Bloodbath in Kensington !

[Anonymous]

The new owner of Van Dyke took out two loans for a total of $612850.00.

Here are some homes in North Park that closed escrow recently:

Purchased 12/3/01 $235K
Sold 3/22/07 $615K

Purchased 10/10/03 $475K
Sold 3/2/07 $615K

Purchased 11/25/02 $595K
Sold 5/3/07 $865K

I bet they were all straw buyers.

Most people purcahse a home based on emotions. If you dont want to deal with peoples emotions deal in units or commercial property.

[citydweller]

FSD,
Yes I know my timing was way off. What I meant was that ever since 2001 I’ve been saying “It’s going to pop any day now”. So finally I’m “right” about that. 🙂

I actually bought a condo in mid-2001, “knowing” that I was buying at the “top”, but I didn’t care because I could afford it and my payment was close to what rent would have been.

[Reality]

“Most people purcahse a home based on emotions. If you dont want to deal with peoples emotions deal in units or commercial property.”

This was also true when you could buy a decent home for $150,000 not too many years ago. It will always be true. But it doesn’t change the fact that incomes will ultimately cause the crash most of us expect. They just don’t support the current “market price”, or anything close to it.

[Bugs]

I think the reason for the crash is the distortion caused by outside influences other than wages and population trends. I know there’s a lot of talk about it all being the fault of easy credit, but I think the easy credit only exacerbated what was already happening as a result of the owner-users competing with investors for that finite supply of listings.

Take away the artificial stimulus caused by the investors and the mechanism whereby a lot of otherwise completely unqualified buyers were able to satisfy their desire to purchase, and we find a market that is forced to seek a retrun to the equilibrium between supply and the owner-users.

The current downswing started before subprime went belly up. It started soon after the investors abandoned their positions, and that happened as a result of the pricing getting so distorted that not even the liar loans could make them work. Substandard lending going down has only removed the other artificial leg of this stool.

I don’t think the eventual outcome would have changed even if substandard lending had stayed in place. It would just take longer. Substandard lending was still going strong in 2006 but that didn’t stop the declines that occurred then. The investors had already left the building, and they won’t be coming back until they see room for short term profits sufficient to justify the risks of speculation.

[temeculaguy]

Bugs is my favorite sage! As I was reading your post I kept thinking Milton Freidman meets Lao Tzu, “invisible hand of economics” and “ying-yang” and a little Obi-Wan Kenobi mixed in.

Seriously Bugs, never stop posting, I appreciate the wisdom you bring to the boards.

[Bugs]

Well, now that you mention it, I guess this is a good time to announce that I’m going to branch off and start my own website. I’m in the midst of working on my website, which will require paid subscriptions. But don’t worry, the first five Piggingtons who sign up will get a discount if they can help me figure out a way to work “Poo Poo Head” into my adverstising banners.

[Bugs]

Just kidding.

[Author]

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