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May 31, 2007 at 11:39 AM #55760May 31, 2007 at 1:26 PM #55748
Anonymous
GuestPC, I thought that you owned and lived in your home, and that it had a special feature, a linen closet and hamper near your dog bed?
May 31, 2007 at 1:26 PM #55767GuestPC, I thought that you owned and lived in your home, and that it had a special feature, a linen closet and hamper near your dog bed?
May 31, 2007 at 2:01 PM #55761PerryChase
ParticipantYes, I do own my home. I plan to move to a different house when the time is right. My dog has several beds around the house.
May 31, 2007 at 2:01 PM #55779ParticipantYes, I do own my home. I plan to move to a different house when the time is right. My dog has several beds around the house.
May 31, 2007 at 5:25 PM #55786cyphire
ParticipantThanks PerryChase…
I agree – no summer surge – I expect a summer bummer… User psychology will show that as economic, interest rates, weakened dollar, etc. data gets worse, more buyers will not risk buying at the current hugely inflated prices.
I think you misread my post about buying – I am absolutely not going to buy for at least 2 years, and maybe beyond that. I will buy when I feel that the possible downside (which I think is huge right now) is somewhat aligned with possible upside. There is NO way that prices will start appreciating in the next 2 years. Even believing that they will be flat is crazy. There is way, way, way too many problems in the RE market, not the least of which is the time lag in selling properties. If this was the stock market, we could see a crash in 1 day. With RE it is ALWAYS lagging. We only see prices on the houses which do sell, not the vast majority which either cannot sell, will take a huge time and huge reductions to sell, or have been withdrawn from the market – but will come back on the market in 1, 2, or 4 years based on eveyone realizing that there is a bubble, was a bubble, and prices are retreating.
I think that folks will be kicking themselves for not getting out now at any somewhat reasonable price (2003-2004 prices). It’s only getting worse and it will continue.
It’s amazing how cycles, bubbles, and the psychology of the herd always ALWAYS pan out. When the tech stocks crashed some smart folks sold out at 60-80% of the highs… Others refused to take the profit and rode it all the way down to 1-5% of the high. (Example Corning Glass Works $100 stock went down to 2$)… If you bought at $20 and sold at $50 you still would have a 30$ profit.. If you didn’t you were greedy. I wasn’t a smart person (but not completely stupid!!!) – I bought at $100 and sold at $18!!! But if I had been on 50% margin I would have lost everything when it hit $50. This is similar to the housing bubble. Here in LJ prices went up 257%…. If you bought a house at 300K and can’t sell it at 1.4M, sell it at 1.2M!!!! In a year you won’t be able to sell it at 1.1M and you will finally sell at 900K.
This is also paralleled in the equity situation. Homes are usually hugely leveraged… A 1M$ home which has 30%-40% equity will have 0 equity if prices come down 30%… If prices are heading downwards – unless you are going to ride out the cycle (which will be 3-8 years – I’m betting on 6 years heading downward with 10-12 years to get back to 2004), you are going to be upside down.
Anyway – no one has a crystal ball, but as most people own homes and most want to own homes, there are blinders on and the market psychology will be the telling factor…
May 31, 2007 at 5:25 PM #55805ParticipantThanks PerryChase…
I agree – no summer surge – I expect a summer bummer… User psychology will show that as economic, interest rates, weakened dollar, etc. data gets worse, more buyers will not risk buying at the current hugely inflated prices.
I think you misread my post about buying – I am absolutely not going to buy for at least 2 years, and maybe beyond that. I will buy when I feel that the possible downside (which I think is huge right now) is somewhat aligned with possible upside. There is NO way that prices will start appreciating in the next 2 years. Even believing that they will be flat is crazy. There is way, way, way too many problems in the RE market, not the least of which is the time lag in selling properties. If this was the stock market, we could see a crash in 1 day. With RE it is ALWAYS lagging. We only see prices on the houses which do sell, not the vast majority which either cannot sell, will take a huge time and huge reductions to sell, or have been withdrawn from the market – but will come back on the market in 1, 2, or 4 years based on eveyone realizing that there is a bubble, was a bubble, and prices are retreating.
I think that folks will be kicking themselves for not getting out now at any somewhat reasonable price (2003-2004 prices). It’s only getting worse and it will continue.
