Mar212017
Know when to fold ’em
Several years ago, I was playing craps in Las Vegas when the shooter went on a long, long run. After about 40 minutes without rolling a seven, I had about $750 I took off the table in front of me, and I had about $500 still sitting on the table from the numerous times I pressed my bets or let it all ride.
In the middle of the pandemonium at the table, I had a funny feeling. Despite the euphoria around me, I felt it was time to leave. Before I could think more about it, I found the words coming out of my mouth, “Please, take down all my bets.” Some of the people at the table ridiculed me, and everyone else thought I was insane.
It took two rolls for the pit boss to color me up; both were winners, and the gamblers at the table now openly laughed at me. I grabbed my $500 worth of chips and added it to the $750 I already had. Before I could turn away, the shooter rolled a seven, and a huge groan resounded across the casino. One of the players pointed at me and said, “He did it.” I looked at the $1,250 in my hand, smiled at him, and walked away.
When people are caught up in the excitement of the moment, or when they’ve been doing something out of habit for a very long time, it isn’t easy to decipher the signs that it’s time to quit — and it’s even harder to act on those signs. So what’s the point of this story?
It’s time for me to stop writing daily about the real estate market.
A difficult decision
I am a minimalist when it comes to possessions. Over the years, I threw away more and more stuff until now I am down to the essentials that I use every day. I have one indulgence that serves no practical purpose in my life: I have four framed prints that represent my achievements in life over the last 30 years.
Two of these items are my diplomas from college, the achievement of my 20s; one is the frame of the golf magazine that featured the golf course I designed in Florida, Mystic Dunes, the achievement of my 30s; and the final one is the book cover of the Great Housing Bubble, together with this blog, the achievement of my 40s.
I recently wrote Reflections on 10 years of blogging. I started blogging two weeks before my 40th birthday, and now, two weeks after my 50th birthday, I realized I am ready to move on. I blogged every weekday for 10 years, published a book, saved many people from buying during the bubble, and directed many others to buy investment properties at the bottom of the market. Whenever I look at the framed print of the book, I feel pride at those accomplishments.
Perhaps it’s ego and I should let go of my prints — and perhaps someday I will — but for now, I will keep my reminders of my accomplishments as I move on with my life.
When I thought about why I keep writing, I realized part of it was emotional attachment. The urgency to educate people about the volatility in the housing market is gone. I enjoy the comradery of the astute observations, and I enjoy the act of writing itself, but I don’t feel I have anything more I can accomplish with this blog, so it’s time for me to leave.
Going out with a bang
I don’t know exactly how I want to end things here. By far the best ending to any blog was the way Keith said goodbye at Housing Panic (And then, on the 5th of November 2008, three years and one historic worldwide housing crash later, HousingPANIC came to an end.) He left on top at the height of his popularity. He recognized the signs, so he picked up his chips and walked away.
I don’t think I will go out like Keith. Instead, like Douglas MacArthur, I will just fade away.
Ongoing Content
I will stop writing about current events in the real estate market. However, I do have an extensive library of timeless posts that I will repost, and I will also post more frequent updates on the real estate market from the housing market reports I publish. As long as it remains viable, I will maintain frequent posts and participate with any comments.
I want to thank you for your ten years of readership.
Larry Roberts
I’m dumbfounded at the timing of this announcement. Around the same time you started the blog I was relocated back to the Bay area from the east coast, and after many years of watching prices go down and then back up, we are about to close escrow on a property. The real estate knowledge I gained here and the IHB forums was invaluable. Thank you for the time you spent educating us all, and I sincerely hope you “unretire” very quickly as your writing is a gift that we all look forward to every weekday.
Thank you for the kind words.
It was a difficult decision driven partly by the fact that good content has been harder to come by over the last few years. If I believed there was a lot of new ground to cover or that another housing bubble was brewing, I would carry on, but right now, I don’t feel like I have much more I can accomplish.
