Basic affordability metrics

[jpinpb]

I agree. Last recession in the ’90’s, I couldn’t sell my place in Carmel Valley for what I bought it for at the peak. And it was still desireable, no?

I already am looking at a place that is at 2000 prices. Granted, tricky to buy b/c no kitchen or baths = no bank loan. BUT, we have not exhausted all the defaults, foreclosures, job losses, etc. The place I’m interested in is in a desireable part of SD, and yet reduced 45% from peak. I am trying to not get emotional and reassure myself that if I’m not able to get it, if so soon into this decline something like this has come along, then what will the market be like year-end or sometime next year.

In fact, that thought almost makes me want to pass on this. Will prices decline lower than 2000 prices? So many argue not in SD and certainly not along the coast, and yet here’s one 45% less, albeit no kitchen or bath, but nevertheless early in the game. If it declines slightly from 2000 prices, I won’t be so upset, but if it declines 20% from 2000 prices, that’ll start to hurt a little.

[SDEngineer]

Numbers are a little off – I was clearing 4200/mo at a single filing status several years back when my salary was about 83.5K/yr.

Point taken though, and why I’ve stayed out of the housing market for so long. The fundamentals are still way out of whack, though they are getting significantly better. I guesstimated at the peak in ’05 that housing would have to fall about 40% for it to get back in line with San Diego fundamentals (of about a 4.5x median household income to price ratio), and we’ve seen about 25% of that drop. Still, the remaining 15% off peak is about another 80K or so drop from current median selling prices.

Hopefully after the spring “non-bounce” we’ll see more sellers getting realistic (and those that aren’t getting pummelled by the REO’s auction prices), and see more major depreciation this autumn/winter. I do expect the trend to hit the downside and go below the fundamentals, but I’ll be willing to buy once the market has returned to fundamentals (the wife wants a home, and we’re both sick of being renters, no matter how much financial sense it makes).

Of course, some markets are falling later than others – we’re looking at probably buying in some North County markets (W. Escondido near Del Dios, San Marcos, etc) which have seen a lot of air bled out already (proximity to my job is good from the N. County). Places like 4S and CMR, though places we’d like to live, are taking longer to adjust and we’re simply not likely to wait the extra 2-3 years for the depreciation to hammer those areas.

[SDEngineer]

Numbers are a little off – I was clearing 4200/mo at a single filing status several years back when my salary was about 83.5K/yr.

Point taken though, and why I’ve stayed out of the housing market for so long. The fundamentals are still way out of whack, though they are getting significantly better. I guesstimated at the peak in ’05 that housing would have to fall about 40% for it to get back in line with San Diego fundamentals (of about a 4.5x median household income to price ratio), and we’ve seen about 25% of that drop. Still, the remaining 15% off peak is about another 80K or so drop from current median selling prices.

Hopefully after the spring “non-bounce” we’ll see more sellers getting realistic (and those that aren’t getting pummelled by the REO’s auction prices), and see more major depreciation this autumn/winter. I do expect the trend to hit the downside and go below the fundamentals, but I’ll be willing to buy once the market has returned to fundamentals (the wife wants a home, and we’re both sick of being renters, no matter how much financial sense it makes).

Of course, some markets are falling later than others – we’re looking at probably buying in some North County markets (W. Escondido near Del Dios, San Marcos, etc) which have seen a lot of air bled out already (proximity to my job is good from the N. County). Places like 4S and CMR, though places we’d like to live, are taking longer to adjust and we’re simply not likely to wait the extra 2-3 years for the depreciation to hammer those areas.

[SDEngineer]

Numbers are a little off – I was clearing 4200/mo at a single filing status several years back when my salary was about 83.5K/yr.

Point taken though, and why I’ve stayed out of the housing market for so long. The fundamentals are still way out of whack, though they are getting significantly better. I guesstimated at the peak in ’05 that housing would have to fall about 40% for it to get back in line with San Diego fundamentals (of about a 4.5x median household income to price ratio), and we’ve seen about 25% of that drop. Still, the remaining 15% off peak is about another 80K or so drop from current median selling prices.

Hopefully after the spring “non-bounce” we’ll see more sellers getting realistic (and those that aren’t getting pummelled by the REO’s auction prices), and see more major depreciation this autumn/winter. I do expect the trend to hit the downside and go below the fundamentals, but I’ll be willing to buy once the market has returned to fundamentals (the wife wants a home, and we’re both sick of being renters, no matter how much financial sense it makes).

