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The-Shoveler.
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February 17, 2022 at 1:54 PM #823880February 17, 2022 at 3:26 PM #823881
sdrealtor
ParticipantLooking at stats is dangerous if you dont understand context. Here is an example that illustrates why. Imagine 5 houses that did not change in price
Before crash sales
1,2,3,4,5
Median is 3
After crash sales
1,2,3 (4 and 5 did not go on market because owners wanted to stay)
Median is 2
You just experienced a 33% decline in the median without prices changing. Im not saying prices didnt go down, we all know they did. But the stats are heavily skewed by a changing mix that make it look far more sever than what actually happened on the streets.
I used nicer parts as an example as I know those numbers at the tip of fingers but more modest areas like MM and SM did not drop like those stats either
At the end of the day, the markets froze up in FAll 2007 with most of the decline coming in only 2 years 08/09. IN 2010/2011 the markets were mostly flat (yes there was a period in 11 where they dropped a bit but overall mostly flat those two years). I dont care what charts say as I was out there selling a couple hundred homes and understood what was happening to prices of individual homes in ways the stats just dont accurately reflect.
Even if you bought at prior peak you are far ahead now. Could you have timed things better with perfect hindsight? Of course, but if you had the worst possible timing and hung on you still did great.
A house in my hood sold for 1.15M at absolute peak. At no time during the bubble would it have been able to sell for more than it did in JUne 2004. All the realtors laughed about it for years. The owner had a great job, could easily afford it the whole time, raised his kids there, loves it and is still here. THat house would sell around $2.4M now
Back in 2010 to 2012 when market was bottoming and buyers were coming back it was not easy to find a nice home. I warned people here for years that is what wold happen and it did exactly that way. There were few on the market and competition for them. It was never a free for all for buyers walking up to great houses and buying them easily. In 2013 the markets took off leaving many bears paralyzed with fear it was a dead cat bounce that never happened.
Many buyers that kept waiting for it to go down further got shut out and never bought in. We have a few of those here
If you focus on each word of what he said, yeah you can pick it it apart. But if you look at the big picture message of the market isnt going to collapse and will come back strong so its OK to find a long term home, get on with life and you’ll be ok. Well that proved to be correct
February 17, 2022 at 5:21 PM #823882svelte
ParticipantWhat color is the sky in your Realtor world?
February 17, 2022 at 6:20 PM #823883sdrealtor
ParticipantIt’s on the ground right now. I’ll bend down and take a look
February 18, 2022 at 7:42 AM #823884svelte
ParticipantThis took me 5 minutes to find. Model match sales on the same street
2007 – $575K
2009 – $440KThat almost a 25% haircut and I probably didn’t find homes that sold at the absolute top and absolute bottom so the max drop 2007-2009 probably approached 30% in that neighborhood.
[quote=sdrealtor]
Im not saying prices didnt go down, we all know they did. But the stats are heavily skewed by a changing mix that make it look far more sever than what actually happened on the streets.[/quote]Home prices did drop drastically from 2007 to 2009 no matter how realtors want to spin it! I know talking about that will lose realtors a few home sales right now since prices are again at a peak, but San Diego has seen some drastic home value declines in the not-too-distant past. And prices will drop again! It may be in 3 years, 5 years, 10 years or more, but prices will certainly drop again at some point. A 30-40% drop is probably a once-in-a-lifetime event, but there will be other significant drops.
And the op on this thread was just dead wrong. Dead wrong.
[img_assist|nid=27518|title=Model Match 2007-2009 Price Decline|desc=|link=node|align=left|width=466|height=260]
February 18, 2022 at 7:50 AM #823885scaredyclassic
ParticipantBoth points have truth.
As they say, time in the market is more important than timing the market.
On the other hand, if you time the market right and have time in the market, you do better all around, in terms of the bumpiness of the ride, opportunity cost of allocating saved monies and ultimate return.
