Housing won’t hit bottom ’til 2012

[bearishgurl]

CAR, I understand what you’re trying to say here re: supply and demand. But RE values in coastal CA counties are determined by sold-comps in their respective “micro-markets.”

For instance, if small dry-rotted “Drogan-style” SFR’s in Loma Portal (92110) have recently sold for =< $500K, you may NOT find any comparably-sized SFR sold comps =<$500K in Plumosa Park (92106), even though the two areas are 1/2 to 1 mile apart.

Even if these two areas were in the same zip code, living in Plumosa Park has several advantages over Loma Portal.

-custom homes (not on tract)
-larger lots
-some wider sidewalks
-grassy traffic circle
-“Historic” low-glow street lamps
-some “Historic” homes
-occasional use of curved glass lends “character” to area
-raised foundations (easier to fix plumbing/heating)
-longtime dog-walking group
-caroling groups at X-mas

Potential buyers for this area may not need a mortgage (or lg mtg) in order to purchase. They may be downsizing retirees or an individual with a construction background who wishes to rehab a personal residence for his/her family or to retire in.

The attractive locations and ambiance of these areas attracts buyers who are not interest-rate and job-sensitive.

[ocrenter]

[quote=briansd1][quote=ocrenter]
But if you are hoping to pick up a small SFR circa 1940’s in original condition for half a million. stay active and grab the best bargain there is today, there really isnt a point to keep waiting.[/quote]

I don’t agree on this. Those houses are functionally obsolete and before the bubble, they did not command that much of a premium over a new house inland. There will be an adjustment.

I don’t think that houses will drop much anymore because the world is awash in capital. Much of he world is peaceful and there is not much competition for capital these days. Central banks are pumping money into their economies.

I foresee a long period of stagnation for US housing with more choices for buyers. Proportional to income, housing will be cost less.[/quote]

I agree with the long term stagnation of the economy. But these homes, even though small and old, are the middle of the housing stock in places like PB. and I don’t see the middle moving all that much, primarily as these are SFRs.

Plus overall there simply wasn’t the amount of speculation in these homes back in the bubble days to supply large amount of “underwater” sellers needed to drop that segment of the market. What will simply happen is the owners will hold on and pass it on to their offsprings.

On the other hand, large new ultra-luxury homes in the millions and small condos were quite bubbly back in the days. Therefore, payback will come around.

[ocrenter]

[quote=briansd1][quote=ocrenter]
But if you are hoping to pick up a small SFR circa 1940’s in original condition for half a million. stay active and grab the best bargain there is today, there really isnt a point to keep waiting.[/quote]

I don’t agree on this. Those houses are functionally obsolete and before the bubble, they did not command that much of a premium over a new house inland. There will be an adjustment.

I don’t think that houses will drop much anymore because the world is awash in capital. Much of he world is peaceful and there is not much competition for capital these days. Central banks are pumping money into their economies.

I foresee a long period of stagnation for US housing with more choices for buyers. Proportional to income, housing will be cost less.[/quote]

I agree with the long term stagnation of the economy. But these homes, even though small and old, are the middle of the housing stock in places like PB. and I don’t see the middle moving all that much, primarily as these are SFRs.

Plus overall there simply wasn’t the amount of speculation in these homes back in the bubble days to supply large amount of “underwater” sellers needed to drop that segment of the market. What will simply happen is the owners will hold on and pass it on to their offsprings.

On the other hand, large new ultra-luxury homes in the millions and small condos were quite bubbly back in the days. Therefore, payback will come around.

[ocrenter]

[quote=briansd1][quote=ocrenter]
But if you are hoping to pick up a small SFR circa 1940’s in original condition for half a million. stay active and grab the best bargain there is today, there really isnt a point to keep waiting.[/quote]

I don’t agree on this. Those houses are functionally obsolete and before the bubble, they did not command that much of a premium over a new house inland. There will be an adjustment.

I don’t think that houses will drop much anymore because the world is awash in capital. Much of he world is peaceful and there is not much competition for capital these days. Central banks are pumping money into their economies.

I foresee a long period of stagnation for US housing with more choices for buyers. Proportional to income, housing will be cost less.[/quote]

I agree with the long term stagnation of the economy. But these homes, even though small and old, are the middle of the housing stock in places like PB. and I don’t see the middle moving all that much, primarily as these are SFRs.

