San Diego YOY Inventory now nearly flat.

[(former)FormerSanDiegan]

Sure …
If rents fall, then one should adjust the anticipated price range downward accordingly.

Similarly, if interest rates are outside of the range assumed then one would have to adjust price expectations also.

I am not really predicting the future of these parameters, just using current ranges for both in projecting forward.

One thing I learned from this site is that deviations from the long-term trend tend to revert.

Rents have risen roughly in line with inflation for the past three decades. So, real rents may decline (nominal rates lower than inflation) n the near term, but I do not try to outsmart the averages.

[CA renter]

Sales will not fall to zero.

Inventory levels will not rise in perpetuity. Nor will prices or credit expansions, unless incomes do the same.

That being said, inventory levels are still at historical highs.

There are so many variables to the housing market:

SUPPLY:
-distressed vs. non-distressed inventory levels
-building (still going on) vs. obsolete/uninhabitable
homes
-bailouts vs. foreclosures
-on the market vs. pent-up/hidden inventory
(I’m seeing more and more empty houses with no
activity.)
-types of new units vs. tear-downs (multi-family
and SFH)

DEMAND:
-credit expansion vs. credit contraction
-wage growth vs. wage declines
-wealth gains vs. losses
-population growth vs. population decline
(also shift in demographics…new residents rich
or poor? those leaving are rich or poor?)
-family formation/living arrangements
(living arrangements becoming more crowded, or
spreading out?)
-falling dollar vs. strengthening dollar
-age demograhics: is a majority of the population
moving into their buying years, or selling years?

I know there’s still a lot missing from the above, but it’s just too difficult to determine exactly what prices will do in the future.

Personally, I think prices will decline to pre-2001 levels if there is only a mild recession. If the recession gets severe or becomes a depression, all bets are off. We could (possible, not likely) see the credit expansion return to 1982 levels, IMHO.

[CA renter]

Sales will not fall to zero.

Inventory levels will not rise in perpetuity. Nor will prices or credit expansions, unless incomes do the same.

That being said, inventory levels are still at historical highs.

There are so many variables to the housing market:

SUPPLY:
-distressed vs. non-distressed inventory levels
-building (still going on) vs. obsolete/uninhabitable
homes
-bailouts vs. foreclosures
-on the market vs. pent-up/hidden inventory
(I’m seeing more and more empty houses with no
activity.)
-types of new units vs. tear-downs (multi-family
and SFH)

DEMAND:
-credit expansion vs. credit contraction
-wage growth vs. wage declines
-wealth gains vs. losses
-population growth vs. population decline
(also shift in demographics…new residents rich
or poor? those leaving are rich or poor?)
-family formation/living arrangements
(living arrangements becoming more crowded, or
spreading out?)
-falling dollar vs. strengthening dollar
-age demograhics: is a majority of the population
moving into their buying years, or selling years?

I know there’s still a lot missing from the above, but it’s just too difficult to determine exactly what prices will do in the future.

Personally, I think prices will decline to pre-2001 levels if there is only a mild recession. If the recession gets severe or becomes a depression, all bets are off. We could (possible, not likely) see the credit expansion return to 1982 levels, IMHO.

[CA renter]

Sales will not fall to zero.

Inventory levels will not rise in perpetuity. Nor will prices or credit expansions, unless incomes do the same.

That being said, inventory levels are still at historical highs.

There are so many variables to the housing market:

SUPPLY:
-distressed vs. non-distressed inventory levels
-building (still going on) vs. obsolete/uninhabitable
homes
-bailouts vs. foreclosures
-on the market vs. pent-up/hidden inventory
(I’m seeing more and more empty houses with no
activity.)
-types of new units vs. tear-downs (multi-family
and SFH)

DEMAND:
-credit expansion vs. credit contraction
-wage growth vs. wage declines
-wealth gains vs. losses
-population growth vs. population decline
(also shift in demographics…new residents rich
or poor? those leaving are rich or poor?)
-family formation/living arrangements
(living arrangements becoming more crowded, or
spreading out?)
-falling dollar vs. strengthening dollar
-age demograhics: is a majority of the population
moving into their buying years, or selling years?

I know there’s still a lot missing from the above, but it’s just too difficult to determine exactly what prices will do in the future.

Personally, I think prices will decline to pre-2001 levels if there is only a mild recession. If the recession gets severe or becomes a depression, all bets are off. We could (possible, not likely) see the credit expansion return to 1982 levels, IMHO.

[CA renter]

Sales will not fall to zero.

Inventory levels will not rise in perpetuity. Nor will prices or credit expansions, unless incomes do the same.

That being said, inventory levels are still at historical highs.

There are so many variables to the housing market:

SUPPLY:
-distressed vs. non-distressed inventory levels
-building (still going on) vs. obsolete/uninhabitable
homes
-bailouts vs. foreclosures
-on the market vs. pent-up/hidden inventory
(I’m seeing more and more empty houses with no
activity.)
-types of new units vs. tear-downs (multi-family
and SFH)

DEMAND:
-credit expansion vs. credit contraction
-wage growth vs. wage declines
-wealth gains vs. losses
-population growth vs. population decline
(also shift in demographics…new residents rich
or poor? those leaving are rich or poor?)
-family formation/living arrangements
(living arrangements becoming more crowded, or
spreading out?)
-falling dollar vs. strengthening dollar
-age demograhics: is a majority of the population
moving into their buying years, or selling years?

