August 28, 2006 at 1:19 PM #7365powaysellerParticipant
Thank you for your e-mail. I can appreciate you viewpoint and can only hope that the real estate market is not in that dire of a position. I am afraid that in 2008 you will be scratching your head wondering why you have been renting all those years while you gave up the tax write-offs, reduction of debt, pride of ownership and any possible appreciation you might have gained, not to mention the gain on any “sweat equity”.
Don’t forget where we live. San Diego may be on the most desireable places to live in the country, let alone California. I don’t have to tell you about the climate. People are still moving here. Yes, some are moving out, but the pace of home building here is said to be a shortfall of about 50k homes / year. (250k vs. 200k built)
From Sunday’s SD Union (8/27/2006), Steve Rodgers of Prudential writes “2006 is still expected to be the 3rd strongest on record, especially strong in cities like San Diego, where the job market and economy is growing.” John Karevoll, Chief Economist for DataQuick info systems says ” Even in a worst-case scenario, which is not expected, economists say homeowners will lose no more that 7% of their home’s values down the line. An inconvenience, yes, but a crash, not by a long shot.”
I would agree that the affordability index doesn’t look promising. I sometimes wonder where people get the money to afford that homes they buy. There is a tremendous wealth transfrer going from the WWII generation to the babyboomers so maybe it’s through inheritance. I don’t know.
I have never been a fan of renting when I could own. There is money to be made even in a relatively down market. Also one must ask themselves why to we own in the first place. Most would say that they need a place to live as opposed to looking only at the numbers. I wish you well with your plans, but if you are waiting for the big crash, you may be waiting for a long time.
August 28, 2006 at 1:22 PM #33734anxvarietyParticipant
HAHA thats great.
August 28, 2006 at 1:28 PM #33736technovelistParticipant
It’s easy enough to answer his question as to “where people get the money to afford that homes they buy”: from “lenders” who don’t care that they can’t ever repay the loans, because they sell them immediately to bigger fools.
August 28, 2006 at 2:03 PM #33743SD RealtorParticipant
PS lemme know the next time you are going to email guys like this. I can give you some additional hard stats and I would love to see his replies.
August 28, 2006 at 4:45 PM #33777mydogsarelazyParticipant
Can I just say that I do think he makes a good point about inheritance…
Yes, in general I think his comments demonstrate a lack of awareness, but in thinking about why the housing market got so over-inflated in the first place you have to consider some things that just don’t show up in the standard formulas.
– More than two incomes paying a mortgage. On our street, a pair of brothers from the Phillipines bought together and it looks like there are a number of wage earners under that roof. Immigrants often pool resources.
– Hidden income. I tend to believe the US has a substantial financial underground. This makes me think of another neighbor who is from another country and tells us that he makes a living in “retail.”
– Inheritance has to be a factor. When estates come the way of Californians I would think that real estate is the place they most likely park it.
Not a real estate professional, just someone who follows the market
August 28, 2006 at 4:52 PM #33779lendingbubblecontinuesParticipant
Yes, don’t forget scratch-off lottery ticket winners, counterfeiters, and extra-terrestrials (don’t laugh…there is some serious “bling” in outer space, I was abducted once and saw it first hand).
August 28, 2006 at 6:51 PM #33797BugsParticipant
I love the aura of mystique he imbues our market with. He as much as said “I don’t know how they do it but they just do and so that’s why RE will continue to be a good deal”. It’s soooo special here.
He can’t understand how it works, ergo nobody else can either.
August 28, 2006 at 6:55 PM #33798JESParticipant
Even worse, he used propaganda to make his points. Here are some clips from the article from Steve Rodgers he mentions, from my earlier post on this site:
Here’s an interesting article from the UT today. Can someone tell me if any of these statements presented in the piece are true?
Union Tribune, SD Homes Section, Aug. 27th
–Paid Advertisement– !!!!
By: Steve Rodgers, CEO CA Prudential, San Diego
1) Headline: Market Leveling, Still Strong
2) “There’s been talk of the RE bubble bursting…but realistically that’s not likely to happen”
3) “…even in a worst case scenario homeowners will lose no more than 7% of their homes values…”
4) “…an inconveinance, but not a crash by a long shot…”
5)”…so the rise we anticipate in existing home prices this year is actually a little above the high end of historic norms…”
6) Southern CA is adding 200-300,000 new residents per year.
7) SoCal will create 30-50,000 jobs in the next 2 years.
8) “…it is difficult to see a price decline in a job creating market like San Diego.”
9)New home sales are showing significant gains…
10) “…real estate is GAURENTEED to remain just as solid as ever…”
August 28, 2006 at 6:48 PM #33795JESParticipant
powayseller – Is this a no kidding email you received? If so, funny that he referenced the quotes from the UT. As we know now, those were paid advertisements from Prudential, not even a legit story. And the article containes numerous lies, starting with the headline.
August 28, 2006 at 7:26 PM #33800vcguy_10Participant
A collection of myths (the same ones we heard in past booms and will hear again in the next boom many years from know):
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