Kate waits as prices fall

Kate in the Valley, my favorite sidelined househunting blogger, comes off the sidelines tonight to file an update: prices are falling in one of her preferred neighborhoods, and she's still not biting:

"You might remember that back in June I visited a little 3 bed + 2 bath house  in Fashion Square (a.k.a 'the house where it all started') that was listed at $825k.  When I told the agent that I thought that was way too high, she offered me a little cash back to sweeten the deal.  Needless to say, I didn't go for it.   Anyhoo, it's been almost six months and the house still hasn't sold.  But the agent gave me a call again recently. Yup.  She wanted me be the first to know (because, apparently, she  still does not read my blog) that the house is currently listed at $694k and: 'there's room to negotiate!'

"The new list price represents a nearly 16% decline over the last six months (assuming you offered to pay list but, given the agent's sales pitch, why would you?).  I still think it's too much and wouldn't be surprised if it dipped into the low $600s before it finally moves.   And this isn't the tale of one desperate seller either; the whole neighborhood has taken a significant hit in recent months.

"So what does this mean for me?  Well, for starters, it means I'm really glad we didn't buy a house this year. It also means that some of the allegedly bubble-proof neighborhoods in the Valley are starting to deflate much faster than the city-wide statistics reveal.   But it doesn't mean that I'm going to put in any offers right now or any time soon.  The price corrections have only just begun."

Thanks, Kate.
Comments? Thoughts? Be polite. Email story tips to lalandblog@yahoo.com.

Comments

[enlightenment]

wait until 2009!!! only a fool would buy now!!!

[blah_to_you]

Kate's doing the right thing. I'm waiting too. No way we should let the flippers/speculators make a dime. ARMS/interest-onlys don't peak until next year and will continue into '09.

The "prime" segment is going to feel some pain too, just take a little longer.

Anyone that paid more than $200/sq ft for a tract house was/is foolish.

[Steve Reynolds]

Mr. Kate is going to be really happy because now he is going to have some extra cash for the necessities of life. Bigger flat screen, better surround sound, new toys for the garage like a neon beer sign. Mr. Kate rocks, give me a bump fist!!!! I got your back...Kate, Mr. Kate and I think you're the best, we're always looking out for ya. This thing is going to drop like a rock or at least give back some of the big gains from the past few years. Go to propertyshark.com, pull up the address of whatever property you're looking for, take a look at the 1997 to 2001 levels and that is a good starting point. Why 1997, someone here on this blog made a great point, that's the time all this creative financing started. It's not gloom and doom, just an average correction.

[Charles Wilson]

Keep waiting, Kate. Pay no more than 130 times what a place can REALISTICALLY rent for per month.

[lefty]

i think prices in greater l.a. will be about the same next year as they are now. if that's true, you will have one year without a house. you will need to do a rental analysis.

[tony almonte]

does anyone have examples like Kate's on the Westside. it seems immune over there.

[John T Watts]

Kate, you're smart to wait. It may be months or it may be years, but somewhere there will be a bottom. You will probably be paying close attention and will recognize it when it comes. Others will not see it until prices have gone up a bit. How rapidly prices rise when there is a bottom is anyones guess. If you had a crystal ball you could put in an offer just before the bottom. Of course, prices might sort of just slog up and down somewhere near the bottom for a long long time. Then it wouldn't much matter when you make your offer.

[Hula Girl]

Kate: Rhymes With Wait...

Sit back and enjoy the sound of air hissing out of the tires. You are in the proverbial cat-bird seat. I just sold my house: The one I bought in 2006 thinking the West Side is immune. Well, guess what? I had to slash the price several times to get anyone to look at it. I finally reduced it to what I paid for it and someone from the greater-fool-school of real estate bought it. Miraculously, I broke even. BUT, I was just about ready to do a major price slash again before my buyer materialized. And I would've continued slashing until I unloaded it. (losing one's job is a powerful motivator), I've since watched prices decline $100-$200k in my former neighborhood - in the last two months.

