When would you like it to be? Why don’t we just get out the ouija board and consult it? Unless you’ve lived through a few of these (which it sounds like you haven’t) your perspective tends to be a bit short-sighted. You want to know NOW. LOL. Cut to the chase so to speak. Can’t say I blame you.
If it were that easy there’d be no point in this blog now would there? Putting a timeframe/date/% is speculative at best. Trying to call the top and bottom of any market has burned many people very badly. There have been many excellent examples posted in this and other threads re: employment, inflation,deflation, outsourcing etc. This past 5+ years has been a real-estate driven boom. That has ended. It’s over – stick a fork in it. I’ve hired a number of people who were in that biz and most of their friends are looking for new careers as well. Historically you’re looking at seven to nine-year cycles based on data over the last 100 years.
We’ve had the seven-year up cycle and now it’s headed down. We can post whatever we desire to support our positions but an often overlooked MAJOR factor imo is the general PSYCHOLOGY of John Q Public. It was a SELLER’s market and many people (herders) rushed in to buy thinking they were never going to “see prices like this again”. They were right – they were going to see lower prices! I’ve been through three of these cycles. It’s never “different this time” despite what you hear or read. Now people are convinced it’s a BUYER’S market and they are going to wait it out for some time. Yes, even years if need be.
We Americans tend to overdo everything to the point where we end up with undesired results. The dot-com era produced many instant million/billionaires and even more who lost their a$$es. Many who made money decided to get into the glamorous wine business and more acreage was planted from the Central Coast up into Napa/Sonoma in 2-3 years than in the previous 25-50 years. Beautiful rolling hills as well as barren scrub were converted into Cabernet, Chardonnay, Merlot or whatever. All these people thought they were going to make more money.
And what was the major result of this? Two Buck Chuck aka Charles Shaw at Trader Joe’s! At one point they were selling 20-25% of all domestic wine. One out of every 4-5 bottles sold was Charles Shaw. For many wealth-seeking wineries this only proved the old adage of “know how to make a small fortune in the wine biz? start with a large one”! What happened after all this over planting? You guessed it. They started pulling out vineyards and housing developments sprung up everywhere. Look at Templeton and Paso Robles for example. It has become so overbuilt that prices there are dropping as quickly as they are in most markets.
There are thousands of houses on the market in most areas right now and there are literally thousands more in new developments (Portola, El Toro, Tustin) coming to market in the OC alone. Not to mention all the people who pulled their homes last Fall/Winter thinking this Spring might be better. Well guess what? They would have been better off pricing them correctly and getting out with a small(er) profit than a potential loss. It’s getting worse by the week/month. The headlines are going to get bleaker as we get into summer and fall.
But I digress…. what was it you wanted? Oh yeah.
Submitted by latesummer2008 on February 25, 2007 – 11:44am.
The magic question is Where’s the Bottom ? I am in Santa Monica and the latest numbers look pretty dismal in higher end markets (LA County) for the month of January as reported by the LA TIMES Sunday Feb 25.
I am interested in when to buy and how much of a drop from the peak for the Westside of LA in particular, but feel other high end markets in So. Cal are in the same boat. SD seems to be leading all down the river. Please post your opinions on local markets here based on SQ FT numbers and NOT MEDIAN prices.
FWIW here are my guesstimates:
How long? 2015
Time frame? Buy from June 2009-2012 (it will have sunk in pretty well in most psyches by then that it’s a buyer’s market and will be for years)
Percentage of drop? I’m looking for an across-the-board MINIMUM decline of 25 to 35% from current prices.