I know there’s still a lot missing from the above, but it’s just too difficult to determine exactly what prices will do in the future.

Personally, I think prices will decline to pre-2001 levels if there is only a mild recession. If the recession gets severe or becomes a depression, all bets are off. We could (possible, not likely) see the credit expansion return to 1982 levels, IMHO.

[CA renter]

Sales will not fall to zero.

Inventory levels will not rise in perpetuity. Nor will prices or credit expansions, unless incomes do the same.

That being said, inventory levels are still at historical highs.

There are so many variables to the housing market:

SUPPLY:
-distressed vs. non-distressed inventory levels
-building (still going on) vs. obsolete/uninhabitable
homes
-bailouts vs. foreclosures
-on the market vs. pent-up/hidden inventory
(I’m seeing more and more empty houses with no
activity.)
-types of new units vs. tear-downs (multi-family
and SFH)

DEMAND:
-credit expansion vs. credit contraction
-wage growth vs. wage declines
-wealth gains vs. losses
-population growth vs. population decline
(also shift in demographics…new residents rich
or poor? those leaving are rich or poor?)
-family formation/living arrangements
(living arrangements becoming more crowded, or
spreading out?)
-falling dollar vs. strengthening dollar
-age demograhics: is a majority of the population
moving into their buying years, or selling years?

I know there’s still a lot missing from the above, but it’s just too difficult to determine exactly what prices will do in the future.

Personally, I think prices will decline to pre-2001 levels if there is only a mild recession. If the recession gets severe or becomes a depression, all bets are off. We could (possible, not likely) see the credit expansion return to 1982 levels, IMHO.

[(former)FormerSanDiegan]

As for current rental rate conditions in the SD area, they appear to be tracking inflation at least through 1Q2008 …

http://www.signonsandiego.com/news/business/20080417-9999-1b17rent.html

http://www.nctimes.com/articles/2008/04/18/business/556f18fc997c15ad8825742e0061b53a.txt

P.S. – As for the original topic regarding flattening of inventory … This is necessary, but not sifficient for price stabilization. We need to see an extended period of increasing sales at the current inventory levels to even talk about a bottom. Once we see decreasing Months of inventory (and account for seasonality), then you can start to think about price stabilization.

[(former)FormerSanDiegan]

As for current rental rate conditions in the SD area, they appear to be tracking inflation at least through 1Q2008 …

http://www.signonsandiego.com/news/business/20080417-9999-1b17rent.html

http://www.nctimes.com/articles/2008/04/18/business/556f18fc997c15ad8825742e0061b53a.txt

P.S. – As for the original topic regarding flattening of inventory … This is necessary, but not sifficient for price stabilization. We need to see an extended period of increasing sales at the current inventory levels to even talk about a bottom. Once we see decreasing Months of inventory (and account for seasonality), then you can start to think about price stabilization.

[(former)FormerSanDiegan]

As for current rental rate conditions in the SD area, they appear to be tracking inflation at least through 1Q2008 …

http://www.signonsandiego.com/news/business/20080417-9999-1b17rent.html

http://www.nctimes.com/articles/2008/04/18/business/556f18fc997c15ad8825742e0061b53a.txt

P.S. – As for the original topic regarding flattening of inventory … This is necessary, but not sifficient for price stabilization. We need to see an extended period of increasing sales at the current inventory levels to even talk about a bottom. Once we see decreasing Months of inventory (and account for seasonality), then you can start to think about price stabilization.

[(former)FormerSanDiegan]

As for current rental rate conditions in the SD area, they appear to be tracking inflation at least through 1Q2008 …

http://www.signonsandiego.com/news/business/20080417-9999-1b17rent.html

http://www.nctimes.com/articles/2008/04/18/business/556f18fc997c15ad8825742e0061b53a.txt

P.S. – As for the original topic regarding flattening of inventory … This is necessary, but not sifficient for price stabilization. We need to see an extended period of increasing sales at the current inventory levels to even talk about a bottom. Once we see decreasing Months of inventory (and account for seasonality), then you can start to think about price stabilization.

[(former)FormerSanDiegan]

As for current rental rate conditions in the SD area, they appear to be tracking inflation at least through 1Q2008 …

http://www.signonsandiego.com/news/business/20080417-9999-1b17rent.html

http://www.nctimes.com/articles/2008/04/18/business/556f18fc997c15ad8825742e0061b53a.txt

P.S. – As for the original topic regarding flattening of inventory … This is necessary, but not sifficient for price stabilization. We need to see an extended period of increasing sales at the current inventory levels to even talk about a bottom. Once we see decreasing Months of inventory (and account for seasonality), then you can start to think about price stabilization.

[Mayer]

“is historically unpresidented. ”

yes we would have been better off unpresidented, historicaly speaking.

…funny… 🙂

[Mayer]

“is historically unpresidented. ”

yes we would have been better off unpresidented, historicaly speaking.

…funny… 🙂

[Mayer]

“is historically unpresidented. ”

yes we would have been better off unpresidented, historicaly speaking.

…funny… 🙂

[Mayer]

“is historically unpresidented. ”

yes we would have been better off unpresidented, historicaly speaking.

…funny… 🙂

[Author]

Posts