Currently reading WAR AND PEACE, a pandemic classic. Not much real estate advice in there, but it certainly gives one the feeling of having to get on with life and the inability to know anything when you’re in the middle of it.
I’m about halfway in the book, and it has a lot of great insight.
But the better short read is THE DEATH OF IVAN ILYICH. 53 pages long, perfect, about a lawyer who suddenly discovers he’s dying. Just spot on. And only 53 pps. I absolutely love this little novella. I especially laugh at the opening, when his colleague buddies first learn of his death, and each one is secretly thinking how this will affect their place in a line of promotions.
February 18, 2022 at 8:16 AM #823886svelte
Participant[quote=scaredyclassic]
I’m about halfway in the book, and it has a lot of great insight.
But the better short read is THE DEATH OF IVAN ILYICH. 53 pages long, perfect, about a lawyer who suddenly discovers he’s dying. Just spot on. And only 53 pps. I absolutely love this little novella. I especially laugh at the opening, when his colleague buddies first learn of his death, and each one is secretly thinking how this will affect their place in a line of promotions.[/quote]
I am reading “2 Years Before The Mast” right now. About halfway done. One of the best books I’ve ever read.
It is a true story written by a college student who takes time off in 1835 to become a sailor on a merchant ship and takes a trip from Boston, around the cape to the tiny cities at the bays on the west coast of North America – including San Diego. He gives very detailed descriptions of the people, customs, and environment he finds on the west coast, as well as aboard the ship. Sailors bunk before the mast (thus the title) and it was to be a two-year round trip back to Boston. It is fascinating. Excellent read!
February 18, 2022 at 8:31 AM #823887sdrealtor
Participant[quote=svelte]This took me 5 minutes to find. Model match sales on the same street
2007 – $575K
2009 – $440KThat almost a 25% haircut and I probably didn’t find homes that sold at the absolute top and absolute bottom so the max drop 2007-2009 probably approached 30% in that neighborhood.
[quote=sdrealtor]
Im not saying prices didnt go down, we all know they did. But the stats are heavily skewed by a changing mix that make it look far more sever than what actually happened on the streets.[/quote]Home prices did drop drastically from 2007 to 2009 no matter how realtors want to spin it! I know talking about that will lose realtors a few home sales right now since prices are again at a peak, but San Diego has seen some drastic home value declines in the not-too-distant past. And prices will drop again! It may be in 3 years, 5 years, 10 years or more, but prices will certainly drop again at some point. A 30-40% drop is probably a once-in-a-lifetime event, but there will be other significant drops.
And the op on this thread was just dead wrong. Dead wrong.
[img_assist|nid=27518|title=Model Match 2007-2009 Price Decline|desc=|link=node|align=left|width=466|height=260][/quote]
Who would you rather be?
Buyer of house two weeks before market froze in august 2007 that saw it drop 25-30% over next 4 years, recover most of that by year 6 and now worth double what they paid for house they enjoyed with their family the last 15 years. And they refinance down to 2.75% so mortgage with insurance and taxes is now under $2k
Person that laughed at them from august 07 through 2011, expected even greater losses, thought 13 was dead cat bounce so didn’t buy during down turn. Bounced from rental to rental. Still in rental now paying $4k a month for a house like that.
Of course they could’ve timed things better but in the end even the guy that bought at worst possible time but held on is now much better off than permabear that never bought
And I don’t care what people do now. I’m not advocating one or the other. Just pointing out that in the long run which is what the OP was advocating things turned out rather well even for those with the worst timing as long as they held on
And at this point nothing will stop home sales for the foreseeable future. Lines out the door everywhere. I just sold one over $2m and while we were accepting the counter there were 3 more buyers that lost out trying to raise their bids. It’s astounding
February 18, 2022 at 8:42 AM #823889The-Shoveler
ParticipantWife was telling me yesterday about nothing special Temecula tract homes going for 1+ million.
I told her she must have been looking at the wrong city.
Maybe I should pay attention next time LOL.
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