IHB hit a nerve: Proof of stage 2 of the bubble

graphrix_IHB

graphrix_IHB

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<p>I mentioned to the fellow mods here at IHB that a commenter at <a href="http://blogs.ocregister.com/lansner">Lansner's blog</a> was trying to put us down. The commenter even said that our identities should be discovered because we might be in the business and should be fired. While this commenter is under a different name the theme remains the same. While we have our fun here we wish no one any financial harm but it is people who made people believe real estate always goes up that will cause the most harm. Here is the official stage 2 comment from the <a href="http://blogs.ocregister.com/lansner/archives/2007/07/tell_us_when_will_4.html#comments">post</a>: </p>



<p>Hi Jon,</p>

<p>Welcome back - we missed you. What an awesome adventure you went on!</p>

<p>While I appreciate the spirit behind your polls, it's pretty obvious that you won't get any meaningful results due to the tremendous tenacity of the negative posters here.</p>

<p>It's not that there aren't us normal folk out here, it's that we won't subject ourselves to abuse, and therefore, read in silence. Yes, we could vote, but it's also obvious that even this simple poll has been over-run.</p>

<p>After reading the nastiness and negativity spewed here and elsewhere (IHB and the like), I am just incredibly sad that this is the world I live in. A world where posters brag about going down to the recorder's office and elsewhere, to invade people's privacy not for the purpose a negotiating advantage, but as group entertainment and public humiliation.</p>

<p>What do you suppose the goal is of those trying so desperately to talk the market down? Many will say they are looking to create bargains - I don't buy that. I have come to the conclusion that many are simply mean-spirted and jealous with a severe case of "poverty mentality". </p>



<p class="posted">Posted by: Disgusted at July 24, 2007 06:33 PM</p>
 
I can't expend any energy worrying about it. That poster is probably an underwater homeowner about to lose everything and go into bankruptcy. Why else would they get so worked up over everything?
 
<p>IHB is offering a great, previously under-represented perspective on the local housing market. The opinions may be bearish, but they are well-thought out and fairly presented. Any bias is toward truthfulness, but when the truth is a market out over the tips of its skis, it appears to be a bear bias. Anyone who makes that connection is mixing up the real cause and effect in the equation.</p>

<p>Noone has to agree with the opinions here, and I can understand why one wouldn't want to if he or she made a 2005ish conventional wisdom bet that the good times would continue.</p>

<p>SCHB</p>
 
The whole invading privacy nonsense fails to take into account that we never post any names. These homeowners are always anonymous. Perhaps the neighbors know them, and perhaps some people look up the records based on addresses and such, but we never put in the names of homeowners -- even though it is public record.
 
<p>The wave, previously thought isolated to sub-prime low end housing, has now hit higher priced homes and higher end borrowers. More will be offended. When they actually blame these blogs for <strong><em>directly</em></strong> causing / exasperating the housing decline, then we will know we are closer to the bottom.</p>

<p>"The three-month constant default rate for 2006 Alt A hybrid adjustable-rate mortgages is 2.3 percent, compared with 2.2 percent for subprime ARMs, New York-based Citigroup analysts led by Rahul Parulekar wrote in a July 20 report."</p>

<p>In other words, Alt-A is now beginning to measure <strong>WORSE</strong> than subprime. This is surprising because according to the reset calendar, subprime is still a big chunk of the resets until another 1.5 years when Alt-A then takes over as the bigger chunk.</p>

<p><img alt="" src="http://www.irvinehousingblog.com/wp-content/uploads/2007/03/reset.PNG" /></p>
 
It's clear to me that several of the posters here rely on the industry for our bread. So outing us will just show that we have been fairly pessimistic even though we rely on the real estate market to eat. A month ago I was eating lunch with my coworkers and one mentioned his house in Encinitas, which he purchased in the beginning of 2005, still had substantial appreciation. I just nodded said perhaps and continued on with my day.





Since commercial is my bread and butter I do not understand how you can make money buying a 1986 construction retail building at north of $700/SF at a 5% cap rate. Retail tends to require substantial tenant improvements (which are not figured in to the cap rate). My parent's house is a 3% cap rate at current market prices. Does that make sense as an investment? No. Have I mentioned that they should sell it? Of course. Did they listen? No. That is their choice.





These people chose to purchase in 2005 and 2006 and they made investments thinking that there would be a bounty of appreciation awaiting them. They were wrong in their investment assumptions. Those of us who advised our friends that buying at the peak of a bubble is not a sound investment have been vindicated.
 
