Irvine Renter's great first post.

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ocprince_IHB

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<p>I want to commend irvine renter on an excellent first post. Great cholesterol analogy. I subscribe to a foreclosure service and I am noticing a lot of atherosclerotic build up in the arteries of OC residents. I totally agree with the prognosis of increasing heart attacks in the next several years on the parts of FB's. Sadly, the first round of casualties seemingly are the Hispanic populations (at least those with Hispanic surnames) in Anaheim, Santa Ana. Perhaps it's their high cheese, and tortilla intake . The more affluent Villa Park, Irvine areas are thus far fairly well immuned. Please give us your insight on the reasons for this. Is it because the less knowledgeable populations are more likely to be suckered into bad loans by their unscrupulous realtor friends?</p>
 
<em>"Please give us your insight on the reasons for this. Is it because the less knowledgeable populations are more likely to be suckered into bad loans by their unscrupulous realtor friends?"</em>





This is not my area of expertise, but I would speculate you are correct. Also, the tighter the budget and the lower the FICO score, the more likely the smallest problem is going to turn into a complete catastrophe. There were probably more negative amortization loans in these areas. The affluent areas will get hit, it will just take a bit longer to happen. The more credit savvy will prolong the inevitable a bit longer through more creative means.
 
The question is when the downfall will take place, shouldn't people who are creative enough to stretch money a little longer be creative enough to not get an excessive mortgage?





I suppose being miserly in the first place isn't exactly creative!
 
<p>IrvineRenter</p>

<p>Great Post. Thank you for sharing with us your thoughts. </p>

<p>Since we all have to admit, all we have right now are individual opinions. None of us has a crystal ball, otherwise Warren Buffet would have called by now ( since he is looking for someone to oversee his investment portfolio). So, at best your housing crashing theory has a 50% chance of being correct. ( I am not a housing bull, but a I am ten-year-span bull, meaning I don't believe there is a high probability of losing money on normal real estate transaction in any given 10 year span) . </p>

<p>I don't know your family status, if you have a wife or kids. What if your theory is wrong? From your post, it looks like you are not going to buy in the next 5 years, since you are working on the theory that the housing market will crash 30% to 40% in the next three to five years. This means that you and your family and kids will live in an apartment or rented house for many years! </p>

<p>Most of us consider our primary house just a home, not as an investment. Life is short, and you never know what is going to come next. Why not find the house you like, can afford, negotiate the best deal you can, and make sure you paid the lowest comp right now in the entire neighborhood and move in!??? </p>

<p>Don't get me wrong. I actually agree with most of your theories. I think folks on this blog should consider those seriously when considering buy an investment property in OC. In terms of buying your primary house with living there enjoying your life in mind, most of what you said are really irrelevant! Sorry...</p>

<p> </p>
 
irvine123,<em>





"Why not find the house you like, can afford, negotiate the best deal you can, and make sure you paid the lowest comp right now in the entire neighborhood and move in!??? "





</em>Thank you for your input and concern, but I really can't see why I would do this. I am currently renting a very nice home for my family for a small percentage of my income. If I were to purchase, I would either have to move in to a much smaller, less desirable place, or spend a much higher percentage of my income on housing. For what? What intangible benefit do I gain that would compensate me for the added stress? Stability? With the mortgage terms I would have to use, I wouldn't feel very stable. Social status? I know homeowners tend to view renters as some kind of inferior sub-species, but I am proud to have abstained from the kool-aid, and I wear the renter label with pride.


<em>


"This means that you and your family and kids will live in an apartment or rented house for many years! "</em>





Yes it does. So what? You make it sound a bit like prison. When I think of all the homeowners who are making huge payments, who are about to go underwater living in undesirable properties and who really will be trapped, the prison analogy really does apply. What is the worst that is going to happen to me? I will save about 50% on my housing costs for the foreseeable future? I can live with that. I might get evicted? Oh, no, I might have to go out and find another nice home to rent. It wouldn't impact my standard of living near as much as buying would.





BTW, are you a realtor? The only person I could imagine who would suggest I buy right now given my opinion about the market would be a realtor. If you aren't, please don't take offense. I have considered all my options and the consequences of my actions, and I am comfortable with the decisions I have made to date.
 
