Wow. 47% Decline for San Diego

[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?

[sdnativeson]

Let me say I appreciate your candor,I agree 47% is significant, although misleading based upon the hyper inflated values, regardless of the state of the economy.

I can remember early to mid 90’s in the “million dollar” areas, I did in fact come close to that exact scenario. Never much cared for Fairbanks though, I did almost as well in Pt.Loma.

I am not familar with Mira Mesa today, I hear there are some nice neighborhoods, big homes, canyon lots on the North side. The majority of it?
IMHO, 250 and lower.

Reading your 5th paragraph, I really don’t see how it contradicts my opinion(s). San Diego is too big (among other reasons) to wind up like Palm Springs. There are a other variables that are omitted that I believe add some validity to my opinion.

The high end areas, La Jolla, Rancho Santa Fe, Del Mar, select Mission Hills etc. no I don’t expect them to adjust to those median ratios. Clairemont? Talmadge, La Mesa yes, I do. Will I be proven wrong? Possibly. But you said it, in a roundabout way, living here will make no sense.

[sdnativeson]

Let me say I appreciate your candor,I agree 47% is significant, although misleading based upon the hyper inflated values, regardless of the state of the economy.

I can remember early to mid 90’s in the “million dollar” areas, I did in fact come close to that exact scenario. Never much cared for Fairbanks though, I did almost as well in Pt.Loma.

I am not familar with Mira Mesa today, I hear there are some nice neighborhoods, big homes, canyon lots on the North side. The majority of it?
IMHO, 250 and lower.

Reading your 5th paragraph, I really don’t see how it contradicts my opinion(s). San Diego is too big (among other reasons) to wind up like Palm Springs. There are a other variables that are omitted that I believe add some validity to my opinion.

The high end areas, La Jolla, Rancho Santa Fe, Del Mar, select Mission Hills etc. no I don’t expect them to adjust to those median ratios. Clairemont? Talmadge, La Mesa yes, I do. Will I be proven wrong? Possibly. But you said it, in a roundabout way, living here will make no sense.

[sdnativeson]

Let me say I appreciate your candor,I agree 47% is significant, although misleading based upon the hyper inflated values, regardless of the state of the economy.

I can remember early to mid 90’s in the “million dollar” areas, I did in fact come close to that exact scenario. Never much cared for Fairbanks though, I did almost as well in Pt.Loma.

I am not familar with Mira Mesa today, I hear there are some nice neighborhoods, big homes, canyon lots on the North side. The majority of it?
IMHO, 250 and lower.

Reading your 5th paragraph, I really don’t see how it contradicts my opinion(s). San Diego is too big (among other reasons) to wind up like Palm Springs. There are a other variables that are omitted that I believe add some validity to my opinion.

The high end areas, La Jolla, Rancho Santa Fe, Del Mar, select Mission Hills etc. no I don’t expect them to adjust to those median ratios. Clairemont? Talmadge, La Mesa yes, I do. Will I be proven wrong? Possibly. But you said it, in a roundabout way, living here will make no sense.

[sdnativeson]

Let me say I appreciate your candor,I agree 47% is significant, although misleading based upon the hyper inflated values, regardless of the state of the economy.

I can remember early to mid 90’s in the “million dollar” areas, I did in fact come close to that exact scenario. Never much cared for Fairbanks though, I did almost as well in Pt.Loma.

I am not familar with Mira Mesa today, I hear there are some nice neighborhoods, big homes, canyon lots on the North side. The majority of it?
IMHO, 250 and lower.

Reading your 5th paragraph, I really don’t see how it contradicts my opinion(s). San Diego is too big (among other reasons) to wind up like Palm Springs. There are a other variables that are omitted that I believe add some validity to my opinion.

The high end areas, La Jolla, Rancho Santa Fe, Del Mar, select Mission Hills etc. no I don’t expect them to adjust to those median ratios. Clairemont? Talmadge, La Mesa yes, I do. Will I be proven wrong? Possibly. But you said it, in a roundabout way, living here will make no sense.

