Spring Housing Prediction

[rnen]

This has been a frustrating time for my wife and I. We have been waiting for the anticipated fall in the 92024 and 92009 areas and have not seen the drops expected.

SDR, in your opinion in this price range in Encinitas and south Carlsbad you do not expect to see much more in the way of declines between now and next fall?

I have been putting my wife off for the past 2 yrs by convincing her that these areas still have a way to go. I selfishly hope that prices still have atleast another 10-15% to go. If not I maybe a single man again soon! :0

I had really hoped we could get into places that were selling for $800-850 in 05-06 for $650-700.

My thought has been and still is that there is more to come as the lay offs start gaining momentum. I am an owner of a family run granite business and we have laid off most of our staff due to an at least 50% reduction in business from 06. I know of many shops that have closed thier doors and many more that are on the edge. I think this is very typical of most in any trade related to housing.

There is however a positive side to this… the weak are the hacks are culled from the herd. Something that needed to happen.

[carlsbadworker]

[quote=CONCHO] Totally agree. But I think what most of the folks on this board are saying is — “Well, buying is still more expensive than renting so I guess I will continue to rent”. Now in areas like Temecula that may not be true anymore because we’ve already had huge price declines there. If I could live in Temecula I would be looking seriously at buying now.[/quote]

I am living in Temecula right now (as a renter) and I am looking seriously at buying. But I think the point most people are trying to make is that although the price/rent multiplier works in some place now, the rent is going decrease. It is a serious possibility in place like Temecula where it is simply over-built. If you go to craigslist etc, you can see the rent declining trend. Heck, some of the rental place are offering 2 months free for 18 months lease now. It is hard to rely on price/rent multiplier if the rent is not stabilized. San Diego (even Temecula, because many people in Temecula work in San Diego) is holding up pretty well, because its job market is still doing OK. Wait until QCOM starts to layoff.

I think the only reason I’d be buying in this environment is for a nice house. A nice house does not come by so often. If I can tolerate an average house, I will definitely wait…even in Temecula.

Also, I am surprised that people still hold the notion of “I can comfortably buy a house if I can save 20% DP”. In this environment, I think you will need at least 40% or so. 20% for DP and 20% for emergency fund in case of layoff. The economic picture is so dark that everyone should be serious about having at least 1 year of emergency cash.

[carlsbadworker]

[quote=CONCHO] Totally agree. But I think what most of the folks on this board are saying is — “Well, buying is still more expensive than renting so I guess I will continue to rent”. Now in areas like Temecula that may not be true anymore because we’ve already had huge price declines there. If I could live in Temecula I would be looking seriously at buying now.[/quote]

I am living in Temecula right now (as a renter) and I am looking seriously at buying. But I think the point most people are trying to make is that although the price/rent multiplier works in some place now, the rent is going decrease. It is a serious possibility in place like Temecula where it is simply over-built. If you go to craigslist etc, you can see the rent declining trend. Heck, some of the rental place are offering 2 months free for 18 months lease now. It is hard to rely on price/rent multiplier if the rent is not stabilized. San Diego (even Temecula, because many people in Temecula work in San Diego) is holding up pretty well, because its job market is still doing OK. Wait until QCOM starts to layoff.

I think the only reason I’d be buying in this environment is for a nice house. A nice house does not come by so often. If I can tolerate an average house, I will definitely wait…even in Temecula.

Also, I am surprised that people still hold the notion of “I can comfortably buy a house if I can save 20% DP”. In this environment, I think you will need at least 40% or so. 20% for DP and 20% for emergency fund in case of layoff. The economic picture is so dark that everyone should be serious about having at least 1 year of emergency cash.

[carlsbadworker]

[quote=CONCHO] Totally agree. But I think what most of the folks on this board are saying is — “Well, buying is still more expensive than renting so I guess I will continue to rent”. Now in areas like Temecula that may not be true anymore because we’ve already had huge price declines there. If I could live in Temecula I would be looking seriously at buying now.[/quote]

I am living in Temecula right now (as a renter) and I am looking seriously at buying. But I think the point most people are trying to make is that although the price/rent multiplier works in some place now, the rent is going decrease. It is a serious possibility in place like Temecula where it is simply over-built. If you go to craigslist etc, you can see the rent declining trend. Heck, some of the rental place are offering 2 months free for 18 months lease now. It is hard to rely on price/rent multiplier if the rent is not stabilized. San Diego (even Temecula, because many people in Temecula work in San Diego) is holding up pretty well, because its job market is still doing OK. Wait until QCOM starts to layoff.

I think the only reason I’d be buying in this environment is for a nice house. A nice house does not come by so often. If I can tolerate an average house, I will definitely wait…even in Temecula.

