How low will it go? Quick survey

[trex]

Quick survey – what percentage decline do you expect for San Diego County over the next five years?

I’m betting about 30% in nominal terms. Inflation will kick in at some point.

I ask, however, because we are thinking about moving out of state to start a family, because we don’t aspire to a crappy run down subdivision, though that’s all we can afford. We probably need close to a 50% decline to make it work here.

[bsrsharma]

No simple answer. It is a function of both location & price range. Good locations are likely to decline some what less while the bottom will fall out of the lowest fifth or so (in desirability).

In terms of price, the Jumbo kind in the 500K – 800K will get hit hardest. Practically that market has gone away overnight due to near non-availability of reasonable mortgage.

If you integrate all transaction over next 5 years, my guess is a 50% decline in today’s prices. Of course, if inflation is severe, the nominal decline may be much less. In case of hyper inflation, there may not even be a nominal decline (or may be there will be a net increase, nominally). If that happens, you can of course see the impact on exchange value of $ and also purchasing power decline.

[bsrsharma]

No simple answer. It is a function of both location & price range. Good locations are likely to decline some what less while the bottom will fall out of the lowest fifth or so (in desirability).

In terms of price, the Jumbo kind in the 500K – 800K will get hit hardest. Practically that market has gone away overnight due to near non-availability of reasonable mortgage.

If you integrate all transaction over next 5 years, my guess is a 50% decline in today’s prices. Of course, if inflation is severe, the nominal decline may be much less. In case of hyper inflation, there may not even be a nominal decline (or may be there will be a net increase, nominally). If that happens, you can of course see the impact on exchange value of $ and also purchasing power decline.

[bsrsharma]

No simple answer. It is a function of both location & price range. Good locations are likely to decline some what less while the bottom will fall out of the lowest fifth or so (in desirability).

In terms of price, the Jumbo kind in the 500K – 800K will get hit hardest. Practically that market has gone away overnight due to near non-availability of reasonable mortgage.

If you integrate all transaction over next 5 years, my guess is a 50% decline in today’s prices. Of course, if inflation is severe, the nominal decline may be much less. In case of hyper inflation, there may not even be a nominal decline (or may be there will be a net increase, nominally). If that happens, you can of course see the impact on exchange value of $ and also purchasing power decline.

[trex]

Thanks for the thoughts. I agree with your jumbo comments. We’ve got some decisions to make…

[trex]

Thanks for the thoughts. I agree with your jumbo comments. We’ve got some decisions to make…

[trex]

Thanks for the thoughts. I agree with your jumbo comments. We’ve got some decisions to make…

[Bugs]

Right now we’re in the equivalent of Round 2 of 12 scheduled round of exciting ARM Reset action. The champ (interest rates) has already gotten a bloody nose in the first round (foreclosures doubled) and a nasty cut over the right eye in the second round (hedgies being revalued). We still have 10 more rounds to go and the interest rates cannot be saved by the bell.

Just based on what I think will happen with financing, I’m thinking the projections for the 50% correction off peak will eventually prove out to be overly conservative. I think this downcycle will overcorrect as has all its predecessors.

[Bugs]

Right now we’re in the equivalent of Round 2 of 12 scheduled round of exciting ARM Reset action. The champ (interest rates) has already gotten a bloody nose in the first round (foreclosures doubled) and a nasty cut over the right eye in the second round (hedgies being revalued). We still have 10 more rounds to go and the interest rates cannot be saved by the bell.

Just based on what I think will happen with financing, I’m thinking the projections for the 50% correction off peak will eventually prove out to be overly conservative. I think this downcycle will overcorrect as has all its predecessors.

[Bugs]

Right now we’re in the equivalent of Round 2 of 12 scheduled round of exciting ARM Reset action. The champ (interest rates) has already gotten a bloody nose in the first round (foreclosures doubled) and a nasty cut over the right eye in the second round (hedgies being revalued). We still have 10 more rounds to go and the interest rates cannot be saved by the bell.

Just based on what I think will happen with financing, I’m thinking the projections for the 50% correction off peak will eventually prove out to be overly conservative. I think this downcycle will overcorrect as has all its predecessors.

[Ex-SD]

IMHO: It’s going to take 3-5 years to get to the bottom and then prices will sit there for a while…………and I believe that prices could drop 50% in some areas. The median price will NOW have to adjust to the loans that borrowers can qualify for. Everything will adjust around that one, simple factor. If prices stayed where they have been, everybody who presently owns a home would have to stay in them for the rest of their lives and a tiny number of people would ever be able to qualify for a loan to buy one that was for sale. You can either stay in CA and rent for 3-5 years until you can see the true bottom or move out of state for a few years and watch what happens. (That’s what we did).
CA is a great place to live but anyone who didn’t see this coming had to be an ostrich with their head in the sand.
Good luck with your decision.

[Ex-SD]

IMHO: It’s going to take 3-5 years to get to the bottom and then prices will sit there for a while…………and I believe that prices could drop 50% in some areas. The median price will NOW have to adjust to the loans that borrowers can qualify for. Everything will adjust around that one, simple factor. If prices stayed where they have been, everybody who presently owns a home would have to stay in them for the rest of their lives and a tiny number of people would ever be able to qualify for a loan to buy one that was for sale. You can either stay in CA and rent for 3-5 years until you can see the true bottom or move out of state for a few years and watch what happens. (That’s what we did).
CA is a great place to live but anyone who didn’t see this coming had to be an ostrich with their head in the sand.
Good luck with your decision.

[Ex-SD]

IMHO: It’s going to take 3-5 years to get to the bottom and then prices will sit there for a while…………and I believe that prices could drop 50% in some areas. The median price will NOW have to adjust to the loans that borrowers can qualify for. Everything will adjust around that one, simple factor. If prices stayed where they have been, everybody who presently owns a home would have to stay in them for the rest of their lives and a tiny number of people would ever be able to qualify for a loan to buy one that was for sale. You can either stay in CA and rent for 3-5 years until you can see the true bottom or move out of state for a few years and watch what happens. (That’s what we did).
CA is a great place to live but anyone who didn’t see this coming had to be an ostrich with their head in the sand.
Good luck with your decision.

[JES]

Where are you considering moving to?

[JES]

Where are you considering moving to?

[Author]

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