50% off is the regular price.

[carlsbadworker]

If I’m in the market to buy jewelry, I will definitely buy at 50% off (if the seller does not move up the original price before he applies the discount). 50% off is typically the wholesaler price. The store is selling at cost. I’m happy to take the jewelry at this price. You can similarly argue that the wholesale price may also drop. But I don’t care.
I don’t know why people are arguing here. If you want to wait for the bottom of the price, this may not be the time to buy. We will know the bottom after we have passed the bottom. Since the price most likely will not be V-shape, there will be plenty of opportunity to get the bottom-like price at that time.
But buying house, like buying jewelry, like buying HDTV, may not be purely an economical activity, many of which are life-style choice. Today’s buyers will definitely not looking foolish if he can hold onto the property for a long time. As Rich pointed out in his article, the housing price has become reasonable at many places, especially the locations where price has been 50% off. Even if the price worth only 1/2 what we paid for 20 years from now (like the Japan example you gave, although I didn’t check the data to see if it is true), SO WHAT? Price is definitely much much lower than 240x rent right now. 20 years of renting would cost you MUCH MUCH more than buying, who cares if you can get another 50% off today’s price at that time. You are paying more on rents and you missed out the joy of 20 years of homeownership.

[Rt.66]

“Those that purchased recently, are hoping for a fairy tale market turn around to restore their equity or those just too antsy to remain on the fence will try like the devil to convince themselves and others that this is somehow not just getting started and somehow will avoid getting much worse.”

See what I mean? Now income averages need to have the bottom 1/3 lopped off to be relevant. Renters should be excluded from any ratios? Why, because we will now get our first time buyers, from “first time buyer fantasy island”?
I was surprised at the “It’s different here” posts. 2.5 x earnings here is SD will still be a hefty sunshine tax when fly-over country is selling for 1 x earnings.

Temecula Guy,

I’ll beat your $165k challenge. Hows about we start at $150k in SD?

http://www.realtor.com/realestateandhomes-search/San-Diego_CA/beds-3/baths-2/price-na-150000/type-single-family-home?pgsz=3&source=a1se7h1t472

Right now today I have 52 homes for $150k or less in SD to choose from. And that’s excluding condos! Sure at this point they are not the cream of the crop obviously. And I really should not have to explain that SD will have that crazy averages thing happening, so yes coastal SD will be higher than inland, duh.

To assume I meant La Jolla or Carlsbad would have a median of $165k when I say “SD will have a median of $165k” is just more RE Bear word games.

You RE bears are insanely humorous. The banks hold 80k CA houses in shadow inventory, NODs, preforeclosures and foreclosures are rocketing upward and you look at the dummies bidding up the price of the obviously and grossly manipulated supply and use them as some indicator of future RE values?

[Rt.66]

“Those that purchased recently, are hoping for a fairy tale market turn around to restore their equity or those just too antsy to remain on the fence will try like the devil to convince themselves and others that this is somehow not just getting started and somehow will avoid getting much worse.”

See what I mean? Now income averages need to have the bottom 1/3 lopped off to be relevant. Renters should be excluded from any ratios? Why, because we will now get our first time buyers, from “first time buyer fantasy island”?
I was surprised at the “It’s different here” posts. 2.5 x earnings here is SD will still be a hefty sunshine tax when fly-over country is selling for 1 x earnings.

Temecula Guy,

I’ll beat your $165k challenge. Hows about we start at $150k in SD?

http://www.realtor.com/realestateandhomes-search/San-Diego_CA/beds-3/baths-2/price-na-150000/type-single-family-home?pgsz=3&source=a1se7h1t472

Right now today I have 52 homes for $150k or less in SD to choose from. And that’s excluding condos! Sure at this point they are not the cream of the crop obviously. And I really should not have to explain that SD will have that crazy averages thing happening, so yes coastal SD will be higher than inland, duh.

To assume I meant La Jolla or Carlsbad would have a median of $165k when I say “SD will have a median of $165k” is just more RE Bear word games.

You RE bears are insanely humorous. The banks hold 80k CA houses in shadow inventory, NODs, preforeclosures and foreclosures are rocketing upward and you look at the dummies bidding up the price of the obviously and grossly manipulated supply and use them as some indicator of future RE values?

