Why would people buy now in this market?

NEW -> Contingent Buyer Assistance Program
I know of at least one millionaire here that accomplished it through real estate. The definition should be 'assets, not including primary residence, of one million dollars or more'. This does exempt many OC people who think they are millionaires due to primary home equity.



Trooper Those Cheerios were great!!



Enjoy!
 
so who here is a millionaire? i am sorry if i offended the millionaires.../billionaires.... if you id yourself, i will make sure to leave your name out of my comments.



anyways like i said to each his own. but from my personal experience when i sold my condo back in 04 people were telling me that i was making a mistake and they kept on telling me that all the way up until middle of 06. That is 2 years of "dang do you know what your place would be worth now?" so i guess i am doing ok and the people who bought out in IE is the unlucky one right? but who knows.... in 3 years we could have a big earthquake and all of oc could be in the ocean and the IE is the new beachfront.....
 
<em>don't listen to these people...[snip] they are trying to time the bottom. my rule is buy when everybody is selling and sell when everybody is buying...





</em>
 
There will always be people that want to buy. People ultimately do what they want to do regardless of what anyone tells them. I don't know what type of realtors most of you are talking to but based on what you're saying, I'd be distrustful too. Actually, a lot of realtors I know tell their clients to wait including me. I deal with a lot of foreclosures though. People that buy foreclosures aren't your typical homebuyer. They love the idea of taking fixer uppers and making it into their dream home. You should see the expressions in their faces when they ulitmatlely acheive what they've envisioned in their mind when their home is complete. One of my clients has been birdwatching a specific community and called me to make an offer on a foreclosure that came up for sale. She knew she wanted to buy there a long time ago; this home had a good asking price, floorplan & location she wanted. I told her to wait for one that needed less work but she felt a turnkey property would have a higher price tag. She'd rather deal with a bank than a homeowner for better pricing.
 
ACPME, I think that Warren Buffet said it best - Be fearful when others are greedy and greedy when others are fearful.
 
jbatzmaru,


<em>


Humble – adjective 1. not proud or arrogant; modest: to be humble although successful.





</em>This is something I struggle with, and what I am going to say is probably not the most humble thing, but I have said most of it already, so it is not new.





I am a homeowner, in a nice area, with a small mortgage for what it is "worth". I am a partner in an investment property, since 96, that is net cash flow positive. I have bought and sold (both without an agent, hehe) two other homes in the last five years. I have mentioned that I trade, and trade almost daily. I have even mention specific trades. Some would have been good, some would have been losers.





The point is, I never mention the money or worth of any of these things. Why? Because it doesn't matter. It doesn't make me better person by what I am worth. It doesn't mean that I am smarter than anyone else by what I am "worth". Trust me, I know some of the dumbest people who are er were millionaires, but because of their stupidity lost it all. I know some extremely intelligent people, who may not be millionaires now, but they will be one day, and they will never lose it all.





I have hung out with true <em>old </em>money people back east. You know... the <em>old</em> money, that have had trust funds set up several generations ago. Never, not once, do they ever mention what amount of money they have or what they are "worth". Why? Because, their parents, grandparents, and the parents before them taught them the importance of being humble. And, I know that they have a boatload of money, by watching them bust out the AMEX black, that they got automatically when they turned 18, to pay for the $800 dinner at The Mesa Grill. How much are they "worth"? I could care less, because again, the money doesn't make the person.





I have made several friends here. And, none of them would care if I had what I stated above, or whether I lived in a dumpy studio apartment in Santa Ana, with just enough money to eat for the next week. They don't judge me for what I have, they judge me by who I am. And, that is why they are my friends.
 
<p><em>"And, none of them would care if I had what I stated above, or whether I lived in a dumpy studio apartment in Santa Ana, with just enough money to eat for the next week."</em></p>

<p>I dunno. I only hang with you because you buy me lunch. </p>
 
wow you wrote all that to explain to me what it is to be humble? ok......

anyways the guy/gal was asking for opinion and i gave him my opinion. my remarks is not directed at you so it is all good. don't take any offense.



did i mention that my dad is one of the owner of dlink? and i am humble enough to go and work and achieve stuff for myself instead of using his money? then again i could just be lying who knows.... right? all good......
 
