Renters of the World UNITE!
Tell us a story about a Really Fucked Homeowner (RFHO) (deadbeat neighbor, relative or something you read) who got in over their head and share it with others so we can get rid of the pro homeowner bias in the United States. Also please post this on other blogs and comments to articles. Read on to see why…
Homeownership is the “American Dream” – or is it YET another bubble? I’m an invisible renter (politically, financially and socially all renters are) who decided it wasn’t part of my “American Dream” yet society continues to lionize the homeowner at the expense of the renter.
How invisible are we? When politicians says “lower house prices hurt us all” they forget the 100 million renters that they help. Its time to wake up and realize that while homeownership is good for some its not good for all (same goes for high house prices) and public policy and perception needs to adapt to that harsh reality. Oh and if homeownership is so great why not give renters a chance to try it out by letting prices fall to their natural level?
Why am I doing this? Well to paraphrase Dean Vernon Wormer of Faber College – its time for someone to prick this bubble and that prick is ME!
Welcome to ReallyFuckedHomeowner.com where we see the dark side of homeownership and the bright side to renting as an alternative lifestyle. Please share your stories of a really fucked homeowner (RFHO) or feel free to rant about anti-renter government policies so we can get past anti-renter bias.
Please NO names or specific addresses of the RFHOs. Oh and don’t forget to let the government know how you feel. Also please tell your renter friends (or even rational homeowner friends) about this site.
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This entry was posted on March 1, 2009 at 7:19 pm and is filed under Stories with tags bryan jung, bubble, case-shiller, cram-down, debt, equity, equity loan, foreclosure, foreclosures, homeowner, housing bailout, housing bubble, lawrence summers, mortgage, mortgage income tax deduction, mortgages, refinance, refinancing, renter, renters, renting, timothy geithner. You can follow any responses to this entry through the RSS 2.0 feed You can leave a response, or trackback from your own site.
May 10, 2010 at 10:02 pm
I rent, and I’m glad I didn’t fall for the temptation of buying. Why? Get this: Where I work they are closing the plant and will send us all to other plants up to 1,000 miles away! The homeowners are trapped and are sure to become non-homeowners because of course they can’t move and with a lousy job market (when is it not lousy anyways?) they will need to take a BIG pay cut. One of these soon-to-be-non-homeowners used to bug me constantly asking me “When are you going to buy a house?”. If we both have to move long range guess who’s going to get the last laugh? (HINT: it’ll be the renter in the old cop car Crown Vic!)
April 1, 2010 at 9:04 am
Renters are uniting. Check out http://www.americantenants.com. Join us!
August 22, 2009 at 4:15 pm
Renters like me who sat out of the housing boom continued to pay outrageous rents while our incomes sat stagnant. There has been no opportunity to save like there was for older generations. We also had no opportunity to sell property that we bought cheap and profit like mad. We hoped and prayed the market would fall and rebalance to a place were we could hope to live the American dream of home-ownership. Since then everthing has been condo-ized and remains artificially inflated while also reducing the number of apartments thus inflating rent and even further reducing savings. The dream of my own yard and raising a family has been circumsized. What we once considered apartments have been converted to “condo’s” that are selling for the price of what used to get an entire house (which we still can’t afford.) This is a generational issue – our elders and venture profiteers have sold out to greed and sold the American dream to flip a profit. What happend to buying a home to live in it? I say we limit the number of properties that property corporations and developers can buy up in one town!!! Let’s not allow them to keep using housing as their new stock market! We need a serious “market correction” – which should be plummeting prices not a bail- out. People need to start living in homes again not trying to flip them – - It is the symptomatic of the American Greed Syndrome – and the already’ haves vs those who are limping along in limbo waiting for something to change. Our generation needs a voice. We are willing to work hard and we do but we need something to work for to keep us going !!!! Don’t get lost in the details – or vegeance on those who made bad or greedy decisions and are being rewarded – the real problem is we don’t have a voice to represent us. I’m ready to fight- Anyone with me ? I say Low rate loans for non-venture capitalists who agree not to sell in the next 5 years – homes should be places to live – not a market!!!! – erin
March 10, 2009 at 7:01 pm
RE: while homeownership is good for some its not good for all….
I’m living proof that homeownership is NOT good at all. I did a blog post awhile back about the fact that all a home does is suck away all of your money. So many people retorted with, “What about the tax benefits?” Well, I did the math and it turns out my home saves me less than 4 figures a year in tax benefits….no great shakes. Check it out:
http://denseblogadvisory.wordpress.com/2009/03/10/the-money-pit-part-deux-tax-benefits-for-homeowners-im-still-waiting/
March 5, 2009 at 9:52 am
We renters were subjected to attitudes, noses in the air and being treated like poor failures at the bubble-nut mojito parties. The very least we should get now is a little time to say I told you so when we turned out to be right about this bubble (duh!). Nope, Obama is gonna take our tax dollars and hand it to the bubble-nuts to subsidize this summer’s mojito parties in thier stucco mansions.