The point is, there are many sellers like me and there will be even more if this WGA strike does not get resolved soon. The deals, they-are-a-coming.
While it was not fun to watch my fantasy money (equity) vanish overnight, it was a lot more pleasant than holding on to a soon to be upside down property and worrying about ruining my perfect credit.

Will I buy again? Hell yeah. But not until that sky quits falling and it seems that it's only just begun.

Hold on to your pocketbook, Kate. You will soon feel like the most popular girl in high school as agents and sellers whisper sweet price reductions into your ear,

[rae]

It does not make sense to spend $600,000.00 for a 60 years old that will cost you a minium of $200,000.00 to renovate. I Agree with Kate to wait

[Duh]

There is no such thing as a bubble-proof neighborhood in the Valley. If you are striving for bubble-proof, buy near the ocean. There's only so much land there.

[Westside Story- Just Call Me Maria]

It is deflating rapidly over here too. The homes we have looked at in Cheviot Hills, Pacific Palisades and Santa Monica still haven't gotten the message in capital letters, but we are seeing significant declines in asking prices for Culver City, Bel Air and Rancho Park- and the houses we want still aren't moving. Currently my eye is on a house in Bel Air that has creeped downward a $100,000 at a time for the last few months. As soon as I start seeing regular prices below a $1,000,000 asking price, then I know it will be time to purchase. There are already plenty of listings in Beverly Glen (Bel Air zip) below the threshold.

[arroyogrande]

As per Dataquick/LA Times, Los Angeles County is now negative in median year-over-year house prices:

Oct. 2006 $ Median SFH: $540,000
Oct. 2007 $ Median SFH: $525,000

Oct. 2006 Sales: 5489
Oct. 2007 Sales: 2917

Find a price that you like...if you have the cash and the good credit, be of the mindset that "you are not just going to give it away".

- arroyogrande

[Neekolaaz]

I'm still pessimistic on the Westside, but while prices have dropped a tiny bit, I don't see anything like 16% discounts (with a plea to negotiate).

Yet.

The Valley is just a leading indicator of what's coming in the Westside. I still believe that - just gotta be patient.

[anon]

Kate will probably eventually get a great deal on a house, but that deal will probably have little to nothing to do with market timing.

Kate is not the typical house-hunter:
She is far more informed than the typical house-hunter.
She is far more diligent than the typical house-hunter.
And, most important, by far, she is far more well-known and connected (due to her blog and all the publicity it generates) than 99.9% of house-hunters will ever be.

My guess is that one of her groupies here will have some inside info on a distressed/inheritance/divorce discounted house in the 'hood she's looking for and will pass that info on to Kate some day.

Kate will get a bargain deal and everyone will ascribe it to her smart timing of the market when, in fact, it will just be a bargain based on that old-fashioned advantage: insider info.

It's not what you know (or how you time the market); it' who you know.

Kate's blogger fame has greatly expanded her investment capital in the "who-you-know" account.

[Rich]

"How rapidly prices rise when there is a bottom is anyones guess. If you had a crystal ball you could put in an offer just before the bottom"

I don't think you want to wait for a general market bottom the way you would for stocks, whose individual prices are tied to the fate of the market as a whole--rather than seeing an identifiable bottom, there will be 2 markets going on in the same space, houses that are priced fairly and are selling, and houses that are overpriced and not moving. Expect to see a steady flow of buying/selling for houses that are priced well for their amenities even as foreclosures and oversupply dominate the news. When the house you want seems fairly priced IN RELATION TO YOUR OWN INCOME and the size/condition/features/location of the house itself, go ahead and buy. A study reported on recently indicates people have a good intuitive sense of what their house is worth in relation to others, so if you "feel" the price is in a good-value zone, you're probably right. Also, it's almost impossible to make a mistake when the price of the house is within striking distance of the median income of a working couple. A $400k purchase will be much safer than a $700k purchase, where the pool of potential buyers is so much smaller...

