Bear Vitriol: “I personally know over a dozen uneducated blue collar people that can now survive on their measly 45k salaries because their homes have doubled, and even with a correction, will still be far ahead of the bears.”

Here’s  Continuous Burn at vancouvercondo.info 26 Jan 2010 12:02 pm

“We all thought we were smarter than the “greaterfools” that ran out to buy in a supposed “bubble.” Four years later and the majority of those greaterfools have received paper equity gains that the average bear will never see in his lifetime, and if they were to cash out or have cashed out, have earned once in a lifetime gains. The funny thing is that a bunch of uneducated blue collar people and immigrants who were told that RE was the best investment have done the right thing, and have reaped the rewards. The educated ones that have conducted market analyses and adhere to perceived “common sense” have been left renting for years, and will like continue to rent for many many many years to come as this thing slowly deflates. I personally know over a dozen uneducated dolts that can now survive on their measly 45k salaries because their homes have doubled, and even with a correction, will still be far ahead of the bears. Some have made hundreds of thousands, which would take a lifetime for savers to make by saving and investing that “renter’s premium.” They have more equity and cash than those earning close to six figures and will come out far ahead of the prudent savers and market timers.” [Only if they actually cash out, and how many do you know who are doing that? -vreaa]

4 responses to “Bear Vitriol: “I personally know over a dozen uneducated blue collar people that can now survive on their measly 45k salaries because their homes have doubled, and even with a correction, will still be far ahead of the bears.”

  1. The problem with this argument is that anyone who made paper gains of this boom really doesnt have anything to show for it. They have something worth more money, however they cant spend or invest that money unless they sell (assuming they dont get HELOCS, which doesnt really make much sense unless you are using it to pay debt with a higher interest rate).

    If someone bought in 2000 and their place doubled in value, do they really care? Unless they sell and move to a place with cheaper prices, or sell and rent it doesnt really matter to them. Moving around Vancouver doesnt do much because you still have to pay the same inflated prices that you used to sell your house.

    Most people wont sell and rent because they bought in order to own. If I was 35 with kids and a paid off house I probably wouldnt sell and rent. At the same time I wouldnt panic if the value starts to drop because I bought it to live in.

    The issue with this argument is that it does not make any points on why buying now is a good idea. It says people who bought before did well. Hard to argue with that. It just seems to be making fun of people who could have bought a few years ago. It doesnt really bother me because I was in school and had no option to buy.

    If we return to sanity in the next few years and prices are the same as 2000 (inflation adjusted) then the only people really getting screwed are the people who bought in the bubble.

    If I buy I would be happy if the place’s value increases with inflation. Since I dont see that happening over the long term I see no reason to buy.

  2. There are a lot of Bears that did well over the past decade. The definition is relative to the time. I was a Bull from 1999 when I bought a place but really didn’t consider my position either way until I planned to move up in the market in 2009. I only became a Bear in relation to the current market conditions however at some point I am sure I will be a Bull again.

    I don’t engage in real estate speculation so I operate on a longer time line. I have to look forward at least 3 or 4 years so that is the difference. I felt I was better off re-financing so that is what I did.

  3. I find it amazing how hostile people get with the topic of real estate.

    As far as RE I was to late to the game (Mid ’07) however there are lots of other things to invest in that have done good….. For instance stocks, bonds, commodities. But, in order to make money and keep it you actually have to do a lot of reading, understand how things work and keep up with it. Otherwise you’ll just get squashed.

  4. I saved up until I had 20% down available, which took a few years since that 20% down figure kept getting larger and larger. I wanted to be safe. I wanted to do the right thing financially. Too bad I didn’t just get a 0%/40yr mortgage 4-5 years ago, I’d be well ahead of where I am now.

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