UT: County housing market strengthening

[Rich Toscano]

Yes, as I mentioned there are other bearish factors for housing that were not in place back then. But this doesn’t nullify my argument that there is not a dependable link between rising rates and lower prices. What I’m trying to argue against is the seeming tautology that some people cite wherein rising rates will exactly be offset by lower prices.

CAR’s item #4 notes a compelling distinction, though… in the 80s, people wages were rising to at least somewhat keep up with rising monthly payments. Home prices stayed flat nominally, but real home prices fell. In an environment of lower wage growth perhaps nominal prices would not be able to hang in there so well if rates were rising.

Anyway, in my second post I cited what I think is the biggest risk factor, which is the existence of forced sellers in a high rate environment. I think that would push prices down. (But I don’t think that’s dependable either).

Rich

[briansd1]

[quote=Rich Toscano]Home prices stayed flat nominally, but real home prices fell.[/quote]

That’s what I observed in the early 90s. Looking at 1996 vs. 1990:

1) Housing construction and design had improved.
2) There were more choices.
3) Interest rates dropped.

The 1996 buyer was definitely better off than the 1992 buyer.

I did not experience the 1980s personally; but I noticed that 1986 houses were better than 1982 houses. 1987 was when San Diego house prices went up, only to crash in again 1990.

[briansd1]

[quote=Rich Toscano]Home prices stayed flat nominally, but real home prices fell.[/quote]

That’s what I observed in the early 90s. Looking at 1996 vs. 1990:

1) Housing construction and design had improved.
2) There were more choices.
3) Interest rates dropped.

The 1996 buyer was definitely better off than the 1992 buyer.

I did not experience the 1980s personally; but I noticed that 1986 houses were better than 1982 houses. 1987 was when San Diego house prices went up, only to crash in again 1990.

[briansd1]

[quote=Rich Toscano]Home prices stayed flat nominally, but real home prices fell.[/quote]

That’s what I observed in the early 90s. Looking at 1996 vs. 1990:

1) Housing construction and design had improved.
2) There were more choices.
3) Interest rates dropped.

The 1996 buyer was definitely better off than the 1992 buyer.

I did not experience the 1980s personally; but I noticed that 1986 houses were better than 1982 houses. 1987 was when San Diego house prices went up, only to crash in again 1990.

[briansd1]

[quote=Rich Toscano]Home prices stayed flat nominally, but real home prices fell.[/quote]

That’s what I observed in the early 90s. Looking at 1996 vs. 1990:

1) Housing construction and design had improved.
2) There were more choices.
3) Interest rates dropped.

The 1996 buyer was definitely better off than the 1992 buyer.

I did not experience the 1980s personally; but I noticed that 1986 houses were better than 1982 houses. 1987 was when San Diego house prices went up, only to crash in again 1990.

[briansd1]

[quote=Rich Toscano]Home prices stayed flat nominally, but real home prices fell.[/quote]

That’s what I observed in the early 90s. Looking at 1996 vs. 1990:

1) Housing construction and design had improved.
2) There were more choices.
3) Interest rates dropped.

The 1996 buyer was definitely better off than the 1992 buyer.

I did not experience the 1980s personally; but I noticed that 1986 houses were better than 1982 houses. 1987 was when San Diego house prices went up, only to crash in again 1990.

[zzz]

pemeliza- yes i am one of those buyers on the sidelines that can afford to buy a home in my desired neighborhoods, but have chosen not to as i believe theres still a ways to go down. the math just doesn’t pencil out when it comes to potential rental scenarios if i needed to rent it out due to job relocation, etc. the homes on the market i can afford are just not desirable in terms of lot size, sq footage, condition, etc. i’m primarily looking in the mission hills, north park, university heights area which i think has had better staying power due to the demographics and desireability. i’d like to think better homes will come on the market as more downward pressure is put on these areas.

secondly, i have uncertainty about my earnings / career looking forward the next few years due to a number of reasons. while i could buy even if my earnings were to dip significantly and i have the safety net to pay the mortgage for a significant length of time, that is not my ideal scenario, call it being conservative, so hence i sit on the sidelines. i’m interested to see what happens this year with loans resetting and principal balances kicking in for the large swath of IO prime loans, whether jobless claims continue to rise, and whether the gov’t intervention runs out of steam.

