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Monday, January 16, 2012
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43 comments:
http://franklymls.com/AR7739261
i think i looked at this place before, i think it was short sale opportunity 2 years ago.
and at the time they wanted 300K
HB
http://www.zerohedge.com/news/citigroup-misses-big-top-and-bottom-line-earnings-negative-absent-loan-loss-release
Not that Citi isn't a pile of crapm, but, they appear to be a pile of crap.
Washington 2012 housing forecast
"According to the economic forecast that George Mason University’s Center for Regional Analysis put together on Friday, 2012 is looking like a year where we run in place, with our eyes on the horizon at 2013, hoping that things might get noticably better a year from now. The title of this year’s forecast conference was aptly called, “Is this a recovery, or what?”"
"There was a packed crowd of business men and women at the Ritz-Carlton Tyson’s Corner, sipping coffee and taking careful note of what regional economicst Stephen Fuller had to say about the impact of the coming (likely) reductions in federal spending and nervous laughter when he told the crowd that the Washington region now “is at the bottom of the heap” among cities actually adding jobs. “Detroit is adding more jobs” than we are, he said, and that is because about halfway through 2011, the federal spending slowed dramatically."
"Really? Detroit? Just two years ago, the Washington area was leading the country among metro areas in terms of adding jobs. As goes Uncle Sam, so goes Washington."
http://www.washingtonpost.com/blogs/where-we-live/post/washington-2012-housing-forecast-lets-hope-for-2013/2012/01/15/gIQAGbUZ1P_blog.html
Pat-
So if you take the zero hedge article and add back the $1.9B related to their bond spreads tightening (this is a good thing and the accounting rule is stupid both ways). They made $1.7B, which is not great, but isn't going to cause the to fail. They also got hit with an additional $0.4B related to severance costs as they continue to adjust their size to reflect weak to no growth prospects.
As for the half their earnings are loan loss releases, I agree. Although this shows that even with bad legacy loans they were able to make a decent profit. So yes weak growth, but strong capital levels that continue to improve.
HB
given the banks are loaded with Mark to Magic garbage and all sorts of off balance sheet risk, it's reall a matter of time till they go to crap.
has anything really changed?
Pat-
Yes things have changed a lot. Pretty much all of the banks capital levels are 2x what they were before the recession. They now also understand that housing prices can go down so they have those assets marked appropriately. If everything was in fact "mark to magin" how has Citi been able to release billions in reserves as they unwind their non-core assets. Doesn't this show that the bank was not hiding losses, but instead it was assuming losses were going to be worse than they actually were.
Have you not noticed that Citi put all of its in a "bad bank" structure which has now removed over half of these assets.
I will continue to reiterate I don't think the growth prospects are good for the banks, but non of the top 10 banks are near failure
I also forgot to comment that nationally the housing market is starting to tighten up. Inventory levels are slowly coming down to normal levels. My guess is that in about one year we will start to see housing construction activities pick up dramatically as housing prices stop falling. This should help strengthen the economy (obviously good for banks).
I do think that the one major risk to this scenario is the government decides that cutting spending quickly is necessary. (I am not sure why a lot of the house members think this will spur the economy), This is what is happening in Europe and causing most of the nations to go into a recession.
http://franklymls.com/DC7560668
back again and gone again.
cute place, but not where we wanted to live.
http://money.cnn.com/2012/01/18/news/economy/world_bank_recession/
but don't worry, Arlington always appreciates.
"Pat said...but don't worry, Arlington always appreciates."
You know, the first time you intoned this blurb of sarcasm was early 09. Some lurker, who was going to buy anyway, and would simply prefer to buy at the bottom, might have stumbled across this site saw what you said and concluded:
"Pat is bearish on Arlington, so this must not be the bottom...its best to wait...at least til he decides its OK to dip a toe in".
Since then, arlington median prices have risen 37K. Worse for our passing-on-the-09-bottom-for-better-deals-in-the-future buyer, he has paid another 73K in rent.
I asked you years ago when you were gonna say "its safe" to buy in Arlington, and you said 2012.
In the past 3 years, your reluctance to call bottom has fucked the median buyer to the tune of 100K. Even if prices stagnate, each month he continues to clock away rent at the tune of 2K a month.