Of course, some markets are falling later than others – we’re looking at probably buying in some North County markets (W. Escondido near Del Dios, San Marcos, etc) which have seen a lot of air bled out already (proximity to my job is good from the N. County). Places like 4S and CMR, though places we’d like to live, are taking longer to adjust and we’re simply not likely to wait the extra 2-3 years for the depreciation to hammer those areas.

[SDEngineer]

Numbers are a little off – I was clearing 4200/mo at a single filing status several years back when my salary was about 83.5K/yr.

Point taken though, and why I’ve stayed out of the housing market for so long. The fundamentals are still way out of whack, though they are getting significantly better. I guesstimated at the peak in ’05 that housing would have to fall about 40% for it to get back in line with San Diego fundamentals (of about a 4.5x median household income to price ratio), and we’ve seen about 25% of that drop. Still, the remaining 15% off peak is about another 80K or so drop from current median selling prices.

Hopefully after the spring “non-bounce” we’ll see more sellers getting realistic (and those that aren’t getting pummelled by the REO’s auction prices), and see more major depreciation this autumn/winter. I do expect the trend to hit the downside and go below the fundamentals, but I’ll be willing to buy once the market has returned to fundamentals (the wife wants a home, and we’re both sick of being renters, no matter how much financial sense it makes).

Of course, some markets are falling later than others – we’re looking at probably buying in some North County markets (W. Escondido near Del Dios, San Marcos, etc) which have seen a lot of air bled out already (proximity to my job is good from the N. County). Places like 4S and CMR, though places we’d like to live, are taking longer to adjust and we’re simply not likely to wait the extra 2-3 years for the depreciation to hammer those areas.

[SDEngineer]

Numbers are a little off – I was clearing 4200/mo at a single filing status several years back when my salary was about 83.5K/yr.

Point taken though, and why I’ve stayed out of the housing market for so long. The fundamentals are still way out of whack, though they are getting significantly better. I guesstimated at the peak in ’05 that housing would have to fall about 40% for it to get back in line with San Diego fundamentals (of about a 4.5x median household income to price ratio), and we’ve seen about 25% of that drop. Still, the remaining 15% off peak is about another 80K or so drop from current median selling prices.

Hopefully after the spring “non-bounce” we’ll see more sellers getting realistic (and those that aren’t getting pummelled by the REO’s auction prices), and see more major depreciation this autumn/winter. I do expect the trend to hit the downside and go below the fundamentals, but I’ll be willing to buy once the market has returned to fundamentals (the wife wants a home, and we’re both sick of being renters, no matter how much financial sense it makes).

Of course, some markets are falling later than others – we’re looking at probably buying in some North County markets (W. Escondido near Del Dios, San Marcos, etc) which have seen a lot of air bled out already (proximity to my job is good from the N. County). Places like 4S and CMR, though places we’d like to live, are taking longer to adjust and we’re simply not likely to wait the extra 2-3 years for the depreciation to hammer those areas.

[SD Realtor]

There is no argument that the metrics are way way out of whack.

However people doubting assets, salaries, and purchasing power of others are doing so because they apply thier own purchasing power, life experience, salaries and circle of friends to the county population in general.

What I am saying is that is short sighted and not realistic. There is no difference between doing that and saying well, everyone here is just as smart or just as dumb as me. Lets not forget that there we have a county population in the 7 figures and we live in one of THE most desireable cities in the country.

Will these people who earn more then us and have this wealth support the market, prop it up, delay the return to fundamentals? Probably not… just try to be realistic and understand what you do or do not have or make in no way reflects what others have or do or do not make.

I am an engineer and work with engineers all day… we all make the same amount more or less and think we are the smartest guys in the world. Yet with my wifes business I deal with plastic surgeons all the time and get a glimpse into thier world. With my real estate business I meet a wide variety of people and have seen more diversity then I would have ever imagined.

Again it will not prop the market up, but don’t fall into the “I don’t make this amount of money trap so how can anyone support this other lifestyle or rental cost,” you kind of see what I am saying?

SD Realtor

[SD Realtor]

There is no argument that the metrics are way way out of whack.

However people doubting assets, salaries, and purchasing power of others are doing so because they apply thier own purchasing power, life experience, salaries and circle of friends to the county population in general.

What I am saying is that is short sighted and not realistic. There is no difference between doing that and saying well, everyone here is just as smart or just as dumb as me. Lets not forget that there we have a county population in the 7 figures and we live in one of THE most desireable cities in the country.

Will these people who earn more then us and have this wealth support the market, prop it up, delay the return to fundamentals? Probably not… just try to be realistic and understand what you do or do not have or make in no way reflects what others have or do or do not make.