I’m really, really mad. We all should be. Every responsible person in America should be boiling mad at what the Gov. is doing to keep bubble-nuts in luxurious McMansions while we toil away in shelter we could actually afford.
March 5, 2009 at 8:30 am
[...] Tell us a story about a Really Fucked Homeowner (RFHO) (deadbeat neighbor, relative or something you read) who got in over their head and share it with others so we can get rid of the pro homeowner bias in the United States. Also please post this on other blogs and comments to articles. Read on to see why… [...]
March 5, 2009 at 3:27 am
I have $2 million in my IRA and still rent. That’s because I never wasted my money on a mortgage over the past 20 years. Also, homelessness is a myth. There are good deals everywhere for people who want to rent instead of being a slave to a mortgage.
March 18, 2009 at 7:17 pm
I have to agree with you. I saved a great deal of money by renting. I did, finally, buy something quite affordable and was able to pay outright. Now, finally, my upkeep is less than a comparable rental but that’s because I made sure that I paid the price I wanted to pay for the house and neighborhood I wanted to live in.
March 3, 2009 at 10:15 pm
[...] ReallyFuckedHomeowner.com Regretting the American Dream « Renters of the World UNITE! [...]
March 3, 2009 at 12:25 pm
I know of several people who have purchased properties and are in foreclosure. I dont feel bad for any of them. the houses lost value and they simply walked away. One of them only bought the house to impress his girlfriend. they split and he moved out a week later without looking back.
I dont feel bad at all for people who overspent. If you didnt see housing was in a major bubble you deserved what you got.
I am currently renting and will hopefully purchase in the next year or so.
I want a home because of the personal (not finacial) advantages i feel ownership has. Id like to be able to remodel to my liking, have a pool and have parties without worry of neighbors being upset. When i purchase my main goal is to pay it off as fast as possible. I think the biggest advantage someone can have in a home is just that. Buy it, pay it off and get rid of the housing expense every month. I will pay extra and work harder now so while i am able to so later in life i dont have to work so hard and can afford to save more for retirement. My fiancee and I will probably end up with a combined income of about 125 – 150k a year. If we can find a nice home that we can afford and pay possibly double payments i will be happy. Id like to have the sucker paid for in 10 years. I cant imagine how much i could save and how much nicer my life would be without a monthly housing expense.
Unfortunatly people dont pay off houses anymore. they upgrade or move around and start from scratch again. I think the “american dream” part of owning a home is that if you are smart and pay it off not only do you have time to love witout that overhead but you can sell it for additional funds down the road and downsize when you retire. If you rent when you leave you get nothing to show for it. I ahve been renting for a while now. I realized that i ahve paid my current landlord over 60,0000 in the last 6 years. Thats about 25% of a decent house in the area of Jersey I live. I would much rather have invested that into a property if the market had been in typical conditions.
I do think people who are losing thier houses should have them taken from them. Let the more responsible people get the house at a discount. Reward the people who were smart enough to stay out not those who made a mistake.
March 3, 2009 at 6:26 pm
You’re the first person, in years, who’s mentioned making double payments to shorten the term of the loan. That’s a refreshing change from the usual claptrap about trading up and moving into overpriced towns with “top” school systems.
June 6, 2009 at 6:53 pm
We started late…our last kid was 17 when we bought. We qualified for over $125000 based on 1 income (both work). We looked in the $50-75K range. Why get a huge place (didn’t want to encourage the kids to cme back! LOL). We have paid it down quite a bit… double payments as often as possible, always round the payments up regardless (set on online bill pay… we don’t miss it). I would still be renting if we couldn’t pay our place off early. Our regular mortgage is about $200 less / month than our last rent. Luckily, our area didn’t lose much with the housing fluke. I am furous about theose that are getting bailed ot for not thinking or planning ahead…what about those of us that planned? We based our purchase on 1 income incase something happened…job or health wise. Where’s my bailout? My daughter rents. Her rent went up because the owner needed to pay more (over bought?). That sucks!
June 6, 2009 at 7:45 pm
Well if this is any consolation THANK YOU for being a responsible homeowner and living within your means. The other consolation is that the current plan to help homeowners isn’t actually being used that much so no one is really getting bailed out. Its designed to help 4 million homeowners and has only helped 100,000 in the first 3 months of the program. At that rate it would take 10 years for the target to be helped and the plan doesn’t go for that long.
March 3, 2009 at 10:02 am
My friend bought and overpaid in Chicago in 2003, then held court over the rest of us through last summer, saying we were really missing out. Mortgage, assessments, taxes, and other bills run her $1600/mo. She hasn’t had a job in a year, can’t sell, can’t rent the place, and can’t find a roommate.