[Rt.66]

“Those that purchased recently, are hoping for a fairy tale market turn around to restore their equity or those just too antsy to remain on the fence will try like the devil to convince themselves and others that this is somehow not just getting started and somehow will avoid getting much worse.”

See what I mean? Now income averages need to have the bottom 1/3 lopped off to be relevant. Renters should be excluded from any ratios? Why, because we will now get our first time buyers, from “first time buyer fantasy island”?
I was surprised at the “It’s different here” posts. 2.5 x earnings here is SD will still be a hefty sunshine tax when fly-over country is selling for 1 x earnings.

Temecula Guy,

I’ll beat your $165k challenge. Hows about we start at $150k in SD?

http://www.realtor.com/realestateandhomes-search/San-Diego_CA/beds-3/baths-2/price-na-150000/type-single-family-home?pgsz=3&source=a1se7h1t472

Right now today I have 52 homes for $150k or less in SD to choose from. And that’s excluding condos! Sure at this point they are not the cream of the crop obviously. And I really should not have to explain that SD will have that crazy averages thing happening, so yes coastal SD will be higher than inland, duh.

To assume I meant La Jolla or Carlsbad would have a median of $165k when I say “SD will have a median of $165k” is just more RE Bear word games.

You RE bears are insanely humorous. The banks hold 80k CA houses in shadow inventory, NODs, preforeclosures and foreclosures are rocketing upward and you look at the dummies bidding up the price of the obviously and grossly manipulated supply and use them as some indicator of future RE values?

[Rt.66]

“Those that purchased recently, are hoping for a fairy tale market turn around to restore their equity or those just too antsy to remain on the fence will try like the devil to convince themselves and others that this is somehow not just getting started and somehow will avoid getting much worse.”

See what I mean? Now income averages need to have the bottom 1/3 lopped off to be relevant. Renters should be excluded from any ratios? Why, because we will now get our first time buyers, from “first time buyer fantasy island”?
I was surprised at the “It’s different here” posts. 2.5 x earnings here is SD will still be a hefty sunshine tax when fly-over country is selling for 1 x earnings.

Temecula Guy,

I’ll beat your $165k challenge. Hows about we start at $150k in SD?

http://www.realtor.com/realestateandhomes-search/San-Diego_CA/beds-3/baths-2/price-na-150000/type-single-family-home?pgsz=3&source=a1se7h1t472

Right now today I have 52 homes for $150k or less in SD to choose from. And that’s excluding condos! Sure at this point they are not the cream of the crop obviously. And I really should not have to explain that SD will have that crazy averages thing happening, so yes coastal SD will be higher than inland, duh.

To assume I meant La Jolla or Carlsbad would have a median of $165k when I say “SD will have a median of $165k” is just more RE Bear word games.

You RE bears are insanely humorous. The banks hold 80k CA houses in shadow inventory, NODs, preforeclosures and foreclosures are rocketing upward and you look at the dummies bidding up the price of the obviously and grossly manipulated supply and use them as some indicator of future RE values?

[Rt.66]

“Those that purchased recently, are hoping for a fairy tale market turn around to restore their equity or those just too antsy to remain on the fence will try like the devil to convince themselves and others that this is somehow not just getting started and somehow will avoid getting much worse.”

See what I mean? Now income averages need to have the bottom 1/3 lopped off to be relevant. Renters should be excluded from any ratios? Why, because we will now get our first time buyers, from “first time buyer fantasy island”?
I was surprised at the “It’s different here” posts. 2.5 x earnings here is SD will still be a hefty sunshine tax when fly-over country is selling for 1 x earnings.

Temecula Guy,

I’ll beat your $165k challenge. Hows about we start at $150k in SD?

http://www.realtor.com/realestateandhomes-search/San-Diego_CA/beds-3/baths-2/price-na-150000/type-single-family-home?pgsz=3&source=a1se7h1t472

Right now today I have 52 homes for $150k or less in SD to choose from. And that’s excluding condos! Sure at this point they are not the cream of the crop obviously. And I really should not have to explain that SD will have that crazy averages thing happening, so yes coastal SD will be higher than inland, duh.

To assume I meant La Jolla or Carlsbad would have a median of $165k when I say “SD will have a median of $165k” is just more RE Bear word games.

You RE bears are insanely humorous. The banks hold 80k CA houses in shadow inventory, NODs, preforeclosures and foreclosures are rocketing upward and you look at the dummies bidding up the price of the obviously and grossly manipulated supply and use them as some indicator of future RE values?