Are you really going to up the ante and stay on the bearish side thru 2012? How much worse does our "I just want to buy at the bottom" Arlington buyer end up being fucked by lisening to you, before you conclude, oops, I was wrong, the bottom is in?
Look, while we all agree Arlington is a terrible investment, and not the best use of ones money, thats not really the question. The question is, for the poor median bastard who just wanted to buy in the bottom and get on with his life, was it wise for him to pass on the 09 bottom for much greater deals in the future? Yes or No?
Oh, and Pat, accptable answers include the following:
1. Yes
2. No
3. Yes, as long as _____
4. No, because ______
The following are not:
1. Myerton
2. The Bernank
3. Shadow Inventory
4. Etc,
5. Etc,
6. Etc.
Good luck...
"The question is, for the poor median bastard who just wanted to buy in the bottom and get on with his life, was it wise for him to pass on the 09 bottom for much greater deals in the future? Yes or No?"
yes, as long as they have cheap rent...
i've had the vantage of cheap rent.
BTW i've been getting on with my life, one can have a life in a rented apartment, kids grow up fine .
my neighbor downstairs has 2 kids, and has been renting.
BTW the Dow Dogs yielded 17% last year,
So Anon, why don't you tell us what neighborhood, you live in?
What size house you bought and how much you paid?
"Pat said...yes, as long as they have cheap rent..."
Bzzzt ohhh, sorry, it looks like you didnt read the question carefully enough. Remember, theyve already done the cheap rent thing long enough such that they were financially "ready" to buy. Instead of spending the next 40-50-60 years renting til death in his ultracheap abode, he wanted to buy. He wanted to start making payments, so that someday... before he dies... they will end.
He, like oh so many of us who lurked or posted on this board, simply wanted decent assurances that he would not lose his shirt thanks to an "another leg down/poor yeilds means prices will crash/its moving in" boogey man was headed to Arlington.
So let me rephrase, with the appropriate emphasis added:
"The question is, for the poor median bastard who just wanted to buy at the bottom and get on with his life, was it wise for him to pass on the 09 bottom for much greater deals in the future? Yes or No?"
BTW, let me add, I too would not have advised buying the instant the 09 bottom formed. At the time, it was quite reasonable to think, maybe it was a blip, maybe it was a bulltrap, maybe this or that parade of horrors was going to hit. Uncertainty was insanely high at the time.
Still, knowing that the rent clock never stops running, and the appreciation clock may start, I set a hard and fast time limit for myself for 12 months to climb that wall of worry. Namely, if the bottom held for 12 months, its reasonable to conclude "that was the bottom", buy and move on. That 12 extra months of rental payments was a "certainty penalty" that I figured it was wise to pay.
So, that same lurker listening to me missed out on 20K appreciation and 24K of rent. Thus after fucking him to the tune of 44K, I released him. I let him go. Yes young man, the bottom is in, go now...be free...live your life...
Now, you having a higher "wall of worry" to conquer before you could conclude the bottom was in, seemed to have an awfully high "wait and see" period. Thinking that you had no real intention of ever really climbing that wall (i.e. you are a permabear) I asked "are you going to set a timeframe and stick to it"? and at the time, you concluded, Yes...basically if nothing had happened to Arlington by 2012, nothing was going to happen.
Its a tough, yet important mental exercise. Here in 2012, there are still lots of worries out there. Lots of potential black swans and the like. I get that. Still, compared to that insaneley high, oh-my-god, we-are-all-going-over-a-cliff-now, timeperiod of 2009, todays worries are a joke.
So here we are now at the 3 year mark. Thus far, you have fucked him to the tune of 37K appreciation and 73K rent. Actually, thats a 110K penalty but whatever, if that was the price of scaling your wall of worry, thats fine. People have different levels of fear to conquer.
But so anyways, again, whats it gonna be Pat? You gonna scale that wall when you said you would, or are you gonna wait longer? If you are going to wait, are you imposing a new "hard and fast" date, say 2014? 2015?
Just remember, the clock is running, at the rate of 2K a month, and it never stops, tic, tic, tic...
