San Diego Housing Bubble News and Analysis

Cough, spit, gasp. Poway, NOOOO. You have forced a long time reader into registering and posting how much I disapprove of your desire to abandon this forum. You have always posted some of the most insightful and accurate information. Don't let one naysayer ruin anything for you. You should feel justified in taking the long time stance that you have. You ought to feel the due respect you deserve after what has transpired. What, is someone going to say, "What does the UCLA Anderson Forcast know about the real estate market?" Just because there are those that don't want to believe the laws of inevitability does mean that you don't have some staunch supporters out there. Don't use this to give up. You are such a large part of this forum. Rich, do something about this.

I wouldn't let that little weasel get under your skin. Keep the posts and research going. I've enjoyed it and from what I see, you spend a lot of time researching on this topic.

It takes two to tango. You surely read the first couple responses to the other thread and you could not have missed SDRs followup post which did indeed stick to the issues (for which I am personally grateful). I admire your enthusiasm and I agree with many of the conclusions you draw, but seriously, you'd do a little better on a forum that uses aliases if you'd develop a little thicker skin. Sometimes it does comes down to letting the other person get the last word in. If we are to go from here, someone has to let the last dig slide.

And yes, you're welcome to refer to me as "Grandma".

You couldn't have found a less inflammatory of encouraging her to stay? That's not going to be helpful in de-escalating this.

I am sure most people on this forum will miss you.Hope you will change your mind and come back.
Don't let those shallow, revengeful, small-hearted ones stop you.

Are you kidding me!? Who will start any forum topics? Thanks a lot sdrealtor. Way to ruin a great website and good conversation. You're a big "teddybear" my a$$. You are no gentleman.

powayseller... you will be sorely missed.
You have just renamed yourself:

"lakesidezipbutpowayschooldistrictseller"

and gotten all these yay-hoos off your back. Don't go!

Ooops, meant to say "you could have renamed..." in the above post. I'm sure all you brilliant people understood anyway.

True, my bad. Just trying to make Poway feel better. For all I know that guy could be a real good guy.

Relax, you can't really beleive she's anywhere....she's just looking for a little validation and a little love.

Here's a little something to lighten things up! It's the #1 screen saver in the US right now.

http://www.planetdan.net/pics/misc/georg...

B-e-l-i-e-v-e

net/net, in my opinion, this site is better with both powayseller and sdrealtor, despite the fact that i think a certain amount of what each of them posts is worthless. (and for that matter i'm sure a certain amount of what i post is worthless too as it's the nature of the beast - see this post for an example - but i digress...)

for example, from PS's above post:

"...and I got a compliment from Christopher Thornberg, who said to me, in front of about 200 people, "You just summarized our entire presentation in 20 seconds." John Orcutt, Sr VP of UBS Private Wealth Management, and Ryan Ratcliff, both shook their heads up and down in agreement. I was thrilled."

basically what you're communicating to the forum here is, "oooh oooh, look at me, other smart people think i'm smart - they really do!! - so you should think i'm smart too!!" this merely comes off as a pitiful attempt at trying to urge the forum to take you seriously because some economist paid you a brief compliment. puhlease!! you shouldn't be at your stage in life and need this sort of reinforcement, powayseller. you have some interesting things to say - just say them and leave it at that. if you spend your life seeking the approval of anonymous internet posters, you will lead a life filled with disappointment.

despite the fact that sdrealtor comes across as an apologist for real estate agents (to me at least) and is certainly not as bearish as i am (or the average forum participant), he's actually posted some thoughtful, interesting stuff here. not as interesting as bugs, but that's a tall order.

the difference between the two of you is that sdrealtor's got the thicker skin. "sdr is driving me away"? puhlease. it's a freakin' internet forum for christ's sake!! lighten up.

Off Topic. Bugs, are you a silver surfer? Your writing style seems familiar. Love your insight and contribution, as always.

Powayseller has started 60+ forum topics which we all enjoyed reading and replying to.

How can she stay on board and ignore him when he keeps reiterating that he "knows who she is"? If you read her posts, she tried very hard to "take the high road" with him at first.

Powayseller deserves more credits than some people thought. If it were not her, I don't think this board could have had this much active intelligent discussion. She has stated in one of her posts that she would focus on bigger picture. Why sb. can not have a bigger heart and let all the fights go? She is just trying to defend herself from sb's revengeful attacking now.
It is a shame that this borad ended like this.

I hope that ps comes back to the forum - she adds a lot. She may just be a little upset at the UCLA forecast of a soft landing in San Diego prices.

For those that have actually sold their homes and are now renting, betting on a large fall in prices: Who knows if your forecast is correct or not. But if prices don't fall by much more than 10%, selling and renting will have turned out to be a bad idea, since it typically costs about 8% to sell a house, with realtors and other closing fees. A 15% drop in prices might be the break-even point, since if you're renting for 2-4 years you will also lose a major tax deduction.

Don't know about you, but I'm already seeing a lot of properties at 10% drop in SD compared to a few months ago.

Guilty as charged.

Wow. You are a real-life super hero?
http://en.wikipedia.org/wiki/Silver_Surfer

OK. Really. What is a silver surfer?

Keep in mind, a fall of %10 over 5 years, when inflation is 3% puts those renters up %25, assuming they have invested and made 3% on their money.

It is somewhat discouraging when an economist like Thornberg suggests that there won't be a large drop in prices, isn't it? It "shakes my foundation" and has me asking, do I need to buy now...am I wrong? After a few hours, I snap out of it.