March 3, 2009 at 8:12 am
We climbed the ladder on the west coast, our houses number 4 & 5 both had a FMV well over 1 million when we sold. Fall of 2005 I had this sense that it was about to be over, the staggering departure from reality couldn’t be maintained much longer. The trigger for me was discovering that no one had any money, all these so-called middle class neighbors we living paycheck to paycheck, usually on credit cards. All large purchases by these families seemed to be a result of re-finances, and they tought they were smart to do so.
We put our house on the market at the end of 2005, a bidding war ensued and we made out great. Moved into a rental house. At the time there we only a half a dozen or so in a area we wanted to live and that made that a little tough (now there are more like a 100). Paid all debts, put cash in money market.
So, it’s been a fascinating couple of years. Our rent justifies a sale price for the house we live in of about $450K, our landlord probably believes this house is worth $650K in today’s market, down from $850K. Talk about denial. We are overpaying in rent the last year, and we know it…but we’re comfortable.
Beyond the numbers, I think we’ve forgotten the freedom renting offers, the ability say once or twice a year – “hey, let’s move over to so and so, I really like that downtown area” and the freedom from worry when it comes to repairs, “That furnance doesn’t sound right, call our landlord and have him send someone out to take care of it”. It’s a quality of life thing, and it compares pretty favorably with the freedom to make (expensive) upgrades and improvements in your own house. I’ll tell you the truth, once the power to customize you home with structural changes is gone, you wonder why that was so important to you in the first place.
And, the untold story about home owernship, aside from movies like the Money Pit, is the horrendous costs of ownership. Homeowners dues, property taxes, utilities cost of mcMansions and all that landscaping watering, constant repairs & upkeep, and those crazy projects that only made sense because relators kept telling you the value of home would increase by a multiplier if you just put in that custom kitchen, bath, jacuzzi, etc., etc.
And so, the craziness is over. Sobriety is pretty nice. Yeah, our neighbors look at us funny, like we are the traitors on the block because we don’t drape ourselves in homeownership debt, but we can live with that.
March 3, 2009 at 12:05 am
We’re renters in San Francisco Bay Area. We’ve always rented, never owned. Plenty of times we had friends and neighbors in the last 10 years tell us how foolish we were that we were mising out on the “new gold rush”. But thanks to simple math, and the backup from patrick.net, Peter Schiff, Roubini, etc, we knew what was coming and kept our smirks to ourselves.
Now like others above, we rent a single family home. We had to move a few times over the years when stupid homeowners lost the grip on their reality (no foreclosures, but just bad decisions on their part). But we ended up in a nice 3 bedroom in a friendly neighborhood. Its the best home on the block, and rents for less than half what the mortgage would be. We also pull in more than $200k, which goes to show again that renters are not all destitute and scraping by. In fact, by continually living below our means – and yet living quite luxuriously – we manage to put over $100k every year into cold hard cash savings. No one we know has any idea we can save like that, because they all live way beyond their reasonable means – they think we must be broke and struggling just like them. One person when I told him we bought a new luxury SUV (Hyundai) told me “no one ever gets out of debt” and yet we have NO debt because we pay CASH for EVERYTHING, including cars (which by the way we were able to buy for $7k under sticker and $4k under invoice – with cash).
So anyone that thinks well-to-do people would never rent, or that renters are scum and ruin neighborhoods, better look twice when they see us. Because chances are we have more a lot more cash than you have equity, are not tied down to a depreciaing asset, and call the landlord’s handyman when the faucet leaks (at no cost to us). This “great recession” will be easier for us to ride out than almost every other homeowner I can think of. We could have been there, if we had chosen to take on debt up to our ears. “A smart man learns from his mistakes; a wise mans learns from the mistakes of others.”
March 2, 2009 at 11:37 pm
I have been a homeowner for many years. In 1988, my company shut down and moved from California to Idaho. I sold in the summer of 1988 and prices were very low at the time. My employer didn’t pay for the move. I relocated to Idaho and rented while monitoring if our new location would be successful. It wasn’t. In 1999, the company closed down. I had no job, plenty of credit card debt and was almost homeless. I returned to California to find that the technology sector where I work was in a bubble. I did temporary work and tried to pay off my old CC debts. As a conditon of employment I was able to sleep in the office since I could not afford Silicon Valley rent. I started my own small consulting business and tried to start over. My income was now 1/4-1/3 of my previous income. EVERYONE I KNEW ridiculed me for not “buying now” or being “a renter” or list to the Realtpr lies ” I hear they ain’t making land anymore” You are a LOSER and RENTER…was the wail of most real estate cheerleaders. My old house had now increased in value 75%. I sold it to my next door neighbor because the Realpors did nothing to sell it. The bubble started in the fall of 1998. I sold in July.
