Fundamental Value of a Home

[no_such_reality]

could be way wrong, but I’m just not seeing La Jolla SFRs bottoming out to $350,000.

I’d agree, but I also agree when you said something of the line: f i f t y t h o u s a n d d o l l a r s !!!!

I too remember the day, not too long ago when a price premium between a good and bad area was $50,000-$100,000. And a million dollar home, was a million dollar home.

Today, less than a decade later, the difference between a okay area and bad are is $300,000 and an good area adds another $200-$300K and average homes are million dollar homes and what was a million dollar home is now a $5,000,000 or $8,000,000 home.

While I doubt you’ll see $350,000 in La Jolla, you will else where. Possibly even less. Then the question becomes, how much is the price premium when a good home in a not so great area is $200-300,000. What’s a good home in a good area go for? And was does a good home is a premium area like la Jolla go for?

Will the premium become less? Or will it be more? The majority are living on credit, that points to less. Yet, the premium areas cluster with high income earners whose incomes and wealth are and have risen disproportionately to the majority. That tends to indicate the premium will be steeper (as a percentage).

[no_such_reality]

could be way wrong, but I’m just not seeing La Jolla SFRs bottoming out to $350,000.

I’d agree, but I also agree when you said something of the line: f i f t y t h o u s a n d d o l l a r s !!!!

I too remember the day, not too long ago when a price premium between a good and bad area was $50,000-$100,000. And a million dollar home, was a million dollar home.

Today, less than a decade later, the difference between a okay area and bad are is $300,000 and an good area adds another $200-$300K and average homes are million dollar homes and what was a million dollar home is now a $5,000,000 or $8,000,000 home.

While I doubt you’ll see $350,000 in La Jolla, you will else where. Possibly even less. Then the question becomes, how much is the price premium when a good home in a not so great area is $200-300,000. What’s a good home in a good area go for? And was does a good home is a premium area like la Jolla go for?

Will the premium become less? Or will it be more? The majority are living on credit, that points to less. Yet, the premium areas cluster with high income earners whose incomes and wealth are and have risen disproportionately to the majority. That tends to indicate the premium will be steeper (as a percentage).

[Bugs]

There’s nothing like be rebutted with my own quote – LOL. Your point is well taken though – that is still a lot of money.

If memory serves, $300k was near the bottom in LJ in 1996. At a 3% annual rate of increase that would indicate to a $415k “should be” value in 2007. Of course, that “should be” is an entirely hypothetical value. If we ever see it again it will probably only be for a fleeting moment as the market passes it on its way to overcorrecting.

[Bugs]

There’s nothing like be rebutted with my own quote – LOL. Your point is well taken though – that is still a lot of money.

If memory serves, $300k was near the bottom in LJ in 1996. At a 3% annual rate of increase that would indicate to a $415k “should be” value in 2007. Of course, that “should be” is an entirely hypothetical value. If we ever see it again it will probably only be for a fleeting moment as the market passes it on its way to overcorrecting.

[bsrsharma]

I can see stability being a factor against seeking rational place to live. But US being “immigrant nation”, why isn’t there more energy in “go heartland young man”. Can some of you who may be long time renters, but would have liked to buy a home if the price weren’t so high, tell what keeps you in SoCal (or whichever bubble market you are presently in)? As for me, a job transfer brought me over to Portland, Oregon about 2 years back from SD area. I am still renting here since I believe there will be a price correction.

[bsrsharma]

I can see stability being a factor against seeking rational place to live. But US being “immigrant nation”, why isn’t there more energy in “go heartland young man”. Can some of you who may be long time renters, but would have liked to buy a home if the price weren’t so high, tell what keeps you in SoCal (or whichever bubble market you are presently in)? As for me, a job transfer brought me over to Portland, Oregon about 2 years back from SD area. I am still renting here since I believe there will be a price correction.

[Reality]

Can some of you who may be long time renters, but would have liked to buy a home if the price weren’t so high, tell what keeps you in SoCal (or whichever bubble market you are presently in)?

Prices will correct here, and this is my home.

Besides, for me anyway, relocating means leaving a decent paying job. Although I’ve never tried it, I’d think finding a job in another city while still employed and living here would be a longshot. And I’d never move elsewhere without a job lined up. I know what it’s like being on the outside looking in and didn’t care for it.

[Reality]

Can some of you who may be long time renters, but would have liked to buy a home if the price weren’t so high, tell what keeps you in SoCal (or whichever bubble market you are presently in)?

Prices will correct here, and this is my home.

Besides, for me anyway, relocating means leaving a decent paying job. Although I’ve never tried it, I’d think finding a job in another city while still employed and living here would be a longshot. And I’d never move elsewhere without a job lined up. I know what it’s like being on the outside looking in and didn’t care for it.

[patientrenter]

bsrsharma, I stay here because I have a good job at a good company and I love the area. If I ever need to buy a place, I’ll go where I can afford it. Some day, that may be right here in So Cal.

The only thing that would change my mind is if prices in other places I would be happy to live in were rising beyond my reach, and I had to buy now so as not to be “priced out forever”. Right now, I am feeling pretty comfortable because prices are doing anything from falling slowly to rising slowly in the places I might move to.

(By the way, my current first choice of affordable alternatives to So Cal is Vancouver, Washington, just across the river from you.)

Patient renter in OC

[patientrenter]

bsrsharma, I stay here because I have a good job at a good company and I love the area. If I ever need to buy a place, I’ll go where I can afford it. Some day, that may be right here in So Cal.

The only thing that would change my mind is if prices in other places I would be happy to live in were rising beyond my reach, and I had to buy now so as not to be “priced out forever”. Right now, I am feeling pretty comfortable because prices are doing anything from falling slowly to rising slowly in the places I might move to.

(By the way, my current first choice of affordable alternatives to So Cal is Vancouver, Washington, just across the river from you.)

Patient renter in OC

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