Contrarian-
You do realize that Faber thinks we are going to have hyperinflation, which is the opposite of what you are preaching. If hyperinflation comes owning a house will be a very good investment.
Personally I don't think he knows what he is talking about and does not understand liquidity traps, but either way you probably don't want to use him as your example seeing that he preaches the opposite things that you like.
""The question is, for the poor median bastard who just wanted to buy at the bottom and get on with his life, was it wise for him to pass on the 09 bottom for much greater deals in the future? Yes or No?""
if the clock stops today, obviously the best time to buy is 09 but the clock doest stop.
if interest rates revert to mean, all those 22207 houses become much more expensive to purchase.
if Bernanke locks the fed to 20 years of ZIRP, sure, but look at Japan. 20 years of Zirp and you can rent apartments in downtown tokyo, for 30% the price of buying.
Word is rents are actually dropping hard, post fukushima.
you propose that a median buyer rents for 73K for 2 years, wow, that's some brutal rent.
I would hope that when you have a purchase cheaper then rent, then you have a much stronger bias to buy.
As for me, I'm not the median buyer, i'm the instantaneous buyer.
Being able to pick up a place for less then Assessed and 30% less then the buyer asked, was a deal for me
and if you were paying 73K in rent, you picked a hideously expensive place.
Contrarian-
Ignoring the whole debate about whether the financial system will collapse in our lifetimes (we will not change each others opinions on this). I think it would only lead to deflation if the government does not react with massive programs. My guess is that in a collapse you would see programs many times what we saw in 2008, preventing deflation although who knows.
Pat-
I think Anon was using 2k a month as rent. I think he was saying your comment was from the start of 09, which is a little over three years ago.
I know your rent is lower than 2k, but for most people who are buying in the nicer parts of Arlington they were probably paying close to 2k a month. So this is not a terrible number to use for the average person looking at this site.
As for ZIRP I think you can expect it to last probably until ~2014-2015 in which case I think a shortage of housing units will cause a lot of new building which will quickly drive down the unemployment rate. Until we get to making a normal amount of housing I think we will continue to see sub par job creation and the unemployment rate relatively flat in the 8-9% range.
pat,
Don't you see the irony of your situation? You are the one that capitulated - not home sellers in N. Arlington. You gave up on your hope/dream/wish/prediction and bought in a sketchy area of DC. Maybe you bought well but that doesn't mean that those who bought, and are buying, in N. Arlington did not.
Do you honestly believe that interest rates will rise significantly before the economy is on sure footing? Do you recall discussions of the effect of increasing interest rates in the early 80's?
Were you here when the "it's moving in" prediction (theory/certainty?) was demolished by reasoned argument?
Pat said...you propose that a median buyer rents for 73K for 2 years, wow, that's some brutal rent."
Its actually 3 years. As HB noted, im using the Arlington median (2K) and starting at the Mar 09 bottom. Point to you, its only been 2 years and 10 months since then, so its really only 69K now, it will be 73K in 2 more months.
"Pat said...if interest rates revert to mean, all those 22207 houses become much more expensive to purchase.
if Bernanke locks the fed to 20 years of ZIRP, sure, but look at Japan. 20 years of Zirp and you can rent apartments in downtown tokyo, for 30% the price of buying.
Word is rents are actually dropping hard, post fukushima."
Disagree with some of your conclusions but whatever - thats a separate issue. This is part of your wall of worries, not mine. I scaled these, put them (along with thousands of others, like a dirtybomb attack which would result in an instant loss of -487K) into the background worries which do not affect the overall soundness of my conclusion...09 was the bottom.
Also, I am a bit confused on your stance. Regarding these, are they still to be scaled, or are these risks, in your judgment, low enough to declare 09 was the bottom?
Put another way, can we stop the clock for our median relying on Pat guy? Total fuckage 69K rent, 37K lost appreciation (106K total)? Can we let him go?
"Contrarian said...HB,
yes, I do. Faber and I agree on the financial system collapsing, while disagreeing on the inflation/deflation issue."
Kinda curious the way Contrarian cobbles together various sources to come up with a picture of a worldview that he agrees with, eh HB? Taking the "deflationary" portion of one guys rant, but rejecting the rest, along with another guys "collapse" meme, but excluding the rest, to come up with a conclusion of "deflationary collapse"...
