I’m bearish. I’m also looking to buy. It’s a damnedable situation. The question is how much will prices in the neighborhood you want really come down? Answer: who knows.
the nice areas don’t seem to have the same rate of houses for sale or the “repo” or “bank owned” signs on them. the crummier areas, and areas that have lousy locations seem like they are going up for sale at a much higher rate
Makes sense to me. It isn’t because the nice areas have people with money. It’s a part, but smaller than you think. My experience with OC may be different than SD, SD locals chime in here.
What I saw in OC looked like a wave from a rock hitting water.
The wave started in the nicest areas. Volume and price surged there. six months, a year later, pricing kept rising, but moderated, volume fell. The next nicer neighborhood surged at that point, volume and prices exploded, prices kept rising, more moderated, but volume fell. The third nicest areas exploded, repeat pattern. We then hit late 2004/2005, the cruddy areas exploded in large swaths and build-out areas exploded with speculators.
What you’re seeing at the moment is the collapse of that last portion of the wave. The nicer areas have a much greater percentage of people bought earlier, 2 years, 3years, 4/5 years. They’ve refinanced, locked long term rates rates at 5.25% and will sit happy to the end of time. There’s some hitting of the ATM, but it probably accounts for less than 10% of the homes. IMHO, the closer to 2005 the purchase, the more likely the housing ATM is being raided.
The buyers in the nicer areas typically, have much more cushion to negotiate, refi and/or ride it out. Their prices will get pulled down relative to the less nice areas, but there won’t as much of a push that the cruddy areas have.
