way too many disgruntled people here

[HereWeGo]

Let’s see now:

“Buy now or be priced out forever” Check

“It’s different here” Check

Cmon, Alex, explain to us how “they’re not making any more land”. We’re all eyes.

[PerryChase]

Rustico, of course my timeline is not etched in stone. My logic is that the last downturn lasted from 1989 to 1996. I expect this downturn to last longer because of the enormity of the run-up (local, national and international). I think that a 10-year downturn (with periodic small upticks) is most likely.

For a personal residence, I’m looking for a house that I can renovate/rebuild before I move in. I’ll hire a contractor for that because I’d rather not deal with the hassle of living in a construction project. I plan to live in it a long time. My current house is perfectly fine so I’m in no hurry.

For investment purposes, I’m open to buying anything, anytime there’s a good deal, bubble or no bubble. I don’t see many money making possibilities now.

A buddy of mine is a builder in Florida. He’s telling me that it’s a massacre. Developers are starting to walk away from projects.

I’ve expunged emotions out of homeownership so I’m having fun watching the market. Watching RE market psychology is like going to the zoo to see the monkeys.

[NeetaT]

I concur with Alex_angel. The simple fact is that if you give a US citizen a dollar, he or she will spend two dollars, thus driving up prices on everything imaginable. I know people in general have a lot of money. If they can’t buy it via cash, they will buy it via credit until they die. We are all hurt by cheap credit. If it were up to me, the prime interest rate would be 20%. Like Alex_angel said, until a million dollar home becomes $300,000.00 like it should be, don’t bother me with your petty discounts. Do I hope your predictions come true? Of course I do. I hope for massive deflation in all aspects, but that never seems to be the case. The Fed will always flood the market with cash to prop up prices, especially home prices. Local and state governments can then collect more in property tax so that they can skim off the top. The question is what are they doing with all that excess property tax? The only answer I can come up with is that it is being skimmed.

[Bugs]

I’m one of the biggest bears, but I come by that honestly – I work in the business of RE valuation. It’s literally all I do.

I will confess to a certain amount of frustration, but my furstration is not directed to foolish buyers or the realty agents who encourage foolishness. After all, that’s what buyers and realty agents do – it’s their nature.

My frustration is aimed at the lenders and investors who have ignored the obvious signs that they were participating in a very risky ponzi scheme that was doomed to collapse from the moment we got past +25% of the long term trend. The higher the variance, the greater the collapse. I’m particularly frustrated that these lenders have not only ignored but have marginalized the appraisers and other market watchers who have been telling them this was coming.

Whomever is telling Alex_Angel to hang on one more year is being dumb. Alex should plan on sticking around for at least 3 or 4 more years. This trend isn’t going to be anywhere near done in a year.

BTW, the open houses may look busy, but the volumes are still in decline. That should tell you that any bump in pricing that possibly could occur would do so only on a temporary basis – there is simply nothing in the fundamentals that would support stabilization right now, let alone a trend toward increasing prices. We should anticipate there will be at least 3 mini-rallies during this downswing. It’s happened before during the prior downswing and it happened during the upswing as prices were going up.

We need to watch this from the 20,000 foot elevation and not rely overmuch on the 100 foot view.

[NotCranky]

Perry,
I understand your point of view..

For me,this is where you gave me a pefect example of where the current opportunities lie.”A buddy of mine is a builder in Florida. He’s telling me that it’s a massacre.” Developers are starting to walk away from projects.

I am looking at permitted projects that will sell CHEAP. I am small time so I won’t be buying any developements.
An idea I have that I might follow is to find a nice lot in a great neighborhood with big nice houses where someone has done all the grading, some infrastructure gotten permits and plans and now is walking. The project and land is cheap compared to putting it together from scratch.All the time wasted doing it was somebody elses.
I throw the plans for the 4500 sq. ft house and 4 car garage in the trash an build the smallest house in the best neighborhood. Man wouldn’t the neighbors hate me. It is a version of buying the worst house in the best neighborhood only the house is brand new.

[no_such_reality]

Man wouldn’t the neighbors hate me.

Unless it’s a new development, the neighbors would probably love you for killing the McMansion plan.

Reminds me of a neighborhood I drove through looking at houses couple weeks ago, nice older tract of small ranch houses on fair size lots (6500-7000), lots of mature trees, one story ranch after another, then whammo, a giant 30 foot high 2 story probably 3500 square foot box of house towering over the neighbors without a single tree left.

[Anonymous]

Speaking (Perry) of developers walking away from projects, what gives with the office building on the east side of 5/805 interchange, a few stories tall, with a big “Reno” sign on it? It seems to have been at a standstill for months. Do my eyes deceive me?

Man, that’s a big building in a prime location to be at a standstill.

[no_such_reality]

the office building on the east side of 5/805 interchange

Is that Sorrento Towers? I used to work there.

[sdcellar]

Alex_angel– Perhaps you have some examples of these PQ homes that were $300K in 2003 and are $800K now, because I sure don’t know where they are.

You are right that prices are still too high, but to say prices haven’t come down is just plain incorrect. sdrealtor (and others) have established pretty well (and with data) that prices have returned to about their 2004 levels. I’m just too lazy to dig up examples right now, but it doesn’t take much looking to see that is indeed the case.

It’s not happening overnight (and probably isn’t going to), but it is happening, so try to be a little more patient (and save a bunch of money in the meantime!)

[NotCranky]

Man wouldn’t the neighbors hate me.

One good example for my plan is in Jamul and one good example is on MT. Helix. The Jamulians would probably be pretty vicious for a while….on MT.Helix I might get the nice response you speak of..lemonade and cookies everyday…depending on the makeup of the street.
Anyway I feel a little guilty now… I know this is not Angel’s Topic. He or she sure got some people riled up.

[sdduuuude]

“It’s like showing up to a Weight watchers’ meeting and saying, ‘geez, most of you folks are pretty fat’ ”

HAHAHAHAHA. Very well put.

[sdduuuude]

gn,

There is a third kind of poster – those who don’t know much about real estate but have latched onto the bubble theories presented here and translate them into “the sky is falling now – huge crash coming tomorrow”

[Raybyrnes]

Most of the people I know who bought are not looking to exit but simply looking to wratchet up. They bought a place for 250 and now are selling for 550. They have great jobs are 2 income households and have earned promotiong. That means that they can look at Del Sur and not sweat the price. They got on the elevator at the right time and have a different take on realestate. Additionally there payment are not changing that much by moving from one area to another and in their estimation the nicer areas, better school systems, additioal space make it a better long term propositon as they begin to have children.

For those who did not get in it is tough to find an entry point.

[bob2007]

Kev374,

The people who have “way too much money” bought their homes long time ago and don’t contribute to new demand. They are not in the market to buy new homes. It’s completely irrelevant.

Speaking from experience, many of these people move up or sideways, regardless of the market. The buy/sell takes place under the same market conditions.

[The-Shoveler]

Nor_LA-Temcu-SD-Guy

There seem to be a lot of Vacant homes (see them all the time at open houses).

The seller is motivated I hear so make offer (after I suggest a rediculous low ball offer).

Seems they were move uppers as well.

Just be careful out there.

[Author]

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