Coworkers argument that house prices won’t fall…

[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.

[snail]

I got into the same situation in 3 months ago. This wanabee realtor (I just got my real estate license dumbo) at work was claiming its a great time to buy. I told her, she must be smoking crack. She was pissed, and called me a lowlife renter.

[snail]

I got into the same situation in 3 months ago. This wanabee realtor (I just got my real estate license dumbo) at work was claiming its a great time to buy. I told her, she must be smoking crack. She was pissed, and called me a lowlife renter.

[snail]

I got into the same situation in 3 months ago. This wanabee realtor (I just got my real estate license dumbo) at work was claiming its a great time to buy. I told her, she must be smoking crack. She was pissed, and called me a lowlife renter.

[PerryChase]

I almost always agree with bugs. About density at Quarry Falls, I think would be much better to have all high-density and mid-density housing and eliminate the low density ones.

Personally, I don’t like the large park and public facilities with gyms and such. Gyms can be in buildings integrated near housing rather than ugly freestanding structures. It would be better to have 3 and 4 story townhouses that front the street with no or very little HOA.

As far as parks go, I believe that smaller neighborhood parks are best. Place des Vosges in Paris, France is my ideal park.
http://en.wikipedia.org/wiki/Place_des_Vosges

The Zocalo of Puebla, Mexico would be a great model for California — An arcade of restaurants and shops surrounding a square park with walkable housing nearby. Parking should be underground.

San Diego needs something creative, something different than the stucco sprawl and stucco strip mall that we have. Considering transportation costs, it’s high time re-invent ourselves.

[PerryChase]

I almost always agree with bugs. About density at Quarry Falls, I think would be much better to have all high-density and mid-density housing and eliminate the low density ones.

Personally, I don’t like the large park and public facilities with gyms and such. Gyms can be in buildings integrated near housing rather than ugly freestanding structures. It would be better to have 3 and 4 story townhouses that front the street with no or very little HOA.

As far as parks go, I believe that smaller neighborhood parks are best. Place des Vosges in Paris, France is my ideal park.
http://en.wikipedia.org/wiki/Place_des_Vosges

The Zocalo of Puebla, Mexico would be a great model for California — An arcade of restaurants and shops surrounding a square park with walkable housing nearby. Parking should be underground.

San Diego needs something creative, something different than the stucco sprawl and stucco strip mall that we have. Considering transportation costs, it’s high time re-invent ourselves.

[PerryChase]

I almost always agree with bugs. About density at Quarry Falls, I think would be much better to have all high-density and mid-density housing and eliminate the low density ones.

Personally, I don’t like the large park and public facilities with gyms and such. Gyms can be in buildings integrated near housing rather than ugly freestanding structures. It would be better to have 3 and 4 story townhouses that front the street with no or very little HOA.

As far as parks go, I believe that smaller neighborhood parks are best. Place des Vosges in Paris, France is my ideal park.
http://en.wikipedia.org/wiki/Place_des_Vosges

The Zocalo of Puebla, Mexico would be a great model for California — An arcade of restaurants and shops surrounding a square park with walkable housing nearby. Parking should be underground.

San Diego needs something creative, something different than the stucco sprawl and stucco strip mall that we have. Considering transportation costs, it’s high time re-invent ourselves.

[cyphire]

I think that there is some disconnect in the psychology of the market. Or at least our understanding of the psychology of the market.

We tend to think of they dynamic of what is happening now, not what the future portends… The idea that most homeowners have tons of equity and they can afford to never sell, and it doesn’t matter to them, to me seems absolute rubbish…

Lets look at reality. Most people who have equity due to the increased value of their homes, have refinanced to support a new type of lifestyle, one which has been increasing along with the equity…. Why has the economy done so well and why is the DOW at 13+K? The US consumer. As we all know the average person in this country has a negative savings rate! We don’t save! We spend! It’s what keeps the roller coaster going. Where I used to live in Carmel Valley – as peoples houses went up in value, they bought vacation homes, they bought new cars, boats, went out to eat all the time, etc. New kitchens, remodels, granite everything, timeshares, European vacations…. All with borrowed money. With huge income taxes, 6% sales commissions, and supporting an ever increasing lifestyle quality, many of the same people who claim that they have this fictitious equity have lived comfortably because that was their nest egg… As interest rates were so low, they refinanced – into ARM’s, etc.

Now if the pain stopped now – no problem for most…. What happens if prices go down 10-20 percent over the next year… Or even just 7%? What happens if this happens in 08, 09, 10, and 11?

