San Diego Housing Bubble News and Analysis

How can that be accurate, we have bidding wars for homes in SoCal? We have a whole new crowd of savvy RE investors outbidding each other preparing for the next big wave of RE appreciation.

Meanwhile...Japanese RE values reach bubble top @ Fall of 1989. 2009 still falling, but hope blooms eternal for RE bulls:

"It is the biggest decline in five years with average price falling 4.4% in the 12 months to the end of June and also marks the 18th consecutive annual decline, according to figures from the Ministry of Land, Infrastructure, Transport and Tourism." http://www.nuwireinvestor.com/articles/j...

18 years of declines ouch!

Japan unemployment 5.7%
US unemployment 20%

We'll be fine right? Bid that REO up!!

Here's that Japan thing again:

“I don’t think we seem to be recovering,” he continued. “There are more people unemployed all the time. … We’re doing everything wrong, we’re doing what we did in the Depression, we’re doing what the Japanese did in the 1990s, which is propping up bad investment".

From the Ron Paul: Federal government ‘one giant toxic asset Thread

2007 plus 18 years = 2025

I'm gonna start making my offers based on declines through 2025.

18 years of declines ouch!

Japan unemployment 5.7%
US unemployment 20%

Comparisons with Japan may not work out with the US. Japan has basically zero immigration, negative population growth, and a strong production-based economy. We have very liberal immigration, positive population growth, and a primarily service and government-based economy. I think the USSR of the 70s/80s and possibly the UK at the end of the 19th century might be better examples but even those don't match up very well. We are in uncharted territory.

We are largely a service-based economy with poor education infrastructure and low trade barriers and restrictions. (Halliburton based in Dubai?)

Doesn't bode well

http://www.bloomberg.com/apps/news?pid=2...

Credit card default rates hit all time high

http://www.dsnews.com/articles/us-mortga...

Mortgage delinquencies hit all time high

http://www.bloomberg.com/apps/news?pid=2...

State foreclosure mediation measures ineffective

http://online.wsj.com/article/SB12536655...

Shadow inventory grows

http://www.bloomberg.com/apps/news?pid=2...

CRE in "steep decline"

Recovery is right around the corner....

Timely article on Mish's site today:

Following the Footsteps of Japan
http://globaleconomicanalysis.blogspot.c...

I wonder how many on this forum believe forms of deflation will be with us for a long time. How many believe that housing will still be in the toilet in ten years?

Bankers have done such a wonderful job convincing people to voluntarily tie a 30 year debt stone around their neck. The bidding wars are fascinating; right when we have an upper hand on the banker debt machine people start giving them power again in hopes they will "win the bidding war" and somehow be able to sell that REO for a profit to someone else in the foreseeable future.
They are in for a BIG surprise.

Another fitting story for this thread:

BLS Jobs Numbers Contradict BLS Jobs Numbers

"Meanwhile, when we view the “statistically significant”job losses for August, we see that only 16 states reported a net total of job losses of 279,800.

Furthermore, of the states listed, only one of the five most-populous states was included: Texas. Thus, if we subtract those 16 states (less than 1/3 of the U.S.), we are left with 26 more states which reported job losses, only 7 states reporting increases – and most of the large-population states had yet to be added to that total. Given these demographics, it is a reasonable extrapolation to estimate that the complete state-by-state totals would have been nearly three times as large, or over 800,000 jobs lost."

http://seekingalpha.com/article/162862-b...

"I wonder how many on this forum believe forms of deflation will be with us for a long time."

one of the unique aspects of the current economic downturn is that world economies are more synchronized at this point than they have ever been in the past

if the bankers are unable to kick the can down the road for awhile longer we are in for a long, deep worldwide correction - back to 1982 levels? overshoot even deeper?

some people think "it's just time" for a major economic correction:

The Dark Years are here
http://matterhornassetmanagement.com/new...
"THE DARK YEARS

In the next few months we will see the start of the Dark Years. For the first time in the history of the world there will be a synchronised downturn affecting all nations (although some a lot worse than others).This is the culmination of the world and especially the Western world, living above its means for decades in a mania of credit bubbles, asset bubbles, real estate bubbles as well as excesses leading to decadence and a society with very weak moral and ethical values. (Of course no society recognises this as it is happening but only afterwards). Governments have fuelled this process by printing unlimited amounts of paper thus destroying the money and purchasing power of most nations.

The Dark Years will be extremely severe for most countries both financially and socially. In many countries in the Western world there will be a severe depression and it will be the end of the welfare state. Most private and state pension schemes are also likely to collapse. It will be a worldwide depression but some countries may only have a deep recession. There will be famine, homelessness and misery resulting in social as well as political unrest. Different type of government leaders and regimes are likely to result from this.

How long will the Dark Years last? There is a book called ”The Fourth Turning” written by Neil Howe. He has identified a pattern that repeats itself every 80 years. The pattern has been extremely accurate in the Anglophile world. We have recently entered the Fourth Turning which is the final 20 years of the cycle. According to Howe we are in the early stages of a 20 year period of economic and institutional upheaval. This is a period of Crisis when the fabric of society will change dramatically. Previous Fourth Turnings have been the American Revolution, Great Depression and World War II. According to Howe the Crisis will be substantially worse before it is over and it will last for another circa 20 years.

