This market has some real fundamental issues!

[mixxalot]

I tend to agree with temeculaguy

Doomsday predictions are no fun and bubble fools are proven wrong. The middle way is best. I hope we do get the economy moving and that home prices drop more in San Diego.

[sdduuuude]

I think that is a good point on interest rates.

To me, one of the characteristics of the bottom is “low prices and high interest rates.” High rates can force the market down a bit near the bottom, but if prices are low enough, a turn-around can start in the midst of high rates.

If rates are high, the general public will avoid real estate due to the big payment caused by interest rates, but investors will start to realize that the price is low and a higher rate loan can be refinanced later. They’ll use the leverage to get into low priced assets and this will start the turn-around.

Seems to me that deflation is winning the battle out there and this high-rate scenario is a year or three off, but I think it has to happen eventually.

Of course, maybe this is the start of our lost decade and the Fed rate will be at 0% until 2018. Mortgage rates don’t necessarily drop when the Fed rate is low either, so who knows. I just hope my project stays funded for the next 12 months so I can save cash for those opportunities.

[sdduuuude]

I think that is a good point on interest rates.

To me, one of the characteristics of the bottom is “low prices and high interest rates.” High rates can force the market down a bit near the bottom, but if prices are low enough, a turn-around can start in the midst of high rates.

If rates are high, the general public will avoid real estate due to the big payment caused by interest rates, but investors will start to realize that the price is low and a higher rate loan can be refinanced later. They’ll use the leverage to get into low priced assets and this will start the turn-around.

Seems to me that deflation is winning the battle out there and this high-rate scenario is a year or three off, but I think it has to happen eventually.

Of course, maybe this is the start of our lost decade and the Fed rate will be at 0% until 2018. Mortgage rates don’t necessarily drop when the Fed rate is low either, so who knows. I just hope my project stays funded for the next 12 months so I can save cash for those opportunities.

[sdduuuude]

I think that is a good point on interest rates.

To me, one of the characteristics of the bottom is “low prices and high interest rates.” High rates can force the market down a bit near the bottom, but if prices are low enough, a turn-around can start in the midst of high rates.

If rates are high, the general public will avoid real estate due to the big payment caused by interest rates, but investors will start to realize that the price is low and a higher rate loan can be refinanced later. They’ll use the leverage to get into low priced assets and this will start the turn-around.

Seems to me that deflation is winning the battle out there and this high-rate scenario is a year or three off, but I think it has to happen eventually.

Of course, maybe this is the start of our lost decade and the Fed rate will be at 0% until 2018. Mortgage rates don’t necessarily drop when the Fed rate is low either, so who knows. I just hope my project stays funded for the next 12 months so I can save cash for those opportunities.

[sdduuuude]

I think that is a good point on interest rates.

To me, one of the characteristics of the bottom is “low prices and high interest rates.” High rates can force the market down a bit near the bottom, but if prices are low enough, a turn-around can start in the midst of high rates.

If rates are high, the general public will avoid real estate due to the big payment caused by interest rates, but investors will start to realize that the price is low and a higher rate loan can be refinanced later. They’ll use the leverage to get into low priced assets and this will start the turn-around.

Seems to me that deflation is winning the battle out there and this high-rate scenario is a year or three off, but I think it has to happen eventually.

Of course, maybe this is the start of our lost decade and the Fed rate will be at 0% until 2018. Mortgage rates don’t necessarily drop when the Fed rate is low either, so who knows. I just hope my project stays funded for the next 12 months so I can save cash for those opportunities.

[sdduuuude]

I think that is a good point on interest rates.

To me, one of the characteristics of the bottom is “low prices and high interest rates.” High rates can force the market down a bit near the bottom, but if prices are low enough, a turn-around can start in the midst of high rates.

If rates are high, the general public will avoid real estate due to the big payment caused by interest rates, but investors will start to realize that the price is low and a higher rate loan can be refinanced later. They’ll use the leverage to get into low priced assets and this will start the turn-around.

Seems to me that deflation is winning the battle out there and this high-rate scenario is a year or three off, but I think it has to happen eventually.

Of course, maybe this is the start of our lost decade and the Fed rate will be at 0% until 2018. Mortgage rates don’t necessarily drop when the Fed rate is low either, so who knows. I just hope my project stays funded for the next 12 months so I can save cash for those opportunities.

[SD Realtor]

I believe that we will see variances in regional markets become more substantial then I had ever anticipated. To me we could see temporal variations in the “bottoms” that could span a year or two or maybe more.