Think about it! Everyone said there would be a new top each year for 10-15 years…. and it came true… But now that the sentiment is going the other way, everyone calls the bottom by late ’08!!!! There won’t be a bottom for a long time. It’s in the cards – because as it gets worse and worse, as credit tightens, buyers are scared, sellers are scared and this pretend equity which has been spent in the economy gets smaller and smaller… Till – only the real savers, the people who live within their means will be ok… That is NOT the vast majority of the southern California lifestyle!

One more point about rubbing it in…. When we were still going up my cousin (in real estate in Malibu and Calabassas) crowed about how well the market was doing. When the tide turned I spent a lot of time trying to get him to understand what was happening and what was going to happen. Now that the tide has turned, and yet the real pain hasn’t even begun to start (it really hasn’t yet!) I no longer talk to him about real estate… He won’t really get it until it gets worse, and I don’t want to make him feel bad. My sister owns a 1M house in the OC… She owes 940K on it because of a remodel. I don’t talk to her about it either… Why? Because she isn’t going to sell, but I don’t want to keep saying I told you so…

The mob will start selling in earnest next year, or the year after. There won’t be any buyers, and the ones that need to cash out will wish that they sold out this year.

p.s. My realtor cousin has his house at 1.5M for a year now. He has only slightly dropped it’s price and can’t understand why no one will buy it. By the time he sells, he will have surrendered all his equity…. This will be a very common story – it’s the fear of losing the equity which will keep houses off the market now, and will bring them on in droves next year when the fear will be losing ALL the equity.

[cyphire]

I think that there is some disconnect in the psychology of the market. Or at least our understanding of the psychology of the market.

We tend to think of they dynamic of what is happening now, not what the future portends… The idea that most homeowners have tons of equity and they can afford to never sell, and it doesn’t matter to them, to me seems absolute rubbish…

Lets look at reality. Most people who have equity due to the increased value of their homes, have refinanced to support a new type of lifestyle, one which has been increasing along with the equity…. Why has the economy done so well and why is the DOW at 13+K? The US consumer. As we all know the average person in this country has a negative savings rate! We don’t save! We spend! It’s what keeps the roller coaster going. Where I used to live in Carmel Valley – as peoples houses went up in value, they bought vacation homes, they bought new cars, boats, went out to eat all the time, etc. New kitchens, remodels, granite everything, timeshares, European vacations…. All with borrowed money. With huge income taxes, 6% sales commissions, and supporting an ever increasing lifestyle quality, many of the same people who claim that they have this fictitious equity have lived comfortably because that was their nest egg… As interest rates were so low, they refinanced – into ARM’s, etc.

Now if the pain stopped now – no problem for most…. What happens if prices go down 10-20 percent over the next year… Or even just 7%? What happens if this happens in 08, 09, 10, and 11?

Think about it! Everyone said there would be a new top each year for 10-15 years…. and it came true… But now that the sentiment is going the other way, everyone calls the bottom by late ’08!!!! There won’t be a bottom for a long time. It’s in the cards – because as it gets worse and worse, as credit tightens, buyers are scared, sellers are scared and this pretend equity which has been spent in the economy gets smaller and smaller… Till – only the real savers, the people who live within their means will be ok… That is NOT the vast majority of the southern California lifestyle!

One more point about rubbing it in…. When we were still going up my cousin (in real estate in Malibu and Calabassas) crowed about how well the market was doing. When the tide turned I spent a lot of time trying to get him to understand what was happening and what was going to happen. Now that the tide has turned, and yet the real pain hasn’t even begun to start (it really hasn’t yet!) I no longer talk to him about real estate… He won’t really get it until it gets worse, and I don’t want to make him feel bad. My sister owns a 1M house in the OC… She owes 940K on it because of a remodel. I don’t talk to her about it either… Why? Because she isn’t going to sell, but I don’t want to keep saying I told you so…

The mob will start selling in earnest next year, or the year after. There won’t be any buyers, and the ones that need to cash out will wish that they sold out this year.

p.s. My realtor cousin has his house at 1.5M for a year now. He has only slightly dropped it’s price and can’t understand why no one will buy it. By the time he sells, he will have surrendered all his equity…. This will be a very common story – it’s the fear of losing the equity which will keep houses off the market now, and will bring them on in droves next year when the fear will be losing ALL the equity.

[cyphire]

I think that there is some disconnect in the psychology of the market. Or at least our understanding of the psychology of the market.