Also, I am surprised that people still hold the notion of “I can comfortably buy a house if I can save 20% DP”. In this environment, I think you will need at least 40% or so. 20% for DP and 20% for emergency fund in case of layoff. The economic picture is so dark that everyone should be serious about having at least 1 year of emergency cash.

[carlsbadworker]

[quote=CONCHO] Totally agree. But I think what most of the folks on this board are saying is — “Well, buying is still more expensive than renting so I guess I will continue to rent”. Now in areas like Temecula that may not be true anymore because we’ve already had huge price declines there. If I could live in Temecula I would be looking seriously at buying now.[/quote]

I am living in Temecula right now (as a renter) and I am looking seriously at buying. But I think the point most people are trying to make is that although the price/rent multiplier works in some place now, the rent is going decrease. It is a serious possibility in place like Temecula where it is simply over-built. If you go to craigslist etc, you can see the rent declining trend. Heck, some of the rental place are offering 2 months free for 18 months lease now. It is hard to rely on price/rent multiplier if the rent is not stabilized. San Diego (even Temecula, because many people in Temecula work in San Diego) is holding up pretty well, because its job market is still doing OK. Wait until QCOM starts to layoff.

I think the only reason I’d be buying in this environment is for a nice house. A nice house does not come by so often. If I can tolerate an average house, I will definitely wait…even in Temecula.

Also, I am surprised that people still hold the notion of “I can comfortably buy a house if I can save 20% DP”. In this environment, I think you will need at least 40% or so. 20% for DP and 20% for emergency fund in case of layoff. The economic picture is so dark that everyone should be serious about having at least 1 year of emergency cash.

[carlsbadworker]

[quote=CONCHO] Totally agree. But I think what most of the folks on this board are saying is — “Well, buying is still more expensive than renting so I guess I will continue to rent”. Now in areas like Temecula that may not be true anymore because we’ve already had huge price declines there. If I could live in Temecula I would be looking seriously at buying now.[/quote]

I am living in Temecula right now (as a renter) and I am looking seriously at buying. But I think the point most people are trying to make is that although the price/rent multiplier works in some place now, the rent is going decrease. It is a serious possibility in place like Temecula where it is simply over-built. If you go to craigslist etc, you can see the rent declining trend. Heck, some of the rental place are offering 2 months free for 18 months lease now. It is hard to rely on price/rent multiplier if the rent is not stabilized. San Diego (even Temecula, because many people in Temecula work in San Diego) is holding up pretty well, because its job market is still doing OK. Wait until QCOM starts to layoff.

I think the only reason I’d be buying in this environment is for a nice house. A nice house does not come by so often. If I can tolerate an average house, I will definitely wait…even in Temecula.

Also, I am surprised that people still hold the notion of “I can comfortably buy a house if I can save 20% DP”. In this environment, I think you will need at least 40% or so. 20% for DP and 20% for emergency fund in case of layoff. The economic picture is so dark that everyone should be serious about having at least 1 year of emergency cash.

[cv2]

Yes the >50% price drop is very tempting but let me explain why there are more legs on the down side:

1. Supply and Demand:

Yes, since new housing starts are down in the toilet, there won’t be not much new supply. However, we got enough extra supply due to the mad construction during the bubble years. Plus the houses are much bigger than before. A SFH can easily house one and a half families, so more people will rent out their extra room in the house.

Then on the demand side, we are starting to see job loses. SD’s high paying jobs are in defense, technology and pharm-bio-tech. Defense, due to the new president, I do not see any growth. All the technology are on hiring freeze. Biotech, with the outsourcing to India and China, will see big layoffs soon. Then on the lower paying jobs, mainly travel related, will be down for sure in a recession.

2. Technical/Psychology

A bottom will reach when nobody want to buy. Right now, people are thinking 50% is a good deal and rush to buy. Once we exhaust this pool of able buyers, the next leg down will continue.

I was tempted to buy a Mira Mesa Condo in June as an investment but got outbidded. It turned out to be a good thing. At that time, the rent multiple is pretty good (125) but it is even better now (100). However, I think the rent will go down, reversing its recent up trend, and make the multiple high again. Proof? Go to craigslist and see how many listing in there. A year ago, I won’t see many apartment building postings on craigslist but now you see them all the time with incentives, even price drop in isolated cases.

In conclusion, yes we may well see a spring bounce but it will follow with another bang. Be careful out there.

[cv2]

Yes the >50% price drop is very tempting but let me explain why there are more legs on the down side:

1. Supply and Demand:

Yes, since new housing starts are down in the toilet, there won’t be not much new supply. However, we got enough extra supply due to the mad construction during the bubble years. Plus the houses are much bigger than before. A SFH can easily house one and a half families, so more people will rent out their extra room in the house.