[IE Baby]

Don't pay more than 200 a sq ft for a tract house? Ha ha, in the IE builders can build new houses for $50 a sq ft. We now have tons of listings in the Temecula area for around $100 a sq ft (nice newer houses). We have better schools, better retail, minimal traffic, way less crime and 6% annual job growth. When are you people going to get it ?

[Joseph]

For those asking about the "immune" westside, here's an excellent blog that charts recent activity in Santa Monica and its environs:

http://smdistress.blogspot.com/

And of course, the always excellent: westside-bubble.blogspot.com

[Rob]

Funny Anon,

"The famous house that Kate bought." It will make it on the map of the stars homes sold on Sunset and Melrose. Sorry couldnt resist...........

[MyLessThanPrimeBeef]

Me too, I am p!ssmistic about the Westside.

BTW, let me share one secret timing indicator with you good people here and perhaps this will help Kate too.

The time to buy is when you no longer see investorguy post here.

Why?

Because despite of what investorguy is saying and writing, the very fact that a sharp operator like him has time to loiter around here betrays the very situation he is in - that this is no time to buy, prices will fall even more, thus nothing to do and plenty of time to hang out here.

Now, one day in the very distant fuutre when he's backing up the truck buying hand over fist, he'll be too busy to keep you guys entertained.

Of course, now that I have revealed this secret knowldege, the National Assoication of Realtors will probably put him on permanent paid leave covertly.

[arroyogrande]

"Kate will probably eventually get a great deal on a house, but that deal will probably have little to nothing to do with market timing."

Agreed. However, for the rest of us, 'now is a great time to buy', 'selection is great', 'you had better buy now before prices start going back up'...right?

The truth is, us *qualified* buyers (buyers with cash in the bank, a good job, and good credit scores) are *not* just going to give our money away. For us, there is no hurry to buy today, tomorrow, next week, next month, or next year.

Yes, there are buyers that are still buying. More power to them. However, I for one am taking my dear sweet time to find something I like at a price I can actually afford...unlike many who bought into the "no money down, you don't have to prove your income level, just refinance into another option-ARM or teaser rate when your loan resets" mantra.

- arroyogrande

[investorguy]

Less Than: I just check in to keep you guys honest. Heaven knows some of you need it. Even at my busiest, making money doesn't take more than a few hours a day. I'm busy as ever, just not in LA.

[Rob]

IE Baby wrote:
"When are you people going to get it ?"

Get what? You are not really trying to sell the IE as some hidden gem?

[perks]

IE Baby wrote: "Don't pay more than 200 a sq ft for a tract house? Ha ha, in the IE builders can build new houses for $50 a sq ft. We now have tons of listings in the Temecula area for around $100 a sq ft (nice newer houses). We have better schools, better retail, minimal traffic, way less crime and 6% annual job growth. When are you people going to get it ?"

If Temecula's so special and great, why are you so anxious to get people to come out there and buy your homes, fill your schools, congest your roads, and increase crime?

I'm not saying Temecula isn't a decent place (I do find it a reasonably nice area), but it's really stretching to make an argument that any part of So Cal has something that absolutely no other part does.

I actually like NOT having to drive from my house to the nearest generic strip mall to eat, shop, etc. Good luck finding any walkable community anywhere in the IE.

[MyLessThanPrimeBeef]

I suggest we have a Virgin Homebuyers Association whose members shall pledge to postpone their 'first time' and will not 'do it' until at least 2012.

[Just call me Maria]

IE Baby wrote:
"When are you people going to get it ?"

When are the big builders in the IE going to get that our jobs are WAAAAAY over here and the commute is not an option. How many hours a day do your children spend in daycare?

[MyLessThanPrimeBeef]

Investorguy, I know you are busy now.

I just want to wait until you're really busy.

In the meatime, I am going to take a nap. I think it is written somewhere that the languid, the slothful and the idle shall inherit all the good deals.