I started saving the difference between my rent and my projected future house payments —if I bought a house. My strategy was that when the bubble popped in a year or so, I would have cleared up my debt and would have saved enough for a 20% down payment, so I could start over.
That never happened. Prices kept going up, and I increased my savings so that I was up to 90% of my after tax income. My new wife is saving 75-80% of her income.
In 2004, our landlord sold our dumpy duplex for $290k to an uneducated stupid flipper wannabe millionaire. This moron immediately HELOC’d the place and double our rent over night. He laughed at us for being “stupid yuppies”. I learned he took a second and bought 5 more houses and a new RED VIPER convertible. He would come by to pick up the rent check at laugh at us.
The market started to freeze by the summer of 2005, he sold our place and we moved elsewhere. He got $490k for it. We found another dump to rent, all the while eating beans and rice and saving as much as we could.
Today that old dump is worth less than $110k and has about five families living in it–and in the front yard. They are illegals and actually camp in the front yard. I saw the custom “palace” he had built for himself was for sale. They were asking “only” 600K which was 250K less than he paid for it. We had a Realtor show us the “property” and of course I had to leave my mark in the restroom. LOL
I checked county records and found he has lost all of “his” houses to foreclosure, he lost his business and he had 90k of IRS liens on the properties. LOL ROFL LOL
We now have over $400K in cash deposits in several small Credit Unions that don’t loan money for mortagges.
Yup we are losers—we rent less than 1/3 the cost of monthly PITI even today.
I called the moron up on the telephone and said GUESS WHO? dunno? we are the stupid Yuppies SUCKER. Do you need a loan to pay the IRS and stop the interest ? DENIED
March 16, 2009 at 1:08 pm
Ha, good story. The sad thing is I bet you dollars to donuts if you ask the stupid landlord he will say “no one could have known” about a “once in a lifetime downturn.” They still think it was a fluke that all their dreams and schemes went sour.
March 2, 2009 at 9:49 pm
So where to start…
I am out here on the West coast.
I have no academic or professional exprience with the world of high finance.It was never in my fanily (like, my Dad was not an accountant), so I had no exposure to it other than by my own mid life motivations.
I took up finance as a sort of hobby about ten years ago.
A heavy background in math made most of it seriously boring.
I have been strudying it consistently, yet casually, since then.
I saw this whole subprime and Option ARM iceberg dead ahead.
The bubble of all bubbles for my lifetime, at least.
Greenspan sounded like so many friends who were multimillionaires via stock options who were lucky to get a nickle onthe dollar when that fiasco unwound. So I smelled a rat when he put positive spin on the whole home ownership thing.
My wife and I found a super sweet deal on a house in 2006 that most people would have walked away from. Not abused, just minimally maintained. We were able to actually decrease our then present mortgage by moying into the present house. I insisted that we stay away from the larger over priced stuff that was so prevalent then. We spent many months fixing the new place ourselves. Two real estate agents lived across the street. They seemed a bit distant with us, and it soon became clear why. They were close to buying another house in a much more upscale (in their minds) community a few miles away. As the story goes, they bought the new place before even putting the existing house up for sale. I thought it was pure nuts but kept my mouth shut. Yet they had no need to associate with mere middle class folks like us, as they were now going to be upscale. I even watched the rental truck show up and get loaded.Then the for sale sign went up. And stayed up. And stayed up. Month after month. After what I think was maybe 6 months, they had not yet actually moved. Then the for sale sign disappeared. But they did not. Then she was no longer in her real estate job and got another paper pushing job in another soon to tank business sector. Then she offered the observation that we had seriously increased the value of our house by all of the remodeling we did on our own. I think she was envious. Bottom line, they never moved. Yet the confidence level they were so weightless from eventually vanished too. You know the market is hosed when TWO real estate agents can’t sell their own home!!! And all of this story is quite old considering what has transpired in just the last year.
Now that the finacial Titanic is scraping up against the Option ARM iceberg, I am hanging out in the life boats, thank you.
March 2, 2009 at 9:35 pm
O BUBBLETARS, BUBBLETARD wherefore art thou BUBBLETARD?
Deny thy BUBBLETWRD and refuse thy name;
Or if thou wilt not, be but sworn my lBUBBLETARD,
And I’ll no longer be a BUBBLETARD.
‘Tis but thy name that is my BUBBLETARD:
Thou art thyself, though not a BUBBLETARD.
What’s BUBBLETARD? It is nor hand nor foot,
Nor arm nor face, nor any otherBUBBLETARD
Belonging to a BUBBLETARD. O be some other name!
What’s in a name? That which we call a BUBBLETARD
By any other word would smell as BUBBLETARD;
So BUBBLETARD would, were he not BUBBLETARD call’d,
Retain that dear BUBBLETARD which he owes
Without that title. BUBBLETARD, doff thy name,
and for thyBUBBLETARD, which is no part of thee,
Take all myself.
