Wow. 47% Decline for San Diego

[equalizer]

commentary on Fitch model change:

“But I’ve heard from more than a few market participants, the kinds of in-the-trenches people that would never get permission from their employer to see their name in print, that the opaque ratings models used by the big three — a “competitive advantage” that all three firms work hard to protect, hence the opacity — also allow the agencies to cover up for models that have some very rudimentary failings in modeling techniques.

The risk factors discussed above would appear to be one example of this, and while it’s good to see Fitch now making an attempt to correct for this, the move to include the variables into the model now is really no different than closing the barn door after the animals have long since run out of their stalls.

And it’s only one example of how ratings models missed clear risk factors that might have forced greater credit enhancement, but might have also protected investors to a larger degree: Fitch said its Resilogic 2.0 model will up penalties for loans written in no-doc or low-doc scenarios, as well as for loans with a piggyback second lien at origination.”

So, competitive factors, aka free market, complete failure for common investor, but not for insiders at every related firm. But once again, its others people’s money, why the bleep does anyone in industry care, its not their money and they cant get fired for being average.

Well, maybe GimmeCredit has some credibility since it is indepedent. It issued warning on WaMu today and it went down another 4%.

http://www.bloomberg.com/apps/news?pid=20601087&sid=a2ZCdg_BBYlk&refer=home

http://www.housingwire.com/2008/07/24/ratings-models-missed-essential-collateral-risk-factors/

[mixxalot]

Yee haw! Let the games begin! Time to put cash away for the crash. Maybe us piggs can afford a place next year in nice part of San Diego.

[mixxalot]

Yee haw! Let the games begin! Time to put cash away for the crash. Maybe us piggs can afford a place next year in nice part of San Diego.

[mixxalot]

Yee haw! Let the games begin! Time to put cash away for the crash. Maybe us piggs can afford a place next year in nice part of San Diego.

[mixxalot]

Yee haw! Let the games begin! Time to put cash away for the crash. Maybe us piggs can afford a place next year in nice part of San Diego.

[mixxalot]

Yee haw! Let the games begin! Time to put cash away for the crash. Maybe us piggs can afford a place next year in nice part of San Diego.

[sdnativeson]

47% decline? How much was the appreciation runup? 100%,150%, 200%? If the market is going to become “affordable” to the “average” San Diegan 47% isn’t close.

While some(very few) areas of Clairemont are nice most is/was always lower middle class. Lol, so a 400,000 dollar home is “middle class”?

IMHO, it still comes down to basic fundamentals. The median income for San Diego single or family doesn’t come close to putting someone into a median priced home, in a relatively decent community, one where all the houses aren’t barred up.

[sdnativeson]

47% decline? How much was the appreciation runup? 100%,150%, 200%? If the market is going to become “affordable” to the “average” San Diegan 47% isn’t close.

While some(very few) areas of Clairemont are nice most is/was always lower middle class. Lol, so a 400,000 dollar home is “middle class”?

IMHO, it still comes down to basic fundamentals. The median income for San Diego single or family doesn’t come close to putting someone into a median priced home, in a relatively decent community, one where all the houses aren’t barred up.

[sdnativeson]

47% decline? How much was the appreciation runup? 100%,150%, 200%? If the market is going to become “affordable” to the “average” San Diegan 47% isn’t close.

While some(very few) areas of Clairemont are nice most is/was always lower middle class. Lol, so a 400,000 dollar home is “middle class”?

IMHO, it still comes down to basic fundamentals. The median income for San Diego single or family doesn’t come close to putting someone into a median priced home, in a relatively decent community, one where all the houses aren’t barred up.

[sdnativeson]

47% decline? How much was the appreciation runup? 100%,150%, 200%? If the market is going to become “affordable” to the “average” San Diegan 47% isn’t close.

While some(very few) areas of Clairemont are nice most is/was always lower middle class. Lol, so a 400,000 dollar home is “middle class”?

IMHO, it still comes down to basic fundamentals. The median income for San Diego single or family doesn’t come close to putting someone into a median priced home, in a relatively decent community, one where all the houses aren’t barred up.

[sdnativeson]

47% decline? How much was the appreciation runup? 100%,150%, 200%? If the market is going to become “affordable” to the “average” San Diegan 47% isn’t close.

While some(very few) areas of Clairemont are nice most is/was always lower middle class. Lol, so a 400,000 dollar home is “middle class”?

IMHO, it still comes down to basic fundamentals. The median income for San Diego single or family doesn’t come close to putting someone into a median priced home, in a relatively decent community, one where all the houses aren’t barred up.

[SD Realtor]

I believe the original post said “an additional 47%”. Now that is not nominal that is said to be adjusting for inflation. Ah okay then… so if inflation is say 8% a year then yes it is VERY easy to see 47%. Basically if pricing remains even for several years then effectively you get to 40% pretty damn fast.