I could almost see him creating the following argument:
Contarian would say...Anon - you are so stupid! Want me to spell it out for you???
1. Here, this source says "housing"
http://www.nyc.gov/html/nycha/html/home/home.shtml
2. This source says "will"
http://content.usatoday.com/communities/gameon/post/2011/10/phil-simms-no-way-peyton-manning-will-let-colts-draft-andrew-luck/1
3. Finally, this source says "collapse"
http://www.recipes.it/reference39.htm
Put them all together, and what do you get Anon? Thats right! "Housing...Will...Collapse" Coming soon to a theater near you, BWAHAHAHA!!!
Anon
You should be very careful saying Rent is a terrible expense out of pocket, unless you consider interest on a mortgage as also an expense.
There is no Moral difference between renting volume and renting money.
Pat and Contrarian the problem with both your analysis is that it is driven almost purely from an investment perspecive basically its a very simple "for the forseeable future, do I want to rent, or do I want to buy"
I get that. I have no problem with that. In fact, there are certain high priced places where the best financial decision one could make is to rent very possibly for the rest of your life. Pay far less in rent than mortgage expenses, live a much higher quality of life (vacations, nicer cars etc). I get that. I have no problem with that.
Also, lets say you arent "ready" to buy. You dont yet have the DP together, you want a larger cash cushion, whatever. In that case, absolutely, rent as long as you need to decide you are "ready".
Now, the problem (or perhaps my different perspective) comes in to play when the person decides: I SEE all the calculators, I KNOW its not the best use of my money, and yet I SIMPLY DONT CARE, IVE HAD IT WITH RENTING, I AM READY, I AM GOING TO BUY AND GET ON WITH LIFE. When this happens, its a seachange. It changes the calculations, it changes way you look at rent, it changes nearly everything.
For example assume a 500K house and 2K monthly rent:
1. Lets say the market is going to lose 40% over 2.5 years as it did in say manassas. Given that you are going to buy, do you:
A. Buy now, paying 500K over 30 years (plus all PITI and expenses) on the house.
OR
B. Wait Rent for 2.5 years, paying 60K in rent, AND THEN pay 300K over 30 years (plus all PITI and expenses) on that same house.
Here B is an obvious slam dunk. Anyone sane waits til prices bottom, and then (and only then) they buy. No sense catching such a rapidly falling knife.
2. NOW, IN COMPARISON, Lets say the market is flat. Given that you are going to buy do you.
A. Buy now, Pay all PITI & other expenses when over 30 years the house is 500K.
OR
B. Rent for a year, pay 24K in rent AND THEN buy, paying all PITI & other expenses over 30 years when the house is STILL 500K
Here it seems like A is the right choice, no?
NOW, even further, (this is for contrarian) lets say housing drops 90% but it takes 30 years to get there. Do you
A. Buy now at 500K paying PITI & expenses for 30 years
OR
B. Wait, spend 720K in rent over 30 years AND THEN buy pay 50K cash?
Honestly, this ones kind of a stumper. One of you guys may want to run the numbers out and see which one is better, (calculating opprortunity costs & the like) but honestly, looking at the raw numbers 500K buy now vs 770K later, even the 90% drop masturbatory fantasy contrarian has doesnt seem like a slam dunk.
Now, granted, the examples here are simplistic, in that I didnt calculate interest rates, opportunity costs, etc but you see what the once in "buying" mindset does to your decision making doesnt it? Plug in whatever hypotheticals you want and you will quickly see that in flat markets, slowly rising, (and sometimes, paradoxically even slowly falling markets) there are not as many cases for continuing to wait.
The reason this is, is because, unlike paying for the house, which (for most people ends 30 years after it starts) RENT IS ETERNAL. If you dont do something about it (i.e. someday buy), it starts the day you set out on your own, and only stops 50-60-70 years later when you draw your last breath of life on this planet.
Thus, once you are of the "I will buy" mindset, the rent, which is always, running, forever tallying, is an expense you would soon enough end.
So bottom line guys, as it stands, using these raw numbers given what has happened in Arlington since the 09 bottom, lets consider what happens to the hypothetical median buyer with the hypothetical median rent in Arlington.
