once a month you’ll see a single hobo. We also keep out the poorest of the poor by having virtually no public transportation (unless you count winery bus limos). You would let your college age daughter live in our “worst” neighborhoods.

    • You have decided it has “popped” based on what factors? I do not see it the same way, but let’s hear it….Portland homes are still frying over the offer price. OC too.
      And please don’t post a link from zerohedge or some bot site.
      standing by….

      • eckspat, most homes in Portland are currently selling near their asking price. That doesn’t sound to me like there is a bidding war going on. Online estimates for my home range from $313K to $341K so I will likely ask $329K. I think I will be lucky to get $325K.
        I paid $150K for the home in 2004–near the previous real estate bubble peak which shows that Portland real estate has appreciated much more in the last decade than OC/LA real estate.

    • A long wait?

      2012 was 6 years ago LOL

    • Throbert Girth

      @Gary – what makes you think it has popped? I personally wouldn’t sell your CA home if it’s paid for and you have low property tax locked in with P13.

    • Cognitive dissonance test?

    • What’s making you say the bubble has popped?

    • Lord Blankfein

      We’ve heard the same story here since fill in the blank (2012, 2013, 2014, 2015, 2016, 2017, 2018, etc), CA RE has finally topped out and is in for a big decline. Needless to say, these people should throw their crystal ball in nearest dumpster. It has cost them dearly!

      • True. But please look at the SP500 and combine that with the end of QE. Give it some time, this affordability bubble is hissing right now…

      • Their “strategy” relies on having an accurate crystal ball.
        The real good strategy always has mitigation plan for a number of scenarios, which alleviates a need for accurate crystal ball. (This reducing dependency on gambling).

        They typically budget for single scenario:
        Housing will tank – I will do nothing.
        Housing will grow forever – everyone needs to buy.

        Very few can say: housing can this way or this way, and this is what I am going to do now and under a multitude of possible scenarios.

  • At least the Facebook criminals will have less money to buy overpriced RRE with.

    • 2012: Obama uses FB data to micro target voters….it’s genius, says the MSM, and shows how super smart and tech savvy Obama is. What a dreamboat president!

      2016: Trump uses FB data….BURN FACEBOOK DOWN, says the MSM

      And the clapping seals watching CNN bark in approval.

      • Basically, Obama was a puss and Trump doesn’t take shit from anybody. It’s a show most people alive haven’t seen before.

  • I think most of the commenters on this site are self-rationalizing real estate to make themselves feel good … hoping for an outcome! In reality, not a one of us really knows when the next shoe will drop, what will cause it, or how painful it will be! Everyone of us will have ‘hindsight’ … it was a great decision, it was a lousy decision!

    • Trump will do something to destroy things. Don’t know when, don’t know how, but he will surely do something catastrophic.

  • The only people that don’t like Prop 13 in California are a small percentage of renters, who may not benefit from semi-controlled property taxes as much as homeowners, but should be grateful that they might still have a chance.

    In places like NJ/NY homeowners pay ridiculous property taxes while being held hostage to politiks and escape as soon as they are able to…

    • You’re right, most people in the state haven’t a clue about it and the only people who love Prop 13 are the small majority of earliest freeloading owners whom are conferred the biggest subsidy.

      • The people who love prop 13 are the ones who actually understand it. My last purchase was a year ago and I love it (I would love a replacement more, but this is far better than no protection at all). Why? Because 1) it caps property tax percentage in a very blue state and 2) I know that I get exactly the same benefits as the old timers you hate so much.

        If you want to imagine what life would be like without it, first calculate the current prop 13 taxes for a $1m property all the way out to your retirement. Then pretend for a moment that prices are 40% lower, and figure at least 2.5%/year taxes based on assessed value (although I believe the legislature would happily try for 4%), reassess every year using the long term trend line (up, up, up), and when you’ve calculated all the way out to your retirement, tell us again how unfair prop 13 was.

      • No one gives a shit about what John D thinks is fair. The question is about what’s sustainable in a state governed by morons. Prop 13 will be long deconstructed before someone like Millennial retires (if such a concept even exists by the time he is older), so there’s no point in imagining life without it since that will be the reality soon enough. Gravy trains never last long regardless if some people understand how freeloading works.

      • Lordt, CA is facing a major pension crisis (almost like Illinois) and they don’t know how to solve it. They already raised the sales tax and income tax to one of the highest in the nation. The baby boomers continue to retire more and more every day. There are too many poor people in CA who can not be taxed any more. What can you tax a homeless or an old retired person?. The ONLY target left for taxation are the property owners. Add on that the FANG which is on wobbly feet lately and the picture is not too rosy.

        CA at this point is facing major headwinds. The only saving factor is the weather, but the state government has to turn the weather factor into a revenue source (tax the property) to avert a major pension crisis. The businesses are already taxed to death and they are leaving the state in droves. When a reporter pointed out recently to the governor that businesses are leaving the state he said that he doesn’t care if businesses who not share his values leave (whatever those values are!!!!…). You can ignore all of these factors only for so long. Eventually it is going to be reflected in a very poor financial picture. It is already poor; I meant worse.

      • “No one gives a shit about what John D thinks is fair.”

        So you don’t want to know how it will benefit you. I get it, you want to be right, and if you keep your head in the sand, you don’t have to be wrong.

        “The question is about what’s sustainable in a state governed by morons.”

        Prop 13 is sustainable indefinitely (going on 40 years now), although it does need to change. California has enough revenue – it’s the ever-increasing fees (another form of taxation), spending, and unfriendly business climate that is unsustainable.

    • Chew on this;

      My brother recently closed on a house in Upstate New York for 270,000 there were closing costs in the amount of 13,000. Of that approximately 10,000 were taxes!!!!

      He pays more in annual taxes on that $270,000 house that I do on my property which is worth around $900,000.

    • Connecticut is probably the most obscene. In the Hartford area $600K homes come with $20-25K property tax bills. And this is on top of a high state sales tax, high income tax, and ridiculously high car registration taxes.

  • My mother works for Toll Brothers and is pretty high up the ladder and got a memo last Friday talking about a shift in the market around 2020.

    apparently, a few of the big builders timed the 2007/08 recession with good success and of course to full advantage of how cheap materials were in 2009 etc

    this is just food for thought guys. I enjoy reading of this site and wish I could sit down with a few of you guys and going over my finances haha I will most likely continue to live in socal until I get close to retirement, which is 30+ years away.

    • Toll is one of the better national builders for sure. What’s the shift? Details, please.

    • I suspect that the Troll Brothers are off by a few years in their 2020 real estate decline prediction. New home sales have already peaked according to the statistics I have seen.

      If the Troll Brothers specialize in high end real estate, their particular niche may last a little longer (1 year or so) because they are selling to the rich who have had the most income gains in the part 6 years.

    • She is trying to get me more info on that matter. She just got the email from her boss. She is on the design side and runs the socal region. I will post up here when I get more information.

  • It’s total insanity that Americans are not burning down their government buildings with the treason going on here. America is being sold out to the Chinks. Real estate and higher education sold to the highest international bidder. Screw the generations of WHITE Americans that should benefit from the nation and institutions built by their forefathers. Let’s sell it all out because doing otherwise wouldn’t be FREE MARKET and would be RACIST.

    Do you think the Chinese are this GOD-DAMN stupid? Do you think they would sell out their nation and people like this?

    No, only the dumb, fat and happy boomer Ameriburgers watching another race chase balls on a field and sucking down as many calories as they can before they croak.

    Pathetic. A pathetic nation going down the tubes. By 2050, whites will be the minority in the USA. They already are in California. The boomer generation’s legacy is the destruction of the USA by massive demographic transformation. They cheered the bombs over Baghdad while their own nation was conquered from within. Idiots.

    • You are right, but don’t put the blame on the boomers. They had as much influence on politics as you do today. Call the real source by their true name – Globalists (all democrats plus all the neocons). They care less about the good of the american people and more about global domination (that includes domination of US population). For them we are just another colony.

      These globalists are also collectivists in the sense that they want everyone equal poor and themselves with all the wealth and power to be above the law. They are sick minded. Poor people with no arms are easier to control.

  • Wondering if Millennial took profits on crypto. A little ironic that he speaks of a ~50% drop in RE while the asset he has been promoting has indeed crashed more than that amount in relatively short order. I don’t claim to know where RE goes from here like some do but I think crypto assets still have a ways to go before consolidating a bottom.

    • Taking profits? What’s that? I put all my money in bitcoin when it hit 19k, tron at 20 cents, ripple at 3 bucks and ADA at 1 dollar. Than I sold everything when it went down. Lol

      I’ll tell you my secret….when nobody talks about crypto/during bear markets is when you want to start dollar cost avg back in. When zerohedge, cnn and all others report on bitcoin’s massive gains….that’s when you want to start getting out. These cycles happen over and over. It’s fascinating how strong fomo and FUD is expressed in crypto. People rush in at the top (fear of missing out) and panic as soon as FUD (fear, uncertainty and doubt) approaches.

      Crypto markets can move like a laser pointer, the stock market like a fighter jet and the RE market like a cruise ship. But all have one thing in common, when the masses panic is when you want to get greedy and buy in.
      . I have seen many crashes in crypto. It’s normal. It’s relatively easy for me to buy back in when it’s down. But it’s hard to stick to my strategy and sell when a coin is up 3-4x. It’s a shitty feeling when you sold at a massive gain BUT see the coin go even up more. You gotta be strong and not get too greedy.
      Crypto game def helped to increase my war chest/downpayment. I am ready to buy RE but want to wait until we see a buying opportunity in the housing market. 55-75% below today’s prices seem realistic. This is the biggest debt bubble in the history of the world and we are way overdue for a deep recession. Once the masses panic in the RE market I will buy for half off and maybe even in all cash. Let me know if you have any other questions. I love crypto and talking about it.

      • son of a landlord

        Milli: I’ll tell you my secret….

        Your “secret” amounts to buy low and sell high. That’s no secret. Everyone already knows that.

        The real secret is to recognize the lows and highs. That’s one secret that only a few insiders (sometimes) know.

      • thomas verlain

        LMAO you got lucky on crypto and now you think you are an expert. That lucky gamble is going to ruin the rest of your life because I bet you think you are a genius. You also need the prices to come down because no bank would ever give YOU a loan. I bet you have no college degree or job and just a little 15 – 20 k crypto budget to try and but. What a joke this forum is. Enjoy renting your whole life silly billy

      • Thomas, you are bit off. 🙂 not sure why you are so hostile. May I ask why? Are you in the real estate business or are you an older guy benefiting from prop13?

        Anyways. I am happy to tell you more about my finances. You will probably understand where I am coming from.
        I make over six figures working for a tech company. My wife works too. My credit score has been over 800 the last few years. I got zero debt and a LARGE downpayment sitting in several bank accounts.
        I am fine telling you this since I don’t know you. To friends and family I try to downplay my wealth as much as possibly. My landlord lady thinks I am struggling financially. Lol. I worked hard on maintaining that image. Why show off my wealth and risk a rent increase?

