San Diego Housing Bubble News and Analysis

Patience- more resets are in store for 2009 and 2010, with the failing economy the crap is just getting started. It will crash by end of year/early next year when the dingbat gets into office and cannot salvage the failed banking system.

Houses for pennies on the dollar. Luxury/Exotic cars for pennies on the dollar. Boats for pennies on the dollar. That is my dream. If you can save up cash, buy gold and oil futures- it all looks good for massive inflation.

TG: mixxalot is right. Temecula/Murrieta are just getting started and next year looks even more brutal than this one.

Plus, the Chargers look poised to go deep into the playoffs, possibly even make a good run at the Superbowl. Rivers and Gates both look good, and some of their off-season acquisitions will only make a damn good team stronger.

See? You can always work football in there!

Cheers.

Allan remarkably smooth on that transition. Hang tough TG and buckle down for a wait. Same story is happening for other parts of the county as well. I have alot of frustrated clients who are seeing the same sort of activity down here chief.

SDR: Liked that, didja?

Just trying to cheer TG up. He seemed kinda bummed out.

It is interesting, though. I would think that the bloodbath in Temecula and Murrieta would be worse than it is. Fallbrook continues to hold steady in some parts, but others... It must just be a matter of time.

I did mean what I said about the Chargers. That new cornerback, the holdout? That kid is frickin' amazing! I never thought I would say this, but the Chargers are looking like they will have a secondary to go along with that linebacking corps and D line.

The start of the "Holy Shit Dude" phase is still a month-and-a-half away and we won't see the numbers on the start of that phase for three months or so.

Hi TG,
I was waiting for some of the Temecula clan to post something about the activity up there...surprised it's lasted past mid July. Once it's fall, I really can't imagine the amount of people looking. I have noticed prices in Temecula are creeping down a bit. A friend who lives in Morgan Hill informed me that recently a 3300 sf home went for 330k, so there's the $100/sf already...hang tight, there's plenty of homes up there to go around.

Allan, the Chargers 1st pick was Cason and yes he's still a hold out, hopefully he'll sign before Friday, I plan on watching camp next week one day, Gates is still not at full strength, so there are still ??? They did sign a player with the last name of Hester as their second choice, even if he's not related to Devin Hester, just the name will scare defenses. All three franchise players are coming off surgery and Michael Turner is gone but Norv Turner is not (they lost the wrong Turner), let's not start licking each other's popsicles just yet, they still have something to prove.

SDuude and Cash, I know that it is coming and Morgan has popped below 300k but nothing lasts until I have a day off work to look at it. The one I liked referenced above was $91 a sq and move in ready, completely dialed in, even if I had taken half a day off work and bought it in an hour, it was gone. Totally bummed me out, it's like trying to buy a wii or an iphone for christ's sake. It's a house in Temecula, nobody is supposed to want them, right?

I listen and read and even though I don't buy gas and I like it here, I hear all these piggies talk as if the exurbs will implode, there are no high paying jobs, people will move to the city, it's too hot, dirtbags will come, etc. etc. I just think, bring it on!!! Scare off the buyers, sounds perfect. Maybe I'll be the only guy with cash and credit, economy is going to hell, rates are rising, blah, blah, blah. So where in the F%$# are all these people with money coming from, are they bussing them in? I was here first, go back to where you came from and leave me alone.

Off my soapbox, I appreciate the support, I know just a few more months and things will shift, I just had hoped it would have shifted by now and the longer it lasts, the more doubt I have. Hopefully rates will break 7% and clear all the competition out. I just wish these people would stop buying the realtor spin about being a great time to buy, you know when it is a great time to buy? Right after I buy, that's when.

They are catching the falling knife and you are much too smart for that. Stay the course. Go drink some wine.

Help is on the way in the form of higher interest rates:

http://calculatedrisk.blogspot.com/2008/...

If the government cuts back on Fannie's/Freddie's ability to buy/guarantee mortgages, that could cause interest rates to go up even more. There's only so much our government can do to keep qualified buyers out of houses and they are about to run out of bullets.

Speaking of drinking, this is what Bush said about Wall Street:

http://briefingroom.thehill.com/2008/07/...

It's almost August and inventory isn't rising in my zip code

but it's not August yet. Buyers are in high gear now because they are hoping to close and move in before the beginning of the school year. One month from now the situation might be different. In Temecula the school begins on August 18th (I think)

At some point every house bought during the bubble will have been repo'd or shorted and replaced with owners that have fixed loans and wont be underwater, it's scary, I'm gonna miss the damn boat!