Plus overall there simply wasn’t the amount of speculation in these homes back in the bubble days to supply large amount of “underwater” sellers needed to drop that segment of the market. What will simply happen is the owners will hold on and pass it on to their offsprings.

On the other hand, large new ultra-luxury homes in the millions and small condos were quite bubbly back in the days. Therefore, payback will come around.

[ocrenter]

[quote=briansd1][quote=ocrenter]
But if you are hoping to pick up a small SFR circa 1940’s in original condition for half a million. stay active and grab the best bargain there is today, there really isnt a point to keep waiting.[/quote]

I don’t agree on this. Those houses are functionally obsolete and before the bubble, they did not command that much of a premium over a new house inland. There will be an adjustment.

I don’t think that houses will drop much anymore because the world is awash in capital. Much of he world is peaceful and there is not much competition for capital these days. Central banks are pumping money into their economies.

I foresee a long period of stagnation for US housing with more choices for buyers. Proportional to income, housing will be cost less.[/quote]

I agree with the long term stagnation of the economy. But these homes, even though small and old, are the middle of the housing stock in places like PB. and I don’t see the middle moving all that much, primarily as these are SFRs.

Plus overall there simply wasn’t the amount of speculation in these homes back in the bubble days to supply large amount of “underwater” sellers needed to drop that segment of the market. What will simply happen is the owners will hold on and pass it on to their offsprings.

On the other hand, large new ultra-luxury homes in the millions and small condos were quite bubbly back in the days. Therefore, payback will come around.

[ocrenter]

[quote=briansd1][quote=ocrenter]
But if you are hoping to pick up a small SFR circa 1940’s in original condition for half a million. stay active and grab the best bargain there is today, there really isnt a point to keep waiting.[/quote]

I don’t agree on this. Those houses are functionally obsolete and before the bubble, they did not command that much of a premium over a new house inland. There will be an adjustment.

I don’t think that houses will drop much anymore because the world is awash in capital. Much of he world is peaceful and there is not much competition for capital these days. Central banks are pumping money into their economies.

I foresee a long period of stagnation for US housing with more choices for buyers. Proportional to income, housing will be cost less.[/quote]

I agree with the long term stagnation of the economy. But these homes, even though small and old, are the middle of the housing stock in places like PB. and I don’t see the middle moving all that much, primarily as these are SFRs.

Plus overall there simply wasn’t the amount of speculation in these homes back in the bubble days to supply large amount of “underwater” sellers needed to drop that segment of the market. What will simply happen is the owners will hold on and pass it on to their offsprings.

On the other hand, large new ultra-luxury homes in the millions and small condos were quite bubbly back in the days. Therefore, payback will come around.

[briansd1]

[quote=bearishgurl]
This is why I advocated doing the plat map study for the streets of your choice if you are a higher-end-custom buyer in an established area — to check the level of overmortgaged properties in order to determine if current asking prices had any “froth” to them.[/quote]

I agree. Life expectancy is about 70+. Plenty of 50+ to 60+ people bought and refied during the boom. I see that downtown. The bubble heads were saying the buyers bought for retirement in the “best downtown in the country” and they would never sell. Results: foreclosures galore.

Will these elderly folks have enough staying power to outlast an extended stagnation? I doubt it.

Remember that a recovery is from the very trough and doesn’t begin to make overextended debtors whole.

[briansd1]

[quote=bearishgurl]
This is why I advocated doing the plat map study for the streets of your choice if you are a higher-end-custom buyer in an established area — to check the level of overmortgaged properties in order to determine if current asking prices had any “froth” to them.[/quote]

I agree. Life expectancy is about 70+. Plenty of 50+ to 60+ people bought and refied during the boom. I see that downtown. The bubble heads were saying the buyers bought for retirement in the “best downtown in the country” and they would never sell. Results: foreclosures galore.

Will these elderly folks have enough staying power to outlast an extended stagnation? I doubt it.

Remember that a recovery is from the very trough and doesn’t begin to make overextended debtors whole.

[briansd1]

[quote=bearishgurl]
This is why I advocated doing the plat map study for the streets of your choice if you are a higher-end-custom buyer in an established area — to check the level of overmortgaged properties in order to determine if current asking prices had any “froth” to them.[/quote]

I agree. Life expectancy is about 70+. Plenty of 50+ to 60+ people bought and refied during the boom. I see that downtown. The bubble heads were saying the buyers bought for retirement in the “best downtown in the country” and they would never sell. Results: foreclosures galore.