        I could easily buy now but I am gaming the system. If you can’t beat the system you need to learn how to play it right. I feel like I am cheating because I am THE perfect candidate to buy a house but I don’t do it. I only buy on large discounts.
        This is simply because I understand how incredible stupid RE cheerleaders are. Their sales pitches can easily be dismantled and it’s easy to see that buying overpriced houses only benefits a few. Not YOU (the buyer).

        All it needs is patience. And let’s say that somehow we will never ever get a recession/crash again. We all know this is impossible but let’s just assume it for fun. Well, then of course I would never buy and simply inherit the houses my parents and in-laws accumulated over the years (back in the day when they were cheap-comparably).

        You see, it’s a compliment that I am so hated by RE cheerleaders. It means I nailed it and have the right strategy. Just imagine I would be a fool and stupid. Why would all these realtards and RE cheerleaders try so hard to make me look bad? They would not need to. But since I am young and figured it out it means the majority of millennials can do the same. That makes these old farts nervous. They know we won’t support them and the next chance we get to repeal prop13 it’s a done deal.

      • What cycles? The crypto market doesn’t even have ten years under its belt, so there’s hardly any history to work with in terms of reliably identifying patterns and trends.

        Sounds like you didn’t take profits at $19K.

      • Gaming system? Lol

  • One indicator of a top, might be the insane number of rooms, floors, and entire homes for rent from individuals who are in WAY over their heads. Heck, one of my friends is renting an entire house in Beverly Hills and the owner lives in the garage.
    When I walk around the neighborhood there are signs on every street with people renting out rooms.
    We have gone back to the insanity that was featured in the movie, “The Big Short.”

    • That’s a great post Anna Mouse. And Due to the enormous supply of available places for rent, rents haven’t gone up at all-If you rent from a private landlord. The peak has been reached for the housing bubble. All you need to do is wait a couple more years and buy half off.

      • Thomas Verlain

        Hahahahaha rents in Los Angeles just rose again in February! Keep dreaming silly billy. You will be living at home with mommy for a longgg time for not taking advantage of 3% interest rates. What a fool

      • Thomas, I would love to live with my parents. I would save even more money than I do now by renting a cheap apartment from a private landlord. My rent has never increased. Why would it? There is plenty of rooms available, wages have not increased and they are building multi family housing like there is no tomorrow.

        Regarding the interest rates….I think you misunderstand how it works with interest rates….low interest rates is extremely bad for buyers. You always want to buy a lower priced home with higher interest rates instead of buying an overpriced crapshack with a low interest rate. Artificial low interest rates push house prices higher. Way above value. Why is it better to buy the house with higher interest rates? Because you can just refinance when interest rates go down again. But you can never change the insane price you bought your house at. It’s pretty simply and shocking that people are too dumb to understand this. That’s why I am here. I am entertained by the stupidity and I am here to help.

        Bottom line. You want 7,8,9 % of interest rates. House prices will crash by 55-75%.

    • People renting out their rooms is not necessarily people in over their heads. It is older people who are out of a job or semi retired who are doing everything they can to bring in some dough and enjoy continuing to live in the area they have lived in for 20+ years.
      These people will not have problems in the next crash other than perhaps rent out another room or rent out their garage, or work for Uber, etc.
      If they have been owning for 20+ years then cannot afford to sell!

      • “t is older people who are out of a job or semi retired who are doing everything they can to bring in some dough and enjoy continuing to live in the area they have lived in for 20+ years.”
        Isn’t that exactly the issue? We have a ton of old people who can stay in their 7 bedroom house and have no need to downsize because they don’t pay their fair share in property taxes. Thanks to prop13. Smart on their end to create a property tax law that screws just younger people and benefits older ones. No need to downsize. Boomers are doing just fine as long as millennial put up with the scam. The minute you repeal prop13 the boomer will say, i will downsize and I can’t believe we got away with this scam for soooo long.

    • Somehow I smell BS here. Nobody puts signs for “room for rent”.

      • Sorry, should have been clear. After the housing bubble crashed I saw a ton of signs for rooms/houses for rent. Of course now these rooms go so fast there is no reason to put out a sign. Craigslist is full of rooms for rent. Only issue is that you never really know what you are getting into. I have moved a couple of times, once because the landlady was certifiably nuts, and another because I got a much better deal. Right now I rent out a room in Century City/Beverly Hills in a large house along the golf course. The owners are away 70% of the time on projects, jetting around the country. Pretty good deal for me. Only downside is that I have to make sure the pool guy, gardeners, maid, and dog walker are paid every week.

  • This will end badly!…..that’s the end of my story.

  • I wonder now many people were on this site or others like it, back in 2008-2010. If you did not buy then, why not? I can remember back in 1998-1999 there were blogs calling for a bubble burst. It happened 9-10 years later but not sure if it will or will not happen this time around. Nobody knows. A broken clock is correct once every 24 hours….

  • China has a massive debt fueled real estate problem. The Chinese export their issues with purchases of foreign real estate around the world. Not only in the USA, Europe and Australia as well. This created the current “too much money chases too few goods/real estate”. We can call it inflation!

  • So what happens to the US housing market if the petro-yuan displaces the petro-dollar as the world reserve currency?

    https://www.rt.com/business/422314-petro-yuan-futures-dollar-death/

  • Here is my final word on rental parity and how silly it can be:

    $1mil home in So. Cal, prime area
    Scenario1:
    0%, 4.5% interest rate – $5066 mortgage, $1400 Prop Tax/HOA/Mello Roo.. 6.5k/month. $3750 month of interest, at ~30% back that is -$1125/month. So, that is 5350/month. And 1300 of it is principal (debt reduction). Total cost = $4000. Comparable home for rent = $4000-$4500. Roughly at rental parity in my definition, but many disagree. No downpayment -> No opportunity cost.

    Scenario2
    20%, 4.5% interest rate – $4053 mortgage, $1400 Prop Tax/HOA/Mello Roo.. 5.4k/month. $3000 month of interest, at ~30% back that is -$900/month. So, that is 4553/month. And 1053 of it is principal (debt reduction). Total “cost” = $3500. Comparable home for rent = $4000-$4500. $200k opportunity cost, but it earns you 4.5% in interest.

    Scenario3
    0% down, 5 year mortgage at 3.5%. $18000/month. WAY WAY WAY above rental parity. No matter that home is yours in 5 years -> Should NOT EVER consider this.

    Scenario4
    All cash.
    1st month -> You pay $1mil. This is 1mil over rental parity (for that month) Absolute insanity to buy.

    This is just to demonstrate if you exclude long term view and real financial considerations, rental parity argument never makes any sense

    • Lord Blankfein

      Surge, I was running these numbers on the blog 5 years ago. And I got plenty of flack when I told people to buy if you are anywhere close to rental parity. Since then, home prices have went up nearly 50% and rents have increased dramatically. Taking the emotion out of home buying and doing basic math was likely one of the best financial decisions of their lives.

      • Lord b,
        It does not surprise me that you side with surge. You promote buying now but you yourself admitted you are not in the market to buy. You just want US younger people to buy high to keep the bubble going. Also, a little advice…..if you crunch the numbers to show rental parity and forget costs like PMI you make yourself an easy target. That’s why the smart RE cheerleaders don’t post numbers that show rental parity in California. Because there is none.

      • Lord Blankfein

        Millie,

        I have went on the record many times saying I want to buy an investment property, but not at today’s prices. However, if I were in the market for a PRIMARY RESIDENCE I would not hesitate to buy if I could meet the simple criteria I outlined above. The benefits from buying a rental vs. a place to live are completely different. Buying a rental property is purely a math equation. When buying a primary residence, there are many other forces at play…providing a safe, stable environment for a family, being located in a good school district, etc. Many people will put a premium on this.

        Dude, forget about PMI. See rule number 2 above…20% down minimum. This has always been the gold standard and protects both buyers and lenders. Don’t over complicate this.

      • Lord,

        You are right so many of these arguments can be thrown out the window if you take out a majority of the financial piece and just base it on a place to live with your family over the next 10 to 15 years. That is what I did and I could not be any happier.

        My two kids could not be any happier we have a neighborhood full of kids that I absolutely love to come over everyday and play in are huge backyard and in the summertime go in our pool.

        Close to family n friends. Having our friends baby shower here, 100 attendees will easily fit into our yard. Walking distance to a great school.

        It was the perfect house for our family.

        Far below what I can afford, and have a significant reserve build up which increases every month.

        I don’t really care what the market does in the short term because over the next 15 years I’ll probably still be living here.

    • Hilarious! Someone should tell Surge that paying down debt (principal) for an overpriced house is not the same as paying yourself. Just a small little detail. You are paying the bank. Without paying money down you are paying PMI. Another small little detail he likes to forget about. You are basically renting from the bank which costs you an arm and a leg compared to renting from a private landlord. And what about the horrendous fees, commissions for realtards and lenders?

      This is what happens when you buy high….the minute you buy you hang out on a housing bubble blog and tell people (and yourself) that buying high was somehow a good idea. Pretty entertaining and a confirmation that buying high is the worst thing you can do. The fact that he tries so hard to make up examples where he does not mention half the costs is the icing on the cake.

      • You forgot the MeloRoose (in essence development fees which in most states are incorporated in the price of the house) and bonds on top of property taxes. It is true that not all the houses have them, but in many cases they are very very high. I saw cases where they were higher than interest and principal with 20% down.

        I had cases where I backed out of the deal because of them. I never regret it.

      • Yes, PMI was omitted for simplicity, it would add an extra cost of course. I omitted something to let you chew on it, since you do not seem capable to react to overall message (which is not suggestion to buy)

        What is mathematical support why this home is overpriced?

        Paying down debt is exactly paying back to yourself. By that argument I can say that depositing cash to bank is paying to a bank.

        If I sell you this million dollar home for $200k (80% discount), but force you into 5 year loan -> your monthly payment would be 8.8k -> WAY about the rent. Would you buy this home?

      • I did include mello roo, improve your reading skill
        Mello roo btw is california only thing. Do your research

      • Millennial makes a good point about MIP because the closest thing to rental parity is a zero or near zero down purchase scenario. This is because a comparative rental only requires a small deposit and confers opportunity cost saved. Some people like to point to a 4.5% metric on the buy side but hey we had TONS of idiots here only a year or two ago proclaiming rates would NEVER go up in our lifetimes so sure why not just assert that 4.5% today will be worth two shits tomorrow.

    • Gary,

      This will be interesting to see would you care to share the listing on here when it is listed or just an address or I guess at the very least let us follow by posting the listing price and then final sold price?

      • Dan, there is one month left on Portland home’s lease, but the tenant wants to move which is good timing. I am starting to fix up the outside already–mainly having the old wooden fence repaired.

    • You didn’t include maintenance and insurance.