i dont know what everyone's financials look like but given that there are some extremely bright, sensible, and intellectually-curious folk here, i would be surprised if there <em>weren't </em>some extremely wealthy and successful people in our ranks. (and how do we know don bren's not lurking around given that what's discussed here could be of interest to him. so maybe there is a billionaire in the midst??) jbatz's comment implies that we're all a bunch of unfortunate sorts, looking upwards and hoping housing comes crashing down so we too can hope to snag a piece of the american dream. as if having wealth precludes one from caring about how one's hard earned money is spent. most millionaires are working professionals that may have substantial assets, but also substantial liabilities and responsibilities -- doctors and lawyers in private practice, small business owners and entrepreneurs, or even corporate executives. these are people with grueling schedules that work hard for their wealth, not dotcom millionaires or old money inheritants that just happened to stumble into huge sums of money and are just sitting on a mountain of cash. my guess is they would care a lot about their homes and other assets so to assume they wouldn't be interested in this site or participate in the fora is logic i find, quite frankly, unsophisticated. i hope to join the ranks of the former one day and believe me, even if i could afford to, i wouldn't just drop money down haphazardly on a home like a rap star getting a new set of gold teeth.





as for simply buying low and selling high, that sounds like a great investment philosophy but so much easier said than done. the problem is sometimes prices go down as part of a cyclical pattern and then revert back. that's the basic strategy most quant hedge funds have employed to great success (recent months notwithstanding.) but sometimes prices go down because something is simply mispriced. anyone still waiting for shoelaces.com to go back up to $350/sh? depending on the timing of when the condo was purchased and sold, $180 in 1999 to $350 in 2004 is an annualized return of 11%~14% depending on whether you're using a 5 yr or 6 yr horizon. and that's not even including mello roos, hoa, cost of borrowing, closing costs, other costs of ownership, and inflation. impressive but hardly other-worldly that its worth bragging about. simply touting purchase and sales price as evidence of a great profit says a lot about how much weight we should put into jbatz's investment advice going forward.
 
having reread jbatz's original post, in his defense, i think he meant "dont listen to people who are only buying homes for investment purposes (i.e. flippers who are only timing the mkt and have no interest in living in the home long term." i think most of us would agree with that stmt.





the confusion is the remark about "posting here" which suggests he's directing the comments to people here. that's the part that irked me at least and seemed to change the whole tone of the original post as i was reading it the first time. just thought i'd throw that out there...
 
ACPME,





I find that there are people that are really good at making money and really work hard at it. They have a nack for business and get great enjoyment from acquiring wealth.





Then there are others like myself that try and make sure that we have enough money to live comfortably, but our enjoyment comes from our professions and our families. I have decided to do what I like to do, and if I make money doing it, thats great.
 
<p>Concur w/ ACPME. The response was a little out of character based on what JBatz has said to date, i.e., more antagonistic than I would have expected. I think something was lost in translation.</p>

<p>{Now had it been from JPMF, sadly, it would have been entirely in character.}</p>
 
i am just sayin....



about my condo.... it wasn't the best time to sell i could have wait and made more money but being blog down with a payment at a young age and not having enough money to go out was one of the main reason to sell. i am not braggin it was sheer luck.... but i hate when people keep telling me how foolish i was to sell and that i missed out. same people that kept on telling me to get back in the housing market and buy out in Inland empire.....



i am just saying if you buy a place to live then it is all good.
 
why it works for me...



- the numbers work for me, owning instead of renting costs me between $500.- and $1000.- more a month. that includes the benfetit of write offs etc...

- i found the perfect home in the perfect neighbourhood, quiet street and local to everything

- looking at a growing $$number in my bank account does not make me happy, living in a great home does... for all i know i might be dead tomorrow... you have to live now, not just in the future

- my lifestyle will not change, i still can go on vacations, dinners etc...

- i don't care about the value dropping... i will be living there for a long time

- the tax write-off will get me below AMT limits giving be benefits for my CNG car and i can invest in my roth IRA again

- i don't have any kids and will not ever have any... talk about bad investment... each kid will cost you $500k plus with $0 return... how many of you "renting is cheaper than buying" guys have kids... hahaha

- i don't want all my money in the stock market... even if the value drops to 1/2 or a 1/4 of what i pay for now i will still have a home to live in. that's something i will always need. if my portfolio drops to 1/4 of the value it might not pay the rent anymore...

- money is cheap... 100% financed at less than 5 1/2 %...

- i don't like paying the IC $2k a month for a 1100 sft 2bd/2bath...
 
<p>No kids, your genes are eliminated from the gene pool.</p>

<p>Think of it as evolution in action. (Niven)</p>

<p>You would actually not have kids because they cost money????? I can see not having them because they are a pain in the patoot, but I just find it weird that the reason is money. . . .</p>
 
I think what flmgrip is saying is that just as you would not NOT have kids because they cost money, housing would have to be a similar type of an emotional decision. It's an extreme comparison to be sure, but I think it has some merit in that there are emotional factors that you must take into account when buying a house, beyond the financials. The big difference I see between the two is that when buying a house, you must be able to somehow quantify that emotion into a number - a premium - that you would be willing to pay over and above a more objective calculated value. That premium must also exist for a child, but it would be much, much higher.
 
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