- This topic has 7 replies, 8 voices, and was last updated 18 years ago by no_such_reality.
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October 11, 2006 at 4:43 PM #7722October 11, 2006 at 4:55 PM #37712woodrowParticipant
Personally, I’m looking for mid-December as a watershed moment. We’ll get November’s numbers ~ Dec. 15, and if that median is 466k or below, the YOY decline will be double digits (518k to 466k is almost exactly 10%).
When the headlines begin showing double digit YOY declines it should drastically cut down on the greater fools out there who are still overpaying for SD RE. Downward pressure on price snowballs with fewer sales, and next springs comps are even lower.
November’s median being at 466k (or lower) will accelerate the panic.
October 11, 2006 at 5:11 PM #37716sdrealtorParticipantI’ve been predicting this for a couple months. Mid-December is when it will all get real. Double digit declines should strike fear in people’s gut and will lead to another 10% decline over the next 12 months.
October 11, 2006 at 5:15 PM #37717mydogsarelazyParticipantSince you mention the figure of $42,000.00 here is an anecdote about a loss of around that amount.
A young couple who I worked with bought a house in late 2004 in Wildomar. It was a very deluxe house, around $700k. Their intention was to have it be an investment.
When the husband got a new job out of state they put it on the market and after almost a year of listing it they managed to sell it themselves a few months ago. They did so after borrowing $40k from their parents to cover their loss.
I figure they were lucky to get out and only lose $40k, but still, that is a lot of money to burn.
JS
October 11, 2006 at 5:17 PM #37719lindismithParticipantDecember, interesting. That should help the economy come a screetching halt!
Does anyone check Mr. Brightside’s blog? He posts the losses in dollar values, and it’s really crazy how much people are losing on those downtown condos.
October 11, 2006 at 5:18 PM #37720waiting hawkParticipantBe even worse if people would see a 10% delcine and it would also show how much appreciation that has been lost.
I’m sick and not sure if this makes sense sorry.
October 11, 2006 at 11:02 PM #37741rankandfileParticipantWe must not forget that most of us Piggingtonians are salmon swimming upstream. I agree that things will get worse this winter. However, there are many forces working against us. There are many factions that want, and need, to see home prices NOT fall dramatically (as they should). Realtors, banks, politicans, government, media outlets, developers, contractors, etc. They just have too much invested in it. I truly feel that we are in the minority.
I am not saying that things will continue to get worse at a faster rate. I am merely saying that there are many in powerful positions that will try to keep this thing from dropping too far too fast. A Fed interest rate cut or two, dropping oil prices, substantial incentives on autos, the classic media-real estate propaganda, and more will all be employed in full force.
We already see it going on around us. Every normal-thinking person has at least some idea that homes are overpriced, and that they can’t realistically afford them without incurring major long-term debt. Yet, even as prices have more than tripled in some places, we are still being told by some sources that there is just a mild correction taking place – that prices will start going back up again in the spring! Hey, I don’t mind an asset appreciating. My only concern is that wages simply aren’t keeping pace. If I earned 3-4 times what I am currently earning I’d be more than happy to purchase a home at current prices. The money has to come from somewhere, right?
October 12, 2006 at 8:56 PM #37789no_such_realityParticipantInterestingly though, both resale condos and SFRs are both down slightly over 4% from peak.
Obviously the builders are giving up the ghost on the new home sales.
If October slides like September did, the January numbers may be interesting. There’s a psychological tipping point just past 10% lower from here. Another 10% down and SFRs fall back below $500,000.
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