[Rt.66]

4 San Diegan housing bulls walk into BofA to bid on BofA owned REOs.

Mr. Banker says: Thanks for coming, today we are bidding on 2 fine REOs, one on Main St. and one on 3rd St. We’ll start at $200k for the Main St. property and $160k for the one on 3rd.

SD Bull #1: But I see 250 REOs on your list for the area we are interested in.

SD Bull #2: Why can’t we just make you an offer on any one of the 250 we prefer?

MR Banker: It does not work that way. There are only 2 available for sale. So there is an extreme, dire shortage of these affordable houses.

SD Bull #3: Makes sense! Here’s my bid on the one on Main St. My realtor said I need to get ahead of the bidding if I expect to win one of these 50% of REOs so I’m gonna go with…. $220k

SD Bull #2: I bid $225k!

SD Bull #1: I want to bid but I am worried because I see 250 REOs on that list right now and I read somewhere that there is a tidal wave of even more foreclosures coming soon.

Mr. Banker: The average wage for people in this area has been re-adjusted upward by removing the lower income earners from the equation so affordability ratios are now at all time lows, first time buyers will now come from wealthy islands and not from apartments anymore, SD has wonderful weather, It’s different here, Its different this time. Mortgage rates are low. Engineers are getting raises. You had better hurry and put an offer in on this house on Main St. because it seems everyone wants that one!

SD Bull #1: Well Bernanke did say he saw some green shoots, and that house on 3rd St. is a mess so….I’ll go $230k on Main St!

SD Bull #4: I’m a winner, and I deserve this house, I’m gonna go $240k!

————————-
The next day Piggs are treated to a new post:

“Hey everyone this fence sitter finally snagged one of those super priced REOs!”

Circle jerking and reach arounds from likeminded folks ensue.

[Rt.66]

4 San Diegan housing bulls walk into BofA to bid on BofA owned REOs.

Mr. Banker says: Thanks for coming, today we are bidding on 2 fine REOs, one on Main St. and one on 3rd St. We’ll start at $200k for the Main St. property and $160k for the one on 3rd.

SD Bull #1: But I see 250 REOs on your list for the area we are interested in.

SD Bull #2: Why can’t we just make you an offer on any one of the 250 we prefer?

MR Banker: It does not work that way. There are only 2 available for sale. So there is an extreme, dire shortage of these affordable houses.

SD Bull #3: Makes sense! Here’s my bid on the one on Main St. My realtor said I need to get ahead of the bidding if I expect to win one of these 50% of REOs so I’m gonna go with…. $220k

SD Bull #2: I bid $225k!

SD Bull #1: I want to bid but I am worried because I see 250 REOs on that list right now and I read somewhere that there is a tidal wave of even more foreclosures coming soon.

Mr. Banker: The average wage for people in this area has been re-adjusted upward by removing the lower income earners from the equation so affordability ratios are now at all time lows, first time buyers will now come from wealthy islands and not from apartments anymore, SD has wonderful weather, It’s different here, Its different this time. Mortgage rates are low. Engineers are getting raises. You had better hurry and put an offer in on this house on Main St. because it seems everyone wants that one!

SD Bull #1: Well Bernanke did say he saw some green shoots, and that house on 3rd St. is a mess so….I’ll go $230k on Main St!

SD Bull #4: I’m a winner, and I deserve this house, I’m gonna go $240k!

————————-
The next day Piggs are treated to a new post:

“Hey everyone this fence sitter finally snagged one of those super priced REOs!”

Circle jerking and reach arounds from likeminded folks ensue.

[Rt.66]

4 San Diegan housing bulls walk into BofA to bid on BofA owned REOs.

Mr. Banker says: Thanks for coming, today we are bidding on 2 fine REOs, one on Main St. and one on 3rd St. We’ll start at $200k for the Main St. property and $160k for the one on 3rd.

SD Bull #1: But I see 250 REOs on your list for the area we are interested in.

SD Bull #2: Why can’t we just make you an offer on any one of the 250 we prefer?

MR Banker: It does not work that way. There are only 2 available for sale. So there is an extreme, dire shortage of these affordable houses.