[sheila]

hmmm. if it's a house you love, why not name your price? you don't sound like you are trying to flip it, so why not buy it at the price you want to pay, without respect to whether it will dip again before it goes back up? there is more to owning a house than it's current market value!

if it were me, i'd find out how much sellers paid, and name a price so that there is a profit margin for them, but it is a price you are happy with, regardless of the "market." if, on the other hand, it is all about feeling like you got a "steal," then this is all just an exercise in ego, and i could care less what you do.

i understand not wanting to get ripped off, but i also understand that house-hunting takes its own toll, and at a certain point, you have to want to live your life again, in your own little house, and stop obsessing over "the deal." sellers who are willing to negotiate may be feeling the same way, and there are a bunch of them who are sick of being in limbo and just want to move on. even though list prices may not reflect that state of mind, if you know how to read people, you can find those sellers and they will make a fair deal.

on the other hand, if you don't really like the house, and there are a hundred houses you'd be just as happy with, then unless you can make a really good deal right now, maybe you should wait. then again, 99 buyers may subscribe to my philosophy, above, and you may find yourself still in an apartment, crouched in front of your computer, 2 years older and no wiser, scanning the internet for that cinderella story that never comes.

[investorguy]

LOL @ MyLess... yeah, something like that. A nap does sound like a good idea.

[Jeff Lebowski]

RE: the IE. There are some nice walkable communities that are centered around the towns that pre-dated the move towards sprawl. Upland, Claremont, Pomona, Redlands, and La Verne all have historical downtowns and surronding neighborhoods that were built in a traditional mode. Riverside also has historical, leafy neighborhoods with classic houses that are located within walking distance of its downtown. (although similarly old, San Bernardino is excluded from this list b/c it's just beyond the pale blight and crime wise). Of course, if you're looking for a walkable community, abandon all hope ye who enter Temecula, Corona, Morena Valley, Perris, Fontana, etc.

[Kate]

Sheila writes:

"you don't sound like you are trying to flip it, so why not buy it at the price you want to pay, without respect to whether it will dip again before it goes back up? there is more to owning a house than it's current market value!
... i understand not wanting to get ripped off, but i also understand that house-hunting takes its own toll, and at a certain point, you have to want to live your life again, in your own little house, and stop obsessing over 'the deal.' "

House hunting absolutely takes a toll and I am not actively looking right now, just observing.

But I think you miss the point. I am not trying to time the market so that I can get in on the absolute bottom. I am trying to buy at a price I can afford, at a reasonable multiple of the areas median income, so that I am more likely to get my investment back if some life change occurs and I am forced to sell.

I wish I had the luxury of buying without regard to what happens to the value of my home but the reality is that I might unexpectedly need that investment back one day.

In an unprecedented real estate market like this, unless you are already financially secure for the rest of your life, how can you think any other way?

[arroyogrande]

"you have to want to live your life again, in your own little house"
"you may find yourself still in an apartment, crouched in front of your computer"

Wow, some people have a warped view of renting. Have you considered that renting also includes renting houses? I know, because I am currently renting one for my family and I to live in, at half the monthly cost of buying a comparable property (including tax benefits). We use that extra money to save/invest, and go on nice vacations not paid for by credit cards. It's really nice. It beats being hunched over a computer looking for ways to get out of a resetting mortgage on a house that we really couldn't afford.

As for looking for houses, we're in no rush. And because we are in no hurry, it's actually a fun weekend activity that we do every once in a while. I'm sure we'll find something eventually. But until then, I'll just keep socking away the savings we get from not throwing our money away on *excessive* mortgage interest.

- arroyogrande

[xtine]

Hey anon - If you had been paying attention you'd know Mr. Kate will never buy a fixer-upper...no matter what price Kate's celebrity gets her.

