Potential RE Shills on these Forums

NEW -> Contingent Buyer Assistance Program
<p>I thought I would turn the discussion "inwards" on the posters on these forums and at least make some guesses on which posters are potential shills for the RE profession. I am not a big fan of McCarthy-esque exposes but sometime you have to separate the "wheat from the chaff.</p>

<p>My first guess is "charlesriver," a poster on the Avenue One forum...</p>

<p>Bring it on!</p>
 
I suspect you are right. It is possible he was simply parroting what he heard a real estate agent say, so I tried to give him the benefit of doubt.
 
<p>OK, in the interest of being "fair," here's another post on the Watermarke forum that he (she?) started a few days ago:</p>



<p><em>"thanks a lot! The things is we have a big house an hour away from Irvine, which is too far away from where we works. After driving a year, feel like it's really a waste of time. We like our house (large part of the reason being we would pay double price to get a similar one in Irvine), so we don't want to sell it. That's why we want to find some small place to live during the weekend. economially renting probably be better, but emotionally my husband couldn't stand the idea that we have a house and we pay rent again."</em></p>



<p dir="ltr">This goes to show that she might not be a RE shill (reasonable doubt). But the post does look a little dubious, agree?</p>

<p dir="ltr">Alright, who's next?</p>
 
IRVINITEEEE,





I think your initial exuberance when you started posting seemed a bit like a realtor trying to sell product. Very few people at this board are going to buy anytime soon because there is a shared consensus that housing prices are too high and likely to fall. People who pump the market stand out here, and REIC trolls are wasting their time trying, and they waste our time when we have to read their drivel.
 
<p><em>"OK. maybe i shouldnt be as enthusiastic ?"</em> </p>

<p>That's what you can suggest to your sales manager the next time there's a meeting called discuss "non-traditional" techniques to drum up business and get the good word out about how now is a good time to purchase.</p>

<p>SCHB</p>
 
<p>This is what I don't get: When a "poster" has finally bit-the-bullet and purchased a home, aside from a recap of their experiences, negotiating, prices, etc., I'm not sure what they are still doing following a forum that describes the difficulties of the housing market. The participants of this forum are transient in nature, because the forum only exists to provide information to people that have yet to make a decision - so that they can hopefully, make an informed decision. Continuous and subsequent justification after making a decision really does lend support to the "troll theory." Anyhow, MSNBC's news ticker just said something about 2006 home sales as hitting a 16 year low?! Hmm, could that be another sign of inflated markets?</p>

<p>Side note: I am hoping for an rate increase from the fed.</p>
 
<p>GrewUpInIrvine: "<em>Side note: I am hoping for an rate increase from the fed."</em></p>

<p>Attaboy! Man after my own heart! I can't wait for banks to charge more interest on loans so that they can pay me even higher cash interest on savings.</p>

<p>Any other trolls out there?</p>
 
<p>Fed meets when? End of the month? Come on 5.50%! Woo-hoo!</p>

<p>While everyone is making their Superbowl plans, I'll be counting my t-bills and rooting for 5.75% next month.</p>

<p> </p>

<img alt="" src="http://www.garmentdistrict.com/store/popculture/southpark/magnets/southr.jpg" />
 
I think there are some people on this forum that are somewhat in the middle and are researching it. So...to that extent, I think it's informative for those of us who did buy and who do believe prices will continue to go up as the rich get richer and the poorer get poorer in OC and other places and to share our thoughts on why.
 
"those of us who did buy and who do believe prices will continue to go up as the rich get richer and the poorer get poorer in OC and other places"





This is one of the reasons people will enjoy the coming price declines. The smug elitism of this statement brings out the schadenfreude in the lower classes.
 
<p>2 edits later ...</p>

<p>Look, we've had some good and informative discussions over the past few weeks.</p>

<p>Sometimes the smug elitism of the permabears gets a little overbearing too. (Watch and wait and when the market crashes, haha I told you so)</p>

<p>We've all agreed no one here is trying to make a quick buck flipping their homes. (right?)</p>

<p>The stats are out there. Listings are high. Foreclosures have skyrocketed. People who got into "stupid" loans are beginning to pay for their greed. Falling knives caught. Prices dropping. I actually have the blogs to thank for discovering how much idiocy and fraud is being committed out there in the RE world.</p>

<p>The purpose of the forum is to provide information - on prices of homes, on quality of lenders, on the neighorhoods in question, and also on statistics - to educate those trying to make up their mind. And from what I can tell, it has helped quite a few people who are (were) on the fence.</p>

<p>However,</p>

<p>People who have made their mind to buy, will buy. They don't need someone to bash them for being such an idiot to buy a home and throw away their money. </p>

<p>People who have made up their mind to rent, will rent. They too, don't need someone to bash them for being an idiot to sit the market out.</p>

<p>That's (hopefully) not what the forum is about. Can we be civil to one another and not assail each other's intelligences? This is beginning to look like a Democrat vs Republican debate, or an Atheist vs Christian debate. Those who have already made up their minds will only agree to disagree. Let's stick to the facts. Please.</p>
 