Then on the demand side, we are starting to see job loses. SD’s high paying jobs are in defense, technology and pharm-bio-tech. Defense, due to the new president, I do not see any growth. All the technology are on hiring freeze. Biotech, with the outsourcing to India and China, will see big layoffs soon. Then on the lower paying jobs, mainly travel related, will be down for sure in a recession.

2. Technical/Psychology

A bottom will reach when nobody want to buy. Right now, people are thinking 50% is a good deal and rush to buy. Once we exhaust this pool of able buyers, the next leg down will continue.

I was tempted to buy a Mira Mesa Condo in June as an investment but got outbidded. It turned out to be a good thing. At that time, the rent multiple is pretty good (125) but it is even better now (100). However, I think the rent will go down, reversing its recent up trend, and make the multiple high again. Proof? Go to craigslist and see how many listing in there. A year ago, I won’t see many apartment building postings on craigslist but now you see them all the time with incentives, even price drop in isolated cases.

In conclusion, yes we may well see a spring bounce but it will follow with another bang. Be careful out there.

[cv2]

Yes the >50% price drop is very tempting but let me explain why there are more legs on the down side:

1. Supply and Demand:

Yes, since new housing starts are down in the toilet, there won’t be not much new supply. However, we got enough extra supply due to the mad construction during the bubble years. Plus the houses are much bigger than before. A SFH can easily house one and a half families, so more people will rent out their extra room in the house.

Then on the demand side, we are starting to see job loses. SD’s high paying jobs are in defense, technology and pharm-bio-tech. Defense, due to the new president, I do not see any growth. All the technology are on hiring freeze. Biotech, with the outsourcing to India and China, will see big layoffs soon. Then on the lower paying jobs, mainly travel related, will be down for sure in a recession.

2. Technical/Psychology

A bottom will reach when nobody want to buy. Right now, people are thinking 50% is a good deal and rush to buy. Once we exhaust this pool of able buyers, the next leg down will continue.

I was tempted to buy a Mira Mesa Condo in June as an investment but got outbidded. It turned out to be a good thing. At that time, the rent multiple is pretty good (125) but it is even better now (100). However, I think the rent will go down, reversing its recent up trend, and make the multiple high again. Proof? Go to craigslist and see how many listing in there. A year ago, I won’t see many apartment building postings on craigslist but now you see them all the time with incentives, even price drop in isolated cases.

In conclusion, yes we may well see a spring bounce but it will follow with another bang. Be careful out there.

[cv2]

Yes the >50% price drop is very tempting but let me explain why there are more legs on the down side:

1. Supply and Demand:

Yes, since new housing starts are down in the toilet, there won’t be not much new supply. However, we got enough extra supply due to the mad construction during the bubble years. Plus the houses are much bigger than before. A SFH can easily house one and a half families, so more people will rent out their extra room in the house.

Then on the demand side, we are starting to see job loses. SD’s high paying jobs are in defense, technology and pharm-bio-tech. Defense, due to the new president, I do not see any growth. All the technology are on hiring freeze. Biotech, with the outsourcing to India and China, will see big layoffs soon. Then on the lower paying jobs, mainly travel related, will be down for sure in a recession.

2. Technical/Psychology

A bottom will reach when nobody want to buy. Right now, people are thinking 50% is a good deal and rush to buy. Once we exhaust this pool of able buyers, the next leg down will continue.

I was tempted to buy a Mira Mesa Condo in June as an investment but got outbidded. It turned out to be a good thing. At that time, the rent multiple is pretty good (125) but it is even better now (100). However, I think the rent will go down, reversing its recent up trend, and make the multiple high again. Proof? Go to craigslist and see how many listing in there. A year ago, I won’t see many apartment building postings on craigslist but now you see them all the time with incentives, even price drop in isolated cases.

In conclusion, yes we may well see a spring bounce but it will follow with another bang. Be careful out there.

[cv2]

Yes the >50% price drop is very tempting but let me explain why there are more legs on the down side:

1. Supply and Demand:

Yes, since new housing starts are down in the toilet, there won’t be not much new supply. However, we got enough extra supply due to the mad construction during the bubble years. Plus the houses are much bigger than before. A SFH can easily house one and a half families, so more people will rent out their extra room in the house.

Then on the demand side, we are starting to see job loses. SD’s high paying jobs are in defense, technology and pharm-bio-tech. Defense, due to the new president, I do not see any growth. All the technology are on hiring freeze. Biotech, with the outsourcing to India and China, will see big layoffs soon. Then on the lower paying jobs, mainly travel related, will be down for sure in a recession.