Housing Bubble Retard = BUBBLETARD
Wait until the BUBBLETARDs begin leaping from tall buildings….
BUBBLETARD
BUBBLETARD
BUBBLETARD
BUBBLETARD
I TOOOOOOOLD YOU BITCHES waaaaay back in 2005 – but you LAUGHED at me for renting. Your ARROGANCE and greed. The fake transplant, neuvo-riche credit card taps resturant 4 dogs, look at me Im PRETEND RICH! NEUVOTARD!!
LOL!!
The neuvotards will get what’s coming………..JUSTICE!
No free lunch bitches…
time to ante up!
BUBBLETARD – BUBBLETARD – BUBBLETARD -BUBBLETARD
If ya liked it then you should put a BUBBLETARD on it!
March 2, 2009 at 8:43 pm
We have three kids and we rent and they DO have a stable home, for those using parenthood as an excuse to buy a home. We are fortunate right now. My husband has been offered a promotion which will double his salary. We have been priced out of the market for several years now. Instead of getting a crazy loan, we decided to stay put. Now that he has been offered this position, we are going to actually downsize our rental budget. We are going to move out of our current rental and find a less expensive place to rent, since rental prices are going down, I am going back to school to become a dental hygienist, and after our bills are paid off, we are going to save until we are blue in the face, so when the bottom comes, we will have a really nice down payment, maybe enough to pay off most of the property. That is our game plan. I never thought we renters had any hope, but I am finally seeing light at the end of the tunnel.
March 2, 2009 at 8:48 pm
AMEN Sister!
March 2, 2009 at 7:21 pm
I myself am a RFHO.
I moved from California to Arkansas (why…for the love of God, why???) so my husband and I could actually afford a house. Little did we know, it would end up costing us a ridiculous amount of money to maintain, and because our mortgage company didn’t tell us it was a really good idea to roll the property tax into the monthly payment, now get slapped with a $3,000 bill every freakin’ March.
So as of right now, we’re selling at a $20,000 loss just to get the hell out.
I wrote a blog post of my own doing the math that PROVES renters are way better off than home buyers, to the tune of over $195,000. If you’re bored, check it out at http://denseblogadvisory.wordpress.com/2009/02/18/the-money-pit-the-untold-secret-of-home-ownership/
March 2, 2009 at 7:16 pm
Moved 9 times in 9 yrs raising 3 boys …renting sucked…then after owning in a market that is still realistic…I had the opportunity to acquire an apartment building…Tenants either ruined the place or stiffed me (the sued)
In the mean time I remodeled repeatededly….got burned by “code officials”
and a quote for work of 800 became a bill of $3500…..Ya Oh boy…
If renters do get together the first thing they need to do is get a list of all the scumbag users that rent and find a nice hole to bury them in….I guarrantee the next call you make for an apartment wont be me answering
March 2, 2009 at 7:09 pm
This is an awesome site. I live in Charleston, SC and wait tables for a living. Over the last fifteen years, I watched my “friends” buy houses and act as if they were as wealthy as Mrs. Astor’s pet horse. I thought that I couldn’t afford a home and knew that there was no way these “buddies” were making that much more money than me.
Guess who’s been calling me to see if they can “pick up a few shifts to tide over”. I’ve had nothing but a polite ‘screw you”.
March 2, 2009 at 6:01 pm
Here’s a great one! This woman was one of the snottiest “Realtor” in Merced CA (You know, the very epicenter of the housing bust?)….Now she’s crying to Bloomberg…..
http://www.bloomberg.com/apps/news?pid=20601087&sid=aamsCEbklYoI&refer=worldwide
Ha! Even the “Professionals” had their heads up their butts, and are being swallowed whole by their own greed….
March 2, 2009 at 4:38 pm
[...] Renters of the World UNITE! Tell us a story about a Really Fucked Homeowner (RFHO) (deadbeat neighbor, relative or something you read) who got in [...] [...]
March 2, 2009 at 4:09 pm
For years people have been telling my wife and I to buy. We couldn’t afford to, and didn’t understand how they could. The more I learned about the crappy loans, the more I realized a lot of my friends were going to be in trouble. Now that’s all coming to pass.
We live in the San Francisco Bay Area as renters. Between us we make $150,000 a year. I believe in the rule of not buying anything for more than 3 times what you make in a year, and that gets you NOTHING here. We just moved out of a house we paid $1900 a month rent on, but would list for $800,000. It was a fine place to live, but I wouldn’t consider buying it for even $300,000. Now we are renting a beautiful house in Marin for $200 more. It’s absolutely huge, and in a beautiful part of the county. My hope? That things will crash even worse so I can buy it. We’ll see.
Things are only worth what people will pay for them, so I think the owners are just gonna have to put up with that. It’s a shame really, I don’t want to see anyone get hurt financially, but I knew I couldn’t buy when things were, ‘going crazy,’ and I really wonder why others didn’t know they shouldn’t be buying either.