<p>Fraychielle:</p>

<p>I think we mean well. Personally, I am trying to reason with people who are going headlong into the most expensive venture of their lives without giving adequate consideration to "rational thought". This is not a soapbox for me. This is a "bully pulpit" in the truest sense of the phrase. By "converting" or convincing one more individual to not make financially disastrous decision to buy a home in the current market, I believe I am doing good in a society gone stir crazy about homeownership regardless of the stakes, and without paying any heed to consequences for most people not in one of the categories you describe (the vultures, flippers, foreclosures, panic sellers etc.).</p>

<p>Look, almost everyone I have met, including the worst of the permabears, are bullish on housing in the long term. They are just irked about the disconnect between current prices and reality, and have turned into cheerleaders for a fall in prices from current levels.</p>

<p>So in answer to your missive, the facts are this: Anyone who is buying today will be burned by falling prices <em>for certain-</em> IF he or she is impacted by a very possible recession later this year. This is a very likely scenario for anybody who works in industries that heavily depend on "consumer sentiment", or anyone who is fortunate enough to work in an industry which directly depends on the RE industry (including builders). So you may have people who have secure enough jobs (in the gov't for example) that maybe in shape to ride out the decline, but a vast majority of people do not know, are completely clueless about what the possible impact might be of this decline.</p>

<p>Consider this example to clarify my thoughts:</p>

<p>Most people who are considering a purchase are still looking at 80 + 20 financing (i.e. 100% financing with 80% conforming loan + 20% with a mix of I/O and other ARM or balloon type loans). Let's say our friend CK likes a house and agrees to buy it for $700,000 today. He is 100% financed, with money enough probably just to take care of the closing costs. His monthly payments will look approximately look as follows:</p>

<p>P&I on Loan #1 - 80%: $3,700</p>

<p>Loan #2: 10.5% amort over 30 years, balloon due at year 10: $1,300</p>

<p>Effective Taxes @ 1.8%: $1,050.</p>

<p>HOA etc: $250</p>

<p>Total monthly recurring obligation: $6,300.</p>

<p>Most likely he and and his spouse make enough to cover their monthly obligations. Keep in mind that the rent on such a new townhome or yardless SFR at VoC is probably going to be no more than $3,000/ month.</p>

<p>If the property declines 10% in value (a conservative estimate), it will be worth $630,000 in January 2008. If CK or his spouse (heaven forbid) loses a job because of one of the reasons mentioned above, and therefore may not be able to make their monthly obligation and may have to sell. (Keep in mind that a $3000 rent of it increased by 10% (unlikely but possible) would still be $3300. Not enough to rent it out and stay cashflow positive.)</p>

<p>So the option is to either (a) sell this house and pay off the loans, or (b) foreclose/default on the loan. If chosen to sell, the damage is obvious, it would be around -$70,000 price drop -6% selling cost, + any principal paid in 12 months or a total of approximately $105,000.</p>

<p>If you are in a postion to ride out such a scenario, more power to you. Most people are still grappling with the affordability gap and are trying their best to make enough to "qualify" to own a $700k house, but just barely. The cash cushion in just not there. How many people do you know who will confidently say: my monthly expenses are $6300 for housing, + $4000 for the rest, and I have 12 months cash cushion, i.e. $120,000 in the bank?</p>
 
<p>I agree with the notion that posts on these forums should be civil and factual. I do think however, that many members wonder about the authenticity of certain participants. One thing is certain, it is less likely that a housing bear is mascarading on this forum than a housing bull.</p>
 
<p>Crucialtaunt: Well, you definitely nailed down our situation well. Good incomes, enough cash on hand to cover closing costs and maybe 5% down (so yes, save the cash and go 100% financing). Your monthly outlay analysis looks very similar to my own. At worst, I am expecting $2500 when we renew April 1.</p>

<p>Your only flaw is in the estimate for monthly rent. Last March we lucked into a 3/2.5 townhome in an IAC complex in Westpark for only $2280/mo - with a whopping $200 security deposit cash outlay. Our unit was completely renovated/updated immediately before our move in...Everything inside was brand new with all the requisite granite in kitchen and baths (and FP mantle), wood laminate on ground floor, brand new appliances, etc --- Looks as good inside as most of what we see in Northpark. </p>

<p>My point is that while yes, it flat out sucks that two accounting professionals making north of $175K live in an "apartment", now is not the right time. We REALLY want and are ready for a home right now. That said, the homes we WANT list for at least $900K right now. What we can GET in our comfort zone of $700 - $750K is not a whole heck of a lot better than what I describe above....And for at least $3500 more a month? No way. As I read what I just typed, I cannot believe that I had myself talked into the fact that I needed to jump into this market --- and came really close to doing so. Whew.</p>

<p>Unfortunately for us, we were in heavy relocation mode when this boom happened (4 moves between 2001 -2006), so buying was not much of an option. Now that we are really ready....well, you know. Such is life. Reading this forum has really helped put it into perspective for me....Thanks to all for your insight. </p>

<p>So it looks like one more year of calling the maintenance guy every time a kitchen light burns out....that's no so bad, after all.</p>

<p> </p>
 
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