The Market is Going to Zero Syndrome

[patientrenter]

raptorduck, most people here can afford less than 1/10 of what you can afford. At current SD prices, what they can buy isn’t so very nice. And that’s the problem…. prices are lower than last year, but decent places are still unaffordable for all but a very few.

Having said that, obviously some people are mistaking hope for knowledge when they assert that prices will drop by more than 50%, and it’s all in the bag, and God himself came by and told them. It may come to pass, but I haven’t seen anyone lay out the proof yet.

Patient renter in OC

[(former)FormerSanDiegan]

asragov –

Looking at the charts you linked from NationalCity Bancorp it looks like the SD area went to undervalued in about 1992, about 4 years from the price bottom. Although, prices may hit their metric of properly valued, they will likely swing below it for a period of time. I’d guess their metric will at least reach negative 5% to neg. 10% before it will have bottomed.

[(former)FormerSanDiegan]

asragov –

Looking at the charts you linked from NationalCity Bancorp it looks like the SD area went to undervalued in about 1992, about 4 years from the price bottom. Although, prices may hit their metric of properly valued, they will likely swing below it for a period of time. I’d guess their metric will at least reach negative 5% to neg. 10% before it will have bottomed.

[(former)FormerSanDiegan]

asragov –

Looking at the charts you linked from NationalCity Bancorp it looks like the SD area went to undervalued in about 1992, about 4 years from the price bottom. Although, prices may hit their metric of properly valued, they will likely swing below it for a period of time. I’d guess their metric will at least reach negative 5% to neg. 10% before it will have bottomed.

[(former)FormerSanDiegan]

asragov –

Looking at the charts you linked from NationalCity Bancorp it looks like the SD area went to undervalued in about 1992, about 4 years from the price bottom. Although, prices may hit their metric of properly valued, they will likely swing below it for a period of time. I’d guess their metric will at least reach negative 5% to neg. 10% before it will have bottomed.

[(former)FormerSanDiegan]

asragov –

Looking at the charts you linked from NationalCity Bancorp it looks like the SD area went to undervalued in about 1992, about 4 years from the price bottom. Although, prices may hit their metric of properly valued, they will likely swing below it for a period of time. I’d guess their metric will at least reach negative 5% to neg. 10% before it will have bottomed.

[Arraya]

From a purely theoretical standpoint, house prices need to fall to match those at the start of the bubble in 2000. Why? Because otherwise we have to believe in The Free Lunch. For The Free Lunch to be true it must be possible for a person to buy a house, do nothing except sit on a couch drinking beer for the next 5 years and get rich in the process. Examining 70 past examples of asset bubbles we find that The Free Lunch has never worked before and it’s very unlikely to work this time either.

http://www.financialsense.com/fsu/editorials/martenson/2007/1217.html

[Arraya]

From a purely theoretical standpoint, house prices need to fall to match those at the start of the bubble in 2000. Why? Because otherwise we have to believe in The Free Lunch. For The Free Lunch to be true it must be possible for a person to buy a house, do nothing except sit on a couch drinking beer for the next 5 years and get rich in the process. Examining 70 past examples of asset bubbles we find that The Free Lunch has never worked before and it’s very unlikely to work this time either.

http://www.financialsense.com/fsu/editorials/martenson/2007/1217.html

[Arraya]

From a purely theoretical standpoint, house prices need to fall to match those at the start of the bubble in 2000. Why? Because otherwise we have to believe in The Free Lunch. For The Free Lunch to be true it must be possible for a person to buy a house, do nothing except sit on a couch drinking beer for the next 5 years and get rich in the process. Examining 70 past examples of asset bubbles we find that The Free Lunch has never worked before and it’s very unlikely to work this time either.

http://www.financialsense.com/fsu/editorials/martenson/2007/1217.html

[Arraya]

From a purely theoretical standpoint, house prices need to fall to match those at the start of the bubble in 2000. Why? Because otherwise we have to believe in The Free Lunch. For The Free Lunch to be true it must be possible for a person to buy a house, do nothing except sit on a couch drinking beer for the next 5 years and get rich in the process. Examining 70 past examples of asset bubbles we find that The Free Lunch has never worked before and it’s very unlikely to work this time either.

http://www.financialsense.com/fsu/editorials/martenson/2007/1217.html

[Arraya]

From a purely theoretical standpoint, house prices need to fall to match those at the start of the bubble in 2000. Why? Because otherwise we have to believe in The Free Lunch. For The Free Lunch to be true it must be possible for a person to buy a house, do nothing except sit on a couch drinking beer for the next 5 years and get rich in the process. Examining 70 past examples of asset bubbles we find that The Free Lunch has never worked before and it’s very unlikely to work this time either.

http://www.financialsense.com/fsu/editorials/martenson/2007/1217.html

[sdrealtor]

Ahem, its 2007 now so it would have to be 7 years. BTW, how much does one get paid for sitting on the couch and drinking beer? Enough to pay that mortgage for 7 years?

BTW, based upon a 30 yr fixed rate around 6%, one would have to come up with payments totaling in excess of 50% of their principal over 7 years.

[sdrealtor]

Ahem, its 2007 now so it would have to be 7 years. BTW, how much does one get paid for sitting on the couch and drinking beer? Enough to pay that mortgage for 7 years?

BTW, based upon a 30 yr fixed rate around 6%, one would have to come up with payments totaling in excess of 50% of their principal over 7 years.

[sdrealtor]

Ahem, its 2007 now so it would have to be 7 years. BTW, how much does one get paid for sitting on the couch and drinking beer? Enough to pay that mortgage for 7 years?

BTW, based upon a 30 yr fixed rate around 6%, one would have to come up with payments totaling in excess of 50% of their principal over 7 years.

[sdrealtor]

Ahem, its 2007 now so it would have to be 7 years. BTW, how much does one get paid for sitting on the couch and drinking beer? Enough to pay that mortgage for 7 years?

BTW, based upon a 30 yr fixed rate around 6%, one would have to come up with payments totaling in excess of 50% of their principal over 7 years.

[Author]

Posts