[Keith]

"if it were me, i'd find out how much sellers paid, and name a price so that there is a profit margin for them,"

Hmmm, sure, take the monkey off their back and put it on yours. If it were me, I'd not want to risk losing 6 figures in a rapidly sliding market. But perhaps you have alot more disposable cash flow and can take the hit.

Are you in the R.E. industry by chance?

[Problemwithcaring]

RE: the IE. There are some nice walkable communities that are centered around the towns that pre-dated the move towards sprawl. Upland, Claremont, Pomona, Redlands, and La Verne all have historical downtowns and surronding neighborhoods that were built in a traditional mode.

Posted by: Jeff Lebowski | November 20, 2007 at 11:09 AM

I was in Pomona last weekend. 8 of 10 storefronts on their "histrical downtown" main thoroughfare are shuttered.

There is absolutely no shopping (expect 1 old bookstore) and nothing to eat besides a fish restaurant with a letter "C" in the window (first one I saw in town) and a Starbucks.

Say what you want but I don't feel like listening to anybody not bringing the real about the IE.

[robert NO longer in L.A.]

Luck can be the best friend an 'investor' ever has on their side. Timing is EVERYTHING, as nothing lasts forever - even Geo. Bush, aka "1 Tin Soldier" (Google for lyrics to song!!!) WILL be forgotten, save for a red stain in History. 1980 and 1990 were tops, followed by 5 year declines, then Space Shuttle-like trajectory for following 4-5 years. You would be wise to monitor situation very carefully for 1-3 years. LOCAL markets are CRITICAL; some rebound, some crash. If Boeing closes Long Beach plant in 2010, could be long downward CRASH as other defense companies REPEAT 1990. Alternatives? Good time to go elsewhere but not AZ nor NV. Bon chance!

[robert NO longer in L.A.]

PS Kate; either the LA Times or WSJ reviewed LA prices during previous boom - Brentwood in 1986= $600k 1990 = $1.6k!!! (whoooooooppppie!_But in 1995 =$600k AGAIN. This one could be equally UGLY, unless you're RENTING....or, got too much income NOT to have a bloody mortgage. PATIENCE works on BOTH ends.

[toby]

I hate to be this way but, what's the point with Kate?

It was obvious 3 months ago that she wasn't going to buy a house, in fact, I doubt she plans on buying a house in the next year either (contrary to what she says).

Seriously, she's past her usefulness and is getting quite boring.

[Keith]

Yeah? How's your ant farm coming along Toby?

[yourkillingmelarry]

"I wish I had the luxury of buying without regard to what happens to the value of my home but the reality is that I might unexpectedly need that investment back one day.

In an unprecedented real estate market like this, unless you are already financially secure for the rest of your life, how can you think any other way?"

That sums the whole thing up nicely. Great point Kate!

[FM71]

Don't pay more than 200 a sq ft for a tract house? Ha ha, in the IE builders can build new houses for $50 a sq ft. We now have tons of listings in the Temecula area for around $100 a sq ft (nice newer houses). We have better schools, better retail, minimal traffic, way less crime and 6% annual job growth. When are you people going to get it ?

Posted by: IE Baby

OMG!!! You have got to be kidding me, Temecula has been trying to be like Orange County for years. They keep harping about how they'll become a big player when they try and carve a tunnel through Cleveland National Forest and pop out in the O.C. My in-laws live there and I visit quite often. Less traffic? I doubt that anymore. It's unofficial nickname is Trafficula and I have seen the amount of foreclosures going on down there, it's pitiful. It has got one of the highest rates in SoCal. Try doing some research and you'll see that Temecula prices have dropped at least 100K. There is massive developments that are unfinished with wood framing turning an ugly brown. That means they're just sitting there unfinished and rotting because no one is buying. Offering 100K in incentives and no one buying is incredible. What a joke!