SD Bull #3: Makes sense! Here’s my bid on the one on Main St. My realtor said I need to get ahead of the bidding if I expect to win one of these 50% of REOs so I’m gonna go with…. $220k

SD Bull #2: I bid $225k!

SD Bull #1: I want to bid but I am worried because I see 250 REOs on that list right now and I read somewhere that there is a tidal wave of even more foreclosures coming soon.

Mr. Banker: The average wage for people in this area has been re-adjusted upward by removing the lower income earners from the equation so affordability ratios are now at all time lows, first time buyers will now come from wealthy islands and not from apartments anymore, SD has wonderful weather, It’s different here, Its different this time. Mortgage rates are low. Engineers are getting raises. You had better hurry and put an offer in on this house on Main St. because it seems everyone wants that one!

SD Bull #1: Well Bernanke did say he saw some green shoots, and that house on 3rd St. is a mess so….I’ll go $230k on Main St!

SD Bull #4: I’m a winner, and I deserve this house, I’m gonna go $240k!

————————-
The next day Piggs are treated to a new post:

“Hey everyone this fence sitter finally snagged one of those super priced REOs!”

Circle jerking and reach arounds from likeminded folks ensue.

[Rt.66]

4 San Diegan housing bulls walk into BofA to bid on BofA owned REOs.

Mr. Banker says: Thanks for coming, today we are bidding on 2 fine REOs, one on Main St. and one on 3rd St. We’ll start at $200k for the Main St. property and $160k for the one on 3rd.

SD Bull #1: But I see 250 REOs on your list for the area we are interested in.

SD Bull #2: Why can’t we just make you an offer on any one of the 250 we prefer?

MR Banker: It does not work that way. There are only 2 available for sale. So there is an extreme, dire shortage of these affordable houses.

SD Bull #3: Makes sense! Here’s my bid on the one on Main St. My realtor said I need to get ahead of the bidding if I expect to win one of these 50% of REOs so I’m gonna go with…. $220k

SD Bull #2: I bid $225k!

SD Bull #1: I want to bid but I am worried because I see 250 REOs on that list right now and I read somewhere that there is a tidal wave of even more foreclosures coming soon.

Mr. Banker: The average wage for people in this area has been re-adjusted upward by removing the lower income earners from the equation so affordability ratios are now at all time lows, first time buyers will now come from wealthy islands and not from apartments anymore, SD has wonderful weather, It’s different here, Its different this time. Mortgage rates are low. Engineers are getting raises. You had better hurry and put an offer in on this house on Main St. because it seems everyone wants that one!

SD Bull #1: Well Bernanke did say he saw some green shoots, and that house on 3rd St. is a mess so….I’ll go $230k on Main St!

SD Bull #4: I’m a winner, and I deserve this house, I’m gonna go $240k!

————————-
The next day Piggs are treated to a new post:

“Hey everyone this fence sitter finally snagged one of those super priced REOs!”

Circle jerking and reach arounds from likeminded folks ensue.

[Rt.66]

4 San Diegan housing bulls walk into BofA to bid on BofA owned REOs.

Mr. Banker says: Thanks for coming, today we are bidding on 2 fine REOs, one on Main St. and one on 3rd St. We’ll start at $200k for the Main St. property and $160k for the one on 3rd.

SD Bull #1: But I see 250 REOs on your list for the area we are interested in.

SD Bull #2: Why can’t we just make you an offer on any one of the 250 we prefer?

MR Banker: It does not work that way. There are only 2 available for sale. So there is an extreme, dire shortage of these affordable houses.

SD Bull #3: Makes sense! Here’s my bid on the one on Main St. My realtor said I need to get ahead of the bidding if I expect to win one of these 50% of REOs so I’m gonna go with…. $220k

SD Bull #2: I bid $225k!

SD Bull #1: I want to bid but I am worried because I see 250 REOs on that list right now and I read somewhere that there is a tidal wave of even more foreclosures coming soon.

Mr. Banker: The average wage for people in this area has been re-adjusted upward by removing the lower income earners from the equation so affordability ratios are now at all time lows, first time buyers will now come from wealthy islands and not from apartments anymore, SD has wonderful weather, It’s different here, Its different this time. Mortgage rates are low. Engineers are getting raises. You had better hurry and put an offer in on this house on Main St. because it seems everyone wants that one!

SD Bull #1: Well Bernanke did say he saw some green shoots, and that house on 3rd St. is a mess so….I’ll go $230k on Main St!