Had the guy listened to me, he would have lost out on 20K appreciation, and 24K rent before i stopped the clock and said buy (in total, he wasw fucked to the tune of 44K)
Had the guy listened to PAT, he would have lost out on 37K appreciation, and 69K rent. Pat still wont say whether he is now in 2012 stopping the rent clock and declaring "buy" (Thus far, he's fucked to the tune of 106K - which may or may not continue)...Pat???
Had the guy lisened to Contrarian, he would have lost out on 37K appreciation, and 69K rent (106K thus far) and that rent clock is gonna keep ticking away, 2K a month, for god knows how long, til Contrarian says "buy". This one could be alot of fun to track in the months and years ahead :)
Hey contrarian,
There is a new listing on your desired LN RD. Just thought I'd let you know. I'll do some looking in that nabe and see what's been happening since 3/09.
cheryl
i still have dry powder to buy a place in arlington using other funds, i bought in DC because i got into law school and my tuition will decline enough, to offset a fair enough chunk of housing costs, plus my commute to school is shorter.
anon
why do you dislike myerton so much?
its a failed condo program, which many median buyers can afford.
Now, the problem (or perhaps my different perspective) comes in to play when the person decides: I SEE all the calculators, I KNOW its not the best use of my money, and yet I SIMPLY DONT CARE, IVE HAD IT WITH RENTING, I AM READY, I AM GOING TO BUY AND GET ON WITH LIFE.
um Anon, renters have lives too. Look at my neighbor downstairs, 2 kids, a dog a wife, he is getting on with life just like my neighbor next door with a wife, 2 kids and a dog. one rents a 2/1 apt pays 1040 in rent and humps laundry to the laundromat.
The other has a microbasement, a W/D, and a 440K mortgage.
who is happier? The guy who holds little parties every saturday w his friends or the guy gutting out trying to make partner?
Oops. I goofed contrarian. It's Waterfront Road. Listed at 889K. Last sold in 2003 for 755K. The last one listed at this same price went UC in 0/0 days. I was surprised to see only 7 homes available at 800K+ in the entire zip.
pat,
I do believe that you made the right choice for you. It's the "doomer" stuff that bothers me (obviously, contrarian is in a league of his own). If I spent my time worrying about all the things that could possibly go wrong, I'd be paralyzed. What a life that would be.
cheryl i think i made the right choice for me too, because of my situation, the savings on tuition and the fact i have to live here for 3 more years, insulates me against a 30% decline in values,
now could the area decline 50% sure.
would i have preferred a garden quadplex or duplex? absolutely, but,
they are hard to get even in the transition zones.
not alot move and the sellers are psycho.
properties with cash flows good for the high 200's, they want 450K for.
yeah, like I want to subsidize the rent of tenants, that would make me a homedebtor.
cheryl
I bought a place because it seemed like a rational move, it was price equivalent to my rent, i had a reason to be there for 3 years minimum, and, it met my functional requirements.
I basically traded a 1K rent for a 2/1 apt in Arlington for a 3/1 row house in a transitional neighborhood in DC.
Yes across the street is the hood, and down the road is the hood, but to the west, is rising new developement and the south is rising new developement.
yes the 7/11 around the corner has been robbed 3 times.
however, none of the houses on my block report a burglary in years.
it's afunctioning social community, where everyone knows everyone and watches out in the backyards.
with the heavy bus service and trolley coming, it's easy enough to commute around, and i'm only 4 blocks from 295.
So the transportation is good, and the people ar enice.
"um Anon, renters have lives too. Look at my neighbor downstairs, 2 kids, a dog a wife, he is getting on with life just like my neighbor next door with a wife, 2 kids and a dog. one rents a 2/1 apt pays 1040 in rent and humps laundry to the laundromat.
who is happier? The guy who holds little parties every saturday w his friends or the guy gutting out trying to make partner?"
Oh Jesus Christ dude. Really? If I had to guess, I have said "nothing is wrong with long term renting" if thats your thing probably 60-70 times in my 4 years on this blog. I said it upthread for christ sakes. Do I have to restate that in toto everytime to keep you from continuing to raise this strawman?
You know what, im not answering it. Know why? Cause this happens all the time. Heres the typical exchange between you and I.