I’m going to take the rest of the week off and leave this post on top of the blog so everyone sees it. Next week, I may start reposting some cleaned up old content and posting more from my housing market reports. I like the conversation in the astute observations, and if people want to carry on as a daily forum, I would be happy for that to continue, but unless I have a change of heart over the upcoming days and weeks, I think I am done with daily writing on current real estate issues.
I have felt this energy from you over the past 18 months. Let’s face it, at this point the housing market is pretty boring. Low inventory and rental parity.
This is the story in Silicon Valley – though rents have leveled off, so rental parity doesn’t really exist beyond the ~$1.2M range. If anything were to happen to the job market here I think we would see a quick 20 percent haircut – however AI is breathing a new hype cycle.
As expected… the SiliCON Valley area tech eCONomy continues to roll over… layoffs spike in Q1-17.
SV area loses 100% of total 2016 job gains, in 1 month/Jan 2017.
http://www.labormarketinfo.edd.ca.gov/file/lfmonth/sjos$pds.pdf
Please remind me…. what comes after the pump?
the job market is on fire up here, like nothing I’ve ever seen – beyond the original tech bubble. Listing prices are meaningless given the double digit offers on any property ~$1M in a decent area of metro San Jose. The East Bay can be more affordable, but the 1-way 90-120 min commute (for 30-40 miles) is a deal breaker for most.
Dude….he needs to come back. This is not cool.
Great story. That was a great move. I once played in a $80 buy in game and everyone else had $500 or more in chips and kept buying back in on losses. I knew this $80 was all i could afford to lose for the weekend. So I sat back and folded until I got some good cards. They forced me all in just to see the flop and I ended with a full house. I folded one more hand to not make it totally obvious and then cashed in my chips. Someone said, “what is this a hit and run” Like you I just smiled and thought I don’t have the chip stack to stick around. I went to another casino did a $50 buy in and promptly lost it all on the second hand. So it goes.
Anyways I think your timing is good. You have done so much and I think deep down you believe the bubble is about to burst and things will be crashing so people won’t need warning anymore anyways. I hope you do a I told you so post in a few months when prices are 50% lower.
Housing to Tank Hard Soon!
PS I am intrigued that you are into minimalism. This is something I want to purse myself. Any tips? Some questions I have are where do you splurge? Do you rent a small apartment, or did you buy a nice plot of land, but keep a small building. I think I am good with having less things and living in a small space, but I still like the idea of having a great peaceful, serene place to live, but that can be costly and delays retirment.
Read these two short books:
The Life-Changing Magic of Tidying Up: The Japanese Art of Decluttering and Organizing
and
Spark Joy: An Illustrated Master Class on the Art of Organizing and Tidying Up
I picked them up on impulse at Costco one day, and they changed my life. I was already fairly minimalist, but after reading those books, I really purged nearly everything. To give you an idea of how little I own, when we moved last year, other than clothes, toiletries, and some furniture, when I packed my personal possessions, everything I owned fit inside a box that was an 18″ cube.
I have noticed that I spend more money on the few possessions I allow myself. I don’t feel indulgent if I spend over $100 on a shirt or $300 on a golf club. I’ve also noticed that I don’t spend much time window shopping because I don’t want anything. Once you know you could have any consumer item on earth, you aren’t driven by scarcity, so much of your desire to possess things falls away. If I need something, I buy it, use it, and generally discard it. For example, I still read a lot of books, but I don’t keep them after I read them.
When you’re no longer weighed down by possessions, you feel very free.
Thanks for sharing. I look forward to checking out those books. I feel I am on the right track for not buying stuff as I usually don’t. I don’t window shop either. The only window shopping I do is for real estate. But I never buy because it costs more to own than rent small. I would rather put the money into investments that outperform housing and aim for early retirement. I guess I wish I could have both early retirement and a nice place to own.
Renting leaves the flexibility to travel the country or pick up and move spots whenever you like and as you said if you can fit your stuff in an 18″ cube it makes it very easy to do so on a whim. For those reasons I feel that ownership costs would need to be substantially below rental costs to even consider buying. Do any of my concerns make sense, or does this not apply to minimalism and is a separate issue?
