What if it doesn’t collapse?

[cr]

What’s so bad about prices declining? Most people here are either for it or expect it even if they lose some equity. Those avidly against it we tend to drive away, so I am just posing the question: so what if prices fall 50%? They went up 2-300% or more in some places. Even if realistic circumstances could sustain that why wouldn’t we want prices to fall?

Equity isn’t wealth until the house is sold, and that requires someone with MORE money who can afford your house.

In theory buyers, banks, and investors should be fine no matter how low prices go, but skyrocketing defaults leave buyers and lenders facing the consequences of poor business, deception, and outright lying. That’s rough, but if I placed my life savings on red 7 and lost, should the government have to give me my money back?

People are against prices falling because of the sense of entitlement derived from abnormal appreciation. I think people felt like they deserved to be millionaires when their 3br 2ba 1500sq ft house went from $400,000 to $1,000,000 in value, as if they earned it. They didn’t do anything!!

I think “the everyone wants to live here” claim is a cop out. Even the best cities have bad parts where people with money won’t live. SoCal, from SD to Santa Barabara is a great place to live, but there are plenty of equally nice places across the US, and other countries. International money will do a little, but as soon at the values drop they’ll bow out too.

Outside the dollar eqauling the peso, or incomes doubling next year, I can’t think of anything that will sustain these prices.

The past bubbles have overcorrected, and I hope this one does too. After a few years of correction, as suggested we think, it will be a positive. Those who foreclose, may actually be able to afford a house again, and those who are priced out or weren’t foolish enough to get into an overpriced market may too.

In the end, all this will be is a more painful way to have gotten to the historical average increase in prices. The result is people will be able to afford houses with a fixed loan. Now that’s just crazy!

[surveyor]

foresight?

I think people felt like they deserved to be millionaires when their 3br 2ba 1500sq ft house went from $400,000 to $1,000,000 in value, as if they earned it. They didn’t do anything!!

Not quite true. They saved up money for a downpayment, they cleared their finances, they maintained good credit, and were fiscally responsible. They were also able to maintain the payments, property taxes, and utilities. They had the foresight to buy a property when they did, when others were telling them otherwise.

Their timing may have been good, but you shouldn’t minimize the hard work they did.

Disclaimer: the above is not a justification for higher prices.

[surveyor]

foresight?

I think people felt like they deserved to be millionaires when their 3br 2ba 1500sq ft house went from $400,000 to $1,000,000 in value, as if they earned it. They didn’t do anything!!

Not quite true. They saved up money for a downpayment, they cleared their finances, they maintained good credit, and were fiscally responsible. They were also able to maintain the payments, property taxes, and utilities. They had the foresight to buy a property when they did, when others were telling them otherwise.

Their timing may have been good, but you shouldn’t minimize the hard work they did.

Disclaimer: the above is not a justification for higher prices.

[surveyor]

foresight?

I think people felt like they deserved to be millionaires when their 3br 2ba 1500sq ft house went from $400,000 to $1,000,000 in value, as if they earned it. They didn’t do anything!!

Not quite true. They saved up money for a downpayment, they cleared their finances, they maintained good credit, and were fiscally responsible. They were also able to maintain the payments, property taxes, and utilities. They had the foresight to buy a property when they did, when others were telling them otherwise.

Their timing may have been good, but you shouldn’t minimize the hard work they did.

Disclaimer: the above is not a justification for higher prices.

[JWM in SD]

Nice post coop. You laid out the reasons why I have difficulty taking certain posts seriously from certain posters. They always seem to hide behind “in my opinion” or “devil’s advocate”. But if you look at the history of their posts there is always the same theme: House Prices Can’t go down in SD”. It isn’t an opinion, it’s an agenda.

[JWM in SD]

Nice post coop. You laid out the reasons why I have difficulty taking certain posts seriously from certain posters. They always seem to hide behind “in my opinion” or “devil’s advocate”. But if you look at the history of their posts there is always the same theme: House Prices Can’t go down in SD”. It isn’t an opinion, it’s an agenda.

[JWM in SD]

Nice post coop. You laid out the reasons why I have difficulty taking certain posts seriously from certain posters. They always seem to hide behind “in my opinion” or “devil’s advocate”. But if you look at the history of their posts there is always the same theme: House Prices Can’t go down in SD”. It isn’t an opinion, it’s an agenda.

[JWM in SD]

Try cashing in foresight when I can rent for half the price and bank the difference ad infinitum. It might have been foresight if they didn’t:

Cash out Refi the Hummer or Escalade and now they are stuck

Bought in 2005 with a 2/28 and planned to sell in 2007

Expected 15% per year appreciation when historically that isn’t sustainable.

It aint foresight and don’t try to pretend that it is.

[JWM in SD]

Try cashing in foresight when I can rent for half the price and bank the difference ad infinitum. It might have been foresight if they didn’t:

Cash out Refi the Hummer or Escalade and now they are stuck

Bought in 2005 with a 2/28 and planned to sell in 2007

Expected 15% per year appreciation when historically that isn’t sustainable.

It aint foresight and don’t try to pretend that it is.

[JWM in SD]

Try cashing in foresight when I can rent for half the price and bank the difference ad infinitum. It might have been foresight if they didn’t:

Cash out Refi the Hummer or Escalade and now they are stuck

Bought in 2005 with a 2/28 and planned to sell in 2007

Expected 15% per year appreciation when historically that isn’t sustainable.

It aint foresight and don’t try to pretend that it is.

[surveyor]

foresight 2

It aint foresight and don’t try to pretend that it is.

Response: DUH.

Agreed, those items you listed are not components of foresight and nor did I claim them to be. However, there are many who did not go that route. They’ve been able to make better use of their available resources and created more wealth for themselves. That is what I use for my basis of foresight. I think there are a lot more of these type of people than we think.

[surveyor]

foresight 2

It aint foresight and don’t try to pretend that it is.

Response: DUH.

Agreed, those items you listed are not components of foresight and nor did I claim them to be. However, there are many who did not go that route. They’ve been able to make better use of their available resources and created more wealth for themselves. That is what I use for my basis of foresight. I think there are a lot more of these type of people than we think.

[surveyor]

foresight 2

It aint foresight and don’t try to pretend that it is.

Response: DUH.

Agreed, those items you listed are not components of foresight and nor did I claim them to be. However, there are many who did not go that route. They’ve been able to make better use of their available resources and created more wealth for themselves. That is what I use for my basis of foresight. I think there are a lot more of these type of people than we think.

[sdrealtor]

JWM
Dont know if that was directed at me but if it was. IMO House prices not only CAN go down, they HAVE gone down and WILL continue to go down for the next few years. The only thing I am uncertain of is how far and hopw fast.

sdr

[sdrealtor]

JWM
Dont know if that was directed at me but if it was. IMO House prices not only CAN go down, they HAVE gone down and WILL continue to go down for the next few years. The only thing I am uncertain of is how far and hopw fast.

sdr

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