All that aside, I think we are in HUGE trouble now. Everything I’ve read, and heard on the radio convinces me that the government is simply gonna try to inflate the bubble again.
We’re screwed, all of us.
March 2, 2009 at 12:09 pm
I have a family member that is a slumlord. He inherited shares in a start-up company. Figuring that the company would take off right away, he took out home equity loans for all of his imaginary wealth – about $1 million of leverage. He used it to build a mansion.
Not surprisingly, the company did not take off as quickly as he thought (although it looks like it’s going to soon). Now he’s filing frivolous lawsuits against the company – essentially for not making him rich fast enough. The company settled with him and agreed to pay him a salary that’s just about enough to pay the interest on his insanely moronic loans.
IMO, this is the height of irresponsibility and sociopathic behavior. The world would be a better place without this person. The situation has convinced me to support the death tax.
True story…beat that!
March 2, 2009 at 11:02 am
“How do you just pick up and go with kids?”
I live in an apartment complex and there are kids everywhere. Yes, these new parents were simply too prudent to buy, at twice the price of a typical rental. In essence, the job market’s been bad (eastern MA) for the past seven years but instead of risking a job loss, followed by a short sale, they decided to have kids and stay put, as renters. Now, despite the awful economic downturn, many of them are the least worried of the lot. It’s all the new homeowners, who’re sh*tting bricks today, as a single job loss could mean trying in the keys. So don’t fall for the parent trap of debt slavery.
March 2, 2009 at 11:00 am
Keep renting and saving up as much money as you can, because any renter that wants to become an ex-renter is going to be in an excellent position to recoup their share of the tax dollars appropriated from them to finance irresponsible homeowners, buy buying the irresponsible homeowner’s $300k house at $.30 cents on the dollar after it becomes REO;-)
Your ship is coming in soon, and in some areas of the country it’s already
arrived. Bide your time, wait another 6 months to a year – longer if prices are still falling – and then have at it. Anyone who’s saved their pennies(and still has a job, which unfortunately is another big question),
will be in a great position to buy. Maybe by THAT time, you won’t even NEED a mortgage – maybe just a 48 month car-loan-sized loan:-)
March 2, 2009 at 9:50 am
I agree with most of you that renting at the moment makes more sense economically than buying. But whatabout when you have kids and the landlord wants more money for water, heat, etc.? What do you do when the landlord asks you to move because he/she is selling the house? Or when your lease expires and the landlord refuses to renew it? How do you just pick up and go with kids? Renting for a single or even a married couple makes perfect sense. But when you have kids, the games changes. They need a stable home. What that stability may cost is worth it for the sake of your kids.
March 2, 2009 at 9:58 am
Absolutely true. The trick there is to stick with standard rental properties (apartment complexes) not single family homes that are currently being rented.
BTW, that brings up another important point that all those renting single family homes need to watch out for and that is make sure the owner of your home isn’t about to default and the next notice you get is from your new landlord, the bank. They will probably kick you out pretty quickly (much more quickly than a landlord would). So married, single or with our without kids, make sure the underlying owner of your rental property is in sound financial shape.
March 2, 2009 at 9:10 am
We are just getting started, save your $, get a roommate, take the bus, save, save, save your $. I do own, but bought a cheap home in 2002, focused solely on building equity, but still the property taxes and upkeep are just killing me, surprise, surprise, wish I was renting right now myself. Keep renting and enjoy it, also, if the economy does not completely crash out, the time for investing long term is coming, and renters will be about the only ones left that might actually have some disposable income left! In parts of the U.S. where their are no jobs, you can buy a house for pennies on the dollar or they can’t pay people to take the homes, who wants to pay all these taxes that are only going to go up-up-and-up over the next few years! In some areas property taxes are skyrocketing, effectively destroying the value of the mcmansion, one big ponzi scheme with thousands of ponzi schemes below it, as another poster mentioned, real wages are still going down too, not until things finally plane out will anyone know what anything is even worth!, comps are useless right now!
March 2, 2009 at 9:26 am
Thank you for your candid comment and I do wish you luck. The purpose of this blog (regardless of the name) is to really say that both home ownership and renting are viable lifestyle choices and people need to do what’s right for them and NOT just assume one size fits all. Just ride it out and you’ll do fine. You clearly have the President and public policy on your side.
March 2, 2009 at 8:57 am
Obama and Nancy can do everything they want to screw the renters of the nation and try to prop up housing prices (still too high) and bailout the perpetrators of mass doom on the American economy (the bubble-nuts from the bubble states).
100 million is s strong special interest group and we should band together and use that. I used to dream of owning a home and now even as prices come down I want that less and less. I am envisioning landlords on the side of streets wearing sandwich boards advertising 6 months free rent and weekly free car washes.