    • Surge your calculations are completely wrong but I will start with the tax break you think you are getting. The tax laws changed and only 750k of that 1 million mortgage is deductible. 750k X 4.5% interest rate = $33750 of interest the first year. If you are married deduct 24k from that ( new standard deduction) = $9750 of additional deductions. 30% of that is only a tax savings of $2925 or $243.75 a month not $1125 as you wrongly believe.

      • Yes, you are right, I need to look at tax differential. There are many estimations in my calculations that can be nit-picked (750k limit, tax differential relative to standard deduction, so tax effective tax break is over-estimated in my example.
        But…most people who are buying 1mil home are under AMT, so you mortgage deduction comes straight out at 30%. So, my estimate is not that far off.

        What you guys are missing in my posts is that rental parity is largely a nonsense, especially if you ignore tax component AND Principal component.
        This is why I gave 0% down example to demonstrate rental parity to remove opportunity cost from the equation.

        Maintenance is there of course, but it is there regardless if you buy home cash, below/above rental parity. It is constant regardless of home prices/financing/etc…

  • Looking Forward

    In these crazy times, rental parity makes absolute sense in terms of having your bases covered for life’s contingencies. How wise to be able to rent out a place if your life circumstances change; and, yet, you are not wanting to sell for any reason!

    That being said, here in San Diego the market continues to “go mad”. Houses sell quickly, with prices rising with obvious bidding wars — when one compares listed versus sales price.

    You can check out sdlookup.com to see the actuals of what houses list for, the time it has taken for them to close, and close price.

    What Lord Blankfein has said holds true: buy if you want a home to live in; and, try to get something that would allow you to rent it out for price parity if you ever need to move for a job relocation.

    To those who insist on expressing political beliefs on this site…..please remember we are in an age of “false news/facts”, and it is best to keep to what this site is about, real estate, which in itself of course has become sometimes a misnomer.

    • Yes, this true. Biggest risk in RE is if you HAVE to get out by not your choice (relocation, etc…).
      In this case, rental parity impact is SO minimal…run the numbers.
      Say 1mil home and say rental parity is -1000$.
      That is 12k/year and 36k/ 3years. -> Overall 3.6% of the total home price.
      In 3 years, your home price can swing up and down by 20%+. So, your rental parity impact is not very large.

      The best thing is to negotiate (if possible) lower price to protect your downside.

      Remember, principal that you pay, you will get back when you sell the home.

      • Surge,
        “Remember, principal that you pay, you will get back when you sell the home.”

        Lol. Now I understand why you are so confused and said that principal is paying yourself.
        What about those that don’t sell their homes? Do they get the principal back as well?
        What about those who lost their home? Yea, this actually happened. You can look it up. 7 mio foreclosures during the last crash.
        What about those that have to sell below of what they paid for the house? Yea, this actually happens too! house prices fluctuate.
        It’s shocking that there are people here with a mindset from 2 decades ago….”house prices can only go up”

      • Throbert Girth

        Surge, your post is one of the dumbest I have ever read.

      • Throbert Girth,

        It is a sensitivity analysis.
        People tend to analyze one parameters (rental parity), while ignoring that in the larger context of things (price movements) it actually does not contribute that much to overall picture.

        In the end, my point is: Rental parity is wildly imperfect measure of real estate valuation, has no solid definition and “rental parity” will not get you far in terms of enabling a purchase.

    • LF, I misread your comment.

      Yes, in case you have to move, for long term wealth accumulation it is better to convert your home to a rental.
      In this case, improved “rental parity” would help.
      Problem is:
      1) You will not be able to get “rental parity”. If you buy a home (20%/30yr) and rent it out in few years, most likely your taxable income will be ~0%, but you will have negative cash flow (roughly about size of the principal). So, initially you will be in the mode of forced debt reduction of your asset (eventually, your rent increase will outweight cash flow).
      2) If you try to get best “rental parity”, you might overlook your overall home goals – location, schools, lifestyle, etc…

  • REAL ESTATE CRASHES OCCUR IN SLOW MOTION. The top is occurring right now, but it will be summer before price declines start showing up in statistics. It will be 30-60 months before the bottom is reached.

    There will be a recession but it is a year or two in the future. Home prices will probably be down 15-20% by the time the recession begins. Those reading this board could stop looking for 2 years and probably miss nothing important.

    Politically, the Republicans may do better than expected in the 2018 mid-term elections, but Trump is in a world of trouble. In 2020, the country will likely be in the depths of a 2nd Great Recession.

    • YOU’VE SAID THAT ALREADY!

    • That sounds awesome Gary! 2nd Great Recession in 2020 would be the perfect timeline for me. Gives me two more years to save even more money and than buy a house at a great discount. Maybe in all cash during the next RE crash. And it rhymes.
      The icing on the cake would be to repeal prop13 until then. Boomers enjoyed the free lunch the last decades and it’s time to allocate the property tax burden in a way that everyone pays their fair share? So far the property tax burden has been soley on millennials. Time for change! In our society we should not pick winners and subsidize only certain people. It’s time for a fair, modern property tax law that doesnt just benefit a few old, wealthy people on the expense of all younger generations.

      • Laura Louzader

        Millie, I only hope that you are not depending on your crypto-currency “investments” to buy you a house and have taken your profits- or cut your losses- by now. Bitcoin is rather quickly retracing last year’s path on its way back to zero where it belongs.

      • Hi Laura!
        Depending on crypto to buy a house? Lol. Hell no. I am sitting on cash mainly. Ready to buy now but want to wait until the RE corrects (55-75% below today’s prices is my target).
        Regarding crypto, After a parabolic run on ADA and LTC I sold most of these holdings. Not at the very top but pretty close. If a coin runs a straight line up to the moon it’s a great time to sell. Don’t get too greedy.
        Unfortunately, most crypto fans rush in at the top and think the coin is the next bitcoin.

        Regarding your comment about btc going to zero. I have heard this over the years countless times. I am happy for the FUD. That’s when you want to accumulate again.
        The media has declared bitcoin to be dead over 166 times in the last few years. Nothing to see. When bitcoin makes new highs the critics go quiet and people rush in. When it corrects they all come out again and tell you it will go to zero. Same old story. Especially newbies and older people who don’t like that they can’t participate in this crypto bubble are the ones spreading the FUD.

    • Lord Blankfein

      Gary, can your crystal ball also give winning lottery numbers or horse race results. I would be interested if it did. Thanks in advance.

    • Throbert Girth

      @Gary, you can say that again

  • Surge,

    I like reading your scenarios/comments and some posters get too caught up with the rental parity argument and think it is cut n dry or are comparing it to 2008-2010 which was a generational event.

    Anyways; I’ll be the guinea pig here and post my recent home purchase and let you dissect the rental parity argument b/c im truly interested to hear.

    Single family house within walking distance to a good school in Orange County
    835k price
    200k down (bought with no closing costs so the 200k is my all in)
    635k loan @4%
    PITI = 4k/mo. (no HOA, no mello roos, low tax rate 1%)
    you could say i spend 200/mo. on pool and landscaping if you want

    House in my neighborhood which is inferior to mine (and no pool) was rented for $4500/mo. so I would like to use that metric as a conservative estimate.

    NOTE: If rates drop back down to previous lows I’ll jump into a 15yr fixed

    • Dan, my scenarios was to demonstrate my belief that rental parity itself often makes little sense (unless you are buying a cash-flow investment property)
      If you love (or at least like) what you bought, can afford it comfortably+can save, and Ok to stay there…if this is met and every morning you come out of your home and enjoy being there – all is set.

      And of course you are below rental parity, at least per my definition.
      Even in absolute term, you are +500 on rental parity. (I am not even counting tax breaks and principal payment).
      Yes, you put $200k down, you can treat that opportunity cost any way you want, but it does earn you 4% + it enables leveraged property appreciation.

      • Surge: “If you love (or at least like) what you bought, can afford it comfortably+can save, and Ok to stay there…if this is met and every morning you come out of your home and enjoy being there – all is set.”

        Surge I agree with you on this one. I applied the same thing when I built my house where I built it. However, that is an emotional decision not a financial decision. You can not apply logic to emotions. On the other hand, when I do business and investments I am zero emotions and just logic (ROI trumps everything).

        Don’t try to quantify emotions! Keep emotions and business separate and you’ll do good in life. That is the reason I am not telling anyone to buy or not to buy, to sell or not to sell. Everyone’s reasons are different. It is the same as buying a Ferrari . It is an emotional decision with zero financial sense and zero logic. If you have money to spare, go for it! The sad part is when someone sees a Pinto and in his hungry eyes it looks like a Ferrari and pays the price of a Ferrari.

        Besides diversification, that is the reason I invest in different markets – the good ROI sometimes shows in different states. That is the reason I follow different markets and blogs.

    • The pool and Landscaping are going to cost far in excess of the 200 a month you believe. The pool itself will probably cost 300+ alone. You also have completely neglected the cost of maintenance. Conservatively an investor would assume 8k per year on the low end and 24k on the higher end (especially if the house is older). You house is actually negatively yielding at 4500 a month in rent. You also neglected to include the opportunity cost of the 200k. Conservatively the 200k would net you about 16k per year in capital gains and dividends over time.

      • Lord Blankfein

        8K to 24K per year in maintenance? In one word, NO.

        Making assumptions like that will ensure you never own a home.

      • Actually the 200/mo this accurate bc that’s what I pay for those 2 services.

        Furthermore you say the opportunity cost of the 200k but so many posters on here claim we are in an everything bubble weh’re all asset prices are due to burst therefore if I put the 200k into stocks or bonds or investment real estate I would be upside down in the near future as opposed to putting it into a primary residence which I will live in for the next 10 to 20 years no matter the volatility of the market.

      • “The pool and Landscaping are going to cost far in excess of the 200 a month you believe. The pool itself will probably cost 300+ alone.”

        This is wildly inaccurate. I have a pool and the very long term costs (new pump every 10 years, pebble refinish every 20 years, all chemicals, water, electricity with a properly used variable speed pump, etc.) averages out to about $80/month + gas. Gas is as little or as much as you want. Water is less than an equivalent lawn with sprinklers would use. Anyone who pays for a pool service has reached the height of laziness.

        “Conservatively an investor would assume 8k per year on the low end and 24k on the higher end (especially if the house is older).”

        This is even more wildly inaccurate. Do you put a new roof on your house every year? Try $2,500-3,500/year for a 2,000sf house on a smallish lot, depending on quality of big ticket items. That’s for a whole new HVAC system every 10-15 years, new roof every 25, new flooring every 10, new fence every 15, new appliances and paint every 15, and gardener. Less if you spring for 100-year lifespan items up front (real wood and granite) and do the yard work yourself.

      • Lord Blankfein they are not assumptions they are rules of thumb. They costs are turned into a monthly although they are extremely uneven.

        You can of course do the work yourself to make it cheaper but your time has a value as well.

      • I did own a home for awhile. It was far more expensive than a similar rental. I rent now and invest the large surplus.

    • There is no rental parity to your scenario because a comparable rental won’t require a $200K deposit.

