Coworkers argument that house prices won’t fall…

[Ex-SD]

Tell him to look at this site to get a grasp on what’s happening in the bubble markets around the USA.

http://bubbletracking.blogspot.com/

When distressed owners slash their prices to get out of their financial nightmares or let the house go to foreclosure and the lender takes whatever the market will give them to get the property off their books, the actual selling prices will be the new values for the respective neighborhoods. If someone bought a house in X-area in 2003 for $500k and a similar house sold across the street in 2005 for $625k………..but two or more desperate sellers or foreclosed similar properties in the same neighborhood are put up for sale and close at $400k in the next couple of months, the real value has now become around $400k. That’s the reality of real estate values…….period. It doesn’t matter what someone paid in 1990 or 2006: What is relevant is how much equivalent properties in the same market/area are now selling for.

[PerryChase]

Evidence that drywall prices are coming down. Ray, were is your evidence that construction materials are “dramatically” up?

“If the last two cycles are any guide, USG’s price for 1,000 square feet of drywall could plummet from its high of $188.37 during last year’s third quarter to about $95, even as the volume of drywall USG and its competitors sell also declines steeply. ”

[PerryChase]

Evidence that drywall prices are coming down. Ray, were is your evidence that construction materials are “dramatically” up?

“If the last two cycles are any guide, USG’s price for 1,000 square feet of drywall could plummet from its high of $188.37 during last year’s third quarter to about $95, even as the volume of drywall USG and its competitors sell also declines steeply. ”

[PerryChase]

Evidence that drywall prices are coming down. Ray, were is your evidence that construction materials are “dramatically” up?

“If the last two cycles are any guide, USG’s price for 1,000 square feet of drywall could plummet from its high of $188.37 during last year’s third quarter to about $95, even as the volume of drywall USG and its competitors sell also declines steeply. ”

[PerryChase]

Nice project, radelow. I love in-fill developments. Yours is a big one but I think it’s still far more desirable than the new far flung developments.

I was wondering what the land off the 805 was being graded for. Now I know.

Maybe my nieces can buy their starter homes there when they grow up. 🙂

When do you expect to have the first homes built?

[PerryChase]

Nice project, radelow. I love in-fill developments. Yours is a big one but I think it’s still far more desirable than the new far flung developments.

I was wondering what the land off the 805 was being graded for. Now I know.

Maybe my nieces can buy their starter homes there when they grow up. 🙂

When do you expect to have the first homes built?

[PerryChase]

Nice project, radelow. I love in-fill developments. Yours is a big one but I think it’s still far more desirable than the new far flung developments.

I was wondering what the land off the 805 was being graded for. Now I know.

Maybe my nieces can buy their starter homes there when they grow up. 🙂

When do you expect to have the first homes built?

[temeculaguy]

I’m with perry on the materials and labor costs not increasing. It is supply and demand like everything else, even months ago large builders renegotiated up to 20% reductions from sub contractors and for the most part the subs agreed. The talk about dealing with illegal aliens is just that, talk. There are twice as many in California now than in the 1990’s, labor costs will stay flat or go down in the next two years because the construction work force swelled to meet demand in the last five years, it doesn’t contract quickly.

[temeculaguy]

I’m with perry on the materials and labor costs not increasing. It is supply and demand like everything else, even months ago large builders renegotiated up to 20% reductions from sub contractors and for the most part the subs agreed. The talk about dealing with illegal aliens is just that, talk. There are twice as many in California now than in the 1990’s, labor costs will stay flat or go down in the next two years because the construction work force swelled to meet demand in the last five years, it doesn’t contract quickly.

[temeculaguy]

I’m with perry on the materials and labor costs not increasing. It is supply and demand like everything else, even months ago large builders renegotiated up to 20% reductions from sub contractors and for the most part the subs agreed. The talk about dealing with illegal aliens is just that, talk. There are twice as many in California now than in the 1990’s, labor costs will stay flat or go down in the next two years because the construction work force swelled to meet demand in the last five years, it doesn’t contract quickly.

[Coronita]

Why bother arguing with folks about this? Everyone’s has his/her own opinion, and he/she isn’t going to change his/er opinion. It doesn’t really matter what he/she “thinks”. Waste of time and energy, and we all know what’s going to happen. I had a coworker that use to tout what a great deal renting for 10-15 years was. I won’t go there either.

Regarding your co-worker’s comment….My observation would be that while several home owners “had” equity, a lot of them refinanced to buy all sorts of material possessions, and now don’t have the financial means to juggle credit card and balloon mortgage debt.. I would say this probably happens in areas where the average household income isn’t that great and/or don’t have great pay jobs, but still felt they could finance their way into BMW’s, iphones, etc.

Americans love to spend money they don’t have. You know, the buy now, pay later mentality. Again, not everyone is like this , but I would say that would be a good portion. I cannot believe how many people that drive expensive cars take out ridiculously expensive leases for example.

The only thing more sickening would be to expect a government bailout of some sort.

[Coronita]

Why bother arguing with folks about this? Everyone’s has his/her own opinion, and he/she isn’t going to change his/er opinion. It doesn’t really matter what he/she “thinks”. Waste of time and energy, and we all know what’s going to happen. I had a coworker that use to tout what a great deal renting for 10-15 years was. I won’t go there either.

Regarding your co-worker’s comment….My observation would be that while several home owners “had” equity, a lot of them refinanced to buy all sorts of material possessions, and now don’t have the financial means to juggle credit card and balloon mortgage debt.. I would say this probably happens in areas where the average household income isn’t that great and/or don’t have great pay jobs, but still felt they could finance their way into BMW’s, iphones, etc.

Americans love to spend money they don’t have. You know, the buy now, pay later mentality. Again, not everyone is like this , but I would say that would be a good portion. I cannot believe how many people that drive expensive cars take out ridiculously expensive leases for example.

The only thing more sickening would be to expect a government bailout of some sort.

[Coronita]

Why bother arguing with folks about this? Everyone’s has his/her own opinion, and he/she isn’t going to change his/er opinion. It doesn’t really matter what he/she “thinks”. Waste of time and energy, and we all know what’s going to happen. I had a coworker that use to tout what a great deal renting for 10-15 years was. I won’t go there either.

Regarding your co-worker’s comment….My observation would be that while several home owners “had” equity, a lot of them refinanced to buy all sorts of material possessions, and now don’t have the financial means to juggle credit card and balloon mortgage debt.. I would say this probably happens in areas where the average household income isn’t that great and/or don’t have great pay jobs, but still felt they could finance their way into BMW’s, iphones, etc.

Americans love to spend money they don’t have. You know, the buy now, pay later mentality. Again, not everyone is like this , but I would say that would be a good portion. I cannot believe how many people that drive expensive cars take out ridiculously expensive leases for example.

The only thing more sickening would be to expect a government bailout of some sort.

[Raybyrnes]

Perry,

Copper Prices are up. Minimum wage is going up. Enforcement of labor Laws up. Oil and gas prices are up.

Contractors might be willing to accept less but they still have to buy raw materials and if the cost of materials is up then there is less ability for them to lower costs.

[Raybyrnes]

Perry,

Copper Prices are up. Minimum wage is going up. Enforcement of labor Laws up. Oil and gas prices are up.

Contractors might be willing to accept less but they still have to buy raw materials and if the cost of materials is up then there is less ability for them to lower costs.

[Author]

Posts