Those feelings certainly do apply to minimalism. You probably would enjoy the freedom of it because it sounds like you do already.
For the last six years, I’ve owned investment properties and rented my primary. I’ve also moved a lot. I may be ready so settle down now, and I may buy a house this year or next. I will probably buy a small cottage because I don’t have much need for the space of a large house. What would I fill it with?
Another idea I’ve been kicking around is buying a retirement home and continuing to rent. I wouldn’t want to retire in any of my current rentals.
I hope you enjoy those books. If you’re ready to hear the message, those books can change your life.
Just curious, where do you plan to retire? Florida? Vegas? Or some other undisclosed location?
Even though the politics of this state are screwed up, I’m probably sticking around for the long haul. I love the outdoors, so I have a dream of settling in Lake Tahoe to ski the Winters and fishing & boating the summers.
Minimalism sounds great and I have always been good about clearing things out I don’t need, but with 4 little kids the amount of stuff that enters our house is never ceasing. Last week I was off work on Wednesday and my neighbor noticed and decided she would drop off all this random stuff that she won in a raffle because she thought my girls would like it. This is the same thing that happens with the grandmas, aunts, and other relatives. They all want to give the kids stuff. It just never ends.
If I can earn enough to pay off a primary residence in California, I will probably retire here. If I call it quits before then, then we would probably move to Las Vegas. If you can adjust to climate, the city offers every kind of entertainment imaginable, so we would never be bored.
Minimalism tends to happen in stages, but when you make the final leap, it’s remarkably liberating. You just don’t worry about stuff anymore. Not long after going fully minimalist, I realized I no longer needed to organize or store anything. My garage is nearly empty, and I no longer have desk drawers, filing cabinets, and shelves full of stuff.
I hope you and el O will still come around. Perhaps Friday or next Monday, I will put up some posts with market information or old timeless content to keep the astute observations going. I’m just no longer going to write daily about news items. I may still provide the occasional post on some timeless feature of real estate, but it will go back to being a true hobby that I indulge at my leisure.
I’ll still be around. You don’t need to worry about that.
Jim, the nature of anything can be easily obscured by its label.
Case in point: PROPERTY TAX means RENT.
Thanks for the imput everyone. El O that property tax is the main thing that has always stopped me from buying. I have searched and cannot find anywhere in the US that does not have them. Alaska is about the best it gets as there is no state or sales tax. Then you actually get royalities in credit for the oil sales of the state that you can count to offset property taxes, but I enjoy the weather better in Cali.
I am with Larry in looking for a great piece of land with a small cottage. If the numbers ever work out that it is less than renting then I think it would make sense.
Further with that point of property taxes making you a defactor renter. Doesn’t it seem much riskier to own than rent? If you own you could lose your house to a fire, earthquake, flooding. Or less severe a horrible neighbor next door. The costs to move are very large. Renting seems way less risky. However, the drawback to renting is you can be asked to leave in 30 days which does not give adaquete time to find a suiteale replacement. Also knowing your landlord has a key to your place is less than ideal as well.
I wish to own for the security of knowing I do not have to move. But I also like renting for the security that I can move. It seems to me that the latter is more valuable. But for some reason people 10-1 pick the prior.
Larry, thank you for the past ten years. Even though I have rarely commented on the posts, I have looked forward to reading your post and all the comments every weekday. You have tremendous knowledge about the real estate industry and your writing is superb. I especially found your personal stories entertaining and poignant. I realize everything must end but selfishly I also hope this is just a sabbatical. All the best to you and your family!
Thank you. I will miss the writing and the connection with readers like you.
Irvine Renter, thanks so much for a fantastic blog over the last 10 years. I have learned so much about real estate thanks to you. I remember the early, crazy days (08-10). I hope we never see anything like that ever again, those were truly remarkable, scary times. Great memories include when you finally revealed yourself, the North Korean Towers off of Jamboree, exposing the guru Gary Watts for walking away from investment properties gone wrong, the OC realtors association suing you. Everything should have crashed much harder but the intervention was unprecedented and nobody could have seen that coming. Your blog got me through some tough times in life, thanks so much. Best of luck to you in whatever the future holds.