<p>IrvineRental,</p>

<p>No, I am not realtor. My business has nothing to do with real estate. </p>

<p>LIke i said, we all have our opinions. So don't be defensive about it. There is nothing wrong with believing what you believe. People just have different life styles. </p>

<p>I could have saved probably couple thousand dollars a month if I were to rent a smaller house instead of owning my own house. But we can afford owning, and consider worth while spending the extra couple thousand a month to have our own house and can do whatever we want with our house. I might lose some money on paper in the next several years, but to borrow your words " so what" as long as I don't sell??</p>

<p>I am NOT recommending you to buy a house. It is none of my business at all. I am only recommending to the READERS of this blog to take your opinions with a grain of salt as people have different life styles to choose. That is all. </p>

<p>Again, if one find the house you like at the LOWEST comp in the entire neighbour, and most importanlty that you can AFFORD it ( no suicide loans, etc.) buying it probably won't be the worst thing you can do in your life. </p>

<p> </p>
 
Irvine123: IrvineRenter is clearly not the one on the defensive here; you are! And many of us here don't take his opinions "with a grain of salt": we take them for what they are - clear, logical, fact-based analyses advocating fiscal prudence and rationality.
 
<p>irvine123 - I think you must be missing the point. It is not what you can afford or the paper money it is about making a wise investment decision just as Warren Buffett would do. By the amount irvinerenter is saving per month and investing the difference is going to provide for a much greater lifestyle than owning. Even if you can find the lowest comp and could afford it why buy it now when in five years you could buy it for less. You would have more money saved, your wages will be higher and have a better chance for appreciation. Did you know that if you bought in 90 it would take ten years until 2000 just to break even from inflation? Not to mention the loss on the down payment from inflation and in ten years how much the repairs and upgrades cost. I think many of us here share the same opinion as irvinerenter and with an opinion like yours is the one that will be taken for a grain of salt. Sorry if I am being defensive but may of us here don't share your opinion especially when they come off as offensive.</p>

<p>I have to add a quote from Mr. Buffett. "It is optimism that is the enemy of a rational buyer."</p>
 
irvine123,





Yes, everyone has to make that decision for themselves. You and I have made opposite decisions, and it seems we are both comfortable with it. I didn't mean to be defensive. I get annoyed by realtors trolling to generate a commission at the expense of today's buyers.





The strange thing about the decisions we both made is that both could be correct. Each person has a different situation. If you went in to the purchase with your eyes open to the costs and risks, then the decision was right to you. I am trying to help people realize what the risks are in purchasing real estate because so many people have been brainwashed into believing that real estate only goes up. It doesn't. People may still chose to purchase knowing the risks. The meltdown scenario may not occur.





Over the long term, real estate will appreciate. If you stay in your house long enough the decision will be the right one. I work with a guy who bought in 1989. He was underwater for almost 10 years, but he is still living in that house, and he know has substantial equity (for now). He was annoyed because he was making relatively large mortgage payments for years, but those issues worked out with time. Fortunately, he used a conventional mortgage.
 
<p>IrvineRenter, </p>

<p>At least we have four things in common: </p>

<p>a. we are both annoyed by Realtors trying to get commissions. I found many of them to be among the most unethical person I have ever met.</p>

<p>b. We both believe that too many people get brainwashed into believing real estate only goes up. </p>

<p>c. We both believe over the long term, real estate will appreciate.</p>

<p>Finally both of our wives think we spent too much time blogging! </p>
 
<p>IrvineRenter and irvine 123 - </p>

<p>a. I think most realtors are annoyed at themselves as well. They do not really like what they are doing (24/7), and the public hates them. Yes, the money is good; however, they can not really enjoy the money that they make anyway, it's a job to support their families. This is what I read from the realtors I met.</p>

<p>b. Most people are followers; therefore, it really depends on whom they want to follow.</p>

<p>c. Data speaks for itself</p>

<p>Finally, make sure you both hug your wives and say how much you love her and that how much you enjoy blogging....</p>
 
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