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July 25, 2007 at 6:47 AM #9591July 25, 2007 at 7:32 AM #67551The-ShovelerParticipant
Nor_LA-Temcu-SD-Guy
Yep, that’s a puzzle alright …
How many here can afford (or I should say want to buy) a 700K or 800K tract home ????
Not me for one.
July 25, 2007 at 7:32 AM #67617The-ShovelerParticipantNor_LA-Temcu-SD-Guy
Yep, that’s a puzzle alright …
How many here can afford (or I should say want to buy) a 700K or 800K tract home ????
Not me for one.
July 25, 2007 at 7:54 AM #67619meadandaleParticipantPeople are still in denial and still spending like a drunken sailor.
I was at the Fashion Valley mall last night and it was packed. There was a 30 minute wait at the Cheesecake factory.
July 25, 2007 at 7:54 AM #67553meadandaleParticipantPeople are still in denial and still spending like a drunken sailor.
I was at the Fashion Valley mall last night and it was packed. There was a 30 minute wait at the Cheesecake factory.
July 25, 2007 at 8:08 AM #67559LA_RenterParticipantI think what you are seeing is the bottom half of the market in San Diego and much of Southern California basically becoming an unmitigated disaster. The top half of the market not as much. I like reading this blog for the regular updates from the resident SDRealtors and how the more desirable areas are performing. This housing correction is different than any other housing correction in California primarily due to it not stemming from a recession. This downturn stemmed from a credit bubble, a really really big credit bubble. That’s what makes it so interesting, we have no historical context to gauge where this thing is going and how each segment of the market will perform.
The thing that has been lacking in this correction is a profound shift in psychology. People in the top half of the market obviously don’t see the inherent risk in the market so they keep paying those prices. I think we are at a point right now where the market is becoming so bad and the news so prevalent that we actually crack through denial in all segments. People understand “Record High Foreclosures in California”. That’s not confusing. We are now entering a phase where Mr Sunny Happy Face Realtor (no offense to any realtors on this board) can no longer hide and spin the disaster that is unfolding right now. I would like to see how the top half of the market will perform once we get through this inevitable shift in psychology. I would also like to add that I don’t think that California will escape recession which would take this market to the next level in the correction.
July 25, 2007 at 8:08 AM #67625LA_RenterParticipantI think what you are seeing is the bottom half of the market in San Diego and much of Southern California basically becoming an unmitigated disaster. The top half of the market not as much. I like reading this blog for the regular updates from the resident SDRealtors and how the more desirable areas are performing. This housing correction is different than any other housing correction in California primarily due to it not stemming from a recession. This downturn stemmed from a credit bubble, a really really big credit bubble. That’s what makes it so interesting, we have no historical context to gauge where this thing is going and how each segment of the market will perform.
The thing that has been lacking in this correction is a profound shift in psychology. People in the top half of the market obviously don’t see the inherent risk in the market so they keep paying those prices. I think we are at a point right now where the market is becoming so bad and the news so prevalent that we actually crack through denial in all segments. People understand “Record High Foreclosures in California”. That’s not confusing. We are now entering a phase where Mr Sunny Happy Face Realtor (no offense to any realtors on this board) can no longer hide and spin the disaster that is unfolding right now. I would like to see how the top half of the market will perform once we get through this inevitable shift in psychology. I would also like to add that I don’t think that California will escape recession which would take this market to the next level in the correction.
July 25, 2007 at 8:20 AM #67561SD RealtorParticipantAlex there are submarkets that indeed have depreciated substantially already. Many of the suburban and low end areas are well off 2004 prices. It has not happened at the pace that many desire but in real estate time the drop has been fairly dramatic. The problem is that the desireable areas have not dropped as fast as many would like for a variety of reasons that we have discussed over and over again. The bottom line is that the demand is still there. We regularly see posts from the potential buyers (who have the courage) to post here. As long as there is gainful employment I think they will be out there. If the high paying jobs go, those buyers will dry up.
SD Realtor
July 25, 2007 at 8:20 AM #67627SD RealtorParticipantAlex there are submarkets that indeed have depreciated substantially already. Many of the suburban and low end areas are well off 2004 prices. It has not happened at the pace that many desire but in real estate time the drop has been fairly dramatic. The problem is that the desireable areas have not dropped as fast as many would like for a variety of reasons that we have discussed over and over again. The bottom line is that the demand is still there. We regularly see posts from the potential buyers (who have the courage) to post here. As long as there is gainful employment I think they will be out there. If the high paying jobs go, those buyers will dry up.
SD Realtor
July 25, 2007 at 8:30 AM #67565kewpParticipantBased on my research of the past week or so, its because banks are just sitting on all their repo’s. Possibly hoping for a recovery.
When they unload its going to crater the market.