      • There is never rental parity. Ever. At least not in places I care to live in.
        There are reasons for it which you fail to understand because of extreme shortness of your view
        You should not buy in so cal

      • So in your calculation if the down payment on a purchase is not the equivalent of the deposit on a rental then parody cannot be discussed?

        If that’s your stance then rental parity cannot be a thing because unless somebody has a VA loan the down payment will always be significantly higher than a deposit on a rental.

      • In fact you can’t compare the 2.
        $200k is part of your equity, the more equity you put in, the higher the opportunity cost but better cash flow (less interest).

        Either you invest in RE or you do not.

      • Surge gets it.

    • Dan,
      Thanks for the example!
      Aren’t you a lender? For being a lender you are shockingly clueless when it comes to home expenses. What happened to maintenance costs? Appt. 1% of the house value (annually)? Don’t worry, you are not alone. John D. Also likes to neglect that. As a home owner nothing ever breaks or need to be replaced. It will all last forever. And if it does, it’s 50 bucks.
      My dad is a landlord. He has several multi family homes. I saw his P&L. Holy cow. These maintainance costs/repairs quickly add up. And for his own house he basically re-newed most of it within the last 30 years. These guys who tell you maintenance/upkeep is not that much have never had to fix the roof, bought a new bathroom or kitchen.

      • “What happened to maintenance costs? Appt. 1% of the house value (annually)? Don’t worry, you are not alone. John D. Also likes to neglect that. As a home owner nothing ever breaks or need to be replaced. It will all last forever. And if it does, it’s 50 bucks.”

        You’re full of shit, Millie. I never neglect to include maintenance, but I guess if you can’t beat me in a debate, may as well make something up to try and smear me, as if there aren’t hundreds of others who have seen both of our posts and know that you’re full of shit.

        See my post from yesterday stating $2,500-3,500/year for maintenance of a 2,000sf home. That’s for a primary, not a rental. I would allocate SLIGHTLY more for a rental.

        1% of the house value annually? Even after being schooled on the topic before, you’re still repeating that? You’re essentially saying that a small $1.5m house near the coast has $15,000 in maintenance costs, but the same floorplan and lot in the desert would only have $3,000 in maintenance costs.

        It’s like writing to a bag of rocks.

      • Lord Blankfein

        Millie, I have owned many homes and the maintenance costs that were thrown our are wildly inaccurate. And don’t confuse maintenance with renovating things. My friend just spent almost 70K on a kitchen reno. Their old kitchen was perfectly functional, it was just early 90s vintage. It did not NEED to be replaced. And anybody who is a first time buyer needs to learn to be handy around the house. It’s amazing how much you learn from watching Youtube.

      • Why so angry? Hope you are having these anger outbursts only online…
        The 1% rule is a popular rule of thumb for maintenance costs and has not been invented here on this blog btw.
        So, what is your estimate for maintenance costs for a one million dollar home?
        Happy Easter, stay happy pal 🙂

      • “The 1% rule is a popular rule of thumb for maintenance costs…”

        Only among people who have no idea what they’re talking about.

        “So, what is your estimate for maintenance costs for a one million dollar home?”

        AGAIN, it is impossible to give an accurate estimate of maintenance costs based on purchase price alone. Were you dropped on your head as a baby?

      • Like I said, he likes to neglect maintenance costs….because it’s “impossible”. Lol
        The term “accurate estimate” is pretty funny too. Shows me he has never dealt with budgets….and if he had I bet he was over budget constantly. The whole idea of estimating maintenance costs is making sure you stay in budget and have funds for a rainy day. It’s fine if the estimates are a bit higher than actuals. But hey wha does it matter if one guy doesn’t get it. all he does when called out is respond with anger and name calling. Hope he has this big mouth only online…

      • An accurate estimate, as opposed to a wildly retarded estimate of “1% of the purchase price”. You can actually get very close to reality if you put more than 3 seconds work into it.

        “It’s fine if the estimates are a bit higher than actuals.”

        $1k/year is “a bit higher”. $10k/year is idiotic.

  • just compare the t-bill spreads (30yr vs 2 yr, 10yr vs 2yr, etc…) and that will let you know where we are at in the cycle, more or less…

  • Gary, jt, Millennial, Lord Blankmind, Dan somebody, Jimmy T… what all these characters have in common is getting high on sniffing each others’ farty fumes. As if SoCal is the best edge of the flat earth.

    • Well soCal is one of the best places on earth. Yeah just my opinion, but you are hanging around here as well

    • Most of us on this board believe and hope that real estate prices and stock prices will crash so that we can participate in another of boom-bust cycle. Those cycles will continue to occur until the world governments and central banks allow the capitalist system to correct its excesses through a short depression. Basically, there will be no long term gain without a depression and deflation.

      • With your desire to participate in boom and bust cycle you are actually part of the problem creating the cycle. Not the banks, etc… but people who want to buy low and sell high. You blame government, banks, but inherently it is up to a group of people who participate in buying/waiting/speculative thinking.

        Why not buy a home to live in? Long term strategy without attempt to participate and capitalize on boom and bust cycle

      • Throbert Girth

        Come on, Gary. Don’t participate in logical activities that might cause Surge’s recently purchased home price to crash.

      • Surge, timing real estate purchases is much more profitable than buying and holding in the long run. By buying at a bottom, one could get a 35-70% gain in 5 years while the long-term appreciation of real estate is really only about 3.5% per year–measured top to top. Timing the home purchase is really very important in both the short-term and long-term because it makes it possible to sell at a profit at any time in the boom-bust cycle.

      • Surge,

        “Why not buy a home to live in?”

        What’s wrong with buying a house at a 55% discount to live in?
        Why should we overpay for something that will correct to it’s true value soon?
        When you buy a house at the correct price (55-75% below today’s prices) you have lots of money left over to do other things. (Vacations, buy a new car, invest in crypto, hobbies etc).
        When you buy high, most of your money goes to the bank (interest, PMI and principal). So why make banksters rich if you can just wait and buy at a good price?

      • TG – do you think any discussion here will impact my home price? I do not think so. This ain’t a revolutionary room where people plan and execute on a plan to drop real estate prices. This is just a forum.
        If my home prices will drop, I do have contingency plan (main one being not doing anything).

        You guys are crazy to make your main strategy with expectation that home prices will drop 35%-75%. It is delusional. If you at least mention 10%-25% correction, you have a more realistic strategy. There is very low probability that home prices will drop 50% and then it is very unlikely anyone on this forum will be capable of buying a property.

  • Here are just a few of real estate crash videos on youtube:

    https://www.youtube.com/watch?v=9rcQdH1T9A0

    https://www.youtube.com/watch?v=73NLYWrmLAs

    San Francisco is losing more residents than any other city in the US, creating a shortage of U-Hauls that puts a rental at $2,000 just to move to Las Vegas versus a rental fee of only $100 or so in the other direction.

    • Thanks for the links, they are so amazing (better than abocado toast)

    • I keep reading this. But if thousands of people are moving out every month, why is there still a huge shortage of housing? You’d think if every month a city lost 1000s of residents, there would be empty apartments offering massive discounts all over the city. Instead you have people paying $2500 a month to live in a dorm, with shared bathrooms and kitchens. The modern day equivalent of a flop house…..hipster millennial style!

      https://www.nytimes.com/2018/03/04/technology/dorm-living-grown-ups-san-francisco.html

      • It’s a more recent trend so we’ll see if it picks up. If it does it’ll take the market some time to catch down.

      • They are moving out but they are being replaced mostly by high income immigrants.

        In a few cities like Seattle, you have more domestic immigrants, but that is why places like Chicago LIKE population decline, because the people moving out are making less than $50K a year and being replaced by high income six figure earners.

        This however is concerning as long term results will be a place like Manhattan in the 70s where you basically had very poor and very rich people. Remember NYC lost 900,000 people during the 70s, mostly middle class, to the suburbs.

  • I was lucky to buy August last year. The sales price turned out to be $15k below appraisal value so that was great. I’ve been a renter. Now the comparable properties in the area that have sold with similar size, beds and bath have already sold between $50k to $65k, and a new comparable house just today is listing over $100k of what I bought my property for.

    Now I learned about money with Dave Ramsey’s teaching of 7 baby steps. I came across this website researching for when the bubble will pop. My mortgage is only 3 years my income. No more debts. No car payments. Researching stocks since tech stocks have been down. Tesla, FB, Amazon are all down, including Apple. Deciding to put the rest of my money to stocks or wait and buy another property later on. But with Dave Ramsey’s principals step 6, payoff mortgage, Im struggling whether to just payoff mortgage as soon as I can, or wait for the downturn and save for other properties to invest in because his step 4 is supposed to be to invest 15% of house hold income. That 15% can then be used as my down payment while waiting and accumulating. What do you guys think?

    • Ramsey has good advice, especially for spenders. Some people are spenders by nature and some are savers. You have to consider that.

      As a saver, I can speak only from my perspective. I can have hundreds of thousands in the bank for investment purposes and not touch them if the right investment does not show up. There would be zero temptation for me to spend them. Therefore, I can not speak for spenders.

      When the bubble is too frothy, I would pay of debts – all of them. If the market crashes before I am ready with money for investments, I always have HELOCs on all my paid off properties to access cash instantly. For spenders, it is dangerous to have HELOCs and that is the reason Ramsey discourages people from having HELOCs. The spenders will use it for some dumb spending for instant gratification.

      Nobody knows you better than yourself. If you are a saver, you don’t have to do EVERYTHING Ramsey says. If you are a spender, stick religiously to what he says to save yourself from your own impulses.

    • Welcome and congratulations on your new home. Unless you’re only here to name drop Dave Ramsey…

      “I came across this website researching for when the bubble will pop”

      The answer to that is no one knows. Some here say we are definitely at the peak, but those same people have been saying that for years. I’ve been watching for a four month drop in several different areas (bay, LA, San Diego, inland empire). Two and three month drops are common in all those areas, four not so much.

      I would personally pay the minimum on the mortgage, save and wait for a discount on rental property. But that’s me. I also think there is nothing whatsoever wrong with paying off the mortgage on your primary, unlike many financial advisors who seem to think the interest deduction and inflation hedge of a huge loan is so awesome. I think the security of not having a mortgage is a better stress reliever than a big refund. That said, I’ve run the numbers for both scenarios going out 30 years, and multiple cash flowing rentals easily beats paying your primary off early. If you’re itching to invest now, you can still find a good return in a lot of places – Florida is one. Look for excellent school districts (better parents make better tenants) and charge a little less than market rate.

      Only play the stock market if you can keep emotion out of it.

    • I have read somewhere (might not be entirely true) that in Singapore they have a law that for first property you need to put 20%, 2nd – 40%, 3rd/beyond – 60%.
      I would reverse that, but same logic.

      Buy 1st home with 20% down.
      Once equity reaches 40%, buy 2nd with 20%
      Once equities reach 60%,40% buy 3rd with 20%.
      This assumes accelerated payments of existing properties (otherwise it will take you 20 years to do it).