I wanted to follow up on my first post. I lived through the highs and lows of Orange County, CA during the oughts. It was strange to see people who bought houses in the late 90s for 250K-300K become paper millionaires a decade later. Many of these people ended up losing their houses due to constantly cashing out equity and thinking the house value would go up indefinitely. Going to any high end restaurant, shopping mall, car dealer in 2005 was eye opening. The amount of money being spent was astounding. Luxury cars, vacations, plastic surgeries, shopping sprees, etc. And then it all came crashing down. Jobs were lost, houses were lost, marriages evaporated and families who lived in McMansions ended up in apartments. Those were very interesting times to say the least, can’t believe it’s been a decade.
Those were exciting times. As an observer that didn’t participate, I found it morbidly fascinating, almost like a train wreck in slow motion. If the housing market today were anywhere near as interesting as back then, I would probably keep writing. Who knows, if everyone loses their minds again, perhaps I will pick it up again.
Thanks for a great blog. A lot happened starting around 2007–too much to go into here. I saw the collapse first hand but managed to remain largely unscathed. I worked in private banking in OC and the attitudes and behaviors I saw from clients shocked me. Not only clients, but friends and neighbors, too. Unbelievable. Someone should write a book. haha I see a few signs today that it may be coming back. We’ll see. Best of luck to you.
Larry,
The data you provided people was very valuable.
I hope you realize I often tried to play devils advocate here to prevent the echo chamber that exist at Dr Housing Bubble.
I am sure you will be successful at whatever you choose to do next,,, break a leg..
That’s a good reminder. Dr. Housing Bubble is about the last game in town. For years, I wouldn’t comment there because of how extreme the commenters were, but I finally relented and started to chime in once in a while. Looks like I might need to make that my new housing blog fix. Although I’ll still check in here to see what is going on, I expect the conversation will be more sporadic going forward.
Thank you, Planet Reality. Though we had our disagreements, I always appreciated your participation in the astute observations. As I said above, I will try to keep those going if anyone is interested.
You’ll be missed. I read your post on daily basis and it is very educational. I hope you have a change of heart and keep us update to real estate market as we are facing changes deregulation, lowering income tax rate, rising interest rate, ending 1031 exchange program, etc.
Larry,
Wow, what a shocker. I’ve enjoyed reading your blog over the years (almost the entire time) and have learned so much from you. Your posts convinced us to buy an investment property which has worked out well for us. I will certainly miss your posts – I do hope that you come back (if only temporarily) when/if the market takes another dump. To everything, there is a season. I will miss you very much, Marcie
Thanks for your work here, best of luck on your future endeavors.
Thank you for the blog and all the information that you have provided. It has really changed my perspective on housing, in a good way. Good luck with everything and hopefully one day you will return!
Larry, I wish you all-the-best during your next phase of ‘the ride’… and thank you for all of your hard work, dedication and personal time put-in maintaining OCHN. You’re a bona fide credit to the RE industry.
Regards,
el O
Of course I will continue to comment here, but will I also be seeing you at Dr. Housing Bubble?
“That’s a negative Ghost Rider… the pattern is full”
Too bad. Mulli’s over there too.
What a great run this has been. You started this iteration of your blogging career right when the Lansner blog was ending and it was a perfect transition for a few of us that made this our new home. We’ve had some good laughs and fun debates over the years.
The hinterlands rental market that I chose (29 Palms) was based on studying different markets with the search tool you created. It’s a great way to find the lowest priced markets in the state, and the best relative deals within in each market.
I can understand how difficult it must have been to create fresh blog content on a daily basis, and I’m frankly amazed that you kept it going this long. You have an achievement to be proud of with this blog. I will reach out to connect with you via other channels as maintaining my anonymity isn’t as important as it once was. During the heat of the downturn, my comments here and on Lansners blog would have been grounds for firing if they had been tied back to me. Everybody in mortgage was very sensitive about the media back then, but now it’s not such a big deal.
