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Re: RE bubble bust on the horizon, now what?
Old 08-31-2006, 03:18 PM   #21
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Re: RE bubble bust on the horizon, now what?

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Originally Posted by Scrooge
Next on the agenda: about a hundred (very) old computer and science books that I will never touch again.
Oooh.* *If they're pre-1975, send me a list!* *My collection compulsion in this area is pretty extensive.
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Re: RE bubble bust on the horizon, now what?
Old 08-31-2006, 03:23 PM   #22
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Re: RE bubble bust on the horizon, now what?

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Originally Posted by Nords
Sam, you either have a wicked sense of sarcastic humor, or you're one of those guys who runs the streets of Pamplona waving red flags at the bulls.
It sounds like a compliment, so thank you *

Anyway, thank you all for your input. *I must say I'm very surprised at your responses. *I anticipated "sell and rent" from the majority. *Turned out that Scrooge and I are in the minority.

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Re: RE bubble bust on the horizon, now what?
Old 08-31-2006, 04:08 PM   #23
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Re: RE bubble bust on the horizon, now what?

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Originally Posted by Scrooge
I don't think you understand. I could only wish I had 3,000 books. I bought this house 13 years ago because I had 8,000 books then and needed more space.
Back in the day I used to drag books arouind from place to place. I finally went cold turkey and donated all but a few to a school book fair. How about vinyl LPs? I lost a large collection in a hazy period I try not to think about but DW had hundreds when I married her. When we noticed that we were only listening to CDs I moved the whole lot to the back of the basement. An unnoticed leak, followed by mildew took its toll and I solved the problem by tossing the whole pile. DW didn't understand and still gives me grief 15 years later
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Re: RE bubble bust on the horizon, now what?
Old 09-01-2006, 05:09 AM   #24
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Re: RE bubble bust on the horizon, now what?

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Originally Posted by brewer12345
So you sleep in the car, then?
I'm only allowed in when my DW (and both dogs) allow it...* : : :
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Re: RE bubble bust on the horizon, now what?
Old 09-01-2006, 11:24 AM   #25
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Re: RE bubble bust on the horizon, now what?

I'm going to go out a limb here and say "stay put". What difference does it make what value it is, especially if it's going down - less taxes, etc., if you have to stay put anyway. You have to have a place to live.

It's not like the landlord is ever going to reduce your rent when you sell and move elsewhere. Over the time period, you'd be paying the same rent for a lesser value house/appartment.

Like Nords said, "double down" and buy another when the housing market is at its low.

-CC

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Re: RE bubble bust on the horizon, now what?
Old 09-01-2006, 12:48 PM   #26
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Re: RE bubble bust on the horizon, now what?

I think it all depends on what you do with the equity from the sale. If you invest it in fixed income instruments you will have a sure gain of 5+ percent over the next 5 or so years. Weigh this against the for sure (crystal ball 100% accuracy) loss over in potential equity over the same time period. Selling and moving costs may not exceed your potential losses over this time period.

Do the math. How much would you really lose if you sold at the bottom vs how much would you really make if you sold, moved and rented while investing whatever you were left over after all these expenses? If the math works for you (don't assume a stock market gain unless your crystal ball is tuned to this also and if it is...sell everything and buy into the market), then go for it. If not, then it is only a loss when you actually sell later on. By the time you really want to sell the market might swing back up and your potential loss could be zero vs what you would have lost by selling and moving.

The only right answer is the one that works for your situation and your tolerance for risk.
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Re: RE bubble bust on the horizon, now what?
Old 09-03-2006, 10:02 AM   #27
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Re: RE bubble bust on the horizon, now what?

'Course you could do what we'll probably hear more about down the road ... load on a HELOC to the max, borrow out as much equity as possible, move, change your name, and pocket the cash. Voila ... liquid, no closing costs, no tax impact (since you've gone outlaw anyway).


No, just kidding.

But, I'll bet if we go through a significant downturn, we'll soon hear about HELOC's being called or at least new appraisals being required.
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Re: RE bubble bust on the horizon, now what?
Old 09-03-2006, 10:43 AM   #28
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Re: RE bubble bust on the horizon, now what?

Quote:
Originally Posted by wab
I too have thousands of books, but it's not rational. I rarely refer to 99% of them. I might save a few for my kid. But I can't figure out why I keep the other 3000 of them. Maybe I can burn them to keep me warm if we run out of fuel.
How about a book sale at a local library? Every month or so, the local library holds a book sales.
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Re: RE bubble bust on the horizon, now what?
Old 09-03-2006, 11:09 AM   #29
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Re: RE bubble bust on the horizon, now what?

The house you live in is your home and should not be something you trade like a stock or commodity. I have a friend who sold his mortgage-free house in California 2 years ago and moved his family into a rental in order to wait for the bottom to drop out at which time he intended on buying back in. Well the market continued up for another 2 years and now he has to move out of his rental because his landlord has decided to sell the rental because he sees the RE bubble bursting. So my friend is going to have to put his family through the hassle of another move. There is a certain amount of instability that comes from renting.

Stay put unless you have some other good reason move.
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Re: RE bubble bust on the horizon, now what?
Old 09-04-2006, 03:42 AM   #30
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Re: RE bubble bust on the horizon, now what?

The answer is it depends. First, is your house a 100k or 300k house? That's the difference between losing $18k and $54k. Second, what is the rent rate for a similar house in your area?

Let's assume you own the house free and clear.

If you have a $100k house and rent is $500/mo, then you will spend $500X48 months renting which is $24,000, but lose only $18k in equity. Renting here doesn't make sense.

If you have a $300k house and rent is $1000/mo, then you will spend $48,000 renting, but lose $54k equity.

So you can that it really depends on the rental market and the amount of equity you many lose in the next 4 years.

As far as moving, just rent a house in the same neighborhood. Kids go to the same school, same drive to work, same friends, etc...

I think you'll see that a 18% drop is really not significant enough to make you sell. You will give up 6% to a realtor anyway, so you are really losing 12% which is $10k-$30k in this example. Not much variance in a home price to make a change just due to a down or stagnant market.
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