>Now yes if what you posted IS TRUE, that even with 100% >financing, homeowners in say 4s or Carmel Valley can afford >the payments, then yes, those homes will depreciate at a >slower rate…
I didn’t specify – sorry my fault. I would say carmel valley and 4s are risky. One example of what I was referring to is an area of poway I researched that was the right demographic.
>I feel your assumptions break down very rapidly for a >variety of reasons such as divorce, maybe one of the wage >earners decides to have a baby and stop working, job >displacement, relocation… It seems to me that there are >variables that you are conveniently ignoring.
I agree with you about the divorce, I had not counted that as strongly as I should have. The areas we looked at were populated by local business owners and self employed professionals with their practices located here. They probably won’t be displaced or relocated by a forced move, but rather by their own choice. Although spouses may work, a single income can pay the mort.
>However these people are also smart and I don’t think they >and they alone will prop up the entire market of higher end >property.
I don’t think they will prop up the entire market, but these areas will have higher comps than others. The people live in the house as a choice on where/how to live, not as an investment. If I end up +/- 10% whenever I do sell, its not a big deal. If its down 30%, then I guessed wrong and will pay the price. Hopefully I will guess better on other non-real estate investments.
One of the best posts I have ever read come from this group. I don’t remember exactly who said it, but the gist was that hedge funds controlled the market and any guesses we could make were already considered by the hedge funds earlier. This sure feels right. Since I moved to dollar cost averaging and long term investments life has been much better.
I’m not considering my home as an investment, but my financial bet is that housing won’t crash to the 30% – 50% range from 2007 values.