      OR

      Just pay off your home and invest resulting freed cash flow into stocks.
      Avoid headaches and sleepless nights.

      • Sorry guys, I didnt mean to name drop. But thank you for the wonderful advice. It’s refreshing to get a few views from different individuals. Many of you seem very knowledgeable.

    • Buy another property instead of paying off the mortgage of your current one. Accumulate 4-5 properties if possible and you should have a little more comfort in retirement.

      The prices are high right now, nobody can argue that but if you want to accumulate a few properties over your life for buy and hold there is no way you can time the market and buy all of those properties at once when the market is down. You buy at your own pace and accumulate the properties that you can based on your finances and what you can afford.

      If possible wait for the downturn/crash and pickup that 2nd property. The population is growing and rents will always be higher when you look at long term 5-10 year cycles.

    • I’m put off my Ramsey’s religious stuff, but overall his advice can be boiled down to a simple sentence: Spend less money. It’s so simple and yet very few people do it. It’s like weight loss. There are a gazillion programs out there on losing weight with all sorts of nonsense like counting points, gluten free, etc. When all you have to do to lose weight is eat less. Eat less you will get skinny. Spend less, you will have more money.

    • Lord Blankfein

      Back in the days of 8% plus interest rates, it made sense to pay off a mortgage as fast as possible. Most people today have sub 4% interest rates (some 2.%) on their mortgages and shouldn’t be in a big hurry to pay it off. I would much rather invest elsewhere (in stocks or RE).

  • Saw a small down tick in rates last week, and took 7-8 new home buyer applications.

    9-10 properties listed in last 30 days in my immediate neighborhood, price ranges between 650-900k. Every single one in escrow in under 2 weeks. Only 1 is still listed.

    So far people are unaffected with the bump and interest rates as it seems the initial shock has worn off and properties are moving very quickly with high demand

    • People like Millie have no sense of history.

      30 year fixed rates were 8% in the early 2000s. They were 5-6% in the mid 2000s. They were 6-7% in the late 90s. They were in double digits in the late 80s.

      Yet somehow the entire housing market will tank because rates went from 4% to 4.5% in 2018?

      Sure, why not.

    • I’m seeing similar activity in my area. The market is hot and buyers are stepping over each other with offers over list in many cases. Just had new neighbors move in next door. They bought the house for 10% more than the previous owners paid less than a year ago!

  • NOT a troll OR A whiny millennial. I am am about to close on my first house…it’s south of the Ventura blvd in a nice part of the west SFV. My payment will be about 4k a month with 10% down 3.25k with 20% down. It’s a starter home, not bad, needs some work. Still have a 100k cushion in the bank. I am so freakin nervous. I have been on this site since 2015 and almost bought then but thought going into an election year I was buying at the top. I was sure Trump would crash the economy or go to war. Now the market has risen higher, and those risks are even more glaring. Nonetheless, I am still buying a house with a payment 700-1500 more than I pay in rent (respective of the scenarios on my down payment). A tad worried I am buying at a bad time, but hoping to hold on for 5 years at least. Should I go for 10 or 20% down?

    • 1) 20% down to avoid PMI
      2) Have at least 6 month of expenses in cash
      3) Reasonable prospect of not having to move in next few years.
      4) After everything, can you still save about 1 month worth of expenses every 4 months?
      5) Do not worry about rental parity – you will never truly be below the rental price, but remember there portion that principal (debt reduction) + some tax deduction on interest.

    • If you can do 20% down and still maintain a reserve that is ideal because you can eliminate PMI and have a lower loan balance. Also you are more attractive buyer to listing agents and sellers.

    • ” I was sure Trump would crash the economy or go to war.”

      Lemme guess…..you watch CNN and read New York Times? LOL!!!
      Never go full MSM bro.

    • Seen it all before, Bob

      Congratulations!

      If you can live and enjoy the house for at least 10 years, you will be ahead vs rental parity.

      If you can liven in the house and pay off the 30 year loan, you will live very cheaply for the rest of your life and be very secure. At that time, you will feel very sorry for your neighbors paying rent at some exorbitant sum.

      If your mortgage is around 4%. hold your cash. I expect savings rates to exceed this within 2 years. Nothing is better than holding a 4% mortgage while making 6% in a safe government insured bank account.

      • Bob,

        Curious, same advice on a 4% mortgage holder if you can use the cash to buy RE and make 5-8%?

        More risk but more reward

      • Seen it all before, Bob

        Yes, Dan,

        I agree. much, much more risk in these heady house price days.

        I predict the house price will fall at least 6% in the next year and bank rates with be up to at least 4%.

        Cash in the bank is they way to go.

  • I can understand someone not buying a home in 2012 and before. You could not tell if the bottom was in and obtaining a mortgage was nearly impossible. However, once 2013 rolled around, mortgage money had eased and it was clear the bottom was in and we were only slightly off the bottom. It would be informative if the moderator of this blog could go back to 2013 and 2014 to find then republish posts which laid out rational for not buying in that period. A lot can be learned from their mistake.

    • son of a landlord

      In 2013, Jim Taylor was predicting “Housing to tank HARD soon!”

      When I asked for a more specific date, Taylor responded, “Beware the Ides of March.” (2014)

      After March 2014 passed, Taylor continued to predict a HARD tank sometime in 2014.

      Many of us, myself included, foolishly feared (or hoped for) a HARD tank in 2014. Just as Milli predicts (and hopes for) a HARD tank … soon.

      So far, not HARD tank.

    • Seen it all before, Bob

      The Dr has an archive of all past posts going back to 2007. I wasn’t there and Millennial was in Kindergarten, but it is really interesting.

    • in 2012, there were a lot of arrogant side-line buyers and perma-bears proclaiming that the dead-cat bounce was going to happen soon….. their logic was that 10,000 boomers were retiring each day and there would be an onslaught of homes coming onto the market as boomers needed to retire, downsize and move elsewhere (out of LA). We all know that 10,000 boomers per day have been retiring without any onslaught of inventory. they have allowed children and/or grandchildren to move in and have rented out rooms to continue living in their coosh home and neighborhood AND have turned their granny flat or garage into an AirBnB rental making a grand or 3 grand per month extra income. On top of this the developers have shifted into multi unit residential developments, further pushing SFH prices upward, then of course there is inflation also.

  • Hi all, new here and thought I ask for advice.
    We are planning on buying our first home!
    would you consider online lending platforms? In case online lending is not preferable would you use a company specialized in mortgage lending or a traditional bank (wells Fargo or a credit union)?
    Second question: would you just use the sellers agent and negotiate a better commission
    or get a buyers agent as well. Having a buyers agent and sellers agent means both want commission and the seller adds that cost to the price. In the end you are paying for the house and the commission.
    Thank you!

    • son of a landlord

      Having a buyers agent and sellers agent means both want commission and the seller adds that cost to the price.

      Well, no. Normally, the seller and his agent agree on a fixed commission. Six or five percent. If there’s a buyer’s agent, the seller splits his commission. If there’s no buyer’s agent, the seller keeps the full amount. Either way, the commission amount is the same.

      In some cases, a buyer, who doesn’t use his own agent, can ASK the seller’s agent to lower his commission because there’s no other agent to split it with. This gives the seller an incentive to accept a lower price from that buyer.

      But the seller’s agent does NOT have to agree to this.

      If a house is a tough sell, a seller’s agent MIGHT agree to this to push the deal through. But in a seller’s market, with many over-list bidders, the seller’s agent has no incentive to agree to this.

    • 1 – doesn’t matter who the lender is. 2 – seller pays commissions and won’t cut you a deal if you don’t have a buyer’s agent.

    • I’m a broker but get your own agent. I love representing both sides for a commission but it is near impossiable to be fair to both sides. In the end, a dual agent will always favor the listing side.

      A good buyers agent will work for your best interest alone. Provided they are a good agent.

    • In a market like this, I would personally use the seller’s agent just for a better chance at getting your offer accepted. You may not be able to negotiate a deal on the commission.

    • I believe when you say “buyer’s agent”, you are actually thinking of a sub-agent. A sub-agent works with you to find a home but is taking a cut of the sales price. Because it is the seller, not you, paying the sub-agent, the sub-agent’s duty runs to the seller. I would suggest you retain a dedicated buyer’s agent, who YOU have a contract with and pay out of pocket if you are unsure of dealing with listing agents on your own. A good rule of thumb is, unless YOU are paying someone, they might work with you, but they don’t work for you.

    • As a buyer in this market, you need every competitive advantage you can muster.

      I am biased (full disclosure) as I am a mortgage broker, but, I do feel that going with a local broker is advantageous for the following reasons:

      Close faster than a bank/CU, so, you can write a 30 day offer as opposed to 45 days
      The local brokers name is known among listing agents as being able to close and on time
      Broker can shop around for the best lender as opposed to 1 size fits all bank prorams

      Having your lending ducks lined up and presented properly with your offer is crucial in getting an offer accepted.

      Lastly, if you are familiar with the area then it may be better to go direct to the listing agent as they will be incentivized to accept your offer both due to monetary incentive and also control of the transaction. Just know though, that their loyalty remains with the seller. If you feel comfortable with that then you may beat out other offers for the sole reason that you don’t have a buyers agent.

    • Get a local agent who can close fast (30 days).
      Maybe you can save $1-$2k in closing cost on some of the online lenders, I tried them, most of them seem to run VA-loan switch-bait type of operation, but in the end it might cost you a deal if they drag their feet.
      Remember, any interest rate can be bought down. What you are really shopping for is:
      1) # of points ($$$) to buy down desired rate. Any 2 lenders can give you the same rate but with different fees/points.
      2) Speed/execution/competency of the lender to make sure deal goes through

      Get it down and do not worry too much about 1-2k you might spend extra with better local lender

  • Anybody familiar with the No Hollywood area? I went to open house this Easter sunday and did not see many folks at the open house. The realtor kept yapping that he got multiple emails with folks interested in the house. How is it that this house is now worth 699K and the schools in the area are bad? The Macys that was on Laurel Canyon and Oxnard got gutted and they are building a new Mall being called No Ho West and it will be like the Americana that the city of Glendale has. The realtor told me the same developer who did the americana and the groove is building No Ho West. I kept telling the realtor how can you make money off this property if you want to rent it out as a investment home? He told me well wait till the new mall is built next year it should be done and home values can only go up in value. Either your making a yuge amount in salary by yourself or with your wife etc or you inherited money or you got 2-3 families living in this home to make the monthly mortgage payment. Everything seems out of whack.

    https://www.zillow.com/homes/for_sale/North-Hollywood-Los-Angeles-CA/20010161_zpid/46795_rid/34.224222,-118.305674,34.131628,-118.453303_rect/12_zm/

    • A couple of things to consider.

      1 – Some people will buy anything no matter the cost.
      2 – There are a lot of DINK buyers in LA and they don’t care about schools.
      3 – This is a flip that will most likely sell to a first time owner occupant.

    • 20% down, your PITI is only 3500. That is very affoable in this market. Duall income earners and it’s a piece of cake. If priced right, it’ll go fast.