In CA prices are still being held up too high because the latest knife catchers are wanna-be landlords thinking they are gonna cash-flow that REO they outbid 6 other wanna-be landlords for. Wait till they see what happens to cash flow when they can’t find a renter or they have to drop the rent 30%. Same old story, housing for too many greedy Americans has become a vehicle to get the other guy’s money. The only thing that has changed is now they see dollar signs by renting to us while we pay off their loan, they day dream of selling to us the same house 15 years down the road at inflated prices. We need to break the cycle of greed that makes people think they can get rich off other people’s shelter.
I can’t wait for the day when the mere mention of real estate investing at a party has people spitting up in their mouths and when the words “landlord” carries the same meaning as sub-prime borrower carries today.
2014 will be the year of the landlord crisis in CA RE.
Rant off
March 2, 2009 at 7:56 am
I would like to shed light on an issue which irks me the most as a renter. One of the reasons for home-ownership trotted out by the powers that be is that it helps stabilize neighborhoods. Why do they always have the image of a renter as a no good, pot-smoking, apartment trashing bum? There are lots of different types of renters out there. I for one have rented a nice house with 0.4 acres around it for a pretty good sum. It still made sense to rent one when I moved into one of those high priced areas about four years back. The area I live in is beautiful; schools are great and I pay for the upkeep of the lawns etc. So why this image of a renter as a destabilizing force? I would like to run into one of those haughty schmucks and destabilize him/her.
March 2, 2009 at 8:01 am
Actually it turns out that renters tend to be somewhat socially better off than homeowners (and according to some studies they actually have more sex) and homeowners tend to fight against diversity. You can see a series of papers on this by looking under “Owning vs. Renting” on this website:
http://watchingmarcitz.com/
March 2, 2009 at 7:39 am
I had a roommate a few years ago making about mid-30′s. Couldn’t pay rent a lot of the time (even though it was absurdly cheap), but he could buy a house for nearly ten times his salary. Bragged about how rich he was going to be, etc. Refinanced it a couple times to pay off his astronomical credit card bills and buy expensive consumer electronics. Then when the bills stacked up he refied again, swimming in his magical money pot and living a lavish lifestyle on a meager salary. Of course when the bubble started deflating, he was outta there. Haven’t spoken to him since, but he epitomized homeowner greed. Just the though of someone like him getting a govt bailout makes my blood boil.
March 2, 2009 at 8:48 am
And that’s where most of the money went, into to toys for people spending their imaginary wealth in equity. They’ve now defaulted on their four-wall credit card and we all pay.
March 2, 2009 at 7:10 am
I have a good one..my husband and I saw the bubble living where we were and sold at peak and moved..yes we did buy another home…but one that was much cheaper than the one we sold and lowered all our monthly..anyway another family that we knew lets call them Mr. and Mrs. Joneses decided to move as well…they were already in the hole for 4 million dollars in loans, they lived for the equity lining. Of course, they decided to move and buy a 2 million dollar home without having even sold any of the other properties and did one of those exotic mortgages!!! Of course showing off to us how they were living in a better community than us, how we should have bought where they were..blah.blah.. Hubby and I could not figure out how the LENDERS could be so STUPID!!…we knew none of this was going to end well and distanced ourselves..knowing the blame game would soon follow…well fast forward later…1)All the properties are underwater big time 50% or more! 2)Equity Lining to solve the problem..GONE and 3)He is in the mortgage businesss…which is like non existent..4)The miillion dollar community..is millions of dollars worth of foreclosures..5.YES THEY ARE REALLY FUCKED HOMEOWNERS!!!
March 2, 2009 at 6:39 am
Been a renter since selling our Florida house in 2002. The lady who bought it for $325K has had it for sale ever since. In 2005 she was up to an asking price of $925K (No Sale!). Now she’s down to $599K and still trying to sell. Zillow says it’s worth $340K. Boo Hoo. All I know is I’m glad we’re renters because my husband just got a job in Minneapolis simply because we didn’t have a house to sell and could move quickly. Good Pay, Good Benies! But rental prices there are CRAZY high. As long as there is an out clause if he gets laid off, we’ll be okay. If you own a house, it really limits your ability to leave for a job. Poor Schmucks.
March 2, 2009 at 11:15 am
People forget that renting = mobility. We took our profit by selling our house in early 2007 and have not looked back since. Homes in our former neighborhood have lost more than $50K in value in just two years. Meanwhile, my husband and I have our nest egg in cash and if either of us loses a job, or if the dream job comes available, we can move anywhere. In a recession, this is the most wonderful form of security!
March 2, 2009 at 6:30 am
my ex-neighbors in hawaii, borrowed a couple of million against their inflated property in n.cali, bought 3 lots in our pricey subdivision..
when i was selling my house in 3/05, they were closing on the 3rd lot, and building a 900k 1000sqf, grand cottage with pool & water,fire features
they werein their early 50`s.