The one thing that I have yet to hear be addressed is the cause and effect possibilities of folks who have purchased "investment" homes in areas outside of San Diego that clearly WILL suffer price declines. Areas like Florida, parts of Arizona, etc...isn't it possible that this is the "economic shock" or surprise that will de-rail our local markets? For instance, someone who bought a home in Queen Creek, AZ may lose all of their investment and ruin their credit in the process. Is it outside the realm of possibility that there will be spillover into the local markets?

Obviously, I believe there will be...I know several people locally who have purchased "investment" homes in AZ, as they had given up the stock market. Also, anecdotally, my LL is selling the SD house he has lived in the last two years to rent. Fortunately, he is not selling the one I am in. I have been watching the sales process from a distance, and it seems likely that he will experience MAJOR difficulty trying to get what he wants for it. He wants and NEEDS to move. I have other friends who want and NEED to move.

I remain unconvinced that prices can't and won't drop when sellers who NEED to sell (how 'bout that increase in notices of default, by the way?) reduce their prices to get the deal done.

Any thoughts? Anyone?

Also, don't forget - depending on when they bought their house, their rent may be quite a bit lower than their payment, thus adding to the cash reserves they have to draw upon when the market is low. It's a pretty complicated calculation, all told, and individual situations should be carefully analyzed.

A truly patronizing comment...

It seems to me that I didn't hear Thornberg say "flattening of prices until fundamentals catch up" until the last few months. Had anybody heard him say that before then?

Also, if the UCLA Anderson school is preparing it's San Diego report and saying aggessive lending won't be a problem, then they lose some credibility. They've been the most respected (besides maybe Rich :-) ) analysts predicting a downturn that I'd been aware of, and now suddenly they're saying all the IO and Neg am arms aren't going to be a problem, and prices will flatten. I don't get it.

I agree with you lendingbubble. The laws of econ 101 will come into to play. The development that I am following this week is the "melt down" of the HB's on wall street. TOL just broke 30 as I write this. I am also monitoring OCRenters bubbletracking. San Diego's inventory is steadily rising and I don't see that trend stopping anytime soon (I am on record for the population adjusted record inventory to be reached on July 15 by the way). HB's are seriously under the gun right now. So you have a situation where inventory is piling up and HB's are moving into survival of the fittest mode. Bottom line is they will cut prices to move inventory period. And as you mentioned "how 'bout that increase in notices of default, by the way?". All of the elements that put downward pressure on prices are in place. I am open minded to prices flattening out but if these trends sustain themselves I just don't see how.

I use SS as an avatar (not an alias) on another forum I participate on, and it relates solely to my vice rather than to any delusions of grandeur. Come to think of it, my alias here wasn't a good choice because I'm not really like this cartoon character, either.

Here is what Thornberg stated in his June 2005 report entitled :The California Report: Beware the Froth!

"Housing market bubbles don't pop, this is true. They deflate. Prices tend to go flat and liquidity in the market drops." p 1.8

That seems pretty similar to what he is allegedly stating now.

He also stated in the June 2005 report:

"A bubble is when an asset price becomes disassociated completely from the fundamental." "There is no reason that a house should be worth 40% more today than it was two years ago. This is a bubble." p. 1-8

Finally, this statement on the magnitude of what we've experienced in CA:

"In the late seventies, during the period of time that ushered in Prop 13 real housing prices in California increased by 55%, trough to peak. In the late eighties, during the bubble that most everyone remembers, prices increased about 46% trough to peak. And this time? So far prices have risen an incredible 80%, and we have not even hit a peak yet." p.1-6

I have since read that he believes we have now seen the peak.

Rich-
That last line of mine was a joke, just to clarify. There is nothing that I would expect you to do. Just accentuating the point that PS posts at least 4 out of 5 topics here. Keep up the good work.

Long time lurker. powayseller wrote this story AFTER the realtor started a thread where he called her inappropriate and that she told her life story at the conference. He tried to start another tango, why? Her post sounds more like defending herself to his comments, than bragging.

Thicker skin is great advice from bugs. I wish she would too. I'm surprised why only she was called names on this blog. The sdrealtor called her pathetic, loser, loner, inappropriate, and other names. He attacked only her and she did not call names on him. His first attack on her started the day she wrote about the book Sell Now. I think it made him get defensive. I wonder if bugs would feel the same about thicker skin if he were called all those names.

I wonder about the realtor's preoccupation with her? What is his motive? Why is he attacking her, instead of presenting us with streams of data to which only he has acess. What about those pendings that powayseller wrote about? He could get busy clearing that up.

powayseller, don't let these people get you down. I hope you decide to come back. You'll be sorely missed! sdrealtor please act like a man in the future. Mind your manners as my mom used to say.

Sincerely,
RockyRoad

I provide plenty of data and explanations for her questions. She chooses not to beleive them, questions my honesty and ignores the answers because they do not necessarily support her views.

lendingbubbleco:

You make some excellent points - but one thing you have to keep in mind is that most homeowners, and most people that own second homes or investment properties, did not purchase their properties at the top of the market. If they did buy property at the top of the market, say last summer or fall, they most probably traded up and sold another property at a huge profit.

If someone did buy multiple investment properties last summer, they will probably take a big loss on paper, and I don't feel too sorry for them, but let's say someone bought a property in San Diego, Arizona, or Florida in 2004, 2003, or earlier - they have had huge profits, and even if prices fall 20 or 25%, they're still going to be money ahead if they have to / want to sell this year.