I would concur with a post by sdr in another thread that certain neighborhoods are showing a more stable behavior. Mira Mesa is an excellent example for certain types of detached homes. I am not saying this neighborhood is bottoming by any means but I do feel a hell of alot more risk is bled out of there then say Carmel Valley.

The upcoming wave of unemployment will deal a harsher blow to the more desireable areas if the tech (both bio and non bio) sector is hit hard here. Following the hangover from that, as an economic recovery does take hold, (assuming one does take hold) then inflation will kick in and rates will run. This will serve to further supress pricing. Those who have saved cash will do well. However those that did not save cash or used cash reserves because they were out of work will indeed be screwed because even with low pricing they will not be able to scrape a downpayment together. As interest rates do run up we will see a reduction in the money supply and a tight credit market to combat inflation.

In all as dude said, perhaps we have a lost decade perhaps we do not. Hard to envision a bottom and then a runup… I see alot of flatness once we do hit bottom.

[SD Realtor]

I believe that we will see variances in regional markets become more substantial then I had ever anticipated. To me we could see temporal variations in the “bottoms” that could span a year or two or maybe more.

I would concur with a post by sdr in another thread that certain neighborhoods are showing a more stable behavior. Mira Mesa is an excellent example for certain types of detached homes. I am not saying this neighborhood is bottoming by any means but I do feel a hell of alot more risk is bled out of there then say Carmel Valley.

The upcoming wave of unemployment will deal a harsher blow to the more desireable areas if the tech (both bio and non bio) sector is hit hard here. Following the hangover from that, as an economic recovery does take hold, (assuming one does take hold) then inflation will kick in and rates will run. This will serve to further supress pricing. Those who have saved cash will do well. However those that did not save cash or used cash reserves because they were out of work will indeed be screwed because even with low pricing they will not be able to scrape a downpayment together. As interest rates do run up we will see a reduction in the money supply and a tight credit market to combat inflation.

In all as dude said, perhaps we have a lost decade perhaps we do not. Hard to envision a bottom and then a runup… I see alot of flatness once we do hit bottom.

[SD Realtor]

I believe that we will see variances in regional markets become more substantial then I had ever anticipated. To me we could see temporal variations in the “bottoms” that could span a year or two or maybe more.

I would concur with a post by sdr in another thread that certain neighborhoods are showing a more stable behavior. Mira Mesa is an excellent example for certain types of detached homes. I am not saying this neighborhood is bottoming by any means but I do feel a hell of alot more risk is bled out of there then say Carmel Valley.

The upcoming wave of unemployment will deal a harsher blow to the more desireable areas if the tech (both bio and non bio) sector is hit hard here. Following the hangover from that, as an economic recovery does take hold, (assuming one does take hold) then inflation will kick in and rates will run. This will serve to further supress pricing. Those who have saved cash will do well. However those that did not save cash or used cash reserves because they were out of work will indeed be screwed because even with low pricing they will not be able to scrape a downpayment together. As interest rates do run up we will see a reduction in the money supply and a tight credit market to combat inflation.

In all as dude said, perhaps we have a lost decade perhaps we do not. Hard to envision a bottom and then a runup… I see alot of flatness once we do hit bottom.

[SD Realtor]

I believe that we will see variances in regional markets become more substantial then I had ever anticipated. To me we could see temporal variations in the “bottoms” that could span a year or two or maybe more.

I would concur with a post by sdr in another thread that certain neighborhoods are showing a more stable behavior. Mira Mesa is an excellent example for certain types of detached homes. I am not saying this neighborhood is bottoming by any means but I do feel a hell of alot more risk is bled out of there then say Carmel Valley.

The upcoming wave of unemployment will deal a harsher blow to the more desireable areas if the tech (both bio and non bio) sector is hit hard here. Following the hangover from that, as an economic recovery does take hold, (assuming one does take hold) then inflation will kick in and rates will run. This will serve to further supress pricing. Those who have saved cash will do well. However those that did not save cash or used cash reserves because they were out of work will indeed be screwed because even with low pricing they will not be able to scrape a downpayment together. As interest rates do run up we will see a reduction in the money supply and a tight credit market to combat inflation.

In all as dude said, perhaps we have a lost decade perhaps we do not. Hard to envision a bottom and then a runup… I see alot of flatness once we do hit bottom.

[SD Realtor]

I believe that we will see variances in regional markets become more substantial then I had ever anticipated. To me we could see temporal variations in the “bottoms” that could span a year or two or maybe more.

I would concur with a post by sdr in another thread that certain neighborhoods are showing a more stable behavior. Mira Mesa is an excellent example for certain types of detached homes. I am not saying this neighborhood is bottoming by any means but I do feel a hell of alot more risk is bled out of there then say Carmel Valley.

