North County Coastal Market-Why so sticky?

[CA renter]

[quote=sdrealtor]FWIW, there were no lines in 1999/2000 around here. I bought in 1999 and when the super prime lots were released they went the 1st day to people who were waiting. The other houses in phases took several weeks to sell. In the phase release I bought in, there were 11 homes of which 3 sold immediately. We bought the 4th best one available in that phase 2 weeks after it was released. we also had about a dozen unsold homes to choose from that were in previous releases that were still available and offering incentives.[/quote]

Some friends of ours who own in your development had to camp out at midnight to get their house. They have a view lot and a single-story house, so not sure if that made a difference, but there were many people fighting for the same lot/house.

Further up the coast, people were also camping out at new releases in O’side when they started building all those 3K-4K sf boxes up there. We’ve been actively watching the RE market here and in LA for many, many years. For those who were watching things closely, you could literally see things begin to take off in late 1997/early 1998. Flipping really got its roots at that point, and the speculative fever began. By 2001, prices in many areas had already doubled (or more), and people were very actively looking to “get into the game.”

I used to think that the cap gains exclusion on home sales wasn’t a major cause of the bubble, and still think it couldn’t have gotten very far without the credit bubble, but when one sees how much the RE industry has taken over our economy, I must admit that it’s a compelling argument to get rid of the exclusion.

[CA renter]

[quote=AN][quote=CA renter]
Remember that 1997/1998-2001 marked the beginning of the bubble. People were already standing in lines to buy houses in 1999/2000 here.[/quote]
Really? So you think we’re in a bubble when the price is not declining? We’ve seen that 1996 is about where the bottom was, yet you think 1997 on is the start of a new bubble?[/quote]

Yes, a bubble is marked specifically by prices that are not declining. The bubble is what happens on the way up.

BTW, I said that it was the beginning of the bubble, and I should have more clearly stated that the bubble “mentality” really began in the 1997-2001 period, maybe because of the cap gains exemption. The normal RE cycle (some might call them bubbles, but these cycles are pretty common in California) should have peaked in about 2001. Prices were already beyond reach for most people, and we were entering a recession, and you could already see the effects in the sales volume and prices — they were going down.

That was when the market changed from the peak of a “normal” top of the RE cycle and began to get really crazy because of the **credit** bubble. Rates were suppressed to abnormal lows which forced normally conservative investors into riskier investments…enter the MBS/CDO/CDS debacle from which they are still trying to unwind.

BTW, prices were not underpriced in the 1990s unless you think prices were “below market” for all the decades that came before that period. Prices have been fairly steady, trading in a relatively predictable channel, until we got the credit bubble. If you want to see “market” prices, let’s stop all the foreclosure moratoriums, loan mods, “rescue” programs, artificially low rates, an end to tax credits and all the other manipulations which have caused prices to go well beyond their natural levels. Only then could we see what could be considered “market” prices. We are not even close in this market.

[CA renter]

[quote=AN][quote=CA renter]
Remember that 1997/1998-2001 marked the beginning of the bubble. People were already standing in lines to buy houses in 1999/2000 here.[/quote]
Really? So you think we’re in a bubble when the price is not declining? We’ve seen that 1996 is about where the bottom was, yet you think 1997 on is the start of a new bubble?[/quote]

Yes, a bubble is marked specifically by prices that are not declining. The bubble is what happens on the way up.

BTW, I said that it was the beginning of the bubble, and I should have more clearly stated that the bubble “mentality” really began in the 1997-2001 period, maybe because of the cap gains exemption. The normal RE cycle (some might call them bubbles, but these cycles are pretty common in California) should have peaked in about 2001. Prices were already beyond reach for most people, and we were entering a recession, and you could already see the effects in the sales volume and prices — they were going down.

That was when the market changed from the peak of a “normal” top of the RE cycle and began to get really crazy because of the **credit** bubble. Rates were suppressed to abnormal lows which forced normally conservative investors into riskier investments…enter the MBS/CDO/CDS debacle from which they are still trying to unwind.

BTW, prices were not underpriced in the 1990s unless you think prices were “below market” for all the decades that came before that period. Prices have been fairly steady, trading in a relatively predictable channel, until we got the credit bubble. If you want to see “market” prices, let’s stop all the foreclosure moratoriums, loan mods, “rescue” programs, artificially low rates, an end to tax credits and all the other manipulations which have caused prices to go well beyond their natural levels. Only then could we see what could be considered “market” prices. We are not even close in this market.