I'd pick a street at random and make a list of all houses, and calculate how many bubble buyers are out and how many are still holding. When the ratio passes 50%, it's time to start worrying.

Try to bear in mind that the price movement isn't steady - it comes in chunks at different times during the year. I like to think of it moving in spasms, some being more pronounced than others. It looks like your area might be between spasms right now. Be patient - you know the next spasm will be coming around shortly.

The market has already passed your original trigger points, and in doing so it emboldened you to move your goalpost. Taken in perspective you could say it's all gravy now.

TG - It is remarkable how slowly this boat is turning. I know that when one look at the graphs, it is obvious what is happening and the lines look really steep - which is to imply that things are moving quickly. But if you have to live it, man it seems slow. Roubini said yesterday that housing would bottom in 2010. That's 5 years from peak-to-trough. That's a long time. My twins are 6 now. In 2010 they'll be 8 and they'll have been waiting for housing to hit bottom since 2004 - or 75% of their whole life!

A watched pot never boils, eh ?

Bugs - I think of it as a ball bouncing down the setps.

At $100 psf aren't housing prices in Temecula essentially below the cost of building the structure ?
I wouldn't really blame these knife catchers for buying properties at 30-40% off bubble peak prices. It seems to me that the folks "catching knives" right now in Temecula aren't really sticking their necks out too far.

Yup, the people buying now in Temecula are people who are either unaware of the direction prices are going, or who cannot wait for whatever reason. They see those properties as great deals, and they are, compared to the peak. But this winter, and fall/winter of '09, prices will be lower. Many of the people buying then will be different - more experienced investors, I would think, with more cash. However, even if there are still a lot of people making offers, I think prices will be low enough that you can make an offer better than theirs and still be saving compared to the current prices. If I see an awesome Fairways house on the course for $250k, I won't mind offering substantially more than asking.

just stay away from the koolaid ;)

Aecetia- at these prices they are catching butterknives

esmith, good point-I'm hoping to see the trend change in 30 days

Bugs-correct as always, yes it has moved past trigger points but I was getting used to moving the goalposts, I moved them one last time and was hoping to reach that goal by years end.

sduude, it is the slow speed that is killing me, it's been fast enough to keep me occupied until recently.

Former, actually it is about 50% off peak and below 2003 pricing, almost 2001/2002 so I don't blame them, it is below construction costs, doesn't mean I need to like them.

Ren, I will beat you like a rented mule if you steal a house from me on the course in the Fairways listed for 250k and you bid 260k, while I bid 250K, you don't have enough band-aids in your house for that. I'm just kidding, unfortunately there are more than you and I looking for that, that is exactly what happened with the 18 bids, however it was for 314k list. I have to think there were 17 people who got outbid and there won't be much more than 17 prime lots repo'd in the Fairways during this downturn so it's going to be a tough battle to get the best properties.

at these prices they are catching butterknives

Great analogy !

This one?

http://www.redfin.com/CA/Temecula/45314-...

If so, I'm a little confused about the sales history. The winning offer was only $303k?

I have to admit, it's nice to see some people are just as frustrated as I am...

some patience quotes for fun:
Moliere
The trees that are slow to grow bear the best fruit.

Benjamin Franklin
He that can have patience can have what he will.

Chinese Proverb
If you are patient in one moment of anger, you will escape a hundred days of sorrow.

Woodrow T. Wilson
All things come to him who waits - provided he knows what he is waiting for.

Ralph Waldo Emerson
Patience and fortitude conquer all things.

Ovid
Everything comes gradually and at its appointed hour.

John Quincy Adams
Patience and perseverance have a magical effect before which difficulties disappear and obstacles vanish.

Ren, I think that was the repo amount, not the winning bid, I talked to a realtor from that office and the current high offer hasn't closed yet, plus there are 17 back ups. That 303 price and date are before it was listed, and it's only the second recording, the first being when it was built in 2003, so that is more than likely the sale back to the bank (not including helocs).

I'll bet at least one offer was for list, if not over.

I'm not even hoping for these at 250k, if they would just come up with regularity at 300k and stay long enough for me to look at them and mull it over, then be the only bidder, I'd be happy. In the last two months at least ten have come up and down before the weekend and I don't get a chance to see them during the daylight hours, let alone be in a position to negotiate.

A patient seeker will be satisfied in due time; patience is a virtue.