[Nikki]

okay, i get that there are a lot of areas in the U.S. in a severe housing crisis, but i just don't see the evidence that areas like West LA. are affected. I really really want there to be a bubble that bursts, so that i can get into the market finally, but we've been waiting 2 years now for the burst. It's always next fall/next winter, now it's in April when the ARMs re-adjust. my husband and i are those 30 something people making 6 figure incomes who are still priced out of venice/santa monica. And even in Mar Vista, "nice" 3 bedrooms are still priced around $1 million and selling. And at the $900,000 range you get a "decent" place that is in bad need of an update. And things continue to sell, sellers get their asking price or better, and there is not a lot of inventory on the market. I can't wait for prices to drop, can someone just notify me when it happens? because i'm spending too much time on blogs trying to find the magic date for this big event.

[peter m]

"RE: the IE. There are some nice walkable communities that are centered around the towns that pre-dated the move towards sprawl. Upland, Claremont, Pomona, Redlands, and La Verne all have historical downtowns and surronding neighborhoods that were built in a traditional mode. "

I have traveled all over the IE(nature of my job)and can dissect walkable old dwtns from LA coast to hi-desert. Lets dissect old Riverside City Center. Lots of old historical bldgs including the fabulous Mission Inn and some nice restored Victorian mansions in the old leafy residential district. Yet the inner city also has lots of unsavory characters cruising around blasting ghetto rap, police are there constantly, and there are derelect homes and hoods encroaching upon the old dwtn.
Lets tour Corona. Their old dwtn along main and lincoln is rather seedy in spots and increasingly crowded with homeless. Or La Verne. The old historical residential section is a de-gentrifying/aging former tidy middle-class community with evident signs of deterioration . Ditto for Upland. Colton and Pomona have already declined into exurban wasted ghettos.
Old town in Murrieta (off winchester drive) is a tiny snippet overwhelmed by traffic and not at all walkable. Temecula is a vast ever -growing mass of new tracts /new developments, new commercials, new roads ; an ever growing IE exuburban sprawling monster. Lake Elsinore's old town not at all inviting, and increasingly crowded with impoverished immigrants.
Rancho Cucamonga is one of the better IE comunities but again no walkablity-the entire design of the city is built around traffic speeding from A. mall to B. commericial park to C. residential area. No walkabilty.
Thr old historical section of Norco along hammer ave and 6th was probably ok a few years ago until the developers and homebuilders invaded Norco and turned it into another IE sprawling shopping/tract housing, sprawling mess.

[Toby]

Yeah? How's your ant farm coming along Toby?

Posted by: Keith

I'm sorry but I don't see the point of someone going around pretending to be interested in buying a house.

It's about as fun as watching someone play a video game.

[Jeff Lebowski]

OK problemwithcaring: granted, Pomona's downtown is not want it used to be, but there are supposedly some nice surrounding neighborhoods that are historical. What about Claremont and La Verne? Claremont has a real functioning downtown, and La Verne, while smaller, is viable. What does "a walkable community" mean anyhow? I don't think there is a real walkable community in greater LA at all, if you take it to mean that every amenity needed for life can be obtained by walking. Even the folks moving to downtown LA are hanging onto their cars.

"Say what you want but I don't feel like listening to anybody" that 1) makes broad unsupported generalizations about an entire region, and 2) cannot complete their post with a grammatically-correct sentence (when the hell did "bringing the real" become acceptable English? Why not just go whole hog and say "bringin' da real-shizit"?) .

[DSL]

I totally agree with Toby. She spends untold years blogging about Real Estate she obviously has no intention of buying. She could have the perfect house at what she deems as the perfect price but still wait for some other unseen circumstance to drop prices to 1972 levels.

[Problemwithcaring]

@ Jeff

ok. So for Claremont walkable community means "has a functioning downtown," but for all of Greater Los Angeles, it must mean "every amenity needed for life be obtained by walking." Convenient. Truthy. But not real. (Or in Lebowski-speak not "bringin' da real-shizit.")

And Jeff you need to open your mind about limits of language and expression. Here's and idea: move to Pomona. I am sure you will find a lot of meth-addicted gang bangers willing to obfuscate with you on a tangent about the totalitarianism of what you call “acceptable grammar.”