[CA renter]

[quote=AN][quote=CA renter]
Remember that 1997/1998-2001 marked the beginning of the bubble. People were already standing in lines to buy houses in 1999/2000 here.[/quote]
Really? So you think we’re in a bubble when the price is not declining? We’ve seen that 1996 is about where the bottom was, yet you think 1997 on is the start of a new bubble?[/quote]

Yes, a bubble is marked specifically by prices that are not declining. The bubble is what happens on the way up.

BTW, I said that it was the beginning of the bubble, and I should have more clearly stated that the bubble “mentality” really began in the 1997-2001 period, maybe because of the cap gains exemption. The normal RE cycle (some might call them bubbles, but these cycles are pretty common in California) should have peaked in about 2001. Prices were already beyond reach for most people, and we were entering a recession, and you could already see the effects in the sales volume and prices — they were going down.

That was when the market changed from the peak of a “normal” top of the RE cycle and began to get really crazy because of the **credit** bubble. Rates were suppressed to abnormal lows which forced normally conservative investors into riskier investments…enter the MBS/CDO/CDS debacle from which they are still trying to unwind.

BTW, prices were not underpriced in the 1990s unless you think prices were “below market” for all the decades that came before that period. Prices have been fairly steady, trading in a relatively predictable channel, until we got the credit bubble. If you want to see “market” prices, let’s stop all the foreclosure moratoriums, loan mods, “rescue” programs, artificially low rates, an end to tax credits and all the other manipulations which have caused prices to go well beyond their natural levels. Only then could we see what could be considered “market” prices. We are not even close in this market.

[CA renter]

[quote=AN][quote=CA renter]
Remember that 1997/1998-2001 marked the beginning of the bubble. People were already standing in lines to buy houses in 1999/2000 here.[/quote]
Really? So you think we’re in a bubble when the price is not declining? We’ve seen that 1996 is about where the bottom was, yet you think 1997 on is the start of a new bubble?[/quote]

Yes, a bubble is marked specifically by prices that are not declining. The bubble is what happens on the way up.

BTW, I said that it was the beginning of the bubble, and I should have more clearly stated that the bubble “mentality” really began in the 1997-2001 period, maybe because of the cap gains exemption. The normal RE cycle (some might call them bubbles, but these cycles are pretty common in California) should have peaked in about 2001. Prices were already beyond reach for most people, and we were entering a recession, and you could already see the effects in the sales volume and prices — they were going down.

That was when the market changed from the peak of a “normal” top of the RE cycle and began to get really crazy because of the **credit** bubble. Rates were suppressed to abnormal lows which forced normally conservative investors into riskier investments…enter the MBS/CDO/CDS debacle from which they are still trying to unwind.

BTW, prices were not underpriced in the 1990s unless you think prices were “below market” for all the decades that came before that period. Prices have been fairly steady, trading in a relatively predictable channel, until we got the credit bubble. If you want to see “market” prices, let’s stop all the foreclosure moratoriums, loan mods, “rescue” programs, artificially low rates, an end to tax credits and all the other manipulations which have caused prices to go well beyond their natural levels. Only then could we see what could be considered “market” prices. We are not even close in this market.

[CA renter]

[quote=AN][quote=CA renter]
Remember that 1997/1998-2001 marked the beginning of the bubble. People were already standing in lines to buy houses in 1999/2000 here.[/quote]
Really? So you think we’re in a bubble when the price is not declining? We’ve seen that 1996 is about where the bottom was, yet you think 1997 on is the start of a new bubble?[/quote]

Yes, a bubble is marked specifically by prices that are not declining. The bubble is what happens on the way up.

BTW, I said that it was the beginning of the bubble, and I should have more clearly stated that the bubble “mentality” really began in the 1997-2001 period, maybe because of the cap gains exemption. The normal RE cycle (some might call them bubbles, but these cycles are pretty common in California) should have peaked in about 2001. Prices were already beyond reach for most people, and we were entering a recession, and you could already see the effects in the sales volume and prices — they were going down.

That was when the market changed from the peak of a “normal” top of the RE cycle and began to get really crazy because of the **credit** bubble. Rates were suppressed to abnormal lows which forced normally conservative investors into riskier investments…enter the MBS/CDO/CDS debacle from which they are still trying to unwind.

BTW, prices were not underpriced in the 1990s unless you think prices were “below market” for all the decades that came before that period. Prices have been fairly steady, trading in a relatively predictable channel, until we got the credit bubble. If you want to see “market” prices, let’s stop all the foreclosure moratoriums, loan mods, “rescue” programs, artificially low rates, an end to tax credits and all the other manipulations which have caused prices to go well beyond their natural levels. Only then could we see what could be considered “market” prices. We are not even close in this market.

