How long to wait for housing prices to hit bottom?

[mixxalot]

How long do you think it will take for San Diego real estate prices to hit bottom? Five years? Ten years? I want to buy a home but waiting on timing the market.

[aguho]

I anticipate that in 5 years SoCal will be at or near the bottom of the real estate cycle.It could happen faster or take much longer.No one knows for sure.My plan is to buy a couple of properties in Dana Point/San Clemente/Laguna Beach/Newport Beach or Huntington Beach when we get close to the bottom of this real estate cycle.

I’m always telling everyone who comes into our business to put off buying a home for a few years.Save your dough now and you will be rewarded later.Some people listen,but others fall prey to those smooth talking devils who claim that real estate never loses value blah blah blah blah……

aguho

[4plexowner]

I’m looking for a bottom in the 2010-2011 timeframe.

[privatebanker]

Within 4-6 years, the market will have made it’s adjustment. The thought of buying real estate will be similar to buying a new car. Once you purchase it, look for the value to depreciate somewhat or remain relatively flat. You’ll have to build equity the old fashion way, put at least 20% down and pay down your mortgage over time. Maybe get some appreciation over time but nothing like what we have seen in the past few years. There’s a good chance that we may never see a RE boom like the one we just experienced again in our lifetime.

[UP IN ARMS]

TOMARROOOWWW RRAAWWRR…

[masayako]

5-7 yrs

[Bugs]

We could be staring down the Japan slope, aka “the long slow slide”. 20 years from trough to trough. Sellers not giving in unless/until forced to do so.

I don’t think it’ll happen but it is one of the possibilities.

[LookoutBelow]

Sooner rather than later……..Think 1929…When it finally does happen, it will happen so quickly it will make ones head swim. I anticipate a major decline by this time next year. 2007 will be a bad, bad year for real estate “Investor/gamblers”.
If you are in your 40’s now, you may want to revisit your thinking on owning anything. What do you REALLY get with that moniker of “Owning” anyway ?

When the financial markets dry up/ tighten liquidity, the real estate prices will crash, when the real estate crashes, the banks holding that goofy paper will fail soon there after (1931 had 1,883 banks fail in one year) and the forclosure process has happened, THEN if you want to “own” something, feel free to buy….but why ? The next cycle will take at least 10-20 more years to peak again, how old will you be then ?

[rankandfile]

I tend to agree with LookoutBelow. I think that the decline will be much more steep and will take place in the next 2-3 years. I think that many of the estimates for 2009-2011 are based on past declines. Like I’ve mentioned in another post, this upswing went so high and so fast, that it is bound to return to normalcy in a somewhat similar fashion. We also need to define what the bottom-out level will be. It will likely be a level that properties would be at considering a normal, historical appreciation level. Or then again, maybe they’ll drop further. I think that jobs, wages, and cost of living need to be considered. Job growth is ok, wages are stagnant, and COL is increasing. If wages remain stagnant and costs for things like gas keep rising, lookout.

[Anonymous]

Chris Johnston

aguho, are you a real estate professional?

[powayseller]

“Given the extreme and unprecedented nature of the current housing bubble, I expect a ten- to fifteen-year downturn to follow this boom”
From iTulip’s Housing Bubble Correction: Fifteen Years to Revert to the Mean

[mixxalot]

Thanks, great posts everyone!

I think that I will park my cash then in money market and growth funds to ride this storm out. Renting an apartment does suck but its better than losing money in the long run. At least, I do not have to mow a lawn or do maintenance work.

I hope that the real estate market in overpriced San Diego and southern California crashes and burns! Then we can laugh at idiots like George Chamber-chowderhead on KOGO and throw eggs (metaphorically speaking) on the scummy realtors and scam artists who are little better than used car and insurance sales people and lawyers.

I want people to go back to an honest system of living and not one of predatory profiteering.

[powayseller]

Regarding the growth funds: we’ve had some discussions on these boards about the stock market peak, and parking in cash because stocks are likely to go down. Also check the bubble blogger section for The Big Picture. Barry Ritholtz who authors that blog does a great job explaining the bear view.

[JJGittes]

OUCH http://sandiego.craigslist.org/rfs/177582345.html

[an]

I expect that the bottom of this downturn will be way below the expected level of normalcy. Like everything in the world, from electronics to financial, when it goes up, it will always over shoot, and when it goes down, it always under shoot. The higher it overshoot going up, the lower it under shoot on the way down. There’s really no way to escape that phenomenon. As for the whole market tanking, I’m pretty sure there will be some sector that you can park your money. Even the last crash in 2000/2001, RE, oil, gold were great sectors to be in. I suspect there will be other sectors that will go up in this coming down turn. But if you truly believe that the whole market will tank and nothing will escape the down draft, then buy bear mutual funds like SRPSX or SRPIX. It would be alot better than parking your $ in cash.

[Author]

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