    • Lord Blankfein

      Los, people are betting on gentrification of neighborhoods. Maybe No Ho will be next? What will this place rent for? That will tell you if it is a decent buy at 699K. And 699K is NOT a lot for LA, sad but true.

      • Not really sure what it will rent for but. I bought in early 2012 in No Ho and home has appreciated over 200K in equity. Current mortgage payment is 1400 a month with taxes insurance etc. I was planning on renting out my current home and buying that one for 699K. I am a software engineer in aerospace and wife is a registered nurse at major la hospital and with one kid in private school. We both make well over 200K a year. I got cold feet and home went pending during week. Lender told me anything at 500K is a steal in this housing market. I told my wife for 700K I would much rather move across to Burbank and pay a bit more. What do you folks think? Thank you all for your great responses.
        I would not be surprised

    • I live a couple of blocks away from that house. The realtor is correct, Noho West will bring 60 restaurants a supermarket a theater and a gym. It will transform the neighborhood. Also, people can’t afford home prices on the other side of the hill so they’re moving into the valley. That home is located next to studio city, one of the wealthiest cities in the valley. The money is just spilling over.

  • The numbers tell the story folks. At any one time approx. I million people in America who are in the 5% to 10% of wealth look or can buy expensive homes. There are not enough very expensive for homes for these buyers to shop. So if any of you on this board are waiting for a $2m house for example to drop to $500k keep dreaming.
    The only way this will happen is a catastrophic event of epic nature as in 8.0 EQ splitting Ca. in two and ocean front houses in the bottom of its floor.
    Fla coast gets hit with a seismic Hurricane that pushes ocean 25miles inland,
    NY gets nuked.
    All this RE that is left will be pennies on the dollar, great so you own a mansion now and what services do you have and police protection etc.
    In other words housing blogs are fun something to do, but the reality is the very rich are getting richer and passing it down they are not going to care if you can’t find a house to afford.
    Capitalism is great one problem, it would eventually pancake 90% of its citizens to wishing and hoping, like on this housing sites?

    • Robert, I use to believe in what you are saying, “Real estate prices can never fall more than about 10% because demand is infinite.” However, recent declines like the one from 2007-2012 proven me wrong when LA/OC homes dropped 35-40% and Riverside homes dropped 50% and stayed low for many years. The next drop could be a little more or a little less, but it will certainly happen and it has probably already started.

      In Mission Viejo, where I live, one house on my street sold for $850,000 in 2006 and 4 years later a home across the street sold for $470,000. Both homes are now worth about $800,000. The 2006 home actually sold faster and the buyers a

      Strangely, it was the dumpiest, cheapest homes in the worst neighborhoods that dropped the most and subsequently appreciated the the most.

      • Been watching the MV market, what are your thoughts on the overall market in that city?

      • Dan, MV real estate is overpriced like all of the cities in the county. I think it a nice place to live, and I would rather buy here than the adjoining cities although they are not necessarily more overpriced than MV.

  • Stocks are tanking!! Thanks trump! Let’s me buy in cheaper! #loveTradeWars #MAGAinfullForce

    • President Spanky will MAFA. Make America fail again.

    • son of a landlord

      Stocks are not tanking. Stocks are in rollercoaster mode. They’ve been rising sharply, and falling sharply, then rising and falling again, for some time now. But stocks have yet to settle on a longterm up or down swing.

    • cynthia curran

      Good point. Trump won in the exburbs that are growing 3 times faster while Clinton won in slow growth big cities and older suburbs. Trump’s thinking isn’t going away. The progressive left is in the part of the US decline in population like New York City lost 2,000 people and Chicago 20,000. La only grew 13,000 versus 36,000 for Riverside. By 2022, housing in LA will decline about 150,000 due to lost of population.

    • Seen it all before, Bob

      Hope was the Obama saying, Millennial.

      When Trump was elected, i shortly sold most of my stocks when the Dow was at 18000

      Now it has dropped to 23000 with still a 20% gain over when Trump was elected. Trump still has bragging rights for no apparent reason.

      There is still a long way to fall to get back to reality.

      • “When Trump was elected, i shortly sold most of my stocks when the Dow was at 18000”

        BWA HA HA HA HA HA HA HA HA HA HA HA HA HA

      • Seen it all before, Bob

        You can laugh now, Mr Landlord but my point was that Millennial was incorrectly declaring victory with a 5% fall.

        When stocks are half-off and the Dow is at 12,000 again, Millennial and I will be feeling very sorry for you (and most of the others who didn’t pull out at 18,0000).

        But hey, Millennial will get his house.

      • That’s right bob! Good stuff

  • LOL at Millie and the other permabears here, still desperately trying to hold on to their dreams of a crash in 2018. SAD!

    “The cost of buying a home in the San Fernando Valley hit a new record-high in February, according to a new report from the Southland Regional Association of Realtors. A typical Valley residence now runs buyers $700,000—well above the previous median price record of $675,000 set in November 2017. That price is also 16.7 percent higher than a year earlier.

    By comparison, real estate tracker CoreLogic estimated the median price across all of LA County to be $580,000 in February, a 10.5 percent increase over the same time a year ago.”

    • Landlord,
      A RE and stock market crash is a beautiful thing. Let’s you buy in cheaper.
      I have all the time in the world. If it does not happen this year, maybe the following or maybe in five years. Why buy now and waste your money?

      • Seen this all before, Bob

        Maybe this year and housing prices will be 70% off, Or maybe in 30 years when your neighbor who bought now is just paying off his 4% mortgage and interest rates are at 15%.

        My crystal ball is still rebooting from the last crash in 2008.

      • All the time in the world is just an expression. We all have a finite amount of time to work with. The younger someone is the higher chance they have of being ignorant of this reality. You could be waiting for a very long time. I know you’re betting the opposite but you reallly don’t know just like the housing cheerleaders don’t know either.

      • Lordt B -> you do not have to neither permabear nor a housing cheerleader.
        What one needs to work is a solid strategy which eliminates a need for a crystal ball (or a belief system).
        In my case, I am no housing cheerleader even though it might appear otherwise. I put a decent chance of correction running as much as 10%-20% for the house that I just bought (but there is a good chance it will stay flat or appreciate 10%-20% near term).

        There are strategies that will alleviate the need of picking a side, rather you can achieve what you want and insulate (to some degree) from the madness of this world. RE (even at today’s higher prices) can still do that.

      • It’s not really that I (or any other millennial) is sitting on the couch waiting for a crash. And it’s not like life starts when the crash happens. Nobody ever has to buy a house. You can have a perfectly happy life renting and saving money. It’s the homeowners who bought an overpriced crapshack who are in trouble. Some of them are just one job loss away from losing the house. Financial stress is one of the worst situations you can be in. I Wouldn’t know. I have never been in a situation with a ton of debt but I have heard it. I am convinced that a renter who pays a fraction of what a house would cost to buy is much better off and much happier than a crapshack owner.

        So comparing a crapshack owner with a millennial renter…..the worst case for a millennial is that he inherits the house(s). The worst case for the crapshack owner is that he will wait for the next recession and loses his house. While he is waiting, he can’t afford much because he bought high. I would chose to be a renter any day compared to that crapshack misery. Wouldn’t you?

        And when the crash happens the renter can almost buy in all cash, a house that’s correctly priced (55-75%) less than today’s prices.

    • I remember in 2012 when I was looking to purchase a home, there are lots of homes in Van Nuys on large lots with a swimming pool in the backyard for about $300K !!!

  • Bad news for bears:

    https://www.cnbc.com/2018/04/02/homeowners-are-sitting-on-5-point-4-trillion-in-ready-cash-the-most-ever.html

    Unlike during the last peak, homeowners today are far more conservative and lenders are stricter. Last year, even with record equity, homeowners took out only $262 billion via cash-out refinances or home equity lines of credit, or HELOCs. While that is another post-recession peak in dollars, it is less than 1.25 percent of all available equity, a four-year low.

    • Lord Blankfein

      As much as the bears hate to hear it, “this time will be very different.” Anybody who bought in the decade was likely VERY qualified. All cash, large downs and most people have boat loads of equity. The foolishness of the oughts on both sides (lenders and borrowers) is simply not there today.

  • A president imposing tarriffs on China is the worstest thing ever right? Only a dummy like Trump would ever do that.

    9/12/2009
    CNBC

    “WASHINGTON — President Barack Obama on Friday slapped punitive tariffs on all car and light truck tires entering the United States from China in a decision that could anger the strategically important Asian powerhouse but placate union supporters important to his health care push at home.

    The federal trade panel recommended a 55 percent tariff in the first year, 45 percent in the second year and 35 percent in the third year. Obama settled on slightly lower penalties — an extra 35 percent in the first year, 30 percent in the second, and 25 percent in the third, White House press secretary Robert Gibbs said.”

    Wait what?

  • To me, it is starting to look like stocks will settle down after a few more earthquakes. After they settle down, they may become boring … not going up or down over the long term. For the short term, a few more roller coasters. However, does not look like a big rally or crash is in the cards.

    This is a perfect environment for real estate. Once stocks settle down and go nowhere, money will pour out of stocks and into real estate. My guess is the odds of this happening is 60%.

    Of course, it is possible the market could fall hard and take real estate with it. But I think the odds of this happening are low.

  • Seen it all before, Bob

    Being a crusty old barn owl who has seen this all before, here is what I think the future may hold.

    1) If we repeat Bush 2007/2008, Millennial will be dancing briefly before he loses his job, bitcoin crashes to 0, and the stock market plummets 50%. The Mega-REITs will descend again on 70%-off homes and gobble them up by the tens of thousands to extort the future 90% renter society. This scenario is a good reason to wait to buy a house until the bottom. As long as you are not afraid, still have cash, and still have a job.

    Or

    2) We will have a repeat of the Reagan 1980’s. 10% inflation, mortgage rates at 15%, wages belatedly growing at 10%, with high unemployment. Housing prices flat or slowly growing to allow the masses to catch up on affordability. The 1980’s is when I purchased my first house at 11% interest, 8% raises PLUS a 4% Cost of Living Allowance(COLA was not just a drink back then) every year. Don’t plan on pulling any down payment out of bitcoin or stocks if this happens either. These will be flat or just rising with inflation. This would be a reason to buy a house now before rates blow up to 15% and the stock market again tracks inflation.

    • LOL Bobby. Reagan 80s you describe were 81-82, which was really just cleaning up Jimmuh Carter’s mess.

      As for Bush 2007….gee what happened in 2007 Bobby? Oh right Nancy Pelosi became speaker, Economy was booming 2003-2007, Dems took over congress and KABOOM.

      Like all good Marxists you find a way to re-write history.

      SAD

      • Seen this all before, Bob

        Mr Landlord,

        I bought my first house in 1987 after Reagan was in charge for 7 years. I had a 11% ten year adjustable loan. That is not a fake fact.

        My parents had a 6% loan in 1976 under Carter., I was jealous.

