Can you feel the shift?

[NotCranky]

Take a look at this home..
http://www.redfin.com/stingray/do/printable-listing?listing-id=1564635
just a basic home in Paloma Del Sol.

Look at the sales history….
Jun 26, 1992 $137,500
—
Oct 16, 1997 $99,429
-5.9%/yr
Oct 20, 1997 $134,890
>1,000%/yr
Apr 23, 1998 $128,000
-9.8%/yr
Jun 21, 2001 $180,000
11.4%/yr
Oct 05, 2005 $389,000
19.7%/yr
Feb 05, 2008 $310,500
-9.2%/yr

My numbers were actually wrong on the work out I did on this I was using the Feb 05, 2008 $310,500 as the listing price.
I honestly never looked at the listing until Nostradamus said it was 229k. It didn’t recently get dropped to 229k I think it was listed at or near that price. I think 310k was probably the trustees sale, again I didn’t look at it,just want to clarify my mistake.
There would be much less point in debating whether a house listed and 229k could go down to 160K. Although I think this actual situation verifies what I have been saying about Lowballing 10-20% off in the summer or even now while interest rates are good and show why I wouldn’t get fixated with the bottom unless I believed, as some do that there is no bottom. I think the rate argument is important in a situation like this… not in the usual way it is used to push buyer’s buttons. The downside risk starts to be getting a little bit lower price but a fixed higher intererest rate that maybe won’t ever drop. Yes the down side risk continues to be price too.We just hsve to weigh these thing for significance considering the properties are penciling out or better and a tax deduction is available for some and that lifestyle change,normally disgust with renting, is a factor too for some.I have no idea what is going to happen to rates. A mortgage broker I work with thinks they will be relatively flat for a year at least.

[hipmatt]

Hey, I’m neither a perma anything like you said TG, I just like research.

I have to say your example is a bit flawed though. I don’t see how you can expect that house to sell for 15% off the list price, when you admit it’s one of the best deals you can find. Thats like me saying that housing has bottomed, assuming you get 15% off of current list prices, why not say housing will bottom when prices drop 15% more? I doubt that will sell for $220k right now, it will go for full price. And tell me how you are gonna pay ONLY $400 for taxes and insurance….hmm thats wishful thinking. I see about $500 more realistic. So putting 52k down, and financing 208k you get PI of 1225+500 taxes ins, and you get $1725.

Sure, it may rent for that(now), and there may be a tax advantage but thats 52k plus closing costs that some schmuck is gonna have to come up with. Does the average Temeculain have that and decent credit? Hardly. Also, you admit that there was an over correction, before in 1996 but discount that it can happen again? I don’t get it, why not? Also, Rustico mentioned un-employment as part of the problem during the 90’s, but its already a problem in so-cal now, and it’s likely to get worse. You can’t say that the 90’s were different because of a recession, or bad labor market, or an over correction, because all of that is just as likely now, if not more so.

And to Rustico, nothing would make me happier than to see interest rates sky rocket back up. Please bring em on, and in a world of negative savings and negative/zero equity, house values will really plummet. I could actually get a decent return on my cash, and since I am lucky to have some, the loan amount and thus the payment will be smaller and much less important, I might be able to pay cash, who knows?

[hipmatt]

Hey, I’m neither a perma anything like you said TG, I just like research.

I have to say your example is a bit flawed though. I don’t see how you can expect that house to sell for 15% off the list price, when you admit it’s one of the best deals you can find. Thats like me saying that housing has bottomed, assuming you get 15% off of current list prices, why not say housing will bottom when prices drop 15% more? I doubt that will sell for $220k right now, it will go for full price. And tell me how you are gonna pay ONLY $400 for taxes and insurance….hmm thats wishful thinking. I see about $500 more realistic. So putting 52k down, and financing 208k you get PI of 1225+500 taxes ins, and you get $1725.

Sure, it may rent for that(now), and there may be a tax advantage but thats 52k plus closing costs that some schmuck is gonna have to come up with. Does the average Temeculain have that and decent credit? Hardly. Also, you admit that there was an over correction, before in 1996 but discount that it can happen again? I don’t get it, why not? Also, Rustico mentioned un-employment as part of the problem during the 90’s, but its already a problem in so-cal now, and it’s likely to get worse. You can’t say that the 90’s were different because of a recession, or bad labor market, or an over correction, because all of that is just as likely now, if not more so.

