Housing & economy doing great…shut down this site!

[rb_engineer]

Hmm, now you are taking cheap shots at me. Geez.

I’m more of a realist than a permabull. I don’t want the housing to go down if that means it will take the rest of the economy with it. I have researched a few downturns of the past (Japan, Korea, San Diego). Their economy has to turn really sour for a big time price drop.

If housing can crash without taking down the economy, what better situation can you ask for? We can all become land barons!

But I don’t know what the fuss is about. Why are you complaining about housing prices? You can easily move to Temecula/Chula Vista/Ramona etc and afford a nice house. That’s the fact of life, some people got here first. You don’t see people complaining about land owners in Manhattan, do you?

[rb_engineer]

Hmm, now you are taking cheap shots at me. Geez.

I’m more of a realist than a permabull. I don’t want the housing to go down if that means it will take the rest of the economy with it. I have researched a few downturns of the past (Japan, Korea, San Diego). Their economy has to turn really sour for a big time price drop.

If housing can crash without taking down the economy, what better situation can you ask for? We can all become land barons!

But I don’t know what the fuss is about. Why are you complaining about housing prices? You can easily move to Temecula/Chula Vista/Ramona etc and afford a nice house. That’s the fact of life, some people got here first. You don’t see people complaining about land owners in Manhattan, do you?

[(former)FormerSanDiegan]

“You don’t see people complaining about land owners in Manhattan, do you?”

Who was complaining about land owners ?

[(former)FormerSanDiegan]

“You don’t see people complaining about land owners in Manhattan, do you?”

Who was complaining about land owners ?

[4plexowner]

Downtown condo situation has only been mentioned in passing during this thread – let’s remind ourselves what’s happening there

Over 600 units currently on the MLS and some unknown number of units not on the MLS

Units are selling at a rate of 40 to 50 per month which gives us at least 12 months of inventory – according to Rich, there is downward price pressure when months of inventory rises above 8

Into this already saturated market we are going to add another 6000 units by the end of 2009

Let’s say that we continue to sell 50 units per month until the end of 2009 (30 months) – that leaves us with only 5100 vacant units

San Diego has never experienced a super-saturated condo market so it is challenging to predict what the effect will be – I personally believe these condos will become rental units and rental rates will be suppressed throughout San Diego (remember that prices are set at the margin)

~

Since I mentioned a glut of condos/rental units, let me also mention that at least 20% of the current 18,000 (21,000?) MLS listings are sitting vacant – that means there is no homeowner that is going to take these properties off the market and continue to live in them – these properties will either be reduced in price to a selling point (possibly via short sale or foreclosure) or they will become rentals – real estate that won’t sell becomes rentals

~

The Bear Stearns mess was mentioned and the $3.2B number was given

As I understand it there are (were?) two funds – one was $5B in size and the other one was $15B in size – the $3.2B loss is ONLY for bailing out the smaller fund – no bailout has been attempted (in public anyway) for the larger fund

~

Another piece of the macro picture is the impending retirement of the baby boomers – they make up 25% of our current work force

That’s 25% of our workforce that will want to STOP contributing to their retirement funds and START drawing on their expected retirement benefits (social security, medicare, perscription drug benefit, etc)

This loss of productive workers and growth of entitlement spending could have a profound effect on America’s economy and nobody knows what that effect will be – I have a hard time imagining that it will be positive

As discussed in recent threads, these same boomers have some portion of their wealth tied up in real estate – some of them will need to tap this equity which means sell, refi/cashout (and service a mortgage) or do some kind of reverse mortgage

Leading edge of the boomers will be eligible for early social security benefits starting in 2008

~

I could go on but what’s the point?

This is all just gloom and doom drivel

Everybody drink up, the koolaid’s fine!

[4plexowner]

Downtown condo situation has only been mentioned in passing during this thread – let’s remind ourselves what’s happening there

Over 600 units currently on the MLS and some unknown number of units not on the MLS

Units are selling at a rate of 40 to 50 per month which gives us at least 12 months of inventory – according to Rich, there is downward price pressure when months of inventory rises above 8

Into this already saturated market we are going to add another 6000 units by the end of 2009

Let’s say that we continue to sell 50 units per month until the end of 2009 (30 months) – that leaves us with only 5100 vacant units

San Diego has never experienced a super-saturated condo market so it is challenging to predict what the effect will be – I personally believe these condos will become rental units and rental rates will be suppressed throughout San Diego (remember that prices are set at the margin)

~

Since I mentioned a glut of condos/rental units, let me also mention that at least 20% of the current 18,000 (21,000?) MLS listings are sitting vacant – that means there is no homeowner that is going to take these properties off the market and continue to live in them – these properties will either be reduced in price to a selling point (possibly via short sale or foreclosure) or they will become rentals – real estate that won’t sell becomes rentals