All of this is not good news and we hope that we and Howe are wrong regarding the severity and length of this crisis. But we fear that we are both right. We must stress again that never previously has the the whole world entered a downturn simultaneously in such a fragile state both financially and economically which is why the Dark Years are likely to be so devastating and long lasting."

~

It's Just Time
http://www.contrahour.com/ItsJustTimeMar...

~

some of the cycle theories suggest that we are due for a significant correction - in Kondratieff cycles we are either in or heading into the Winter phase of the cycle - in Elliott Wave theory we are due for a downturn of either Supercycle or Grand Supercycle magnitude (if I remember the terminology correctly)

Good find with that article 4plex.

I look around and ask myself where are the well paying jobs going to come from? Consumer debt is at all time highs, the major driver to our economy is too far in debt and too many without jobs at all, let alone good jobs.

Our leaders seem to have no plan for future job growth and with the consumer tapped out and debt of every kind up to our eyeballs, another credit driven bubble at the consumer level seems out of the question.

Lot's of smart people are calling for sustained high employment for a very long time and falling wages (supply and demand will do that).

Love the cycle theory though.

What's would a deflation based, 2025 price prediction for the SD median home price look like?

I know San Diego is preferable to Florida in many ways, yet for me that is one of the most comparable markets (weather, recreation, beaches, life style) the devastation in the RE market there is my precurser to SD prices (with a SD premium)

Very interesting ...

I like to see the predictions from you all for the 600K (current price) home would look like in 2025 .... will be (just give a guess)

Huh, a goldie site.* Never would have guessed.

*Not saying it's without credence, but just sayin'.

Miami Florida median list price:

$219,000.00

Median sales price

$200,103.00

Why would anyone be surprised that the economy, or any economy for that matter, is a lie?

"What's would a deflation based, 2025 price prediction for the SD median home price look like?"

600 ounces of silver

Ounces of Silver to Buy Median House

I'm going to revise my prediction - I'll say 500 to 3000 ounces of silver to buy median home - that's $10-60,000 of today's US dollars

RICH INVESTOR, POOR INVESTOR
A Must Read For Real Estate Investors
http://www.silver-investor.com/richinves...
"At the top of the precious metals market last time (January 1980), it took a mere three thousand ounces of silver valued at $150,000 to purchase a median-priced single-family home. Today, three thousand ounces of silver is valued at about $40,000. Who wouldn’t be willing to pick up the median-priced house for $40,000? We are not talking the foreclosure market here; we are valuing houses in terms of silver bullion. "

Good Call Mr Maloney - 10 Oz of Silver Buys Home
http://www.buysilvercoins.org.uk/silver-...
"soon be possible to purchase a median priced family home for just 500 ounce of silver"

Moneyweek: UK House Prices in Terms of Ounces of Silver
http://blog.goldassets.co.uk/2009/03/12/...
"Once again we may see 1,000 ounces for the average UK home."

The minute anyone compares SD to Florida they lose me everytime. The only they share is latitude. Anyone who has spent considerable time both places would know that.

When Housing Is Priced in Gold
http://www.oftwominds.com/blogsept09/hou...

"Pricing U.S. homes in gold reveals that housing has fallen by two-thirds from its 2005 peak."

"Nominal housing prices have returned to 2003 levels. But when priced in gold, the 2003 valuation was 420 ounces of gold. Now that nominal prices have returned to that level today, the median house will only fetch 160 ounces of gold.

But if nominal prices revert to pre-bubble valuations (1997-98), which is the typical course of popped asset bubbles, then we could see housing become even cheaper when priced in gold.

That is, if gold continues rising and housing continues declining, then it is certainly possible that the median house price could fall to 100 ounces of gold--a mere 20% of its 2005 peak. "

"The point is to consider housing in relation to purchasing power/relative performance, not just in nominal dollar terms. Housing will always have value as shelter and land will always have value as productive dirt, but we must be skeptical of the constant hype that "a home is your best investment." "

monetarily, the best investment probably is in your own personal health. has anyone charted or researched that?

You should have said "anytime someone compares SD to FL while acknowledging SD is preferable and deserves a premium."

RT.66 said:

"I know San Diego is preferable to Florida in many ways, yet for me that is one of the most comparable markets (weather, recreation, beaches, life style) the devastation in the RE market there is my precurser to SD prices (with a SD premium)

Do you have a better comparable? I did quantify that "SD was preferable in many ways". I also said SD deserves a premium. But how much????

I like SD and FL for the weather. SD wins.

I like SD for the beaches. FL wins.

I like SD for the Ocean. FL wins.

I like SD for the sport fishing/seafood. FL wins.

Just a taste. When comparing nice cities on the ocean that are semi-tropical what else do we have? Brownsville?

An added benefit is FL is closer to NYC and Europe, FWIW. I would have to agree that the beaches, ocean (surf, snorkling) is better/cleaner in FL. FL does lose out b/c of humidity/storms.

STOP THE NEGATIVITY!!!

Ask yourself what the authors have to gain...they are just trying to bid up gold.

isnt it justa chart of prices? facts is facts.

I was refering to the "Dark Times" article.