And to Rustico, nothing would make me happier than to see interest rates sky rocket back up. Please bring em on, and in a world of negative savings and negative/zero equity, house values will really plummet. I could actually get a decent return on my cash, and since I am lucky to have some, the loan amount and thus the payment will be smaller and much less important, I might be able to pay cash, who knows?

[hipmatt]

Hey, I’m neither a perma anything like you said TG, I just like research.

I have to say your example is a bit flawed though. I don’t see how you can expect that house to sell for 15% off the list price, when you admit it’s one of the best deals you can find. Thats like me saying that housing has bottomed, assuming you get 15% off of current list prices, why not say housing will bottom when prices drop 15% more? I doubt that will sell for $220k right now, it will go for full price. And tell me how you are gonna pay ONLY $400 for taxes and insurance….hmm thats wishful thinking. I see about $500 more realistic. So putting 52k down, and financing 208k you get PI of 1225+500 taxes ins, and you get $1725.

Sure, it may rent for that(now), and there may be a tax advantage but thats 52k plus closing costs that some schmuck is gonna have to come up with. Does the average Temeculain have that and decent credit? Hardly. Also, you admit that there was an over correction, before in 1996 but discount that it can happen again? I don’t get it, why not? Also, Rustico mentioned un-employment as part of the problem during the 90’s, but its already a problem in so-cal now, and it’s likely to get worse. You can’t say that the 90’s were different because of a recession, or bad labor market, or an over correction, because all of that is just as likely now, if not more so.

And to Rustico, nothing would make me happier than to see interest rates sky rocket back up. Please bring em on, and in a world of negative savings and negative/zero equity, house values will really plummet. I could actually get a decent return on my cash, and since I am lucky to have some, the loan amount and thus the payment will be smaller and much less important, I might be able to pay cash, who knows?

[hipmatt]

Hey, I’m neither a perma anything like you said TG, I just like research.

I have to say your example is a bit flawed though. I don’t see how you can expect that house to sell for 15% off the list price, when you admit it’s one of the best deals you can find. Thats like me saying that housing has bottomed, assuming you get 15% off of current list prices, why not say housing will bottom when prices drop 15% more? I doubt that will sell for $220k right now, it will go for full price. And tell me how you are gonna pay ONLY $400 for taxes and insurance….hmm thats wishful thinking. I see about $500 more realistic. So putting 52k down, and financing 208k you get PI of 1225+500 taxes ins, and you get $1725.

Sure, it may rent for that(now), and there may be a tax advantage but thats 52k plus closing costs that some schmuck is gonna have to come up with. Does the average Temeculain have that and decent credit? Hardly. Also, you admit that there was an over correction, before in 1996 but discount that it can happen again? I don’t get it, why not? Also, Rustico mentioned un-employment as part of the problem during the 90’s, but its already a problem in so-cal now, and it’s likely to get worse. You can’t say that the 90’s were different because of a recession, or bad labor market, or an over correction, because all of that is just as likely now, if not more so.

And to Rustico, nothing would make me happier than to see interest rates sky rocket back up. Please bring em on, and in a world of negative savings and negative/zero equity, house values will really plummet. I could actually get a decent return on my cash, and since I am lucky to have some, the loan amount and thus the payment will be smaller and much less important, I might be able to pay cash, who knows?

[hipmatt]

Hey, I’m neither a perma anything like you said TG, I just like research.

I have to say your example is a bit flawed though. I don’t see how you can expect that house to sell for 15% off the list price, when you admit it’s one of the best deals you can find. Thats like me saying that housing has bottomed, assuming you get 15% off of current list prices, why not say housing will bottom when prices drop 15% more? I doubt that will sell for $220k right now, it will go for full price. And tell me how you are gonna pay ONLY $400 for taxes and insurance….hmm thats wishful thinking. I see about $500 more realistic. So putting 52k down, and financing 208k you get PI of 1225+500 taxes ins, and you get $1725.

