Who are the buyers in this market and economy?

[mixxalot]

It amazes me that there are actually buyers in the current bad economy here in San Diego.

[davelj]

People with jobs. If we ultimately go from 5% to 15% unemployment here in CA, that means 9 of 10 folks that had a job a few years ago, still have their job. Plenty of these folks buy houses.

Also, there’s a natural “rate of household formation” that occurs over time as the population grows. This rate slows down when the economy’s bad, but it keeps on chugging. So, there’s a natural mean-reverting slightly upward sloping curve for housing demand over time.

I see nothing particularly amazing about there being buyers in the current economy, as crappy as it is. Also, housing purchases were WAY below trend during 2007 and 2008 (although they were way ABOVE trend from 2003-2006). So, there’s some catch up being played from the last couple of years, offset by lots of new foreclosure inventory hitting the market (the result of the above-trend activity between 2003 and 2006).

But it all comes out in the wash.

[davelj]

People with jobs. If we ultimately go from 5% to 15% unemployment here in CA, that means 9 of 10 folks that had a job a few years ago, still have their job. Plenty of these folks buy houses.

Also, there’s a natural “rate of household formation” that occurs over time as the population grows. This rate slows down when the economy’s bad, but it keeps on chugging. So, there’s a natural mean-reverting slightly upward sloping curve for housing demand over time.

I see nothing particularly amazing about there being buyers in the current economy, as crappy as it is. Also, housing purchases were WAY below trend during 2007 and 2008 (although they were way ABOVE trend from 2003-2006). So, there’s some catch up being played from the last couple of years, offset by lots of new foreclosure inventory hitting the market (the result of the above-trend activity between 2003 and 2006).

But it all comes out in the wash.

[davelj]

People with jobs. If we ultimately go from 5% to 15% unemployment here in CA, that means 9 of 10 folks that had a job a few years ago, still have their job. Plenty of these folks buy houses.

Also, there’s a natural “rate of household formation” that occurs over time as the population grows. This rate slows down when the economy’s bad, but it keeps on chugging. So, there’s a natural mean-reverting slightly upward sloping curve for housing demand over time.

I see nothing particularly amazing about there being buyers in the current economy, as crappy as it is. Also, housing purchases were WAY below trend during 2007 and 2008 (although they were way ABOVE trend from 2003-2006). So, there’s some catch up being played from the last couple of years, offset by lots of new foreclosure inventory hitting the market (the result of the above-trend activity between 2003 and 2006).

But it all comes out in the wash.

[davelj]

People with jobs. If we ultimately go from 5% to 15% unemployment here in CA, that means 9 of 10 folks that had a job a few years ago, still have their job. Plenty of these folks buy houses.

Also, there’s a natural “rate of household formation” that occurs over time as the population grows. This rate slows down when the economy’s bad, but it keeps on chugging. So, there’s a natural mean-reverting slightly upward sloping curve for housing demand over time.

I see nothing particularly amazing about there being buyers in the current economy, as crappy as it is. Also, housing purchases were WAY below trend during 2007 and 2008 (although they were way ABOVE trend from 2003-2006). So, there’s some catch up being played from the last couple of years, offset by lots of new foreclosure inventory hitting the market (the result of the above-trend activity between 2003 and 2006).

But it all comes out in the wash.

[davelj]

People with jobs. If we ultimately go from 5% to 15% unemployment here in CA, that means 9 of 10 folks that had a job a few years ago, still have their job. Plenty of these folks buy houses.

Also, there’s a natural “rate of household formation” that occurs over time as the population grows. This rate slows down when the economy’s bad, but it keeps on chugging. So, there’s a natural mean-reverting slightly upward sloping curve for housing demand over time.

I see nothing particularly amazing about there being buyers in the current economy, as crappy as it is. Also, housing purchases were WAY below trend during 2007 and 2008 (although they were way ABOVE trend from 2003-2006). So, there’s some catch up being played from the last couple of years, offset by lots of new foreclosure inventory hitting the market (the result of the above-trend activity between 2003 and 2006).

But it all comes out in the wash.

[peterb]

The U-6 level of unemployment in CA is probably ~20% at this point. I doubt any of these people are buying houses. But, out of the 80% still employed and getting paid enough to obtain a home loan, prices have come way down at the low-end tier.(And the govt is making the money side of the deal about as good as they ever have in history.) These were people that were priced-out of this market until about a year ago.

It’s a classic reaction of pent-up demand purchasing. Considering how many people now work for the govt, especially at the federal level, they dont get paid a lot, but they know their job is far more stable/safe than the private sector.

[peterb]

The U-6 level of unemployment in CA is probably ~20% at this point. I doubt any of these people are buying houses. But, out of the 80% still employed and getting paid enough to obtain a home loan, prices have come way down at the low-end tier.(And the govt is making the money side of the deal about as good as they ever have in history.) These were people that were priced-out of this market until about a year ago.

It’s a classic reaction of pent-up demand purchasing. Considering how many people now work for the govt, especially at the federal level, they dont get paid a lot, but they know their job is far more stable/safe than the private sector.

[peterb]

The U-6 level of unemployment in CA is probably ~20% at this point. I doubt any of these people are buying houses. But, out of the 80% still employed and getting paid enough to obtain a home loan, prices have come way down at the low-end tier.(And the govt is making the money side of the deal about as good as they ever have in history.) These were people that were priced-out of this market until about a year ago.

It’s a classic reaction of pent-up demand purchasing. Considering how many people now work for the govt, especially at the federal level, they dont get paid a lot, but they know their job is far more stable/safe than the private sector.

[peterb]

The U-6 level of unemployment in CA is probably ~20% at this point. I doubt any of these people are buying houses. But, out of the 80% still employed and getting paid enough to obtain a home loan, prices have come way down at the low-end tier.(And the govt is making the money side of the deal about as good as they ever have in history.) These were people that were priced-out of this market until about a year ago.

It’s a classic reaction of pent-up demand purchasing. Considering how many people now work for the govt, especially at the federal level, they dont get paid a lot, but they know their job is far more stable/safe than the private sector.

[peterb]

The U-6 level of unemployment in CA is probably ~20% at this point. I doubt any of these people are buying houses. But, out of the 80% still employed and getting paid enough to obtain a home loan, prices have come way down at the low-end tier.(And the govt is making the money side of the deal about as good as they ever have in history.) These were people that were priced-out of this market until about a year ago.

It’s a classic reaction of pent-up demand purchasing. Considering how many people now work for the govt, especially at the federal level, they dont get paid a lot, but they know their job is far more stable/safe than the private sector.

[PadreBrian]

Exactly, SD has always had a lot of military related jobs…these will never go away as long a Pakistan and Anastassia are in their current state.

Biotech is still chugging along as well.

[PadreBrian]

Exactly, SD has always had a lot of military related jobs…these will never go away as long a Pakistan and Anastassia are in their current state.

Biotech is still chugging along as well.

[PadreBrian]

Exactly, SD has always had a lot of military related jobs…these will never go away as long a Pakistan and Anastassia are in their current state.

Biotech is still chugging along as well.

[PadreBrian]

Exactly, SD has always had a lot of military related jobs…these will never go away as long a Pakistan and Anastassia are in their current state.

Biotech is still chugging along as well.

[Author]

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