[arroyogrande]

"I'm sorry but I don't see the point of someone going around pretending to be interested in buying a house."

It's about as interesting as reading news stories about people pretending to sell their house..."I'm not just going to give it away", etc. etc. etc.

[Laura]

Kate, I look forward anxiously to all your updates. You have inspired me to "observe" about 10 homes currently for sale in my Burbank hillside neighborhood. I'm finding the same thing you are-- prices are dropping and yet NOTHING is moving! So I sit patiently and watch and continue to save. The big correction is coming, you can almost feel it. Please continue to keep us updated!

[Tbone]

"Keep waiting, Kate. Pay no more than 130 times what a place can REALISTICALLY rent for per month."

Now that is funny!

Presuming a realistic rent of $2200 that would mean a $286K 3br, 2 ba house in a nicer part of Sherman Oaks? Hilarious. Even under the worst case scenario for this current bust that won't happen.

I'm surprised none of you 'keepin 'em honest' types didn't jump all over this statement. Actually, no I guess I'm not.

[Just Call me Maria]

Nikki- the houses are out there, but I don't think we (westsiders in the upper range of income) are going to see a "pop" so much as a loud hiss as the whole thing deflates. I'm trying to be patient too, but waiting for the amount of house we need and the amount we are willing to pay to intersect is killing us. Every year the tuition check for three children looms higher and every year I think that the check would be better spent on mortgage in a better school district.

[jemyr]

Lebowski,

Try Old Town Pasadena. I live here and I do walk to everything.
50+ restaurants
2 movie theaters
3 grocery stores (now Whole Foods)
dry cleaner
clothing stores
Gold line to any other obscure shopping you need. (Like Best Buy).

Plus, it's not freaky scary like Downtown.

Downtown Burbank, Downtown Monrovia, 3rd St Promenade in Santa Monica, are probably also fully walkable.

[MyLessThanPrimeBeef]

Here is one idea about how to redevelop downtown Pomona - convert one of the foreclosed properties there into a 'Subprime Musuem.' Just to make it interesting, go out and catch a few living optional ARM and stated income loan mortgagees and put them in its permanent collection. And in a few years, we can all go and visit the 'Retro Look At the Biggest Financial Mania Of The Century - The Monumental Folly of Alan Greenspan.'

[sheila]

arroyogrande, honey? wasn't actually addressing you. no idea what you are doing or renting or whatever, so don't take it so personally. i was discussing the blog topic. which is kate. who lives in a condo or apartment, per her own blog. and who can afford $700K +, also per her own blog. and who was previously pretty much obsessing (although perhaps no more).

also, having trouble seeing where i recommend that she buy something she can't afford then try desperately to refinance it?? calling my view "warped" when you know nothing about me says more about you than it does about me. for example, i'm not sure what you consider "excessive mortgage interest," but if tax-deductible 5.25% fixed for 30 qualifies, i cop to paying excessive interest.

i'm just saying that there is more to owning a house than the price. i'm not rich, irresponsible, or "in real estate." i own a little house that i L-O-V-E!! i can afford it and i totally, totally enjoy being in it and fussing around and fixing it up, and sitting on the porch with fantastic views, etc. i feel relaxed and happy there, and don't live my like as though it will be snatched from me at any minute.

i guess my reply is that i have no idea if i'm financially secure for the rest of my life because i haven't yet figured out how long i will live. i do know that i am happy now, living within my means, covered by numerous insurance policies, and will simply deal with each chapter of my life as it unfolds instead of deluding myself that i am the Great and Powerful Oz.

of course we should be smart, but recognize the many ways of being smart - not all of them are numerical.

[Greg]

Dont even think about buying a house until 2010, at the least. I really feel bad for those who bought in the last few years. Home ownership is big business, and its not always a sure thing that buying is bettter then renting, during these times, renting is the way to go.