Will these elderly folks have enough staying power to outlast an extended stagnation? I doubt it.

Remember that a recovery is from the very trough and doesn’t begin to make overextended debtors whole.

[briansd1]

[quote=bearishgurl]
This is why I advocated doing the plat map study for the streets of your choice if you are a higher-end-custom buyer in an established area — to check the level of overmortgaged properties in order to determine if current asking prices had any “froth” to them.[/quote]

I agree. Life expectancy is about 70+. Plenty of 50+ to 60+ people bought and refied during the boom. I see that downtown. The bubble heads were saying the buyers bought for retirement in the “best downtown in the country” and they would never sell. Results: foreclosures galore.

Will these elderly folks have enough staying power to outlast an extended stagnation? I doubt it.

Remember that a recovery is from the very trough and doesn’t begin to make overextended debtors whole.

[briansd1]

[quote=bearishgurl]
This is why I advocated doing the plat map study for the streets of your choice if you are a higher-end-custom buyer in an established area — to check the level of overmortgaged properties in order to determine if current asking prices had any “froth” to them.[/quote]

I agree. Life expectancy is about 70+. Plenty of 50+ to 60+ people bought and refied during the boom. I see that downtown. The bubble heads were saying the buyers bought for retirement in the “best downtown in the country” and they would never sell. Results: foreclosures galore.

Will these elderly folks have enough staying power to outlast an extended stagnation? I doubt it.

Remember that a recovery is from the very trough and doesn’t begin to make overextended debtors whole.

[briansd1]

[quote=ocrenter]

I agree with the long term stagnation of the economy. But these homes, even though small and old, are the middle of the housing stock in places like PB. and I don’t see the middle moving all that much, primarily as these are SFRs. [/quote]

I don’t think that professional families buy rehabs. And the rehab market is very different. Professional housewives don’t want houses with 1 bathroom and no closet space.

My opinion is that the old houses are priced too high based on the amount of work that they need. They just rode the zip code appreciation, but that will pass as we return to a normal market.

If our policymakers learned anything, they will need to allocate resources away from housing to more productive purposes. In that case, housing will cost less, proportional to income; and that’s a real price drop.

[briansd1]

[quote=ocrenter]

I agree with the long term stagnation of the economy. But these homes, even though small and old, are the middle of the housing stock in places like PB. and I don’t see the middle moving all that much, primarily as these are SFRs. [/quote]

I don’t think that professional families buy rehabs. And the rehab market is very different. Professional housewives don’t want houses with 1 bathroom and no closet space.

My opinion is that the old houses are priced too high based on the amount of work that they need. They just rode the zip code appreciation, but that will pass as we return to a normal market.

If our policymakers learned anything, they will need to allocate resources away from housing to more productive purposes. In that case, housing will cost less, proportional to income; and that’s a real price drop.

[briansd1]

[quote=ocrenter]

I agree with the long term stagnation of the economy. But these homes, even though small and old, are the middle of the housing stock in places like PB. and I don’t see the middle moving all that much, primarily as these are SFRs. [/quote]

I don’t think that professional families buy rehabs. And the rehab market is very different. Professional housewives don’t want houses with 1 bathroom and no closet space.

My opinion is that the old houses are priced too high based on the amount of work that they need. They just rode the zip code appreciation, but that will pass as we return to a normal market.

If our policymakers learned anything, they will need to allocate resources away from housing to more productive purposes. In that case, housing will cost less, proportional to income; and that’s a real price drop.

[briansd1]

[quote=ocrenter]

I agree with the long term stagnation of the economy. But these homes, even though small and old, are the middle of the housing stock in places like PB. and I don’t see the middle moving all that much, primarily as these are SFRs. [/quote]

I don’t think that professional families buy rehabs. And the rehab market is very different. Professional housewives don’t want houses with 1 bathroom and no closet space.

My opinion is that the old houses are priced too high based on the amount of work that they need. They just rode the zip code appreciation, but that will pass as we return to a normal market.

If our policymakers learned anything, they will need to allocate resources away from housing to more productive purposes. In that case, housing will cost less, proportional to income; and that’s a real price drop.

[Author]

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