Coworkers argument that house prices won’t fall…

[SHILOH]

I don’t think paying 50% for housing supports a healthy local economy –regardless of adjusting to it psychologically for survival.

[HereWeGo]

There are many different markets in San Diego county. Some will fall slowly and marginally, others will have a more brisk decline. It all depends on the supply and demand associated with the locale and the property type.

I’d hate to own a downtown condo as an “investment” right now, that’s for sure.

[HereWeGo]

There are many different markets in San Diego county. Some will fall slowly and marginally, others will have a more brisk decline. It all depends on the supply and demand associated with the locale and the property type.

I’d hate to own a downtown condo as an “investment” right now, that’s for sure.

[HereWeGo]

There are many different markets in San Diego county. Some will fall slowly and marginally, others will have a more brisk decline. It all depends on the supply and demand associated with the locale and the property type.

I’d hate to own a downtown condo as an “investment” right now, that’s for sure.

[ak1]

Sellers on the edges make the price.

We owned a house in the Bay area during the tech-wreck in 2001/2002. All it took for house prices on our street to nose-dive were two houses 100 feet apart desperately needing to sell, one due to a divorce. It didn’t matter that the rest of us could weather the storm, by the time the second desperate seller had sold their house the price was 25% less then the peak price earlier that year for exactly the same model on roughly the same lot size.

We are renting a home now nearby our old neighbour-hood and there are atleast 5 houses for sale in our neighbour-hood. Two of them are confirmed foreclosures on million dollar homes. I strongly suspect atleast 2 others are at a minimum pre-foreclosure and possibly foreclosure. Again two houses on the same street are for sale. One is empty and already has a reduced price. If this person is desperate to sell the other seller 50 feet away is going to have a heck of a time selling their house w/o reducing the price. There is also one home on our street with a sold sign, no sign of anyone having moved in and it looks like people are still taking a look at the house.

[ak1]

Sellers on the edges make the price.

We owned a house in the Bay area during the tech-wreck in 2001/2002. All it took for house prices on our street to nose-dive were two houses 100 feet apart desperately needing to sell, one due to a divorce. It didn’t matter that the rest of us could weather the storm, by the time the second desperate seller had sold their house the price was 25% less then the peak price earlier that year for exactly the same model on roughly the same lot size.

We are renting a home now nearby our old neighbour-hood and there are atleast 5 houses for sale in our neighbour-hood. Two of them are confirmed foreclosures on million dollar homes. I strongly suspect atleast 2 others are at a minimum pre-foreclosure and possibly foreclosure. Again two houses on the same street are for sale. One is empty and already has a reduced price. If this person is desperate to sell the other seller 50 feet away is going to have a heck of a time selling their house w/o reducing the price. There is also one home on our street with a sold sign, no sign of anyone having moved in and it looks like people are still taking a look at the house.

[ak1]

Sellers on the edges make the price.

We owned a house in the Bay area during the tech-wreck in 2001/2002. All it took for house prices on our street to nose-dive were two houses 100 feet apart desperately needing to sell, one due to a divorce. It didn’t matter that the rest of us could weather the storm, by the time the second desperate seller had sold their house the price was 25% less then the peak price earlier that year for exactly the same model on roughly the same lot size.

We are renting a home now nearby our old neighbour-hood and there are atleast 5 houses for sale in our neighbour-hood. Two of them are confirmed foreclosures on million dollar homes. I strongly suspect atleast 2 others are at a minimum pre-foreclosure and possibly foreclosure. Again two houses on the same street are for sale. One is empty and already has a reduced price. If this person is desperate to sell the other seller 50 feet away is going to have a heck of a time selling their house w/o reducing the price. There is also one home on our street with a sold sign, no sign of anyone having moved in and it looks like people are still taking a look at the house.

[Bugs]

I agree that values in the Muirlands area are going to follow a somewhat different curve than homes in most other areas of the County. It’s both coastal and central.