We tend to think of they dynamic of what is happening now, not what the future portends… The idea that most homeowners have tons of equity and they can afford to never sell, and it doesn’t matter to them, to me seems absolute rubbish…

Lets look at reality. Most people who have equity due to the increased value of their homes, have refinanced to support a new type of lifestyle, one which has been increasing along with the equity…. Why has the economy done so well and why is the DOW at 13+K? The US consumer. As we all know the average person in this country has a negative savings rate! We don’t save! We spend! It’s what keeps the roller coaster going. Where I used to live in Carmel Valley – as peoples houses went up in value, they bought vacation homes, they bought new cars, boats, went out to eat all the time, etc. New kitchens, remodels, granite everything, timeshares, European vacations…. All with borrowed money. With huge income taxes, 6% sales commissions, and supporting an ever increasing lifestyle quality, many of the same people who claim that they have this fictitious equity have lived comfortably because that was their nest egg… As interest rates were so low, they refinanced – into ARM’s, etc.

Now if the pain stopped now – no problem for most…. What happens if prices go down 10-20 percent over the next year… Or even just 7%? What happens if this happens in 08, 09, 10, and 11?

Think about it! Everyone said there would be a new top each year for 10-15 years…. and it came true… But now that the sentiment is going the other way, everyone calls the bottom by late ’08!!!! There won’t be a bottom for a long time. It’s in the cards – because as it gets worse and worse, as credit tightens, buyers are scared, sellers are scared and this pretend equity which has been spent in the economy gets smaller and smaller… Till – only the real savers, the people who live within their means will be ok… That is NOT the vast majority of the southern California lifestyle!

One more point about rubbing it in…. When we were still going up my cousin (in real estate in Malibu and Calabassas) crowed about how well the market was doing. When the tide turned I spent a lot of time trying to get him to understand what was happening and what was going to happen. Now that the tide has turned, and yet the real pain hasn’t even begun to start (it really hasn’t yet!) I no longer talk to him about real estate… He won’t really get it until it gets worse, and I don’t want to make him feel bad. My sister owns a 1M house in the OC… She owes 940K on it because of a remodel. I don’t talk to her about it either… Why? Because she isn’t going to sell, but I don’t want to keep saying I told you so…

The mob will start selling in earnest next year, or the year after. There won’t be any buyers, and the ones that need to cash out will wish that they sold out this year.

p.s. My realtor cousin has his house at 1.5M for a year now. He has only slightly dropped it’s price and can’t understand why no one will buy it. By the time he sells, he will have surrendered all his equity…. This will be a very common story – it’s the fear of losing the equity which will keep houses off the market now, and will bring them on in droves next year when the fear will be losing ALL the equity.

[Bugs]

Re: Radelow’s project – which I still think is cool – and my question about the inclusion of low density housing….

In counterpoint there are are other factors, too. Increasing density also means increasing infrastructure and dealing with traffic impacts. There might be topography problems or height limitations or who knows what else.

I was just saying that, all other things being equal, our community needs more medium and high density housing in areas that have services and transportation like Mission Valley. There is no pressing need for more high dollar SFDs in this area.

[Bugs]

Re: Radelow’s project – which I still think is cool – and my question about the inclusion of low density housing….

In counterpoint there are are other factors, too. Increasing density also means increasing infrastructure and dealing with traffic impacts. There might be topography problems or height limitations or who knows what else.

I was just saying that, all other things being equal, our community needs more medium and high density housing in areas that have services and transportation like Mission Valley. There is no pressing need for more high dollar SFDs in this area.

[Bugs]

Re: Radelow’s project – which I still think is cool – and my question about the inclusion of low density housing….

In counterpoint there are are other factors, too. Increasing density also means increasing infrastructure and dealing with traffic impacts. There might be topography problems or height limitations or who knows what else.

I was just saying that, all other things being equal, our community needs more medium and high density housing in areas that have services and transportation like Mission Valley. There is no pressing need for more high dollar SFDs in this area.

[sdrealtor]

I must live on a street of wacky rebels because most people here who have very substantial equity due to the increased value of their homes have not refinanced to support a new type of lifestyle. A physician friend recently treated himself to a BMW for his 50th b day but I dont think there is a single benz or hummer on the street of a few dozen homes. In fact, there are many with loan balanced that represent 70% or better LTV’s based upon purchase prices several years ago and now represent LTV’s below 30%.

Must be the exception……..

[sdrealtor]

I must live on a street of wacky rebels because most people here who have very substantial equity due to the increased value of their homes have not refinanced to support a new type of lifestyle. A physician friend recently treated himself to a BMW for his 50th b day but I dont think there is a single benz or hummer on the street of a few dozen homes. In fact, there are many with loan balanced that represent 70% or better LTV’s based upon purchase prices several years ago and now represent LTV’s below 30%.

Must be the exception……..

[Author]

Posts