1. I ask you a yes or no qestion.
2. You respond with something irrelevant.
3. I answer your irrelvant question, ask you again to answer #1
4. You respond with something else irrelevant.
5. I again respond to you new irrelevant question, and ask you again to answer #1
6. You say: "fukushima/meyerton/bernanke/cap rates/cheap rent!"
7. I bash my head in with a 2X4
In our typical exchange bet I answer 5 things to the 1 you answer for me. No more. Not this time. Not on this one.
Again, this goes back to our discussions of 3 YEARS AGO on when you will call Arlington bottom and you said 2012 No ifs, No ands, No my rent is cheaps, no buts.
2012 isnt over yet. You need more time to decide? Just say "NO! im not ready to call it yet". Thats fine. I'll just keep the fuckage clock running, and ask you later. Its your wall of worry, not mine.
So again, for the record, Arlington Median buyer, OK to buy?
YES OR NO?
The Anonymous,
I think Pat cannot respond to your question because he is not the Arlington regular buyer, as you describe.
The Arlington buyer you describe is someone who does not care to pay a premium to live in a small old house in Arlington. He or she does not care about price-to-rent ratios, or the knowledge that the buyer could afford a similar house for much less in other nearby neighborhoods, or that the buyer could put the money into a better investment. This buyer wants to live in Arlington regardless of the cost and has the money to do so.
For that person, I would say any day is as good as any other day to buy there.
DC2 said...I think Pat cannot respond to your question because he is not the Arlington regular buyer, as you describe.
The problem is, Pat is thinking like an investor only. Yet we dont always put on our "investor hat" when making big purchases. Say you could afford and really wanted a yacht. Your investor brain says these are terrible investments - dont buy!!! Yet the rest of our brain says the yacht will make me happier than the 100K will so DAMMIT, I DONT CARE, I WILL BUY!!! Now granted, sure, you will try to get the best deal possible, but at the end of the day...you will buy.
Unfortunately, as you and I, and alot of us old vets of this board have learned, thats pretty much the way people look at buying in "Immunington". It may not make the best investment sense, but they recognize that having (a) the house will make them happier than (b) a rental and the extra money.
So basically, since they are in the "I will buy" mode, basically all they care about is A. Can I afford it and B. Will I get creamed. If the answers are yes and no, they buy, end of story.
Now back to Pat, Like many of us, he came to this blog, graphs, calculators, charts, etc in hand screaming, " Look at this!!!" "Look at that!!!" "These prices CANNOT be sustained!!!" The problem is, he cannot take off his investor hat enough to recognize, yeah Pat...they can.
What Pat cannot conceptualize yet, is, he (like all investors) have been priced out of the Arlington market. Hence the cognitive dissonance we see today. He brings us some price to rent graph, way out of whack as PROOF that Arlington will CRASH. We point out, its been outta whack for 20 years, why will it CRASH now? Frustrated, but unwilling to concede, (and being an emotional guy) he snarks, BUT ARLINGTON WILL NEVER GO DOWN, runs away, cognitive dissonance intact.
Its interesting, He may want a yacht too, alot of us would, but not at 100K. Still we recognize that just because "we" wouldnt pay 100K, there are apparently alot of other people who will. We dont automatically assume it will "CRASH", we accept we were priced out of that market, and move on.
Continued...
So in an effort to help Pat get over his cognitive dissonance, and get him to recognize how wrong he will be on the Arl bottom in late 09 I set up this mental test for him. I asked him when, at the very latest is it safe for him to say, its OK to buy? Again, not is it a good investment. It hasnt been a good investment for years. All I want him to do is take off his "investment hat" and help his "Dammit I want to buy" buddy.
Funny thing is, its probably not that unrealistic. Like many of us, I betcha Pat is the "housing guy" among his circle of friends. Picture this...
Early 09
Imagine a buddy went to him in and said, "hey I heard it may be the bottom, whatcha think". Pat replies hell no, rents are outta whack, option arms, shadow inventory, etc, no chance it holds...
The buddy, not really knowing about that stuff, kinda nods in agreement and says "OK, well just let me know as soon as you think its safe"
Late 09,
BUDDY: Pat, im really burning thru rent here, it seems like Arlington is holding... are you sure it will justify me paying all this extra rent to wait for whatever CRASH you see?"