[sdnativeson]

Let me say I appreciate your candor,I agree 47% is significant, although misleading based upon the hyper inflated values, regardless of the state of the economy.

I can remember early to mid 90’s in the “million dollar” areas, I did in fact come close to that exact scenario. Never much cared for Fairbanks though, I did almost as well in Pt.Loma.

I am not familar with Mira Mesa today, I hear there are some nice neighborhoods, big homes, canyon lots on the North side. The majority of it?
IMHO, 250 and lower.

Reading your 5th paragraph, I really don’t see how it contradicts my opinion(s). San Diego is too big (among other reasons) to wind up like Palm Springs. There are a other variables that are omitted that I believe add some validity to my opinion.

The high end areas, La Jolla, Rancho Santa Fe, Del Mar, select Mission Hills etc. no I don’t expect them to adjust to those median ratios. Clairemont? Talmadge, La Mesa yes, I do. Will I be proven wrong? Possibly. But you said it, in a roundabout way, living here will make no sense.

[SD Realtor]

SDNative agree completely with you. I think the inflation numbers are so incredibly hard to capture. I was toying with going through my own personal and business records to see how much “inflation” I have seen over the past few years based on grocery costs, SDGE costs, gas costs, and a few other things. I bet that I will see at least 10% but maybe that is just me being cranky.

For sure I am 100% agreed we will see a further depreciation in real housing costs, (excluding inflation)… Of this there can be no rational argument. I am especially fearful of the second wave we will see in the next few years. Perhaps that is how they came up with the 47% number. Perhaps they project a given percentage of those loans not to perform and thus become inventory and press down the market.

I guess we will see.

[SD Realtor]

SDNative agree completely with you. I think the inflation numbers are so incredibly hard to capture. I was toying with going through my own personal and business records to see how much “inflation” I have seen over the past few years based on grocery costs, SDGE costs, gas costs, and a few other things. I bet that I will see at least 10% but maybe that is just me being cranky.

For sure I am 100% agreed we will see a further depreciation in real housing costs, (excluding inflation)… Of this there can be no rational argument. I am especially fearful of the second wave we will see in the next few years. Perhaps that is how they came up with the 47% number. Perhaps they project a given percentage of those loans not to perform and thus become inventory and press down the market.

I guess we will see.

[SD Realtor]

SDNative agree completely with you. I think the inflation numbers are so incredibly hard to capture. I was toying with going through my own personal and business records to see how much “inflation” I have seen over the past few years based on grocery costs, SDGE costs, gas costs, and a few other things. I bet that I will see at least 10% but maybe that is just me being cranky.

For sure I am 100% agreed we will see a further depreciation in real housing costs, (excluding inflation)… Of this there can be no rational argument. I am especially fearful of the second wave we will see in the next few years. Perhaps that is how they came up with the 47% number. Perhaps they project a given percentage of those loans not to perform and thus become inventory and press down the market.

I guess we will see.

[SD Realtor]

SDNative agree completely with you. I think the inflation numbers are so incredibly hard to capture. I was toying with going through my own personal and business records to see how much “inflation” I have seen over the past few years based on grocery costs, SDGE costs, gas costs, and a few other things. I bet that I will see at least 10% but maybe that is just me being cranky.

For sure I am 100% agreed we will see a further depreciation in real housing costs, (excluding inflation)… Of this there can be no rational argument. I am especially fearful of the second wave we will see in the next few years. Perhaps that is how they came up with the 47% number. Perhaps they project a given percentage of those loans not to perform and thus become inventory and press down the market.

I guess we will see.

[SD Realtor]

SDNative agree completely with you. I think the inflation numbers are so incredibly hard to capture. I was toying with going through my own personal and business records to see how much “inflation” I have seen over the past few years based on grocery costs, SDGE costs, gas costs, and a few other things. I bet that I will see at least 10% but maybe that is just me being cranky.