Hopefully, we can still get updates on your other entrepreneurial endeavors in the future. Take care and God speed!
Thanks Larry for the years of solid advice provided at a key moment in time. Methinks it will be deja vu all over again in about 2 years, as the present day seems very “2006” to me. We’ll look forward to OCHN v 2.0 when the Great Collapse v 2.0 begins.
Best of luck Larry, I very much enjoyed the old days on IHB and very much valued your input and insights.
From renter to owner.
Morekaos
Thank you for your 10 years of blogging. The information you shared and the people you helped definitely went beyond this blog site.
I’m one of the silent observers who rarely posted. I find it hard to even “like” a post in facebook, to even post something in it. I’m an immigrant, when I first came here around 2005, I noticed there’s something just not right with the housing market and kept asking myself are people really that well off in this part of the country. Finding this blog I would say is life changing for me, it opened my eyes and got me acquainted to how housing works here in California or the country in general. I learned a lot from the posts but the astute observations were gems in their own right.
To staying informed and may you continue to be successful in any of your future projects.
Wow… already 10 years.
You should stop by TalkIrvine once in a while and say Hi.
Good luck on your future endeavors and your next framed achievement.
#3CWGForever
I always stop and read your blog. Even though I have such a different opinion, I certainly obtained many valuable nuggets. Will deeply miss your blog. All the best.
While I did not post often (or hardly at all for that matter), once I learned of this site many years ago, I would find myself perusing the archives and reading through them. I learned a great deal from the author, participants as well as history. I always enjoyed the interactions from my time as a housing bull, bear, to centrist. I love real estate. A friend of mine in Houston cashed in all of his retirement and has begun investing in rental properties (15 or so) and apartment complexes. He’s a firm believer and does not trust Wall Street. A man of his convictions, he is walking the walk. Sounds like you will keep the site up and that is a win for all of us. Cheers bud…
Glad you were still reading Mulli. I thought maybe you had just commented the one time and decided you didn’t want to get back into the fray. Anybody that built a rental empire near the bottom of the downturn has done extremely well. Hopefully the crash in oil prices hasn’t affected your friend too deeply.
Sincerely,
Mellow Ruse aka Liar Loan
Oh, he started this two years ago…His model is simple: buys $85K prop with private money/hard loan. Refi’s at new appraisal of $120-130K. Rents for $1000-1200 a month to rough credit folks who have health BK, FC, etc. They are grateful for the home, which he does in granite and nice finishes for them. Pretty good model if you ask me. With 15-20 homes, and oil pressure, the rental market is super hot in Houston for that price point. A-plus Apartments are the saturated piece. Good to hear from you LL. Hope all is well.
Wow, today of all days I tune back in to the site. Great job on the blog Larry. BTW, whatever happened to the rental parity tool?
I think I’ve posted all of one time but have been a regular reader for the past 5 years or so. It was refreshing to hear rational and thought provoking commentary when there is so much noise and misinformation out there. I’m going to miss the daily posts but wish you the best personally and professionally.
Public service is work, invaluable work. Thanks Larry for educating me when I was clueless as to what was going on in 2006. I chose the screen name “Perspective” to comment on IHB and provide an alternative point of view, I believed, from the strong bullish and strong bearish comments.
Many thanks for your work Larry. I hope I added value to the comments here. I am indebted. Reach out if you ever need anything.
You will be missed!
I learned a ton from you about real estate, investing, trend analysis, non-emotional decision making, and how to cut through the noise in news articles.
I never did make it to one of your social gatherings, but you created a sense of community for this site that is lacking on most blogs. If our paths cross, I’ll buy you a drink.
Be well, and we’ll hopefully hear from you when Newport Heights goes for $100k or trees grow to the sky… whichever comes first.
Larry, I have really enjoyed reading your daily posts. You have an amazing gift to write such interesting real estate articles with great graphics. I will greatly miss these in the future and look forward to reading your occasional posts. Happy Trails to you. Chris
Thanks for writing all these year. I’ve been an avid reader for years. I really appreciated your perspective and insight on local housing. We’ll see what the next decade brings…..perhaps a slow wealth transfer from boomers to…
Larry, you put into words what we felt. I was in my mid 20s and having been married for a few years, there was a lot of societal pressure to buy a house and “settle” down. Your writing helped us stay on course as we sat on the sidelines through 2012. We were able to buy our first house almost at the bottom and I thank you and a few other people for that.