PAT: Yep, price to rent, Option Arm Tsunami, bunch of dark condos on wilson blvd... its gonna crash!!!
BUDDY, but this sfuff isnt happening yet...are you sure?
PATLook, I still feel confident its gonna crash, no place is different, but at the very latest, if it hasnt happened by 2012, I will say its safe
BUDDY: 2012? Ugh, thats alot of rent...wait you said thats the latest you will call it right?
PAT: Yup
BUDDY: So you could feel sure earlier?
PAT: Sure
BUDDY: Ok, again, just let me know, rents still tickin...wifes gettin ancy, I hate renting, I wanna buy dammit! I just dont want to get creamed...
Continued...It gets comical from here!!!
Early 10
BUDDY: Pat it says here Arlington went UP last year! Plus I paid another 24K in rent last year... Are you still sure its gonna crash? Sure it hasnt bottomed yet?
PAT: Yup. Price to rent, Bernanke, Baby Boomers, its gonna crash.
BUDDY: Ok. Again, as soon as you feel its safe, let me know, I really hate burning through rent here
Late 2010:
BUDDY: Pat, Shit dude, my rent went UP 3.6% last year, are you still sure? I mean, I trust you and all but im not liking what im seein. Is all this rent im paying gonna justify whatever savings I will see when it goes BOOM like you say?
PAT: Yes, look dude...Option Arms, Mr. Mortgage, Dubai World, ARLINGTON IS NOT DIFFERENT!!!
BUDDY: Im not sure I see how all that stuff is relevant, but again your the expert, so OK. Again, as soon as you feel it is safe, 2012 at the latest let me know.
Early 2011:
BUDDY, SHIT pat, it says Arlington went UP AGAIN. Im now out like 20K in appreciation, 48K rent and countin...thats 68K. Are you still sure Arlington is goin down enough to justify that? Sure you dont think its safe yet?
PAT: 23% of Homes are underwater, Bernanke, Greece, Look at Myerton!!!
BUDDY: Greece? I hope you know what you are talking about. Still seems like you could have called it by now, but OK, I trust you.
Late 2011
BUDDY: WTF PAT, YOU BOUGHT!!! YOU SAID NO PLACE WAS DIFFERENT!...OK, well that MUST mean you think its safe, for sure now, RIGHT???
PAT: Not yet. Look, heres the deal, Bernanke, Baby Boomers, Fukushima...
BUDDY: Did you just say Fukushima?!?! WHAT THE FUCK DOES FUKUSHIMA HAVE TO DO WITH ANYTHING!!! Look Pat I trust you but seriously, are you still sure its gonna CRASH?
PAT: Arlington is NOT immune.
BUDDY: But DC is?
PAT: Why do you hate Myerton???
BUDDY: Oh my god, what have I done...
TODAY (1/21/2012)
BUDDY: Mother Fucker, PAT im out 69K rent, 37K in lost appreciation. FUCK ME, I never should have listened to you. Oh well, whatever, its now 2012. Im sure you had reasons to believe all that stuff was important, but it sure as hell wasnt. Still, I accepted 2012 as the latest so I was OK with listening to you....
Funny thing is, I still, for some god forsaken reason, trust you, youve been looking at these things for years, I havent. Maybe you still think I should keep on renting cause whatever crash you see would justify 106K and counting...OK, so here goes, PAT should I keep on renting? YES OR NO
PAT: yes, as long you have cheap rent...i've had the vantage of cheap rent. BTW i've been getting on with my life, one can have a life in a rented apartment, kids grow up fine ."
BUDDY: CHEAP RENT??? I DONT GIVE A SHIT ABOUT CHEAP RENT! I HATE RENTING! I WANT IT TO STOP! AGAIN I WANT TO NOT BE PAYING RENT TIL IM EIGHTY FUCKING YEARS OLD IS IT SAFE TO BUY?
PAT:if Bernanke locks the fed to 20 years of ZIRP, sure, but look at Japan. 20 years of Zirp and you can rent apartments in downtown tokyo, for 30% the price of buying.