As i put my house up for sale, it was pure cognitive dissonance for them.
They had to come over to figure out what was going on, and as i told them its all going to end badly and i getting the %&$# out of the country with my loot, they laughed. One even condescendingly said “you`ll never be able to afford it here again if you sell now”, the other said ” you need to learn how to leverage your money”..
3 foreclosure in the neighborhood now is what i hear, and the n.cali home is still there rotting away. people got really arrogant during those times, you couldnt talk them out of buying if you tried.
The couple( mid 60`s from illinois) that bought my house asked me why i was selling, just as small talk. I told them that it`s the biggest bubble and its going to crash.
They laughed too, and probably thought they were getting a good deal as i threw in my convertible to go with the house. costs to get it off the island anyway.
To all the renters out there, you didn`t miss a thing So dont catch a falling knife, we are not anywhere near a bottom. Keep negotiating your
rents down regardless of when your contrct expires. Get together with other tenants and do it together. Scare the shit out of the owners, this is your time to be pricks.
Enjoy the pricking.
March 2, 2009 at 7:17 am
I agree…people just could not be talked out of what they were doing to themselves..and that is why I don’t feel sorry for them..everyone sat around talking about getting million dollar loans like they were 10 cents!
The Joneses couple right now that I know are living seriously in debt with a home tha is worth alot less than what the paid for it by hundreds of thousands f dollars!
That is one of the reasons I love my community..it is small with less than 50 homes and 99% of the people who bought in here COULD HAVE AFFORDED to buy the million dollar home and didn’t. They could afford luxury vehicles in the driveway and don’t.
It is refreshing to live among real people.
March 2, 2009 at 7:34 am
That is one of the things that really rattles me with these “poor victim homeowner” advocates. They whine on about how “nobody could have seen this coming.” And I’m just shocked at such a statement. This was the most obvious asset bubble anybody has ever seen. Prices don’t nearly triple in less than a decade when salaries are stagnant.
These people were warned. But they listened instead to their little pollyanna realtors and lenders, promising riches. It’s not that they weren’t duped, it’s that they allowed themselves to be duped because they wanted to be rich. Fuck them, let them rot,
March 2, 2009 at 8:45 am
I’m trying to renegotiate my lease now. I have 9 months left on a two year contract and its rather iron clad in locking me up. I can assign it, but i have to find new tenant which is impossible in this market. In fact the local market is about 20% lower to where my rent is currently. Do you have any suggestions or do I just bite the bullet and ride it out?
March 2, 2009 at 9:32 am
Sounds like you may need to ride it out but here is a bit of advice that calms me in times of wide price fluctuations in any investment (it was orginally applied to stocks) – “You’ll never get the first eighth and you’ll never get the last eighth” What it means is that you can never time the market perfectly so just be comfortable with that. Yeah, you’ll miss a 20% rent drop now but hey, I wouldn’t doubt that in 9 months rents will be even lower so even if you could lock in now at the 20% decline you’ll find yourself asking this question again when rents have fallen 30%. You’ll do fine and may even come out ahead without having to go 10 rounds with your landlord.
Another way to look at it is in 9 months it gets better. If you were a homeowner you won’t see your position improving for many years.
March 3, 2009 at 3:22 am
Give it a try. Tell them you are fucked eitherway. Tell them if they lower the rent you will stay the 9 months, if they dont then you are in deep trouble and may have to default anyway.
Eitherway they can try to collect and get pennies for turing it over to a collection agency and having a vacancy.
Make it so that they understand that its cheaper for them to
just come down on the rent now rather than face a loss that they cant collect on.
make it seem real now
March 2, 2009 at 12:28 am
The Gov’mnt is always self promoting. When Lincoln freed the slaves his accountants checked it out first and the new income tax would make us all percentage slaves. Net Net govmnt wins. Hence the govmnt promotion of ownership vx renters they want you to feel as if your a shareholder in their great corporation. You’ve actually just increased your percentage slave. Why they insist on continuing the income tax when it promotes unproductive slaves must be sheer stupidity or popular will. As in the end we the people are indeed the govmnt and we put in these asinine policies not only willingly but with threat of violent action if they don’t get inforced. All Hail George Orwell.
March 1, 2009 at 9:18 pm
I was thinking about a blog posting I saw over a year ago when I was interested in property in 89104 in Las Vegas, NV. VeryVintageVegas.com was praising a couple for “helping maintain property values” in the historic neighborhood; by essentially purchasing as asking price. I was wondering if they’re still happy about their purchase, now that the zip code is down 50%. Poor bastards.
BTW, I’m still renting.
Adam
March 1, 2009 at 1:22 pm
I don’t have any stories but I do know a great place for a lot of news on this. Go to http://www.patrick.net.