IR, my thanks to you as well.
I started following the IHB when my neighbor in Santa Ana sold to some shady folks who then turned the property to a straw buyer. The straw buyer made two payments or so. The property was foreclosed and eventually sold for a 50% markdown from the fraudulent sale, a loss to the lender of more than 300k. This was in late 2007 or early 2008 I think.
Back then, I found that many title companies failed to password protect much of this info; one could use Google to find names, addresses, bank names, loan amounts, delinquent amounts and so on.
In some weird, twisted way I really miss those early posts where you’d lay out all the juicy details. So promise me this; if things go south again, you’ll be the keeper of the flame.
Scottnyc
Larry, your thoughtful advice helped me transition from apartment building investing to single family homes. I started reading your blog in 2011, attended your small investing seminars, and started making offers on single family short sales in the spring of 2012. We now own four single family homes in south Orange County. It has been an experience that I would not have done without your encouragement along the way. Thank you for your commitment to this blog and helping so many of us. Your daily posts will be missed.
apartment investor
Thanks for blogging Larry! I started reading in the spring of 2007 and was relieved to learn that, in fact, house prices really were out of whack and there were reasons why. You couldn’t find this information from the traditional media sources back then or even now. Your Great Housing Bubble book should be mandatory reading for high school seniors. I appreciate you sharing your expert insights and look forward to your occasional future posts. Good luck on your future endeavors!
Larry- I have found your insights into the Real Estate industry both entertaining and educational. I will look forward to any content you choose to pass along in the next 10 years. All the best!
Just want to toss in another thank you,
I started following you back in the 2005-2006 days of Irvine housing blog. It was the first voice I heard at the time recommending against diving into to the housing madness. Not a single person in my social circle agreed with your views, but your logic/data was undeniable. Both families were pushing my wife and I to buy and I was alone in my view that a housing crash was coming. We decided not to jump in. Thank you.
Wow! You will be sorely missed. Your writing has made me smile many a time, and you’ve had such amazing content! Thank you for all that you have done for the past 10 years. I wish you best of luck in all you do!
Thank you for all the posts over the years. I started to follow this blog 8 years ago when I moved to Irvine, it was a great source of information to the OC market and even though I relocated to Phoenix last year I still check in almost daily. I wish you the best and thank you for the various responses you gave on my comments. All the best
Another BIG thank you from a daily reader that’s only commented a couple times. Moved (back) to SoCal in late ’07 and your blog (and others) convinced me not to rent at that time. Will still check back here for and nuggets you happen to post up, how ever often you feel like doing it.
Thank you all for the kind comments. Starting next week, I will start posting new material on the housing market and reposting some cleaned-up old content. I will also participate in the comments if any of you want to continue the forum.
Looks like fold’n-’em is gonna be easier said than done
+1
Thank you Larry. Good luck in your future endeavor.
Irvine Renter, i am very sad to read that you wish to fold now. But I understand. I have been reading your blog for the last 8 or 9 years. I read almost daily, but in the last 12-18 months I must admit I did not visit as often. Nonetheless, you are a very very smart professional and I applied your observations to my real estate investments. Thank you. Would have not been as successful without the stuff I learned at your blog and blogs like drhousingbubble and patrick,net. I appreciate that housing is “boring” right now, but I think it is setting up for craziness. Perhaps you may consider posting weekly instead of daily. You have an encyclopedia of knowledge here. Maybe doing a youtube channel will be less time consuming that maintaining a blog. Youtube may create a stream of income too, so more bonus and people can subscribe, so they check in more often. Hope you do not fade but evolve. Peace!
Sorry to see you retire… but when the passion leaves, it’s time to find it somewhere else. Hope that you’re able to find the same drive in some other endeavor.