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(former)FormerSanDiegan.
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June 21, 2007 at 4:32 PM #61196June 21, 2007 at 4:36 PM #61198
Bob G
ParticipantI don’t think Banks are protecting the comps. They are protecting latest profit statement. If they own a property that had a million dollar loan on it, and they can show it on their books as a 1 million dollar asset, they haven’t lost anything. Once they sell it for, say, $750,000, they have to record an actual loss of $250,000. Multiply this out and it’s a big hit to their quarterly profit. The stock market will take the loss and (correctly) project to onto future earnings. Ouch.
June 21, 2007 at 4:36 PM #61161ParticipantI don’t think Banks are protecting the comps. They are protecting latest profit statement. If they own a property that had a million dollar loan on it, and they can show it on their books as a 1 million dollar asset, they haven’t lost anything. Once they sell it for, say, $750,000, they have to record an actual loss of $250,000. Multiply this out and it’s a big hit to their quarterly profit. The stock market will take the loss and (correctly) project to onto future earnings. Ouch.
June 21, 2007 at 4:49 PM #61171SD Realtor
Participantnsr that is not the problem… she knows, understands and accepts the cycle. She doesn’t care at all for tract homes . Her logic is that it is the home we will be in until the kids are out of high school (and they are 2 and 1 respectively) and it is more of a lifestyle choice. Thus we would be able to outlast the cycle and be able to live within our means as we have diligently saved cash. The submarket we are searching in is small, we want a big lot and don’t like neighbors on top of us…old Scripps (and even in Old Scripps just a few select streets that are not busier or backing to Pomerado), and it will come down, maybe as much as the bears think, maybe not. She doesn’t really care.
SD Realtor
June 21, 2007 at 4:49 PM #61208Participantnsr that is not the problem… she knows, understands and accepts the cycle. She doesn’t care at all for tract homes . Her logic is that it is the home we will be in until the kids are out of high school (and they are 2 and 1 respectively) and it is more of a lifestyle choice. Thus we would be able to outlast the cycle and be able to live within our means as we have diligently saved cash. The submarket we are searching in is small, we want a big lot and don’t like neighbors on top of us…old Scripps (and even in Old Scripps just a few select streets that are not busier or backing to Pomerado), and it will come down, maybe as much as the bears think, maybe not. She doesn’t really care.
SD Realtor
June 21, 2007 at 6:24 PM #61199Anonymous
Guesti hate this website!!
June 21, 2007 at 6:24 PM #61237Guesti hate this website!!
June 21, 2007 at 6:37 PM #61203sdrealtor
ParticipantSorry to hear that Mrs SD Realtor;)
June 21, 2007 at 6:37 PM #61241ParticipantSorry to hear that Mrs SD Realtor;)
June 21, 2007 at 6:44 PM #61205bigmoneysalsa
ParticipantAre prices flat?
The S&P/Case-Shiller Home Price Index for SD is down 6.8% from Nov 2005 to March 2007. These are nominal prices, and include resale SFRs only.
Now, if you factor in that condo and new home prices probably have not held up as well, you could put the overall level of prices declines for the period a little higher, say 8 or maybe 9%. Factor in a year and a half worth of inflation, and the developments since this March, and I’d say a reasonable guesstimate is that prices are down somewhere between 10 and 15% from peak right now. Nothing earth-shattering, but certainly an encouraging start.
June 21, 2007 at 6:44 PM #61243ParticipantAre prices flat?
The S&P/Case-Shiller Home Price Index for SD is down 6.8% from Nov 2005 to March 2007. These are nominal prices, and include resale SFRs only.
Now, if you factor in that condo and new home prices probably have not held up as well, you could put the overall level of prices declines for the period a little higher, say 8 or maybe 9%. Factor in a year and a half worth of inflation, and the developments since this March, and I’d say a reasonable guesstimate is that prices are down somewhere between 10 and 15% from peak right now. Nothing earth-shattering, but certainly an encouraging start.
June 21, 2007 at 8:02 PM #61261no_such_reality
ParticipantSD_R that sounds familiar. When it’s time, it’s time. Hopefully you can get somewhat close to rental value after taxes. Maybe bargain out one more year to gain a little more negative on the market. But ultimately, if you are looking for 10K lot and an area with setbacks that are more than three feet and haven’t been McMansionized, when it’s for sale, it may just be time.
Your target market doesn’t have a comparable rental and that’s a bit of a crux. Sure, you can get the same square footage, maybe a big yard, but likely a different neighborhood, busy street, etc. Or worse, you can settle for “good enough”… If you look at it by taking a similar set of houses and start adding slight premiums in for updating, yard size, neighborhood desire, slow street,… you probably get pretty close especially if you find a seller that realizes it’s 2007 and not 2005+25%.
I’m bearish, and I think the market justifiably has a long way to fall, but that is only because so much of the market are literally, just glorified rentals (condos, townhomes) or cookie cutter clustered tract homes with a 1000 identical within the square mile of the HOA.
Properties that aren’t that, will fall, but before they do, every move-up buyer that wants out of the cookie cutter is going to go for it. If the financing works, it’s happiness and certainty versus uncertainty and some probability distribution centered around a couple hundred thousand of extra cost stretched over 30 years.
I’m a pretty simple guy, I always focus on two extremes: the minimum I need and has everything I want. “Good enough” always tends to get me in a spot that isn’t satisfactory and just burns my time, money and energy. If it doesn’t have everything I want, there’s no point in having more than the minimum I need.
June 21, 2007 at 8:02 PM #61222ParticipantSD_R that sounds familiar. When it’s time, it’s time. Hopefully you can get somewhat close to rental value after taxes. Maybe bargain out one more year to gain a little more negative on the market. But ultimately, if you are looking for 10K lot and an area with setbacks that are more than three feet and haven’t been McMansionized, when it’s for sale, it may just be time.
Your target market doesn’t have a comparable rental and that’s a bit of a crux. Sure, you can get the same square footage, maybe a big yard, but likely a different neighborhood, busy street, etc. Or worse, you can settle for “good enough”… If you look at it by taking a similar set of houses and start adding slight premiums in for updating, yard size, neighborhood desire, slow street,… you probably get pretty close especially if you find a seller that realizes it’s 2007 and not 2005+25%.
I’m bearish, and I think the market justifiably has a long way to fall, but that is only because so much of the market are literally, just glorified rentals (condos, townhomes) or cookie cutter clustered tract homes with a 1000 identical within the square mile of the HOA.
Properties that aren’t that, will fall, but before they do, every move-up buyer that wants out of the cookie cutter is going to go for it. If the financing works, it’s happiness and certainty versus uncertainty and some probability distribution centered around a couple hundred thousand of extra cost stretched over 30 years.
I’m a pretty simple guy, I always focus on two extremes: the minimum I need and has everything I want. “Good enough” always tends to get me in a spot that isn’t satisfactory and just burns my time, money and energy. If it doesn’t have everything I want, there’s no point in having more than the minimum I need.
June 21, 2007 at 11:14 PM #61254ParticipantNSR you captured it very accurately. In my own case I know what will be happening and while it may not be the wisest economic move it will be best for my family. Chris S made a good post in a different thread, something most of us have agreed on, that every situation is unique.
SD Realtor
June 21, 2007 at 11:14 PM #61293ParticipantNSR you captured it very accurately. In my own case I know what will be happening and while it may not be the wisest economic move it will be best for my family. Chris S made a good post in a different thread, something most of us have agreed on, that every situation is unique.
SD Realtor
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