Tuesday, May 15, 2007

Real Estate emotions May update

Folks, this will be my last posting until a mid-June post honeymoon. :)

I like to update my "real estate" emotions about once a month. This has been tracking the investment emotion cycle.

Without further comment:

A review of investment emotions.
1. Optimism
2. Excitement
3. Thrill
4. Euphoria (market price peak) Peaked in late 2005/early 2006
5. Anxiety (I'm a long term investor, not a speculator.)
6. Denial (Reached in October of 2006 until mid-May of 2007)
****7. Fear (Reached in mid-May of 2007). *****Just entering****
8. Desperation Predicted for July/August 2007
9. Panic
10 Capitulation Could it be summer 2008?
11 Despondency (start of market price bottom)
12 Depression (end of market price bottom) Not before summer 2010
13 Hope (hey, this investment has picked up off its bottom)
14 Relief (Its almost what I paid for it...)
15 Optimism (cycle starts again)

I haven't updated a single time frame. I'm happy at the previous predictions.

Here is the last real estate emotions thread:

Basically, Joe Sixpack is getting a bit worried that he's stuck with what he bought. It might be an investment... it might be an overpriced primary residence. It doesn't matter... he's worried.

The media has now bombarded him with just enough press to create a sense of doubt.

Don't mistake this for Desperation or Panic. Every coworker, when told real estate has entered fear, started to describe the later states.

Fear is marked by a willingness to discount a home a small amount.
Fear is marked by buyers hesitating a few more weeks before making an offer.

If you read the HBB, you consider Fear not even a good start. You might even consider a late stage of denial (well... it is!).

The spring buying season was mostly a flop. Some areas did ok, but people are worried the contagion will spread to snob hill.

I reiterate that anyone who reads housing bubble blogs who buys before Fall of 2008 is insane. The only question is will the bottom be in 2009, 2010, or 2011? I'll admit there is a chance of 2009... but my vote has shifted to 2010 or 2011.

Sit back, relax. Heck, even ignore the housing blogs for a bit. The weather is great. The advantage to us... is to do *nothing* but rent. :)

Now what quantifiable things changed?
1. See coworkers retire at an even faster rate (to cash out home equity)
2. Retirements are at rather young ages. (42?!? Ok... one exception)
3. The cockiest "real estate always goes up" a**holes have finally moderated their comments.
4. The complete lack of fear in "non-buyers."
5. Coworkers/friends are talking about buying... in 2009 or 2010. (Non-HBB'ers.)

With 14 distinct emotional states I admit the lines get blurred.

But sometime in the last week we left denial. I still do not expect more than Desperation in 2007. Cest la vie.

At T-minus 4 days to my wedding, I'm signing off for a month from the blogging world.

Got popcorn?

Sunday, May 13, 2007

What price freedome?

This is a totally non-housing related post.

What price do you put on freedom? I just discovered that it can be quite a bit. Why? A relative of my fiancee' had given her a gift of cash in the past and was holding it over her (and my) head(s). In an argument tonight (it is 3am, just finished), we finally asked "how much?"

I just wrote the third largest check of my life to buy out of an "obligation."

The largest was a down payment on a house (sold pre-bubble... damn! At a small loss too.) :(

The second was to buy my BMW, cash on the barrel. :) 145k miles later, I'm happy with it. (but warning, the maintenance is too much. But I will keep it another 100k engine/transmission willing. FUN car.)

The third was tonight. Ended the argument and dis-invited the person from the wedding (they were making a fuss over new guests we "had to fit in to the wedding.") Ok, funny, the spouse (+ "guest") is still invited (love the spouse... yea.. life throws curve balls...) , so the person will still be there. But under our terms. ;)

Make no doubt, there was a debt of gratitude owed. The person had been generous. Now paid in full. Every red cent. Ok, I have to scramble to the bank tomorrow to make sure no wedding checks bounce, but all is ok. Did I mention I'm a saver. ;)

Did I have to pay the person? No. Not even when my fiancee' asked me to whip out a check. (We had been paying wedding vendors all day... Due to a trip, I was behind paying my share, so it was time for me to pay for everything at most of the vendor "finals". Can we say OUCH!).

So somewhere someone is going to stimulate the economy whom has no belief in a housing bubble. Even then, I feel better. (I Can't believe it, it takes me weeks to work up to spending $500, normally.)

Bedtime is now coming (had to wind down). Its sort of fun knowing I've rewritten the rules. We left noting, its a new day.

I cannot ever tell you who I bought out.

They say a wedding is a new start. For us, in more than one way, it truly will be.


Six days to go until the wedding! Expect one more post and then nothing until mid-June. (We're doing a proper honeymoon.)

Friday, May 11, 2007

Early retirement

I've posted before how some of my coworkers are retiring early; they're cashing out on their California real estate and moving to parts less crowded. That trend seems to be continuing; however take that with a grain of salt. My work is seeing a pension change, so perhaps its just people jumping ship while they can (there is a year or two "penalty" for not jumping ship now).

But what is new and shocked the heck out of me... a co-worker in his 40's has announced his retirement. How? Why? Simple, he bought a home at the right location in 1995. Now... he's selling (hasn't sold, yet) and will use the $1M profit to assist his retirement. OK, there are mitigating circumstances (his child survived a serious illness that scared him silly). So they will become a "stay at home couple" in an uncrowded suburb in another state. Any one else seen this? Is this a one off? He'll be able to get some consulting work later I'm sure...

All I can think of is "unintended consequences." The equity (or perception of equity) is driving people to make rash choices. Not that I disapprove taking four to five years off to spend most of the day with a child during the years the child will still idolize the parents... But I do wonder at the situation that makes this possible.

Got popcorn?

Thursday, May 03, 2007

Net Worth Killers

CNN's Money is doing a series of "net worth killers."

#2? Buying too much house:
Gee, never would have thought that...

And who wrote #6?

Sell the house, rent, and live off the income? Ok, fess up, who of you writes for CNN?

edited with hyperlinks (yea... Neil was slow to implement)

Got popcorn?