For sure I am 100% agreed we will see a further depreciation in real housing costs, (excluding inflation)… Of this there can be no rational argument. I am especially fearful of the second wave we will see in the next few years. Perhaps that is how they came up with the 47% number. Perhaps they project a given percentage of those loans not to perform and thus become inventory and press down the market.

I guess we will see.

[gdcox]

Personally, I don’t think that housing discussion benefits from the use of real house prices, unless there is specific analytical reason. Nominal house price change is most useful since most people are concerned about how that stacks up against nominal mortgage rates and the nominal value of the mortgage. I do not know why Fitch would use real house prices changes unless it is to give the impression that they are super careful now (after they and their ratings agency pals caused about half a trillion losses round the world and catalysed a serious world slowdown) by exaggerating the headline percentage change figure quoted. And this will confuse many people. No doubt some people in SD are going around today saying that a rating agency has said “prices” will fall 47%.

If they have assumed a reasonable 3% inflation rate, that translates to a further 32% decline over five years in SD average prices. I get the sense from Piggs comments that such a forecast is overly pessimistic. Perhaps it relates, in effect , for their purposes, to the areas covered by the securitized loans they have rated. in which case they are saying a 32% decline in the ‘worst’ areas. hard to know without comment from Fitch.

[gdcox]

Personally, I don’t think that housing discussion benefits from the use of real house prices, unless there is specific analytical reason. Nominal house price change is most useful since most people are concerned about how that stacks up against nominal mortgage rates and the nominal value of the mortgage. I do not know why Fitch would use real house prices changes unless it is to give the impression that they are super careful now (after they and their ratings agency pals caused about half a trillion losses round the world and catalysed a serious world slowdown) by exaggerating the headline percentage change figure quoted. And this will confuse many people. No doubt some people in SD are going around today saying that a rating agency has said “prices” will fall 47%.

If they have assumed a reasonable 3% inflation rate, that translates to a further 32% decline over five years in SD average prices. I get the sense from Piggs comments that such a forecast is overly pessimistic. Perhaps it relates, in effect , for their purposes, to the areas covered by the securitized loans they have rated. in which case they are saying a 32% decline in the ‘worst’ areas. hard to know without comment from Fitch.

[gdcox]

Personally, I don’t think that housing discussion benefits from the use of real house prices, unless there is specific analytical reason. Nominal house price change is most useful since most people are concerned about how that stacks up against nominal mortgage rates and the nominal value of the mortgage. I do not know why Fitch would use real house prices changes unless it is to give the impression that they are super careful now (after they and their ratings agency pals caused about half a trillion losses round the world and catalysed a serious world slowdown) by exaggerating the headline percentage change figure quoted. And this will confuse many people. No doubt some people in SD are going around today saying that a rating agency has said “prices” will fall 47%.

If they have assumed a reasonable 3% inflation rate, that translates to a further 32% decline over five years in SD average prices. I get the sense from Piggs comments that such a forecast is overly pessimistic. Perhaps it relates, in effect , for their purposes, to the areas covered by the securitized loans they have rated. in which case they are saying a 32% decline in the ‘worst’ areas. hard to know without comment from Fitch.

[gdcox]

Personally, I don’t think that housing discussion benefits from the use of real house prices, unless there is specific analytical reason. Nominal house price change is most useful since most people are concerned about how that stacks up against nominal mortgage rates and the nominal value of the mortgage. I do not know why Fitch would use real house prices changes unless it is to give the impression that they are super careful now (after they and their ratings agency pals caused about half a trillion losses round the world and catalysed a serious world slowdown) by exaggerating the headline percentage change figure quoted. And this will confuse many people. No doubt some people in SD are going around today saying that a rating agency has said “prices” will fall 47%.

If they have assumed a reasonable 3% inflation rate, that translates to a further 32% decline over five years in SD average prices. I get the sense from Piggs comments that such a forecast is overly pessimistic. Perhaps it relates, in effect , for their purposes, to the areas covered by the securitized loans they have rated. in which case they are saying a 32% decline in the ‘worst’ areas. hard to know without comment from Fitch.

[Author]

Posts