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<p>IR,</p> <p>Don't you think that lower cap rates are justified by the fact that real estate tends to appreciate at about the same rate as inflation? It seems like this should matter even for conservative investors. Unlike putting your money in a bank, your "principle" here is automatically...

<p>reason,</p> <p>How much did a new Corolla cost to lease back then? I bet it was a little less than half of what it costs to lease one today...</p> <p>To answer your question, the reason prices are considered inflated today is because they have gone up so much more than inflation and rent...

<p>Assuming that the Case-Shiller HPI for LA metro (which includes OC) is representative of OC, and that rents have increased approx 5% per year since 1997:</p> <p>It would take a 58% fall in peak 2006 prices, minus rent increase between 2006 and market bottom, to return to the 1997 price/rent...

I was still in college. By the time I had a stable and high enough income to think about buying, I couldn't afford to buy anything near as nice as what I could afford to rent. Thankfully the critical reasoning skills I picked up in school allowed me to discern the difference in quality of the...

<p>Irvine_native and nirvinerealtor have a point: there are several problems with using incomes to predict how low prices are likely to go. The biggest issue I see is that the desirability of an area is only moderately correlated with the incomes of the people who live there. Different cities...

<p>I wouldn't buy. 30% off peak prices is still leaves you with a price/rent ratio that is way out of whack. Speculative bubbles don't halfway correct, they go all the way. So the way I see it the only way for nominal prices to "only" 30% is if we have some pretty massive rent inflation in the...

<p>marty,</p> <p>Perhaps you could share with us some links to investigative material from a reputable source that documents the racist associations of the Minutemen?</p>

<p>irvine_native,</p> <p>Didn't mean to imply that you are a spendthrift or that your purchase was on impulse. If you have been reading housing bubble blogs for many months than obviously there is some serious thought behind your decision. And, um, yeah, I know that bigger != better. "Better"...

<p>irvine_native,</p> <p>The point of waiting is pretty simple: to get more for your money. Potentially saving hundreds of thousands of dollars (or getting a much better home for the same $$) is a really big incentive. I plan on watching the leading indicators and buying once it looks like...

<p>Spend it. Travel and see the world while you are still young. Have experiences. <a href="http://www.chicagotribune.com/business/yourmoney/sns-yourmoney-0617spending,1,7822245.story">Make memories.</a></p> <p>Worry about buying a home later, after things blow over.</p> <p>And check out <a...

<p>TRock,</p> <p>Whatever you do, don't let sunk costs affect your thinking. What you paid and whether you would take a profit or a loss is not relevant if you are trying to make the best possible financial decision.</p> <p>Try turning the question around this way. If you didn't own this...

<p><a href="http://en.wikipedia.org/wiki/Straw_man">http://en.wikipedia.org/wiki/Straw_man</a></p> <p>'nuff said</p>

<p>"The appreciation will allow you to upgrade to the home..."</p> <p>reason, I don't think this strategy is going to work very well. Maybe I am missing something?</p> <p>If the condo appreciates, won't SFRs be appreciating too, keeping them <a href="http://pricedoutforever.com/">forever out...

<p>I saw this excellent post on another blog from a young man in similar circumstances. He realized that there is no reason to give up hope once he understood what is going on.</p> <p><em>I graduated from law school in spring of 2005, and got married that fall. My wife and I got a lease...

<p>"There is no direct relationship between price and rent."</p> <p>Wow. I swear I just heard the collective gasp of just about every free market economist who has every lived. </p> <p>If rents have no relationship to prices, why do nicer homes tend to both cost more and rent for more than...

<p>It's fascinating how many people see such strong parallels between this issue and the housing bubble. Time and time again it seems like a vigorous global warming debate comes up in housing blog forums. I wonder why exactly that is...</p> <p>Suzanne's Ex, I personaly have looked into the...

<p>vtech22a,</p> <p>How many children are you planning on having? Unless it's more than 2 or 3 I don't see why you would be uncomfortable with where you are at now.</p> <p>If you are pretty sure you want to upgrade to a larger place, then your best course of action really depends on where...

<p>nirvinerealtor,</p> <p>I wasn't trying to impune the veracity of your claim. It's just that the statement "These recent solds increase up to 12% since late 2006 pricing" is vaguely worded and I wanted to know precisely what you meant. Thank you for clearing it up for me.</p> <p>Permabear...

<p>"Permabear" - interesting.</p> <p>I have been reading bearish bubble blogs like crazy for the last 2 years, and I don't think I have once seen a post by someone that fits this description.</p>

<p>nirvinerealtor,</p> <p>Thanks for the reply. I know how to calculate a percentage... what I meant was, do all 5 of the homes have a sale in late 2006 as well as a sale at the time you specified? Or are you using other properties w/ similar characteristics that sold in late 2006 as comps? If...