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(former)FormerSanDiegan.
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June 21, 2007 at 12:03 PM #9354June 21, 2007 at 12:12 PM #61043
donaldduckmoore
ParticipantI wish I knew the answer, I have been waiting too. I don’t understand how it works. Anyone from the last housing downturn remember any phenomenon?
June 21, 2007 at 12:12 PM #61081ParticipantI wish I knew the answer, I have been waiting too. I don’t understand how it works. Anyone from the last housing downturn remember any phenomenon?
June 21, 2007 at 12:13 PM #61045PD
ParticipantDidn’t the downturn start later in Orange County than San Diego? Further, if you adjust for inflation, prices are down.
I think we are about to see some good discounting coming up. Orange County has lost a chunk of 100k+ wage earners with all the mortgage layoffs.June 21, 2007 at 12:13 PM #61082ParticipantDidn’t the downturn start later in Orange County than San Diego? Further, if you adjust for inflation, prices are down.
I think we are about to see some good discounting coming up. Orange County has lost a chunk of 100k+ wage earners with all the mortgage layoffs.June 21, 2007 at 12:48 PM #61066kev374
ParticipantPD, the problem with adjusting for inflation is that incomes are generally not keeping up with local inflation rates. OC has an inflation rate of 4.3%, most wage increases I have heard of are in the 1-3.5% range, that is not even sufficient to keep pace with local inflation.
The problem is that the prices of certain items like gas, rents, energy, health insurance etc. is skyrocketing. Rents in my area went up 6%-9% last year. So prices may be lower inflation adjusted but incomes are even lower than that!
June 21, 2007 at 12:48 PM #61104ParticipantPD, the problem with adjusting for inflation is that incomes are generally not keeping up with local inflation rates. OC has an inflation rate of 4.3%, most wage increases I have heard of are in the 1-3.5% range, that is not even sufficient to keep pace with local inflation.
The problem is that the prices of certain items like gas, rents, energy, health insurance etc. is skyrocketing. Rents in my area went up 6%-9% last year. So prices may be lower inflation adjusted but incomes are even lower than that!
June 21, 2007 at 12:56 PM #61070noone
ParticipantThe answer my friend, is blowing in the wind. Actually it’s all over this board. Top 3 as I see it…
Lenders aren’t getting as tight as they should. There were some fairly strict guidelines introduced a few months back, but they are still just guidelines.
There are still many people who buy based on the monthly mortgage payment at the introductory rate, without thinking about whether or not they will be able to afford the mortgage if they cannot re-finance when the rate resets.
While there is a lot of foreclosure activity right now, most of the existing ARMs are resetting later this year/next year. This will put a lot more inventory in the hands of the banks.
June 21, 2007 at 12:56 PM #61108ParticipantThe answer my friend, is blowing in the wind. Actually it’s all over this board. Top 3 as I see it…
Lenders aren’t getting as tight as they should. There were some fairly strict guidelines introduced a few months back, but they are still just guidelines.
There are still many people who buy based on the monthly mortgage payment at the introductory rate, without thinking about whether or not they will be able to afford the mortgage if they cannot re-finance when the rate resets.
While there is a lot of foreclosure activity right now, most of the existing ARMs are resetting later this year/next year. This will put a lot more inventory in the hands of the banks.
June 21, 2007 at 1:27 PM #61087SD Realtor
ParticipantAs noone said the answers are all over this board….
Lets review…
Sticky on the way down… reluctant sellers with equity (and these seem to be more prevalent in nicer neighborhoods) don’t care. They price according to their own standards and if the home doesn’t sell then they pull it off the market.
REO properties not being priced to sell or being held off the market. We have seen alot of this. Remember, the NOD list being large is one thing. We need more more more REOs to hit the market so they will start competing against each other price wise.
We all agree that the ARM Tsumani is just now coming ashore. Give it a few years.
Just a few posts away you can read about people buying and just recently bought. Others, many others are out there looking. Granted sales volume is down, but buyers are out there.
There are plenty of other posts speculating on the reasons why RE moves down slowly… I am to lazy to keep writing, sorry bout that.
RE cycles take years not months…
SD Realtor
June 21, 2007 at 1:27 PM #61124ParticipantAs noone said the answers are all over this board….
Lets review…
Sticky on the way down… reluctant sellers with equity (and these seem to be more prevalent in nicer neighborhoods) don’t care. They price according to their own standards and if the home doesn’t sell then they pull it off the market.
REO properties not being priced to sell or being held off the market. We have seen alot of this. Remember, the NOD list being large is one thing. We need more more more REOs to hit the market so they will start competing against each other price wise.
We all agree that the ARM Tsumani is just now coming ashore. Give it a few years.
Just a few posts away you can read about people buying and just recently bought. Others, many others are out there looking. Granted sales volume is down, but buyers are out there.
There are plenty of other posts speculating on the reasons why RE moves down slowly… I am to lazy to keep writing, sorry bout that.
RE cycles take years not months…
SD Realtor
June 21, 2007 at 1:39 PM #61089drunkle
Participanta thought about “inflation”…
it sucks to be in the bottom 3/4 that has been inflated on. top earners have inflated along with asset and commodity prices. top earners have absorbed all the wage inflation that would have otherwise been spread around. i guess this is what they mean by stagflation; 3/4 stagnating in wages while prices across the board are inflating. imported chinese goods excluded.
prices of goods can inflate because the *wealth* of the bottom 3/4 is being diminished. that is, people still have the wealth to pay for inflated goods without dipping below sustenance levels. that would explain the zero savings rate, anyway… no savings = no wealth = spending to support inflation.
June 21, 2007 at 1:39 PM #61126Participanta thought about “inflation”…
it sucks to be in the bottom 3/4 that has been inflated on. top earners have inflated along with asset and commodity prices. top earners have absorbed all the wage inflation that would have otherwise been spread around. i guess this is what they mean by stagflation; 3/4 stagnating in wages while prices across the board are inflating. imported chinese goods excluded.
prices of goods can inflate because the *wealth* of the bottom 3/4 is being diminished. that is, people still have the wealth to pay for inflated goods without dipping below sustenance levels. that would explain the zero savings rate, anyway… no savings = no wealth = spending to support inflation.
June 21, 2007 at 2:10 PM #61097recordsclerk
ParticipantBuilders are slowing down production. Just enough buyers out there for the properties that are priced right. Half the listings of the MLS are outrages and will never sell. I don’t think there is enough must sell inventory competing for buyers. It’s going to take more must sell inventory to compete against each other until prices are forced to drop at a faster rate.
June 21, 2007 at 2:10 PM #61134ParticipantBuilders are slowing down production. Just enough buyers out there for the properties that are priced right. Half the listings of the MLS are outrages and will never sell. I don’t think there is enough must sell inventory competing for buyers. It’s going to take more must sell inventory to compete against each other until prices are forced to drop at a faster rate.
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