        The 2008 crash was building for at least 8 years while the Bush Presidency and entirely Republican Congress were asleep at the wheel.

        It seems like Republicans find a way to wreck the housing market if they are in office too long. I’ve seen it all before. Trump is on track to do it again.

      • Crashing the housing market 50% is not a wreck it is a huge benefit.

        What is good about expensive housing? Perhaps you would like expensive water, food, and power to go along with it?

        The only people who would consider it a wreck are people who over paid and have no other investments.

      • “It seems like Republicans find a way to wreck the housing market if they are in office too long. I’ve seen it all before. Trump is on track to do it again.”

        It looks to me that you agree with Millennial that a new crash is coming but you act like you don’t. The causes are irrelevant. The point is that you expect a “wreck in the housing market”. Are your real feelings coming to the surface??!!!….

      • I bought my first house in 1987 after Reagan was in charge for 7 years. I had a 11% ten year adjustable loan. That is not a fake fact.

        My parents had a 6% loan in 1976 under Carter., I was jealous.

        ____

        Good lord man, learn some civic basics. Jimmuh Carter didn’t become prezzy until Jan 1977. So if anything your parents can thank Prsident Ford (R) for their cheap mortgage. I swear, talking to liberals is like talking to my dog. I take that back, my dog knows a few things.

      • Woody. you are confusing cause and effect.
        You think that 50% market crash will just occur and give everyone better housing costs.
        In reality,50% crash will be a result of really shitty situation (super bad depression, war, no loans, etc…). Prices will come down so much because there will be nobody buying, and that is very very bad.

        As an analogy….retiring early is good. But often time people retire early because of health issues, which is nothing good.

      • Seen this all before, Bob

        Yes, you are correct Mr Landlord. Ford was responsible for the rates in 1976. They were at 9% then.

        I now recall that my parents bought their house with an assumable loan (Remember those?). The 6 % rate was from 1968 when the house was built. The Democrat LBJ days.

        I was still jealous of them since I had an 11% rate in the Reagan days.

        One of my points from the chart above comparing 4% with 15%, is that millennials don’t realize how historically low rates are today.

      • Sorry surge I am not confusing anything you are putting words in my mouth.

        I am just arguing a 50% decline in home values is not a wreck of the housing market. You are correct that one of the ways to cause a 50% decline is an economic crash. There are other ways to cause housing to decline such as removing all government support and incentives for housing and opening up land for development.

      • Serg700@hotmail.com

        Yes – massive increase of supply could dent prices. But this can only happen by building lots of condos or building homes far wrong good employment (suburban sprawl). 50% drop due to supply increase is a pipe dream
        Not sure what govt support are you talking about – mortgage writeoff?
        It does not account for much (unless you are in AMT) and prop tax deduction is practically a toast for Cali. This does not contribute much

      • Since you are unaware of the massive government support for housing I will list just a few I can pull off the top of my head.

        Section 8, mortgage interest deduction, FHA, HUD, GSE, and of course the federal reserve buying up all the toxic waste the banks pump out in order to artificially lower the interest rate of mortgages. Perhaps you should ask yourself if housing was such a great investment why do the large banks only want to make loans when they can get a government guarantee on it? Why don’t they want to hold these “assets” on their books to term?

    • Seen it all before, bob.

      Number 1) sounds great! That’s what I am waiting for.

    • Seen this all before, Bob

      If number 2 happens:

      Today at Obama’s 4% rate
      Principal: $800,000.00
      Interest Rate: 4.00%
      Payment Interval: Monthly
      # of Payments: 360
      Payment: $3,819.32
      Principal Interest
      Year 1 $14,088.27 $31,743.57

      At Reagan’s 1987 15% rate..

      Principal: $800,000.00
      Interest Rate: 15.00%
      Payment Interval: Monthly
      # of Payments: 360
      Payment: $10,115.55
      Principal Interest
      Year 1 $1,486.01 $119,900.59

  • It is correct that banks generally do not care about who they loan to, they can offload bad loans to taxpayer backed entities and/or the Fed. They and many people taking on risk in the housing market are clearly counting on being bailed out again if things go south and chances are not that bad for them. One thing though to consider is that rates are still kept very low by the Fed and there won’t be much room to drop rates this time or inflate balance sheets before the old positions have been offloaded. Subprime has started again, all things eventually repeat.

    • Totally agree with Hans. Glad I am not the only one who doesn’t buy the “no-more-stated-income-loans-means-everything-is-awesome” BS.

    • Hans,

      What you say is absolutely not true. If what you say was true, then every lender would have the same program with the same guidelines (conv, fha, va) since they are all sold to larger investors and fannie/freddie. This is not the case. Each lender has it’s own set of internal guidelines or “overlays” that are put into place in order to abide by “responsible lending”. Furthermore, HUD has something called “compare ratios” for its FHA business and if 1 lender has higher than average (of its peers) default rates, even though the guidelines set forth by HUD for FHA buyers was followed, HUD reserves the right to cut that lender off and pull its FHA endorsement. This is why many lenders will not go below 620 fico or 600 fico or 580 fico even though technically FHA allows it.

      Lastly, today’s “Non-QM” programs are nowhere near what sub-prime was before the bust. Income is still verified, not in the traditional sense via tax returns, but utilizing bank statement deposits for a business (Self employed buyer) and oh btw, they need 20% down and a 700 fico score. So if you think that is “sub-prime” then I cannot debate you.

      There really is not much secondary market appetite for these “Non-QM’ files right now b/c they must still abide by Dodd-Frank and its ATR “ability to repay” rule. Credit is still available to buyers, demand is not the problem; SUPPLY is the problem.

      • There’s a very big difference between subprime (a loan that holds more risk than prime, but still needs to meet requirements) and loans that should never have been made in the first place (stated income, where the income stated is outright fiction and literally enabled people to buy a home with a payment four times the size of their monthly pay).

      • I read the article and I refute the premise that today’s non-prime programs are “essentially the same” as sub-prime of a decade ago; which is what the article claims.

        They are not, and if you read my comment above about that Carrington 500 fico and all of its restrictions you would see that I am correct. What do you say about that? Would you like me to print on here or provide a link to the EXACT guidelines of the program so you can see direct from the lender? Is that enough for you or will you spout off a bunch of nonsense and end it with 50-70% crash tomorrow like Millenial?

      • @wrong,

        Strike 1: providing a link to a sales website slinging precious metals. Couldn’t find a valid article? A blinking sign with phone number on my phone as i read that pathetic content. LOL

        Strike 2: Peter Schiff who has been WRONG about housing, the economy, precious metals and everything in between for the past 10 years. If you would have heeded his advice you’d be flat broke.

        Strike 3: 0 useful information, facts, examples, etc… on that page. Couldn’t do a little bit better on that google search? Yikes.

        @Flyover

        I am surprised and disappointed in the link you posted without doing any further due diligence; especially when you know I am a lender. I know Carrington very well, closed a lot of loans with them. Pretty average to below average lender.

        I am also very familiar with their new non-QM programs as I have reviewed the matrix and guidelines with my account rep there. Technically it’s true they will go down to 500 credit score but with about a million caveats. So, it’s not like 100% of the people with a 500 credit score will get this loan; pretty much the opposite where a very small % of applicants will ever make it to the closing table. This was a very simplistic view put up by you.

        Here is some additional information on that program and you judge if it’s truly the “sub-prime” of decades past:

        25%-35% MINIMUM down payment required
        43% back debt to income ratio (including the new PITI and ALL other debts)
        *and remember this DTI is AFTER the large down payment quoted above
        Minimum of 3-6 months reserves
        Additional RESIDUAL income requirement: $1,500 plus an additional $150 per dependent is required
        Payment shock 150% max (I.E. current rent 2k/mo; new PITI cannot exceed 3k/mo.)
        There are additional credit restrictions, but, you get where I am going with this.

        So Flyover, as someone who rails against posting of “fake news” you just posted it. I stand by my comment that today’s non-QM and overall loan quality is not in the same galaxy as it was in the lead up to the RE/mortgage meltdown. This is coming from someone who saw it and writes loans for a living.

      • Dan, why so jumpy?!….

        I posted an article with a question mark and NO comment. I am familiar with RE loans but not an expert. I am not a lender and I never contradicted you on you specialty – loans. I did not write the article and the article does not go into details.

        You admitted that it is a subprime lending but not the variety prior to 2008. So, why do you accuse me for posting “fake news”?….All the article mention is the fact that subprime loans are made; it doesn’t mention the variety. Only the loan officers can talk about the details, which by the way, they change from one week to another and sometimes from one day to another. You also mentioned that it varies even from one lender to another.

        Besides the fact that I did not comment on the article, my comments do not affect your business. I am sure more than 99% of your clients do not read my comments.

      • still wrong dan

        Just like a true RE investor, danny boy steers clear of rebutting the substance of Schiff’s link and gets caught-up on the window dressings.

        Take a deep breath and a break from your strenuous job DB-here is a phun video for you.

        https://www.youtube.com/watch?v=ZladO06LVNI

    • What are stocks telling us? So far, the Housing Index is correcting but has not yet entered bear market territory. Is has been going sideways for two months. Sooner or later the Housing Index will break out of its sideways consolidation and give either a buy or sell signal for the housing industry. A drop to 290 would be a clear signal to sell real estate. It is currently near 322 and its all-time high was 369.

  • LA Liberals Monday: Isn’t diversity wonderful? Everyone in the world should move here

    LA Liberals Tuesday: Those damn foreigners are making housing unaffordable, we need to limit foreigners from buying real estate.

    SAD

    • LA Libs on Wednesday: Everyone wants to live here because of the perfect weather lie.
      LA Libs on Thursday: Everyone wants to live here because the reasons they move to other places we breathlessly compare ourselves to that don’t have perfect weather.

    • Republicans 1.5 years ago: no more spending, our national debt is out of control…How dare Michelle Obama wear that, nothing is more sacred than our FBI, no collusion with Russia ever happened

      Republicans Today: LOL… I don’t have to type my joke

      Mr. Landlord…you sir are an idiot

      • Yes. His love and loyalty to Spanky McPresident is odd.

      • You still believe in the Russia collusion thing? LOL. I guess that circus guy was right, there is an idiot born every minute.

  • I have talked about this trend a number of times … anyone who is anybody is moving to NY, Boston, DC, Seattle, LA/OC, SF. Here is an interesting take on this … and it concludes that the prices in the best cities should continue to rise.

    https://www.citylab.com/equity/2018/04/how-your-social-class-affects-where-youll-move/557060/

    • This is another example of sore losing libs like Richard Florida cleverly attempting to bargain with the deplorables. Losers like jt think that doubling down on classism is the recipe for convincing the increasingly productive class to stop running away from dysfunctional nanny state government, sky high taxes, unbearable congestion, and a lowering standard of living.

      The truth is that inexperienced younger people are increasingly forced to gravitate toward piling on top of each other out of a dearth of what used to be other reasonable options. Note the weasel words they use. “affluent” and “educated” to imply “best”. It’s mostly just higher incomes which is offset by a higher cost of living and a lot of borrowed money used to buy credentials.