Now if you are thinking you will get a million dollar home for 530k then …. well I will meet you there.

If you think that the current homes in Mira Mesa that are priced near 300k right now will go for 170k then I simply don’t agree.

Now in 5 years will your US dollar be worth 47% less? Well now that is a definite possibility. However if you take that argument and twist it around then unfortunately it makes more sense to put your dollars into ANYTHING that will depreciate LESS then themselves.

Once more this is not an argument to say that fundamentals are not out of whack. Nor is it an argument to defend the San Diego premium. We soon will be living in a state that will have 12% state income tax, couple that with what will be higher federal taxes if/when there is a new president, then many people on this site will be paying close to 50% income tax. 50%… Those of us that live here in San Diego will be living in a county where the median income to price ratio makes no sense, paying taxes that make no sense.

So do you really honestly in your heart believe that the more desireable neighborhoods in San Diego will ever, EVER revert to “fundamental” ratios of say 3-4x median income?

Do you?

[SD Realtor]

I believe the original post said “an additional 47%”. Now that is not nominal that is said to be adjusting for inflation. Ah okay then… so if inflation is say 8% a year then yes it is VERY easy to see 47%. Basically if pricing remains even for several years then effectively you get to 40% pretty damn fast.

Now if you are thinking you will get a million dollar home for 530k then …. well I will meet you there.

If you think that the current homes in Mira Mesa that are priced near 300k right now will go for 170k then I simply don’t agree.

Now in 5 years will your US dollar be worth 47% less? Well now that is a definite possibility. However if you take that argument and twist it around then unfortunately it makes more sense to put your dollars into ANYTHING that will depreciate LESS then themselves.

Once more this is not an argument to say that fundamentals are not out of whack. Nor is it an argument to defend the San Diego premium. We soon will be living in a state that will have 12% state income tax, couple that with what will be higher federal taxes if/when there is a new president, then many people on this site will be paying close to 50% income tax. 50%… Those of us that live here in San Diego will be living in a county where the median income to price ratio makes no sense, paying taxes that make no sense.

So do you really honestly in your heart believe that the more desireable neighborhoods in San Diego will ever, EVER revert to “fundamental” ratios of say 3-4x median income?

Do you?

[SD Realtor]

I believe the original post said “an additional 47%”. Now that is not nominal that is said to be adjusting for inflation. Ah okay then… so if inflation is say 8% a year then yes it is VERY easy to see 47%. Basically if pricing remains even for several years then effectively you get to 40% pretty damn fast.

Now if you are thinking you will get a million dollar home for 530k then …. well I will meet you there.

If you think that the current homes in Mira Mesa that are priced near 300k right now will go for 170k then I simply don’t agree.

Now in 5 years will your US dollar be worth 47% less? Well now that is a definite possibility. However if you take that argument and twist it around then unfortunately it makes more sense to put your dollars into ANYTHING that will depreciate LESS then themselves.

Once more this is not an argument to say that fundamentals are not out of whack. Nor is it an argument to defend the San Diego premium. We soon will be living in a state that will have 12% state income tax, couple that with what will be higher federal taxes if/when there is a new president, then many people on this site will be paying close to 50% income tax. 50%… Those of us that live here in San Diego will be living in a county where the median income to price ratio makes no sense, paying taxes that make no sense.

So do you really honestly in your heart believe that the more desireable neighborhoods in San Diego will ever, EVER revert to “fundamental” ratios of say 3-4x median income?

Do you?

[SD Realtor]

I believe the original post said “an additional 47%”. Now that is not nominal that is said to be adjusting for inflation. Ah okay then… so if inflation is say 8% a year then yes it is VERY easy to see 47%. Basically if pricing remains even for several years then effectively you get to 40% pretty damn fast.

Now if you are thinking you will get a million dollar home for 530k then …. well I will meet you there.

If you think that the current homes in Mira Mesa that are priced near 300k right now will go for 170k then I simply don’t agree.

Now in 5 years will your US dollar be worth 47% less? Well now that is a definite possibility. However if you take that argument and twist it around then unfortunately it makes more sense to put your dollars into ANYTHING that will depreciate LESS then themselves.

Once more this is not an argument to say that fundamentals are not out of whack. Nor is it an argument to defend the San Diego premium. We soon will be living in a state that will have 12% state income tax, couple that with what will be higher federal taxes if/when there is a new president, then many people on this site will be paying close to 50% income tax. 50%… Those of us that live here in San Diego will be living in a county where the median income to price ratio makes no sense, paying taxes that make no sense.

So do you really honestly in your heart believe that the more desireable neighborhoods in San Diego will ever, EVER revert to “fundamental” ratios of say 3-4x median income?

Do you?

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