Friday, November 04, 2005

Three-legged Chihuahuas and the Sleeping Lions

Here is an article worth reading (scroll down towards the end); nothing new to us "survivors" but maybe the three-legged Chihuahuas out there in the RE wild will finally get a clue. Ok, so maybe not. But I also like the fact that the author quotes a Marin County fool:

"Doug Levy, a university administrator in San Francisco, sucked $25,000 out of his Marin County condo to pay a few bills and to take a modest skiing vacation in British Columbia. "It's like I'm sleeping in my piggy bank," Levy gushes. "In this market, real estate is a liquid asset. There is no longer an incentive to paying off your mortgage. The only way I'll ever pay mine off is if I win the lottery.""

"The flip-side of this borrowed prosperity as Levy admits, is that the leveraged homeowner becomes a kind of long-term renter, never really accumulating much equity in the house he purports to own. "I'm never going to be able to retire," Levy says, "because I'll never have enough money in the bank"...And neither will the millions of other American homeowners who have mortgaged away their home equity. In the old days, a mortgage was something that started off big and slowly shrank. Now it does just the opposite."

"Because so few Americans posses so little home equity, they possess no capacity to withstand adversity. That's why a reversal of fortunes could prove so devastating...and why the next recession could be surprisingly ferocious."

8 Comments:

Blogger Marin_Native said...

"I'm never going to be able to retire," Levy says, "because I'll never have enough money in the bank"...

Hey, who needs to worry about minor details like retirement. I'm living in MARIN, God's Country! I can piss away my financial future, because great weather and good wine is all that real matters, right?

Nov 4, 2005, 4:06:00 PM  
Blogger fredtobik said...

"I'm never going to be able to retire," Levy says, "because I'll never have enough money in the bank"...

That guy could be dead already.

Some people live for today, there are a lot of hippies or x hippies in Marin.

I think there is one person posting on these boards with various ID's. Probably a bitter RE investor, or a poor 3rd gen Marinite.

Nov 4, 2005, 4:24:00 PM  
Blogger marin_explorer said...

I think there is one person posting on these boards with various ID's. Probably a bitter RE investor, or a poor 3rd gen Marinite.

I'm curious, what's with all the ad hominem?
And what are your creds re Marin, that somehow you can dismiss other views? Geez.

Nov 4, 2005, 4:31:00 PM  
Blogger Marin_Native said...

Reskeptic:

Agree 100%. Sounds to me like he's trying to justify his reasons for moving here.

Nov 4, 2005, 5:17:00 PM  
Anonymous Anonymous said...

Ad hominem is pretty standard for people who are on the defensive.

Nov 4, 2005, 6:33:00 PM  
Blogger fredtobik said...

I have been posting here for some time, and the argument and data to support it has changed significantly, which makes me curious. Why?

I added bitter RE investor to the list after a recent article was posted. Also, keeping bitter 3rd gen Marinite in there, because I have a hard time believing anyone who has LIVED anywhere else wouldn't agree Marin IS a great place to live.

Nov 4, 2005, 7:59:00 PM  
Blogger sf jack said...

fred -

Nobody has said Marin wasn't a great place to live.

It's just that right now, it's anything but that if you're looking to be a homeowner any time soon.

Currently, it's simply overpriced. Some day the market will be more rational and whether it happens suddenly or over a number of years - it certainly *will* happen.

And only then it will be a great place to be a homebuyer again.

Nov 4, 2005, 8:52:00 PM  
Anonymous Anonymous said...

good old doug. like socketsite said a couple months back: "damn it doug, stop consuming real estate".

Nov 7, 2005, 2:55:00 PM  

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