July 25, 2007 at 8:30 AM #67631kewpParticipantBased on my research of the past week or so, its because banks are just sitting on all their repo’s. Possibly hoping for a recovery.
When they unload its going to crater the market.
July 25, 2007 at 8:31 AM #67629HLSParticipantMost people are not affected by what is going on, other than their net worth dropping.
Their house is still worth 2x-10x what they paid for it, and they never sucked their equity out.
They need a place to live, and don’t view their home as an ATM.The % of the population that is in over their head is relatively small, but those that are losing their homes are getting the majority of the attention.
I think that there is another group of people who aren’t concerned
today and think that they have plenty of equity and aren’t concerned about their ARM because it isn’t adjusting until 2008 or 2009. They will be added to the statistics at a later date. They may not find out that they have no options until it’s too late.
In a bubble market of any product, when the bubble bursts, the prices at the peak have no bearing on where/when the market will stop falling. Silver peaked at $50 and dropped to $6 or $7. NASDAQ was 5,000 and dropped to 1300.
Gold dropped over 50% from the peak as well.If 70%-80% just watch their home values rise and fall, they still have a place to live. Most people don’t day trade their houses.
It is impossible to pick tops or bottoms in any market, but markets rarely collapse quickly when they hit a top nor do they bounce quickly at the bottom.
There is still plenty of downside to the local property market, but probably only 10% of homes will be trading owners. These will get 90% of the attention.
When the market does finally hit “the bottom” I think that it will be flat for a long while. There will be no rush to jump in as it still won’t pencil out to buy as rentals with any cash flow. Many people will be burned and have bad credit as a result, and unable/unwilling to buy again.
For those that are waiting to get in, I think that there is still at least 2 to 3 years before the bottom, but it will remain cheaper to rent than to buy for a very, very long time. Save up for the down payment and keep your credit score up!
July 25, 2007 at 8:31 AM #67563HLSParticipantMost people are not affected by what is going on, other than their net worth dropping.
Their house is still worth 2x-10x what they paid for it, and they never sucked their equity out.
They need a place to live, and don’t view their home as an ATM.The % of the population that is in over their head is relatively small, but those that are losing their homes are getting the majority of the attention.
I think that there is another group of people who aren’t concerned
today and think that they have plenty of equity and aren’t concerned about their ARM because it isn’t adjusting until 2008 or 2009. They will be added to the statistics at a later date. They may not find out that they have no options until it’s too late.
In a bubble market of any product, when the bubble bursts, the prices at the peak have no bearing on where/when the market will stop falling. Silver peaked at $50 and dropped to $6 or $7. NASDAQ was 5,000 and dropped to 1300.
Gold dropped over 50% from the peak as well.If 70%-80% just watch their home values rise and fall, they still have a place to live. Most people don’t day trade their houses.
It is impossible to pick tops or bottoms in any market, but markets rarely collapse quickly when they hit a top nor do they bounce quickly at the bottom.
There is still plenty of downside to the local property market, but probably only 10% of homes will be trading owners. These will get 90% of the attention.
When the market does finally hit “the bottom” I think that it will be flat for a long while. There will be no rush to jump in as it still won’t pencil out to buy as rentals with any cash flow. Many people will be burned and have bad credit as a result, and unable/unwilling to buy again.
For those that are waiting to get in, I think that there is still at least 2 to 3 years before the bottom, but it will remain cheaper to rent than to buy for a very, very long time. Save up for the down payment and keep your credit score up!
July 25, 2007 at 9:03 AM #67637ArrayaParticipantI think it all depends what you are watching. I pay attention to central SD.
I the last 6 months
Dowtown- inventory seems to have doubled and roughly 20% of all re-sale condos are selling at a loss.
Hillcrest -where I live, prices seems to be hanging tough but inventory has skyrockeded with condos which is 2/3s of the market. People are starting to crack and sell under market value. Probably about 15 months supply+ and climbing on market.
Kensington/normal hieghts/north park/southpark-there used to be only 3-4 sfrs under 400K now there are at least 30-40 and climbing.
Combine all that with all the REOs that have popped up. Seems to be 1 in 10 are bank owned.
To me it is imploding…
July 25, 2007 at 9:03 AM #67571ArrayaParticipantI think it all depends what you are watching. I pay attention to central SD.
I the last 6 months
Dowtown- inventory seems to have doubled and roughly 20% of all re-sale condos are selling at a loss.
Hillcrest -where I live, prices seems to be hanging tough but inventory has skyrockeded with condos which is 2/3s of the market. People are starting to crack and sell under market value. Probably about 15 months supply+ and climbing on market.
Kensington/normal hieghts/north park/southpark-there used to be only 3-4 sfrs under 400K now there are at least 30-40 and climbing.
Combine all that with all the REOs that have popped up. Seems to be 1 in 10 are bank owned.
To me it is imploding…
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