Radelow – I’ve always liked infil development and you guys have a pretty cool project going there, although I must confess to not caring so much for the low density section on the north end.

It seems to me that bumping up some of medium density stuff in the middle to high density and extending the medium density to include the entire northern half would better suit that site. It does side that freeway, after all. What kind of development is on the sites to the north of this project?

[Bugs]

I agree that values in the Muirlands area are going to follow a somewhat different curve than homes in most other areas of the County. It’s both coastal and central.

Radelow – I’ve always liked infil development and you guys have a pretty cool project going there, although I must confess to not caring so much for the low density section on the north end.

It seems to me that bumping up some of medium density stuff in the middle to high density and extending the medium density to include the entire northern half would better suit that site. It does side that freeway, after all. What kind of development is on the sites to the north of this project?

[Bugs]

I agree that values in the Muirlands area are going to follow a somewhat different curve than homes in most other areas of the County. It’s both coastal and central.

Radelow – I’ve always liked infil development and you guys have a pretty cool project going there, although I must confess to not caring so much for the low density section on the north end.

It seems to me that bumping up some of medium density stuff in the middle to high density and extending the medium density to include the entire northern half would better suit that site. It does side that freeway, after all. What kind of development is on the sites to the north of this project?

[sdduuuude]

His logic is almost right, but wrong enough to be dangerous.
It isnt the number of sellers who don’t have to sell that matters. It is the number of sellers who do have to sell.

i.e. Look at the supply, not the lack of supply.
You never hear anyone say “how many widgets are not in production”

Secondly, it is the supply relative to the number of buyers, not the supply relative to the number of houses.

See here for data and details:

Sales and Foreclosures

[sdduuuude]

His logic is almost right, but wrong enough to be dangerous.
It isnt the number of sellers who don’t have to sell that matters. It is the number of sellers who do have to sell.

i.e. Look at the supply, not the lack of supply.
You never hear anyone say “how many widgets are not in production”

Secondly, it is the supply relative to the number of buyers, not the supply relative to the number of houses.

See here for data and details:

Sales and Foreclosures

[sdduuuude]

His logic is almost right, but wrong enough to be dangerous.
It isnt the number of sellers who don’t have to sell that matters. It is the number of sellers who do have to sell.

i.e. Look at the supply, not the lack of supply.
You never hear anyone say “how many widgets are not in production”

Secondly, it is the supply relative to the number of buyers, not the supply relative to the number of houses.

See here for data and details:

Sales and Foreclosures

[DaCounselor]

Regarding construction expenses, my clients in the industry routinely inform me that overall costs continue to rise. You just can’t cite falling gypsum prices and call it a day. My understanding is that material prices in many categories are up, including roofing, siding, glazing, doors, structural steel and pre-cast concrete. In addition, I have been told that labor costs are up. Further, I am on the receiving end of the occassional rant regarding outlandish insurance premiums.

Where costs may go in the future is speculative, but my sources assure me that overall costs to date are not going down. Any recent decreases in specific line-item costs must also be viewed within the context of what has happened over the past 3 years in that category; ie, beginning in about 2004 material costs in many categories increased dramatically. Perhaps radelow can provide additional input regarding costs.

[DaCounselor]

Regarding construction expenses, my clients in the industry routinely inform me that overall costs continue to rise. You just can’t cite falling gypsum prices and call it a day. My understanding is that material prices in many categories are up, including roofing, siding, glazing, doors, structural steel and pre-cast concrete. In addition, I have been told that labor costs are up. Further, I am on the receiving end of the occassional rant regarding outlandish insurance premiums.

Where costs may go in the future is speculative, but my sources assure me that overall costs to date are not going down. Any recent decreases in specific line-item costs must also be viewed within the context of what has happened over the past 3 years in that category; ie, beginning in about 2004 material costs in many categories increased dramatically. Perhaps radelow can provide additional input regarding costs.

[Author]

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