Sure, it may rent for that(now), and there may be a tax advantage but thats 52k plus closing costs that some schmuck is gonna have to come up with. Does the average Temeculain have that and decent credit? Hardly. Also, you admit that there was an over correction, before in 1996 but discount that it can happen again? I don’t get it, why not? Also, Rustico mentioned un-employment as part of the problem during the 90’s, but its already a problem in so-cal now, and it’s likely to get worse. You can’t say that the 90’s were different because of a recession, or bad labor market, or an over correction, because all of that is just as likely now, if not more so.

And to Rustico, nothing would make me happier than to see interest rates sky rocket back up. Please bring em on, and in a world of negative savings and negative/zero equity, house values will really plummet. I could actually get a decent return on my cash, and since I am lucky to have some, the loan amount and thus the payment will be smaller and much less important, I might be able to pay cash, who knows?

[NotCranky]

O.K Matt I am surprised to find that people participating on a housing blog for two years would not want historically low interest rates at a time when housing starts to hit some serious affordability in their market. I’d want historically low rates and to keep my cash and hope for better investments,after I bought a house that could cash flow anyway if needed or I might even buy more houses since my parameters including interest rates were looking good.Different strokes.

[NotCranky]

O.K Matt I am surprised to find that people participating on a housing blog for two years would not want historically low interest rates at a time when housing starts to hit some serious affordability in their market. I’d want historically low rates and to keep my cash and hope for better investments,after I bought a house that could cash flow anyway if needed or I might even buy more houses since my parameters including interest rates were looking good.Different strokes.

[NotCranky]

O.K Matt I am surprised to find that people participating on a housing blog for two years would not want historically low interest rates at a time when housing starts to hit some serious affordability in their market. I’d want historically low rates and to keep my cash and hope for better investments,after I bought a house that could cash flow anyway if needed or I might even buy more houses since my parameters including interest rates were looking good.Different strokes.

[NotCranky]

O.K Matt I am surprised to find that people participating on a housing blog for two years would not want historically low interest rates at a time when housing starts to hit some serious affordability in their market. I’d want historically low rates and to keep my cash and hope for better investments,after I bought a house that could cash flow anyway if needed or I might even buy more houses since my parameters including interest rates were looking good.Different strokes.

[NotCranky]

O.K Matt I am surprised to find that people participating on a housing blog for two years would not want historically low interest rates at a time when housing starts to hit some serious affordability in their market. I’d want historically low rates and to keep my cash and hope for better investments,after I bought a house that could cash flow anyway if needed or I might even buy more houses since my parameters including interest rates were looking good.Different strokes.

[barnaby33]

I am surprised to find that people participating on a housing blog for two years would not want historically low interest rates at a time when housing starts to hit some serious affordability in their market.

Why the hell would I or anyone want low rates? I want high rates. That way when rates drop I can re-finance and win again. Low price/High interest beats the opposite every time if you stop and think about it. You’re stuck with the price, but maybe not the rate.

Josh

[barnaby33]

I am surprised to find that people participating on a housing blog for two years would not want historically low interest rates at a time when housing starts to hit some serious affordability in their market.

Why the hell would I or anyone want low rates? I want high rates. That way when rates drop I can re-finance and win again. Low price/High interest beats the opposite every time if you stop and think about it. You’re stuck with the price, but maybe not the rate.

Josh

[barnaby33]

I am surprised to find that people participating on a housing blog for two years would not want historically low interest rates at a time when housing starts to hit some serious affordability in their market.

Why the hell would I or anyone want low rates? I want high rates. That way when rates drop I can re-finance and win again. Low price/High interest beats the opposite every time if you stop and think about it. You’re stuck with the price, but maybe not the rate.

Josh

[barnaby33]

I am surprised to find that people participating on a housing blog for two years would not want historically low interest rates at a time when housing starts to hit some serious affordability in their market.

Why the hell would I or anyone want low rates? I want high rates. That way when rates drop I can re-finance and win again. Low price/High interest beats the opposite every time if you stop and think about it. You’re stuck with the price, but maybe not the rate.

Josh

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