[zzz]

pemeliza- yes i am one of those buyers on the sidelines that can afford to buy a home in my desired neighborhoods, but have chosen not to as i believe theres still a ways to go down. the math just doesn’t pencil out when it comes to potential rental scenarios if i needed to rent it out due to job relocation, etc. the homes on the market i can afford are just not desirable in terms of lot size, sq footage, condition, etc. i’m primarily looking in the mission hills, north park, university heights area which i think has had better staying power due to the demographics and desireability. i’d like to think better homes will come on the market as more downward pressure is put on these areas.

secondly, i have uncertainty about my earnings / career looking forward the next few years due to a number of reasons. while i could buy even if my earnings were to dip significantly and i have the safety net to pay the mortgage for a significant length of time, that is not my ideal scenario, call it being conservative, so hence i sit on the sidelines. i’m interested to see what happens this year with loans resetting and principal balances kicking in for the large swath of IO prime loans, whether jobless claims continue to rise, and whether the gov’t intervention runs out of steam.

[zzz]

pemeliza- yes i am one of those buyers on the sidelines that can afford to buy a home in my desired neighborhoods, but have chosen not to as i believe theres still a ways to go down. the math just doesn’t pencil out when it comes to potential rental scenarios if i needed to rent it out due to job relocation, etc. the homes on the market i can afford are just not desirable in terms of lot size, sq footage, condition, etc. i’m primarily looking in the mission hills, north park, university heights area which i think has had better staying power due to the demographics and desireability. i’d like to think better homes will come on the market as more downward pressure is put on these areas.

secondly, i have uncertainty about my earnings / career looking forward the next few years due to a number of reasons. while i could buy even if my earnings were to dip significantly and i have the safety net to pay the mortgage for a significant length of time, that is not my ideal scenario, call it being conservative, so hence i sit on the sidelines. i’m interested to see what happens this year with loans resetting and principal balances kicking in for the large swath of IO prime loans, whether jobless claims continue to rise, and whether the gov’t intervention runs out of steam.

[zzz]

pemeliza- yes i am one of those buyers on the sidelines that can afford to buy a home in my desired neighborhoods, but have chosen not to as i believe theres still a ways to go down. the math just doesn’t pencil out when it comes to potential rental scenarios if i needed to rent it out due to job relocation, etc. the homes on the market i can afford are just not desirable in terms of lot size, sq footage, condition, etc. i’m primarily looking in the mission hills, north park, university heights area which i think has had better staying power due to the demographics and desireability. i’d like to think better homes will come on the market as more downward pressure is put on these areas.

secondly, i have uncertainty about my earnings / career looking forward the next few years due to a number of reasons. while i could buy even if my earnings were to dip significantly and i have the safety net to pay the mortgage for a significant length of time, that is not my ideal scenario, call it being conservative, so hence i sit on the sidelines. i’m interested to see what happens this year with loans resetting and principal balances kicking in for the large swath of IO prime loans, whether jobless claims continue to rise, and whether the gov’t intervention runs out of steam.

[zzz]

pemeliza- yes i am one of those buyers on the sidelines that can afford to buy a home in my desired neighborhoods, but have chosen not to as i believe theres still a ways to go down. the math just doesn’t pencil out when it comes to potential rental scenarios if i needed to rent it out due to job relocation, etc. the homes on the market i can afford are just not desirable in terms of lot size, sq footage, condition, etc. i’m primarily looking in the mission hills, north park, university heights area which i think has had better staying power due to the demographics and desireability. i’d like to think better homes will come on the market as more downward pressure is put on these areas.

secondly, i have uncertainty about my earnings / career looking forward the next few years due to a number of reasons. while i could buy even if my earnings were to dip significantly and i have the safety net to pay the mortgage for a significant length of time, that is not my ideal scenario, call it being conservative, so hence i sit on the sidelines. i’m interested to see what happens this year with loans resetting and principal balances kicking in for the large swath of IO prime loans, whether jobless claims continue to rise, and whether the gov’t intervention runs out of steam.

[Rich Toscano]

Nominal home prices actually did drop in the 1990s per the CS index:

Rich

[Rich Toscano]

Nominal home prices actually did drop in the 1990s per the CS index:

Rich

[Rich Toscano]

Nominal home prices actually did drop in the 1990s per the CS index:

Rich

[Rich Toscano]

Nominal home prices actually did drop in the 1990s per the CS index:

Rich

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