Word is rents are actually dropping hard, post fukushima."
BUDDY: WHAT?!?!?! WHY DO YOU KEEP BRINGING UP FUKUSHIMA??? WHAT DOES THAT HAVE TO DO WITH WHETHER ITS NOW SAFE TO BUY IN ARLINGTON???
PAT:who is happier? The guy who holds little parties every saturday w his friends or the guy gutting out trying to make partner?
BUDDY: OH god. Kill me...kill me now...
"Ken, I grew up in Dublin. I love Dublin. If I grew up on a farm, and was retarded, Bruges might impress me but I didn't, so it doesn't. "
Anon,
I grew up in a city, and I love cities. If i grew up in a farm, owning a house in Arlington might impress me.
You see, you want the argument to read exactly as you see it, and with no variation.
You claim that the median buyer buys a house. I hate to break it to you, but in Arlington, the median buyer is buying a condo. THere are an assload more condo's then houses in Arlington.
What you mean is the median house buyer. Should the median house buyer buy a median house in 22207.
Now for the retarded, sure they should have bought, they should have bought in any year, because it's a poor idea.
Let me tell you a funny thing, this morning my landlord was out there, shoveling ice off the steps. Kind of rough.
There is a really nice thing in letting the landlord worry about this stuff.
i'm sure that will outrage you, though, so let's stop worrying about that.
And lets think about the median buyer who is overpaying and overinvesting in the house.
So what does that median buyer do when the kids are headed to college? Sorry kids, no 529 because Dad wanted a house in North Arlington?
So what does that median buyer say when his wife wants to quit working and stay home with the kids?
Those median buyers, are essentially fucking themselves by lashing both adults to the wheel of the mortgage.
And the place I bought in DC is a bellweather. Being able to buy a place inside the beltway for less then 250K?
See, you rant on about Arlington, but, DC is according to Harriet's stats, the Real cinderella story.
you want good median stats? look at DC. I have a neighbor who bought a reno'd version of my place for 390K.
i bought one for half the price of his just a little later.
really, why don't you look at DC, a bit and rethink your story.
"Pat said...really, why don't you look at DC, a bit and rethink your story."
Because its YOUR story you idiot!
Chapter I (at the bottom)
"pat said...
Before people start crowing try and remember the
big problems out there.
1) the primary cause of the bubble was Low INterest rates and whacky mortgages.
2) We are in a Zero interest rate environment now.
3) There are a tremendous amount of condos sitting empty in arlington (Ballston, clarendon VS).
4) there are a lot of 5/25s, IO's and Neg-Am mortgages still waiting to go bust in DC, Mont
and Arlington.
Don't start crowing about arlington, i'd rather view it like an avalance about to happen.
3/19/09 4:42 PM
Chapter XXXVI (3 days ago)
pat said...
http://money.cnn.com/2012/01/18/news/economy/world_bank_recession/
but don't worry, Arlington always appreciates.
1/18/12 11:40 PM
Nearly 3 years later, you continue to trot out some largely irrelevant parade of horrors as if that will somehow make the early 09 bottom, (far far above anything you thought possible), go away.
Years ago, seeing how far you were behind reality (i.e. I was coming to terms with the bottom being here, while you calling for an avalance) I asked you when you would call it, and you said you would eat your Arlington crow, by 2012 at the latest.
3 years ago you put your crow in the oven. You could have taken it out at any time and eaten it. Medium rare in 2010, Well done, in 2011. Now overcooked. Its now sitting on your plate, and unsurprisingly you dont want to eat it. Somehow thinking that by changing the subject you will make it go away. Yet, it sits there, getting less appetizing by the minute.
Look, its your choice Pat. There is still a miniscule chance that Arlington implodes, drops 37K in appreciation and 69K in rent (and running) to make waiting the all these years the better choice. If that happens, I will gladly snatch that crow away and eat it for you. Youve seen me do it. When kevin was right and I was wrong, I loudly ate my crow for all to watch. If it somehow happens here, given how much shit I have given you, I will have to eat a few humble pies too.
Still it seems to me, the better choice is to get it over with. If not, I will check with you next month, and again, and again, and again, to see if your ready to call it yet.
So again, ready to call bottom, yes or no?
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