Is it bad everywhere?

[Nor-LA-SD-guy]

[quote=patientrenter][quote=CA renter]……How are you calculating “real value”?[/quote]

Is it the price you REALly want? I want to earn $10 million a year. But, alas, I am earning less than my real value. Seriously, No-LA-SD-guy, if you are claiming that prices in a market segment are below their long-term trend values, or something like that, then bring the data. For example, the current prices for that market segment and the trend back through at least the bottom of the last cycle (1996), or preferably through a few cycles (so back to 1980, maybe).[/quote]

OK well I will admit its just educated guess work mostly, but I would say the real value of a home (without adding more than minimum location premium) is the cost to build (including all fees, roads, schools, fire, police etc…) Plus about 7 to 10 percent.

( That is why I corrected that it is not necessarily market value but real value).

Let say your in TG’s neighborhood (just to pick one that’s easy)

If your building with any quality the structure is going to cost at least $50 to $75 a sqf (flooring alone can set you back $3 to $6 or more a sqf if it’s of any quality).

Building on a hill always cost more so add about $10 a sqf.

Add in the fees and roads etc.. and you’re over a $100 a sqf easy.

And that’s without any location premium.

I would say when you start to see at least 70% organic sales then you are getting close to real value again.

Again these are just my armature guesses.

[Nor-LA-SD-guy]

As for this X shaped recovery theory ,

I would say yes we won’t be getting back to 2005 anytime soon, but I don’t know many people driving 26 year old cars either.

Just replacement buying and population growth would get us 70% of the way back at this point.

[Nor-LA-SD-guy]

As for this X shaped recovery theory ,

I would say yes we won’t be getting back to 2005 anytime soon, but I don’t know many people driving 26 year old cars either.

Just replacement buying and population growth would get us 70% of the way back at this point.

[Nor-LA-SD-guy]

As for this X shaped recovery theory ,

I would say yes we won’t be getting back to 2005 anytime soon, but I don’t know many people driving 26 year old cars either.

Just replacement buying and population growth would get us 70% of the way back at this point.

[Nor-LA-SD-guy]

As for this X shaped recovery theory ,

I would say yes we won’t be getting back to 2005 anytime soon, but I don’t know many people driving 26 year old cars either.

Just replacement buying and population growth would get us 70% of the way back at this point.

[Nor-LA-SD-guy]

As for this X shaped recovery theory ,

I would say yes we won’t be getting back to 2005 anytime soon, but I don’t know many people driving 26 year old cars either.

Just replacement buying and population growth would get us 70% of the way back at this point.

[Reality]

[quote=Nor-LA-SD-guy]As for this X shaped recovery theory ,

I would say yes we won’t be getting back to 2005 anytime soon, but I don’t know many people driving 26 year old cars either.

Just replacement buying and population growth would get us 70% of the way back at this point.[/quote]

Replacement of what? And population doesn’t increase when jobs are scarce.

Where is the purchasing power coming from? Nothing I see except for inventory manipulation points to higher prices.

[Reality]

[quote=Nor-LA-SD-guy]As for this X shaped recovery theory ,

I would say yes we won’t be getting back to 2005 anytime soon, but I don’t know many people driving 26 year old cars either.

Just replacement buying and population growth would get us 70% of the way back at this point.[/quote]

Replacement of what? And population doesn’t increase when jobs are scarce.

Where is the purchasing power coming from? Nothing I see except for inventory manipulation points to higher prices.

[Reality]

[quote=Nor-LA-SD-guy]As for this X shaped recovery theory ,

I would say yes we won’t be getting back to 2005 anytime soon, but I don’t know many people driving 26 year old cars either.

Just replacement buying and population growth would get us 70% of the way back at this point.[/quote]

Replacement of what? And population doesn’t increase when jobs are scarce.

Where is the purchasing power coming from? Nothing I see except for inventory manipulation points to higher prices.

[Reality]

[quote=Nor-LA-SD-guy]As for this X shaped recovery theory ,

I would say yes we won’t be getting back to 2005 anytime soon, but I don’t know many people driving 26 year old cars either.

Just replacement buying and population growth would get us 70% of the way back at this point.[/quote]

Replacement of what? And population doesn’t increase when jobs are scarce.

Where is the purchasing power coming from? Nothing I see except for inventory manipulation points to higher prices.

[Reality]

[quote=Nor-LA-SD-guy]As for this X shaped recovery theory ,

I would say yes we won’t be getting back to 2005 anytime soon, but I don’t know many people driving 26 year old cars either.

Just replacement buying and population growth would get us 70% of the way back at this point.[/quote]

Replacement of what? And population doesn’t increase when jobs are scarce.

Where is the purchasing power coming from? Nothing I see except for inventory manipulation points to higher prices.

[patientrenter]

No-LA-SD-guy, valuing homes at building cost + 7-10% ignores the value of the land.

In coastal areas, even in severe recessions, the value of land will not be negligible.

You need a way to assign a value to the land. The market is the only way to do that, I think, and that’s why I stick to what can be observed – all actual transactions that took place over several RE cycles. If you have a better way, I am interested, but it is hard to beat just observing the market – the whole market, not just the cherries.

[patientrenter]

No-LA-SD-guy, valuing homes at building cost + 7-10% ignores the value of the land.

In coastal areas, even in severe recessions, the value of land will not be negligible.

You need a way to assign a value to the land. The market is the only way to do that, I think, and that’s why I stick to what can be observed – all actual transactions that took place over several RE cycles. If you have a better way, I am interested, but it is hard to beat just observing the market – the whole market, not just the cherries.

[patientrenter]

No-LA-SD-guy, valuing homes at building cost + 7-10% ignores the value of the land.

In coastal areas, even in severe recessions, the value of land will not be negligible.

You need a way to assign a value to the land. The market is the only way to do that, I think, and that’s why I stick to what can be observed – all actual transactions that took place over several RE cycles. If you have a better way, I am interested, but it is hard to beat just observing the market – the whole market, not just the cherries.

[patientrenter]

No-LA-SD-guy, valuing homes at building cost + 7-10% ignores the value of the land.

In coastal areas, even in severe recessions, the value of land will not be negligible.

You need a way to assign a value to the land. The market is the only way to do that, I think, and that’s why I stick to what can be observed – all actual transactions that took place over several RE cycles. If you have a better way, I am interested, but it is hard to beat just observing the market – the whole market, not just the cherries.

[Author]

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