It’s amazing how cycles, bubbles, and the psychology of the herd always ALWAYS pan out. When the tech stocks crashed some smart folks sold out at 60-80% of the highs… Others refused to take the profit and rode it all the way down to 1-5% of the high. (Example Corning Glass Works $100 stock went down to 2$)… If you bought at $20 and sold at $50 you still would have a 30$ profit.. If you didn’t you were greedy. I wasn’t a smart person (but not completely stupid!!!) – I bought at $100 and sold at $18!!! But if I had been on 50% margin I would have lost everything when it hit $50. This is similar to the housing bubble. Here in LJ prices went up 257%…. If you bought a house at 300K and can’t sell it at 1.4M, sell it at 1.2M!!!! In a year you won’t be able to sell it at 1.1M and you will finally sell at 900K.
This is also paralleled in the equity situation. Homes are usually hugely leveraged… A 1M$ home which has 30%-40% equity will have 0 equity if prices come down 30%… If prices are heading downwards – unless you are going to ride out the cycle (which will be 3-8 years – I’m betting on 6 years heading downward with 10-12 years to get back to 2004), you are going to be upside down.
Anyway – no one has a crystal ball, but as most people own homes and most want to own homes, there are blinders on and the market psychology will be the telling factor…
May 31, 2007 at 5:51 PM #55788(former)FormerSanDiegan
ParticipantRegarding 200X pricing comparisons :
For years with rapid appreciation there can be a huge difference between the beginning of the year and the end. Prices were skyrocketing from 2003 to early 2005.
Take 2004 for example.
The County-wide median increased by about 22% from January 2004 to December 2004.I think I could have sold my house in early 2004 for about 650-700K, but by the end of 2004 it would likely have sold for > 775K. I sold in mid-2005 for nearly 825K.
Seems like DaCounselor had a valid point.
May 31, 2007 at 5:51 PM #55807ParticipantRegarding 200X pricing comparisons :
For years with rapid appreciation there can be a huge difference between the beginning of the year and the end. Prices were skyrocketing from 2003 to early 2005.
Take 2004 for example.
The County-wide median increased by about 22% from January 2004 to December 2004.I think I could have sold my house in early 2004 for about 650-700K, but by the end of 2004 it would likely have sold for > 775K. I sold in mid-2005 for nearly 825K.
Seems like DaCounselor had a valid point.
May 31, 2007 at 5:59 PM #55790ParticipantI’m gonna go out on a limb and say that San Diego SFR home prices are going back to 2003-2004 levels as measured by the county-wide median price.
How can I be wrong, with such a huge price range ?
The median started in Jan 2003 at ~ 358K and ended 2004 at ~ 525K.
May 31, 2007 at 5:59 PM #55809ParticipantI’m gonna go out on a limb and say that San Diego SFR home prices are going back to 2003-2004 levels as measured by the county-wide median price.
How can I be wrong, with such a huge price range ?
The median started in Jan 2003 at ~ 358K and ended 2004 at ~ 525K.
May 31, 2007 at 6:13 PM #55792GuestYou guys are arguing over pointless details. The point is that median prices in SD will bottom out SO FAR LOWER than even the lowest 2004 prices (Jan) that even mentioning 2004 as a bottoming out reference, as Thornberg supposedly did, is absolutely ridiculous.
May 31, 2007 at 6:13 PM #55811GuestYou guys are arguing over pointless details. The point is that median prices in SD will bottom out SO FAR LOWER than even the lowest 2004 prices (Jan) that even mentioning 2004 as a bottoming out reference, as Thornberg supposedly did, is absolutely ridiculous.
May 31, 2007 at 6:35 PM #55800Participantcyphire, I agree with you, prices are heading way, way down. I don’t have a crystal ball either but, like you, I won’t buy for at least two more years. And even then I won’t buy until I feel we’re reached a sustainable level.
Still I wonder, since you learned your lesson in the tech bubble, why did you buy a house in 2004 to sell it at a loss in 2006. Two years is barely enough to settle in and get everything the way you want it.
I was around in the 1990s and I remember the downturn. I would never buy an overpriced house to live in. I may however buy a house to flip if I got a good deal.
May 31, 2007 at 6:35 PM #55819Participantcyphire, I agree with you, prices are heading way, way down. I don’t have a crystal ball either but, like you, I won’t buy for at least two more years. And even then I won’t buy until I feel we’re reached a sustainable level.
Still I wonder, since you learned your lesson in the tech bubble, why did you buy a house in 2004 to sell it at a loss in 2006. Two years is barely enough to settle in and get everything the way you want it.
I was around in the 1990s and I remember the downturn. I would never buy an overpriced house to live in. I may however buy a house to flip if I got a good deal.
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