I immediately short-circuit to the conclusion that the speaker has "wealth appreciation fantasy" everytime I hear "jealous".
 
<p>"Many will say they are looking to create bargains - I don't buy that. "</p>

<p>I don't buy it either. I think most of us are here to watch the market curmble real-time before our eyes. This housing boom/bust cycle is very unique in that it is the first time the independently-minded minority can conveniently gather in a forum and educate each other and view relatively unbiased information. Prior to the internet, people had to rely on newspapers who received lots of advertising revenues from the RE industry.</p>

<p>Oh, and we are enjoying ourselves too. We certainly aren't jealous of the homedeptor sheeples!</p>
 
<p>Sheeples ha ha!</p>

<p> No jealousy, unless you call me being jealous for not having huge amounts of debt on a depreciating asset.... then no i'm not jealous. While I'm displeased about living in an apt. I can fund my other ventures because of it.... Would you like to see my 16 unit apt. complex? How about the other invest ventures I have? I'm just not into buying things that are at LEAST 50% over priced. You know the old saying your mom had.... "just because all the other people are doing it...."</p>

<p>-bix</p>
 
<p>Speaking of money saved through renting, did you know my electric bill was $20 last month?!</p>

<p>I couldn't believe it as it had always hovered around $15-$17. Probably due to all the ice cubes I had been making that month.</p>

<p>I wonder how much it costs to cool down an entire house located inland. (I rent by the beach so I don't use AC.)</p>
 
<p>What irritates me the most about comments like this is the shear ignorance and hypocrisy of it. They only focus on the homedebters we feature and never have they ever mentioned the analytical and deeply researched posts you can find here. I just picture them squinting their eyes and rubbing their forehead complaining about getting a headache before they get past the third sentence. I am fine with people who disagree and if I ever find someone who can logically debate me I would really enjoy it. The population is growing and everyone wants to live here because it is so beautiful here with great weather doesn't make you look very intelligent. I'd have a more productive conversation about Transformers with a fourth grader. Even the fourth grader wouldn't understand home prices when in 1999 OC's employment rate was down below 3% and the weather was still same why they are as high as the are I mean were. I learned the hard way that "investments" do not always go up and from that I learned about how many millionares were created because of taking advantage of down markets. I am not a pessimist just because I am not always a bull but I am optimistic that I am more aware than these fools to take advantage of their optimism that things can only go up. </p>

<p>And no OC is not special the majority just has the ability to be in denial longer. I welcome you to stage 2 this is going to get more entertaining.</p>
 
The <a href="http://blogs.ocregister.com/lansner/archives/2007/07/tell_us_when_will_4.html#comments">comments</a> just keep getting better.
 
I read through some of those comments, when did I admit to being a twice-failed investor?





I don't even know where that comment comes from. Is failing to buy in a bubble rally defined as a failure? I call it a success.
 
It's funny that you probably never heard "disgusted" complain about all the bulls showing that they held their homes for a yr, flipped them, made $200K, and never have looked back on the OC Register's blog or for that matter anyone's elses blog. This site has been a tremendous source of education and knowledge.





I wonder if "disgusted" is the same person as "Jane" was?
 
<p>It looks like "Disgusted" reads the forums. Well when I say read it is very selective because it doesn't seem he has heard of zillow or redfin.</p>

<p>Hey Bill,</p>

<p>Could you please offer proof of homeowners in Orange County owing more than their house is worth?</p>

<p>I mean more than 1-2 examples.</p>

<p>I don't know of a single person who fits that profile. I know IHB has shown some, but they work full-time (between them) going through people's records at the County Recorder's office and elsewhere, so they are bound to find a few. (Anyone see where they say your trash on the street is also fair game, and that they could very easily purchase any of our credit reports?) Note: karma's a b*tch. You will reap.</p>

<p>Also, are you aware that ARMs/IO come in all sorts of flavors? For instance, I have a 30 year fixed with an I/O option - does that mean I am in trouble? Even with $400,000 down? Really? (Jerks: insert nasty reply about how I'm going to be wiped-out here.) So a person with a $2,000,000 home and a $1,000,000 option ARM is also in trouble? I don't know a single person who fits your profile. Where did you get your data?</p>

<p>Hey Jon, can we get average LTV data for purchases in Orange County in the last few years? That should tell alot. Since it won't reflect equity buildup of longtime owners, it will be be skewed even higher in favor of claims like Bills.</p>
 
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