SD Bull #4: I’m a winner, and I deserve this house, I’m gonna go $240k!

————————-
The next day Piggs are treated to a new post:

“Hey everyone this fence sitter finally snagged one of those super priced REOs!”

Circle jerking and reach arounds from likeminded folks ensue.

[4plexowner]

Rt.66 – one of the reasons I continue hanging around Pigg-land (OK, I’m addicted!) is to gauge sentiment

I have high confidence in these data points:

1. San Diego real estate was a bubble that has now burst

2. bubble dynamics say that ALL financial bubbles (not some, or most – ALL) fully retrace to their starting points and often overshoot to the downside

3. market psychology says that a significant downward trend (economy, real estate, consumer sentiment, incomes, rents) will not end until there is a capitulation phase – people involved in the market will be utterly repulsed by the ongoing decline – even the least economically-savvy guy on the street will ‘know’ that it is a bad idea to get involved in the declining market

As long as we continue to have threads where people are trying to rationalize purchasing San Diego real estate (especially rental property!) I will remain convinced that the RE bottom is off in the future somewhere – at the true bottom in our real estate market I doubt there will be many people blogging about real estate at all – most people will be repulsed by the mere thought of real estate and smart people who have maintained the ability to actually purchase property will be busy doing so

[4plexowner]

Rt.66 – one of the reasons I continue hanging around Pigg-land (OK, I’m addicted!) is to gauge sentiment

I have high confidence in these data points:

1. San Diego real estate was a bubble that has now burst

2. bubble dynamics say that ALL financial bubbles (not some, or most – ALL) fully retrace to their starting points and often overshoot to the downside

3. market psychology says that a significant downward trend (economy, real estate, consumer sentiment, incomes, rents) will not end until there is a capitulation phase – people involved in the market will be utterly repulsed by the ongoing decline – even the least economically-savvy guy on the street will ‘know’ that it is a bad idea to get involved in the declining market

As long as we continue to have threads where people are trying to rationalize purchasing San Diego real estate (especially rental property!) I will remain convinced that the RE bottom is off in the future somewhere – at the true bottom in our real estate market I doubt there will be many people blogging about real estate at all – most people will be repulsed by the mere thought of real estate and smart people who have maintained the ability to actually purchase property will be busy doing so

[4plexowner]

Rt.66 – one of the reasons I continue hanging around Pigg-land (OK, I’m addicted!) is to gauge sentiment

I have high confidence in these data points:

1. San Diego real estate was a bubble that has now burst

2. bubble dynamics say that ALL financial bubbles (not some, or most – ALL) fully retrace to their starting points and often overshoot to the downside

3. market psychology says that a significant downward trend (economy, real estate, consumer sentiment, incomes, rents) will not end until there is a capitulation phase – people involved in the market will be utterly repulsed by the ongoing decline – even the least economically-savvy guy on the street will ‘know’ that it is a bad idea to get involved in the declining market

As long as we continue to have threads where people are trying to rationalize purchasing San Diego real estate (especially rental property!) I will remain convinced that the RE bottom is off in the future somewhere – at the true bottom in our real estate market I doubt there will be many people blogging about real estate at all – most people will be repulsed by the mere thought of real estate and smart people who have maintained the ability to actually purchase property will be busy doing so

[4plexowner]

Rt.66 – one of the reasons I continue hanging around Pigg-land (OK, I’m addicted!) is to gauge sentiment

I have high confidence in these data points:

1. San Diego real estate was a bubble that has now burst

2. bubble dynamics say that ALL financial bubbles (not some, or most – ALL) fully retrace to their starting points and often overshoot to the downside

3. market psychology says that a significant downward trend (economy, real estate, consumer sentiment, incomes, rents) will not end until there is a capitulation phase – people involved in the market will be utterly repulsed by the ongoing decline – even the least economically-savvy guy on the street will ‘know’ that it is a bad idea to get involved in the declining market

As long as we continue to have threads where people are trying to rationalize purchasing San Diego real estate (especially rental property!) I will remain convinced that the RE bottom is off in the future somewhere – at the true bottom in our real estate market I doubt there will be many people blogging about real estate at all – most people will be repulsed by the mere thought of real estate and smart people who have maintained the ability to actually purchase property will be busy doing so

[Author]

Posts