2. Technical/Psychology

A bottom will reach when nobody want to buy. Right now, people are thinking 50% is a good deal and rush to buy. Once we exhaust this pool of able buyers, the next leg down will continue.

I was tempted to buy a Mira Mesa Condo in June as an investment but got outbidded. It turned out to be a good thing. At that time, the rent multiple is pretty good (125) but it is even better now (100). However, I think the rent will go down, reversing its recent up trend, and make the multiple high again. Proof? Go to craigslist and see how many listing in there. A year ago, I won’t see many apartment building postings on craigslist but now you see them all the time with incentives, even price drop in isolated cases.

In conclusion, yes we may well see a spring bounce but it will follow with another bang. Be careful out there.

[NotCranky]

As someone pointed out there is a lot of wild predicting going on on this thread.

I am not even sure if this conversation would have legs if volume had not picked up.Some piggs started buying, realtor bias & attention getting behavior,the election being decided and the fact that Marion is no longer posting pictures of body parts.

We don’t know yet if recent or current pick in sales is sustainable at all. It was caused by the first success at capitulation by distressed property sellers.That isn’t going ot hold up prices. We are in inning 4.5. Houses especially in the price ranges being hashed over in this thread with a few exceptions are toast regardless of what happens next spring. Almost everything is going back to 2001 era prices or less.

On another sub topic: Rent equations and tight credit suit some piggs with or without macroeconomic improvement,great. I am not sure it affects main stream the same way. So, with that in mind I agree with Concho.

This won’t be significantly over until the basic house in most zip codes can be sold 6-12 months later at break even price, starting in the spring.

Give credit to water front maybe being different. But I think we are talking about the market much more generally and we were on the “big chunk” thread too.

[NotCranky]

As someone pointed out there is a lot of wild predicting going on on this thread.

I am not even sure if this conversation would have legs if volume had not picked up.Some piggs started buying, realtor bias & attention getting behavior,the election being decided and the fact that Marion is no longer posting pictures of body parts.

We don’t know yet if recent or current pick in sales is sustainable at all. It was caused by the first success at capitulation by distressed property sellers.That isn’t going ot hold up prices. We are in inning 4.5. Houses especially in the price ranges being hashed over in this thread with a few exceptions are toast regardless of what happens next spring. Almost everything is going back to 2001 era prices or less.

On another sub topic: Rent equations and tight credit suit some piggs with or without macroeconomic improvement,great. I am not sure it affects main stream the same way. So, with that in mind I agree with Concho.

This won’t be significantly over until the basic house in most zip codes can be sold 6-12 months later at break even price, starting in the spring.

Give credit to water front maybe being different. But I think we are talking about the market much more generally and we were on the “big chunk” thread too.

[NotCranky]

As someone pointed out there is a lot of wild predicting going on on this thread.

I am not even sure if this conversation would have legs if volume had not picked up.Some piggs started buying, realtor bias & attention getting behavior,the election being decided and the fact that Marion is no longer posting pictures of body parts.

We don’t know yet if recent or current pick in sales is sustainable at all. It was caused by the first success at capitulation by distressed property sellers.That isn’t going ot hold up prices. We are in inning 4.5. Houses especially in the price ranges being hashed over in this thread with a few exceptions are toast regardless of what happens next spring. Almost everything is going back to 2001 era prices or less.

On another sub topic: Rent equations and tight credit suit some piggs with or without macroeconomic improvement,great. I am not sure it affects main stream the same way. So, with that in mind I agree with Concho.

This won’t be significantly over until the basic house in most zip codes can be sold 6-12 months later at break even price, starting in the spring.

Give credit to water front maybe being different. But I think we are talking about the market much more generally and we were on the “big chunk” thread too.

[NotCranky]

As someone pointed out there is a lot of wild predicting going on on this thread.

I am not even sure if this conversation would have legs if volume had not picked up.Some piggs started buying, realtor bias & attention getting behavior,the election being decided and the fact that Marion is no longer posting pictures of body parts.

We don’t know yet if recent or current pick in sales is sustainable at all. It was caused by the first success at capitulation by distressed property sellers.That isn’t going ot hold up prices. We are in inning 4.5. Houses especially in the price ranges being hashed over in this thread with a few exceptions are toast regardless of what happens next spring. Almost everything is going back to 2001 era prices or less.

On another sub topic: Rent equations and tight credit suit some piggs with or without macroeconomic improvement,great. I am not sure it affects main stream the same way. So, with that in mind I agree with Concho.

This won’t be significantly over until the basic house in most zip codes can be sold 6-12 months later at break even price, starting in the spring.

Give credit to water front maybe being different. But I think we are talking about the market much more generally and we were on the “big chunk” thread too.

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