~

The Bear Stearns mess was mentioned and the $3.2B number was given

As I understand it there are (were?) two funds – one was $5B in size and the other one was $15B in size – the $3.2B loss is ONLY for bailing out the smaller fund – no bailout has been attempted (in public anyway) for the larger fund

~

Another piece of the macro picture is the impending retirement of the baby boomers – they make up 25% of our current work force

That’s 25% of our workforce that will want to STOP contributing to their retirement funds and START drawing on their expected retirement benefits (social security, medicare, perscription drug benefit, etc)

This loss of productive workers and growth of entitlement spending could have a profound effect on America’s economy and nobody knows what that effect will be – I have a hard time imagining that it will be positive

As discussed in recent threads, these same boomers have some portion of their wealth tied up in real estate – some of them will need to tap this equity which means sell, refi/cashout (and service a mortgage) or do some kind of reverse mortgage

Leading edge of the boomers will be eligible for early social security benefits starting in 2008

~

I could go on but what’s the point?

This is all just gloom and doom drivel

Everybody drink up, the koolaid’s fine!

[SD Realtor]

Hype –

Been busy and just logged on for the first time just now. Will give you some cases late tonite on this thread.

Scruffydog you never answered my questions so I assume you will pass.

SD Realtor

[SD Realtor]

Hype –

Been busy and just logged on for the first time just now. Will give you some cases late tonite on this thread.

Scruffydog you never answered my questions so I assume you will pass.

SD Realtor

[scruffydog]

The US consumer, with zero savings, will spend everything they earn and overextend themselves with borrowing to support house and car payments etc. They will do anything and everything to attain and preserve their bigger houses and consumer goods. They simply will not be denied anything.

The ONLY way I can foresee any r/e price reductions is if people are unable to service their debt and that will happen only if unemployment increases to > ~ 8% like the 90s.

As for a blowup like LTCM, the government will come to the rescue again (with our tax money!)

[scruffydog]

The US consumer, with zero savings, will spend everything they earn and overextend themselves with borrowing to support house and car payments etc. They will do anything and everything to attain and preserve their bigger houses and consumer goods. They simply will not be denied anything.

The ONLY way I can foresee any r/e price reductions is if people are unable to service their debt and that will happen only if unemployment increases to > ~ 8% like the 90s.

As for a blowup like LTCM, the government will come to the rescue again (with our tax money!)

[JWM in SD]

“Their economy has to turn really sour for a big time price drop.”

Uhhh, lets see…40% of new job growth in the past several was in what industries again???? Biotech? No. Manufacturing? Oh, hell no. Gee, what was it?

You really don’t get it do you?

[JWM in SD]

“Their economy has to turn really sour for a big time price drop.”

Uhhh, lets see…40% of new job growth in the past several was in what industries again???? Biotech? No. Manufacturing? Oh, hell no. Gee, what was it?

You really don’t get it do you?

[4plexowner]

Update on the second of the Bear Stearns hedge funds:

http://www.ft.com/cms/s/67814fd0-29c7-11dc-a530-000b5df10621.html

“Investors in the worse-hit of two stricken Bear Stearns hedge funds are offering to sell their holdings for as little as 11 cents on the dollar but still finding no buyers, according to unfilled trades on Hedgebay, a secondary market for funds.”

11 cents on the dollar being offered and no takers – wow!!!

Here’s another hedge fund that has halted redemptions because the main investor (25% of the fund) and many others are trying to get out:

http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=104&STORY=/www/story/07-03-2007/0004619918&EDATE=

~

Don’t worry folks – the subprime mess is well contained – there is nothing to see here – isn’t that American Idol about to start on TV? …

[4plexowner]

Update on the second of the Bear Stearns hedge funds:

http://www.ft.com/cms/s/67814fd0-29c7-11dc-a530-000b5df10621.html

“Investors in the worse-hit of two stricken Bear Stearns hedge funds are offering to sell their holdings for as little as 11 cents on the dollar but still finding no buyers, according to unfilled trades on Hedgebay, a secondary market for funds.”

11 cents on the dollar being offered and no takers – wow!!!

Here’s another hedge fund that has halted redemptions because the main investor (25% of the fund) and many others are trying to get out:

http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=104&STORY=/www/story/07-03-2007/0004619918&EDATE=

~

Don’t worry folks – the subprime mess is well contained – there is nothing to see here – isn’t that American Idol about to start on TV? …

[JWM in SD]

“The ONLY way I can foresee any r/e price reductions is if people are unable to service their debt and that will happen only if unemployment increases to > ~ 8% like the 90s.”

Oh silly me, I guess record levels of NODs in SD county doesn’t translate to not being able to service debt. How silly of me to mis-interpret that.

Are freaking retarded or what???

[Author]

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