    • More food for thought. All of the sidewalk pooping homeless people flocking into LA SF and so on must be anyone who’s anybody! This jt guy is a total shit talk artist!

      • Why you keep focusing on poop on sudewalks (which is like very few streets of the entire LA/SF vs opportunities people look for there. Cant see beyond the poop, you are self limiting

    • “best” cities? That’s an interesting take.

      Here is the first paragraph of that article:

      “and the only thing keeping expensive coastal cities afloat is international immigration, as American-born residents flee their escalating housing prices.”

      So a traditional American family of 4 or 5, sells a 3 bedroom home in LA, and 9 illegals move in. Maybe your definition of “best” is different than mine, but I don’t consider that to be an optimal situation. LA is basically a 3rd world country now, much like Brazil. A small group of light skinned ultra rich people, a slightly bigger group of upper middle class light skinned people barely hanging on and a majority of dark skinned peasants. Maybe LA will start a really cool Carnival? To complete the picture.

    • JT, indirectly this is the same idea I proposed few weeks ago.
      Expensive areas are expensive because they provide opportunities which attract ambitious people.
      Less ambitious/successful ones just bitch about how terrible coastal area and what a nice home you can get somewhere else for a fraction of a cost. And they say they can’t wait to move out. While someone ambitious can’t wait to get in.
      Great sort – this is a great definition applicable to attitudes of many people on this blog.

      • Correlation isn’t causation. But you’re so educated due to living in a high cost area you already knew that. People like you and jt promote classist rhetoric because it makes you feel better about paying so much. Ambitious people don’t promote classist rhetoric

      • Ambition is class-less.
        A person from Guatemala making it to US and making it better for their children.
        A person in US who talks shit about expensive areas overrun by illegals.

        I would bet my money on the first person.

    • You missed this part: “Romem’s data show that in-migrants to expensive coastal metros are much less likely to be homeowners than those moving out, and are more likely to live in a household with multiple earners (that is, with roommates). As these young people get older, start families, and need more space, they are more likely to leave for cheaper places either in the suburbs or in less expensive metro areas.”

      “anyone who is anybody”? LOL. Moving where the majority of them will live in poverty isn’t intelligent, nor does it grant one “class”. They go there to party with fellow progressive narcissists, then they grow up and realize they live in a shithole.

      • In other words…American family of 4 move out, 7 illegals move in. And to liberals this is a wonderful thing, LOL. Good luck with that LA, NYC and SF.

      • Most beach cities in Southern California are some of the most desirable zip codes on the planet.

      • jt — my farts are some of the most desirable on the planet!

      • JT,

        Bro, get over yourself. I lived in NYC and the Bay Area for most of my 20s. It was a lot of fun. But the plan was always to make money there and then get the hell out. Even as a dumb 25 year old I could tell how crazy it was to live in a coastal city past my 20s. At 23, fresh out of college, living in a 500 sq ft s**thole is fine. Hell you’re barely home anyway, so who cares. But living in the same place in your 40s or 50s and paying $3-4K rent for the privilege? That’s not glamorous. That’s pathetic.

      • Mr Landlord,

        By the time you hit 40s / 50s, you should be way beyond paying 4K to 5K rent. If you are successful, you should own a multi-million dollar home mostly free and clear.

      • JT,

        The vast majority of 40/50 year olds in NYC live in apartments that they rent. Only about 25% of NYC residents own. And even the ones who do own, typically own a cramped 1-2 bed condo/co-op, with sq. footage less than my backyard shed. And even so they’re somehow proud of this “accomplishment”, lol. Whatever makes you happy I guess.

        I get a single dude living like that. What blows my mind is people with kids living like that. That is literally child abuse.

    • Hey remember how the housing market was going to crash in 2018…yeah about that…

      USA TODAY
      April 3, 2018

      “Home buyers are busting budgets — and in some cases selling things they love — to snag their dream houses. A third of home buyers blew through the upper limit of what they planned to spend, topping that cap by an average $16,510, according to a Owners.com survey of 1,214 Americans who purchased a house within the last four years. The survey was conducted Jan. 31 to Feb. 8.”

      AND OF SPECIFIC INTERESTING TO OUR RESIDENT PERMABEAR MILLIE…

      “Millennials are most likely to splurge, with 40% going over budget and by $24,545 on average. Thirty-four percent of Gen Xers raced past their limits, by $13,996 on average. And 19% of Baby Boomers topped their spending parameters, by an average $8,024.”

      Hey gang, don’t worry, 2019 is only 8 months away. Maybe your long awaited crash will happen. Then. Or 2020. Or 2021. Eventually you will see a 10% correction after 10 years of 10% yearly gains. LOL.

      I look forward to collecting rent from you for decades to come.

      • You look forward to collecting rent from people who are clearly stretching their finances to keep up the illusion of wealth? Your own examples prove what many are missing…people are living off of credit!! When credit dries up so will your income…good luck budy, better brush up on the eviction process-

      • Hi Landlord,

        I love paying rent. It’s much, much cheaper than if I would pay rent to the bank (“purchase”). If a 10% correction happens, that would not be enough to get me off the couch and look at an open house. Once prices will correct to the true value of the house (55-75% below today’s prices) I am happy to go out and buy. We just need a little bit of patience. I am not sure why you are so anti-crash. An economic collapse will be nice for you as well. You can buy another rental property,no? Why buy high and waste money if you can simply wait and buy low, very low?

      • Honky:

        I only rent to quality renters. Must have solid, steady employment and excellent credit. I’m no slumlord. In fact I rent for slightly under market value, in order to get a bigger pool of applicants from which to choose. One of my tenants actually just signed a year extension on their lease. I could have easily increased rent by $100/mo, but I didn’t. These tenants have been about as it good as it gets, and I’d much rather keep them in for another year than take a chance on them moving out, just for an extra $1200/year income. Slow and steady is the name of the game, not squeeze every dime out of tenants.

        Landlords get burned when they’re a-holes to their tenants and gouge them. Those are the tenants that put holes in walls and piss on carpets when moving out. On the other hand, treat tenants well, make repairs when needed, have a cordial relationship and stuff like that doesn’t happen. I’ve been at this for almost 10 years so I think I know what I’m doing by now. But thanks for the advice nonetheless.

        Millie:

        I don’t really care about prices per se. I look at cash flow and ROI on a property. A house that costs $100K but brings in $500/mo rent is more expensive to me than a house that costs $300K but brings in $2000/mo in rent.

        In the 07-09 crash, rents barely budged. In some areas rents even increased. When nobody wants to buy, everyone wants to rent. Higher demand = higher price for rentals. So as long as the rent keeps coming in and the ROI stays the same, I don’t much care what happens to the price of the house in the short run.

      • Landlord, spot on, that’s the way to treat good tenants. My old landlord lady is similar. Repairs everything in no time. I cause no trouble, pay always on time and sign long term leases. No rent increases since the beginning. Win win and actually a steal for me. Let’s me save a ton of money and when the market crashes I can pick up a nice house on the cheap side.

        If you don’t lose during a crash why do you care so much in showing us how great the market is and how there won’t be a crash? What’s the big motivation?

      • Millie,

        We agree on a lot more than we disagree on. I like that you are fiscally prudent, I wish more of the yuutes were like you. But at the same time you’re living in a fantasy world of 75% crashes. You are setting yourself up for a yuugely bigly big disappointment. I hope you’re being facetious with the 75% prediction and really mean more like 10-20%, which is realistic.

        I’ve said a million times that nothing goes up forever and at some point there will be a correction. It just isn’t happening for a while, a lot more upside to go.

        Pick any 10 year time frame you want and anyone in real estate made money in that 10 years. Short term, anything can happen. Long term you have to really try hard to lose money in r/e.

  • The turn has begun, the last housing hyped summer will end and many will see 20% lower on the price they paid….25-40% in other outlying areas, the market is leading the way, followed by rates and of course DTI and PTI…….enjoy buying at the top sheeple, seen it before and now unfolding again……this is just too easy to play…..

    • Are you saying housing to tank hard in 2018?

    • Lord Blankfein

      Does your crystal ball have insight on the winning powerball numbers? I would be very interested if it did. Thanks in advance.

    • LOL!

      SF’s median just hit $1.6M. But yeah man, the crash is here!!

      “The biggest news is the median house sales price which jumped up 24 percent compared to last year to a record high of $1.6 million. But condos also saw an increase, albeit not as large due to a new spate of units hitting the market, with prices rising 4.6 percent to about $1.2 million, according to a recent report by Paragon Real Estate Group.”

      • Meanwhile in trump country people are still pitching coal and thinking their cousins are looking pretty good. Great company you keep Mr. Landlord…

      • Yep, the peak has been reached. Just a bit more patience and we will see a nice downturn!

      • Poor LOL….still believing the Fake News MSM lies.

        Look up some exit polls from 2016 amigo. Trump won every income group $50K and above, the old hag won everything under $50K. Trump voters are the productive class, old hag voters are the leeches.

        And PS: coal miners make $60-80K a year living in areas where a nice home costs $200K. Compare that to making $100K in LA where the same home costs $800K. LOL!!

        https://www.nytimes.com/interactive/2016/11/08/us/politics/election-exit-polls.html

      • LOL, utter lack of reading comprehension. You guys reply to each other comments without even comprehending what each person is writing

  • Reading this message board, its quite apparent theres a lot of anger out there. Even if you have a nice house, little to no loan, you’re likely not happy with the direction of things. Just as the US serves as a relief valve for the horrible dysfunction in Mexico and elsewhere, the red states now appear to serve in a similar capacity for the blue states (I think they should be called brown states, because their leaders are turning them into s-tholes, lol). So following this to its conclusion, will the civil war go hot when the density in Alaska mirrors that of a major city?

    • Nope. “Red” states do not act as relief valve for “blue” states. This is just your opinion and because few on this board express the same opinion, it cannot be declared as a conclusion.
      Try again

    • You got it 1/2 right. Mexico is sending the US its peasants. CA is sending the US its productive class. Red states are fiscally sound, have great quality of life and still have some semblance of normalcy. It’s a neat little balancing act really. CA can keep going on its path to insanityville, while the sane people of CA find homes in the rest of the country.

      Win win situation.

      • Red state – good, blue state – bad
        Good simple life you lead

      • Some of the poorest / most impoverished states are red states. Are you leaving out Mississippi, Akansas, West Virginia, Georgia? My wife hails from Kentucky. One of the poorest (and red) states. And the state is broke. Her mom is a teacher and they’re trying to slash pensions because there is no money.

        Landlord himself lives in SPOKANE which is in Washington in case he forgot. And WA is a very blue state that has voted democratic in every election since 1988. So you must be part of the unproductive blue state citizens that were left behind. What a hypocrite. Slumlord has properties in the ghetto of Spokane which he calls home. Worse crime rate than Detroit all without any Mexicans or people of any color. Yet he comes on here trolling to trash CA every chance he gets. SMH

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