The upcoming wave of unemployment will deal a harsher blow to the more desireable areas if the tech (both bio and non bio) sector is hit hard here. Following the hangover from that, as an economic recovery does take hold, (assuming one does take hold) then inflation will kick in and rates will run. This will serve to further supress pricing. Those who have saved cash will do well. However those that did not save cash or used cash reserves because they were out of work will indeed be screwed because even with low pricing they will not be able to scrape a downpayment together. As interest rates do run up we will see a reduction in the money supply and a tight credit market to combat inflation.

In all as dude said, perhaps we have a lost decade perhaps we do not. Hard to envision a bottom and then a runup… I see alot of flatness once we do hit bottom.

[socrattt]

I appreciate all the analysis. I agree this is somewhat of a guessing game. I will admit though that my sentiment since the last downturn is dramatically different. This housing market has affected the entire global economy throwing many of the past cyclical ideologies out the door.

I really don’t believe that we can chart anything with the stock market or real estate market at this point due to so much global involvement. I don’t think it would be far fetched to prepare for a few more catastrophic economic events in this country. Many are fear based and run off emotions therefore the chance of things getting much worse before they get better seems extremely possible.

I am blessed to be cash rich and have always lived within my means. That said I still believe those who made the poor choices in this country are the ones who will thrive. I don’t want to change the topic here, but the bailout of GM and Ford make me sick to my stomach. Another round of bailing out those who deserve to fall! When this market turns around the question might be “Why buy a home when our tax rate will be 50% on middle class income?” A small write off is great, but the liability of the investment may not be worth it. We still have to solve a massive tax problem once everything else is back on track!

Thanks again for the insight!

[socrattt]

I appreciate all the analysis. I agree this is somewhat of a guessing game. I will admit though that my sentiment since the last downturn is dramatically different. This housing market has affected the entire global economy throwing many of the past cyclical ideologies out the door.

I really don’t believe that we can chart anything with the stock market or real estate market at this point due to so much global involvement. I don’t think it would be far fetched to prepare for a few more catastrophic economic events in this country. Many are fear based and run off emotions therefore the chance of things getting much worse before they get better seems extremely possible.

I am blessed to be cash rich and have always lived within my means. That said I still believe those who made the poor choices in this country are the ones who will thrive. I don’t want to change the topic here, but the bailout of GM and Ford make me sick to my stomach. Another round of bailing out those who deserve to fall! When this market turns around the question might be “Why buy a home when our tax rate will be 50% on middle class income?” A small write off is great, but the liability of the investment may not be worth it. We still have to solve a massive tax problem once everything else is back on track!

Thanks again for the insight!

[socrattt]

I appreciate all the analysis. I agree this is somewhat of a guessing game. I will admit though that my sentiment since the last downturn is dramatically different. This housing market has affected the entire global economy throwing many of the past cyclical ideologies out the door.

I really don’t believe that we can chart anything with the stock market or real estate market at this point due to so much global involvement. I don’t think it would be far fetched to prepare for a few more catastrophic economic events in this country. Many are fear based and run off emotions therefore the chance of things getting much worse before they get better seems extremely possible.

I am blessed to be cash rich and have always lived within my means. That said I still believe those who made the poor choices in this country are the ones who will thrive. I don’t want to change the topic here, but the bailout of GM and Ford make me sick to my stomach. Another round of bailing out those who deserve to fall! When this market turns around the question might be “Why buy a home when our tax rate will be 50% on middle class income?” A small write off is great, but the liability of the investment may not be worth it. We still have to solve a massive tax problem once everything else is back on track!

Thanks again for the insight!

[socrattt]

I appreciate all the analysis. I agree this is somewhat of a guessing game. I will admit though that my sentiment since the last downturn is dramatically different. This housing market has affected the entire global economy throwing many of the past cyclical ideologies out the door.

I really don’t believe that we can chart anything with the stock market or real estate market at this point due to so much global involvement. I don’t think it would be far fetched to prepare for a few more catastrophic economic events in this country. Many are fear based and run off emotions therefore the chance of things getting much worse before they get better seems extremely possible.

I am blessed to be cash rich and have always lived within my means. That said I still believe those who made the poor choices in this country are the ones who will thrive. I don’t want to change the topic here, but the bailout of GM and Ford make me sick to my stomach. Another round of bailing out those who deserve to fall! When this market turns around the question might be “Why buy a home when our tax rate will be 50% on middle class income?” A small write off is great, but the liability of the investment may not be worth it. We still have to solve a massive tax problem once everything else is back on track!

Thanks again for the insight!

[Author]

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