I am an engineer and work with engineers all day… we all make the same amount more or less and think we are the smartest guys in the world. Yet with my wifes business I deal with plastic surgeons all the time and get a glimpse into thier world. With my real estate business I meet a wide variety of people and have seen more diversity then I would have ever imagined.

Again it will not prop the market up, but don’t fall into the “I don’t make this amount of money trap so how can anyone support this other lifestyle or rental cost,” you kind of see what I am saying?

SD Realtor

[SD Realtor]

There is no argument that the metrics are way way out of whack.

However people doubting assets, salaries, and purchasing power of others are doing so because they apply thier own purchasing power, life experience, salaries and circle of friends to the county population in general.

What I am saying is that is short sighted and not realistic. There is no difference between doing that and saying well, everyone here is just as smart or just as dumb as me. Lets not forget that there we have a county population in the 7 figures and we live in one of THE most desireable cities in the country.

Will these people who earn more then us and have this wealth support the market, prop it up, delay the return to fundamentals? Probably not… just try to be realistic and understand what you do or do not have or make in no way reflects what others have or do or do not make.

I am an engineer and work with engineers all day… we all make the same amount more or less and think we are the smartest guys in the world. Yet with my wifes business I deal with plastic surgeons all the time and get a glimpse into thier world. With my real estate business I meet a wide variety of people and have seen more diversity then I would have ever imagined.

Again it will not prop the market up, but don’t fall into the “I don’t make this amount of money trap so how can anyone support this other lifestyle or rental cost,” you kind of see what I am saying?

SD Realtor

[SD Realtor]

There is no argument that the metrics are way way out of whack.

However people doubting assets, salaries, and purchasing power of others are doing so because they apply thier own purchasing power, life experience, salaries and circle of friends to the county population in general.

What I am saying is that is short sighted and not realistic. There is no difference between doing that and saying well, everyone here is just as smart or just as dumb as me. Lets not forget that there we have a county population in the 7 figures and we live in one of THE most desireable cities in the country.

Will these people who earn more then us and have this wealth support the market, prop it up, delay the return to fundamentals? Probably not… just try to be realistic and understand what you do or do not have or make in no way reflects what others have or do or do not make.

I am an engineer and work with engineers all day… we all make the same amount more or less and think we are the smartest guys in the world. Yet with my wifes business I deal with plastic surgeons all the time and get a glimpse into thier world. With my real estate business I meet a wide variety of people and have seen more diversity then I would have ever imagined.

Again it will not prop the market up, but don’t fall into the “I don’t make this amount of money trap so how can anyone support this other lifestyle or rental cost,” you kind of see what I am saying?

SD Realtor

[SD Realtor]

There is no argument that the metrics are way way out of whack.

However people doubting assets, salaries, and purchasing power of others are doing so because they apply thier own purchasing power, life experience, salaries and circle of friends to the county population in general.

What I am saying is that is short sighted and not realistic. There is no difference between doing that and saying well, everyone here is just as smart or just as dumb as me. Lets not forget that there we have a county population in the 7 figures and we live in one of THE most desireable cities in the country.

Will these people who earn more then us and have this wealth support the market, prop it up, delay the return to fundamentals? Probably not… just try to be realistic and understand what you do or do not have or make in no way reflects what others have or do or do not make.

I am an engineer and work with engineers all day… we all make the same amount more or less and think we are the smartest guys in the world. Yet with my wifes business I deal with plastic surgeons all the time and get a glimpse into thier world. With my real estate business I meet a wide variety of people and have seen more diversity then I would have ever imagined.

Again it will not prop the market up, but don’t fall into the “I don’t make this amount of money trap so how can anyone support this other lifestyle or rental cost,” you kind of see what I am saying?

SD Realtor

[jpinpb]

I have no doubt there’s people with high paying jobs. But I remember reading somewhere about the percentage of people w/savings and that was at historical lows. Money is out there, some spent, some tied in investments.

[jpinpb]

I have no doubt there’s people with high paying jobs. But I remember reading somewhere about the percentage of people w/savings and that was at historical lows. Money is out there, some spent, some tied in investments.

[jpinpb]

I have no doubt there’s people with high paying jobs. But I remember reading somewhere about the percentage of people w/savings and that was at historical lows. Money is out there, some spent, some tied in investments.

[jpinpb]

I have no doubt there’s people with high paying jobs. But I remember reading somewhere about the percentage of people w/savings and that was at historical lows. Money is out there, some spent, some tied in investments.

[Author]

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