sdsundevil, you stated that “I have always failed to see the purpose of this site as it has predicted a fall in housing prices since ’03 I believe. Well, it took 3 years, but things eventually got there.”
Where to begin… First of all, the purpose of this site is to discuss SD (and elsewhere) housing. Good, bad and other. I thought that was obvious. Logically, given its nature, most of the people here are housing bears to some degree or other. Yes, it took another two years (’03 to ’05) for prices to level off and begin to fall. Likewise, many stock market bears were complaining about the Nasdaq in ’97… it took another three years for valuations to start falling. Does that mean the early bears were wrong? Does it mean that their viewpoint was invalid? Does it mean that they were to be ignored? I think you see my point. Your argument here is a version of the Straw Man Fallacy.
Rents have been discussed here on many threads. Your statement, “I have always stated that rents never go down” is most unfortunate because it’s 100% incorrect. And to read this statement should logically make one question the validity of anything else you have to say, fairly or unfairly. In fact during the early 90s SD rents did fall – I can’t remember the peak-to-trough number (Rich, you know this number) – but I think I recall it being in the mid-single digit percentage range (maybe 4%-6%). Far less than house prices fell, to be sure, but they fell nonetheless.
Regarding the use of “bubble” and “bursting” this is all a matter of semantics. I could argue that prices falling by 20% over a 2-3 year period is a bursting and you could argue that it’s not. This is a tomato/tomahto issue. It’s probably not worth discussing. I will say this however… if you talk to the average person who bought a house in 2005 for $500K and asked them 3 years later after their house was appraised at $420K whether or not they felt a “bubble had burst” I’m going to bet they would say, “yes.”