[an]

CA renter, when I hear bubble, I interpret that we’re in an unnatural situation and bubble would have to pop. So, when you say, in 1997 was the start of the bubble, I associate that to mean, in 1997, price was already out above its natural range and become overpriced.

You seem to forget one very important factor, interest rate. People don’t pay for their house in cash, so absolute price is only one part of the total equation. I consider a house to be under priced when it’s cheaper to buy than rent. In mid 90s, it was definitely cheaper to buy than rent. You seem to forget inflation as well. I guess what I’m trying to say is, the market is being controlled by TPTB, and it has been that way for a very very long time. I don’t think we’ll ever see a completely free market. BTW, I think you forgot, FHA, GSE, and Fiat currency in your list of manipulators as well.

[an]

CA renter, when I hear bubble, I interpret that we’re in an unnatural situation and bubble would have to pop. So, when you say, in 1997 was the start of the bubble, I associate that to mean, in 1997, price was already out above its natural range and become overpriced.

You seem to forget one very important factor, interest rate. People don’t pay for their house in cash, so absolute price is only one part of the total equation. I consider a house to be under priced when it’s cheaper to buy than rent. In mid 90s, it was definitely cheaper to buy than rent. You seem to forget inflation as well. I guess what I’m trying to say is, the market is being controlled by TPTB, and it has been that way for a very very long time. I don’t think we’ll ever see a completely free market. BTW, I think you forgot, FHA, GSE, and Fiat currency in your list of manipulators as well.

[an]

CA renter, when I hear bubble, I interpret that we’re in an unnatural situation and bubble would have to pop. So, when you say, in 1997 was the start of the bubble, I associate that to mean, in 1997, price was already out above its natural range and become overpriced.

You seem to forget one very important factor, interest rate. People don’t pay for their house in cash, so absolute price is only one part of the total equation. I consider a house to be under priced when it’s cheaper to buy than rent. In mid 90s, it was definitely cheaper to buy than rent. You seem to forget inflation as well. I guess what I’m trying to say is, the market is being controlled by TPTB, and it has been that way for a very very long time. I don’t think we’ll ever see a completely free market. BTW, I think you forgot, FHA, GSE, and Fiat currency in your list of manipulators as well.

[an]

CA renter, when I hear bubble, I interpret that we’re in an unnatural situation and bubble would have to pop. So, when you say, in 1997 was the start of the bubble, I associate that to mean, in 1997, price was already out above its natural range and become overpriced.

You seem to forget one very important factor, interest rate. People don’t pay for their house in cash, so absolute price is only one part of the total equation. I consider a house to be under priced when it’s cheaper to buy than rent. In mid 90s, it was definitely cheaper to buy than rent. You seem to forget inflation as well. I guess what I’m trying to say is, the market is being controlled by TPTB, and it has been that way for a very very long time. I don’t think we’ll ever see a completely free market. BTW, I think you forgot, FHA, GSE, and Fiat currency in your list of manipulators as well.

[an]

CA renter, when I hear bubble, I interpret that we’re in an unnatural situation and bubble would have to pop. So, when you say, in 1997 was the start of the bubble, I associate that to mean, in 1997, price was already out above its natural range and become overpriced.

You seem to forget one very important factor, interest rate. People don’t pay for their house in cash, so absolute price is only one part of the total equation. I consider a house to be under priced when it’s cheaper to buy than rent. In mid 90s, it was definitely cheaper to buy than rent. You seem to forget inflation as well. I guess what I’m trying to say is, the market is being controlled by TPTB, and it has been that way for a very very long time. I don’t think we’ll ever see a completely free market. BTW, I think you forgot, FHA, GSE, and Fiat currency in your list of manipulators as well.

[sdcellar]

I’d say your characterization of the market through the 90’s until now is pretty spot on, CA renter, especially with regard to when it should have peaked.

The numbers pemeliza posted bear that out pretty well as well.

[sdcellar]

I’d say your characterization of the market through the 90’s until now is pretty spot on, CA renter, especially with regard to when it should have peaked.

The numbers pemeliza posted bear that out pretty well as well.

[sdcellar]

I’d say your characterization of the market through the 90’s until now is pretty spot on, CA renter, especially with regard to when it should have peaked.

The numbers pemeliza posted bear that out pretty well as well.

[sdcellar]

I’d say your characterization of the market through the 90’s until now is pretty spot on, CA renter, especially with regard to when it should have peaked.

The numbers pemeliza posted bear that out pretty well as well.

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