Wow. 47% Decline for San Diego

[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.

[Eugene]

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?

In 1999, median SFH price to median family income ratios were:

In Rancho Bernardo: 3.36
In Scripps Ranch: 3.51
In Carmel Valley: 4.28
In Encinitas: 4.43
In Point Loma: 5.41

We can revert to that if interest rates get to 8-9%.

[Eugene]

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?

In 1999, median SFH price to median family income ratios were:

In Rancho Bernardo: 3.36
In Scripps Ranch: 3.51
In Carmel Valley: 4.28
In Encinitas: 4.43
In Point Loma: 5.41

We can revert to that if interest rates get to 8-9%.

[Eugene]

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?

In 1999, median SFH price to median family income ratios were:

In Rancho Bernardo: 3.36
In Scripps Ranch: 3.51
In Carmel Valley: 4.28
In Encinitas: 4.43
In Point Loma: 5.41

We can revert to that if interest rates get to 8-9%.

[Eugene]

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?

In 1999, median SFH price to median family income ratios were:

In Rancho Bernardo: 3.36
In Scripps Ranch: 3.51
In Carmel Valley: 4.28
In Encinitas: 4.43
In Point Loma: 5.41

We can revert to that if interest rates get to 8-9%.

[Eugene]

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?

In 1999, median SFH price to median family income ratios were:

In Rancho Bernardo: 3.36
In Scripps Ranch: 3.51
In Carmel Valley: 4.28
In Encinitas: 4.43
In Point Loma: 5.41

We can revert to that if interest rates get to 8-9%.

[peterb]

This situation is turning into the worst economic scenario since the 1930’s. There’s virtually no reason to believe things will improve for at least another year or two. And evey reason to believe things will get worse! Much worse. All records are being broken right now. SD County foreclosures are near to 2000 a month. They barely got to 700 in the 1990’s. And shadow inventory is a heated topic here. Those old ratio’s seem all too likely to return.

[peterb]

This situation is turning into the worst economic scenario since the 1930’s. There’s virtually no reason to believe things will improve for at least another year or two. And evey reason to believe things will get worse! Much worse. All records are being broken right now. SD County foreclosures are near to 2000 a month. They barely got to 700 in the 1990’s. And shadow inventory is a heated topic here. Those old ratio’s seem all too likely to return.

[peterb]

This situation is turning into the worst economic scenario since the 1930’s. There’s virtually no reason to believe things will improve for at least another year or two. And evey reason to believe things will get worse! Much worse. All records are being broken right now. SD County foreclosures are near to 2000 a month. They barely got to 700 in the 1990’s. And shadow inventory is a heated topic here. Those old ratio’s seem all too likely to return.

[peterb]

This situation is turning into the worst economic scenario since the 1930’s. There’s virtually no reason to believe things will improve for at least another year or two. And evey reason to believe things will get worse! Much worse. All records are being broken right now. SD County foreclosures are near to 2000 a month. They barely got to 700 in the 1990’s. And shadow inventory is a heated topic here. Those old ratio’s seem all too likely to return.

[peterb]

This situation is turning into the worst economic scenario since the 1930’s. There’s virtually no reason to believe things will improve for at least another year or two. And evey reason to believe things will get worse! Much worse. All records are being broken right now. SD County foreclosures are near to 2000 a month. They barely got to 700 in the 1990’s. And shadow inventory is a heated topic here. Those old ratio’s seem all too likely to return.

[SD Realtor]

Something is off somewhere then E. Looking at this link,

Risks of a Serious Home Price Decline

it would seem that in 1999 the price to income ratio was indeed much different.

My statement was made 100% by using the data on this link above. Using the link above it shows that at the VERY lowest point in the entire county, the price to income ratio went a tiny bit below 7. That was for a single year as well.

Please take a look at the link and tell me what you think.

I am not sure that it is explainable to say that the county stats by Rich are way out of whack compared to the zip stats you produced because his are more encompassing and that there were zips that pulled up the zips that you presented.

My post was based entirely on the statistical data that Rich has presented. If you indeed have data that shows that in essence, the data that Rich had gathered is incorrect, then yes I would agree with you and say it is possible. Consequently at 8-9% interest rates and a subsequently tight credit market, those who have sufficiently adequate downpayments are in great position. Those who don’t will be forced to continue to rent.

Mu

[SD Realtor]

Something is off somewhere then E. Looking at this link,

Risks of a Serious Home Price Decline

it would seem that in 1999 the price to income ratio was indeed much different.

My statement was made 100% by using the data on this link above. Using the link above it shows that at the VERY lowest point in the entire county, the price to income ratio went a tiny bit below 7. That was for a single year as well.

Please take a look at the link and tell me what you think.

I am not sure that it is explainable to say that the county stats by Rich are way out of whack compared to the zip stats you produced because his are more encompassing and that there were zips that pulled up the zips that you presented.

My post was based entirely on the statistical data that Rich has presented. If you indeed have data that shows that in essence, the data that Rich had gathered is incorrect, then yes I would agree with you and say it is possible. Consequently at 8-9% interest rates and a subsequently tight credit market, those who have sufficiently adequate downpayments are in great position. Those who don’t will be forced to continue to rent.

Mu

[SD Realtor]

Something is off somewhere then E. Looking at this link,

Risks of a Serious Home Price Decline

it would seem that in 1999 the price to income ratio was indeed much different.

My statement was made 100% by using the data on this link above. Using the link above it shows that at the VERY lowest point in the entire county, the price to income ratio went a tiny bit below 7. That was for a single year as well.

Please take a look at the link and tell me what you think.

I am not sure that it is explainable to say that the county stats by Rich are way out of whack compared to the zip stats you produced because his are more encompassing and that there were zips that pulled up the zips that you presented.

My post was based entirely on the statistical data that Rich has presented. If you indeed have data that shows that in essence, the data that Rich had gathered is incorrect, then yes I would agree with you and say it is possible. Consequently at 8-9% interest rates and a subsequently tight credit market, those who have sufficiently adequate downpayments are in great position. Those who don’t will be forced to continue to rent.

Mu

[SD Realtor]

Something is off somewhere then E. Looking at this link,

Risks of a Serious Home Price Decline

it would seem that in 1999 the price to income ratio was indeed much different.

My statement was made 100% by using the data on this link above. Using the link above it shows that at the VERY lowest point in the entire county, the price to income ratio went a tiny bit below 7. That was for a single year as well.

Please take a look at the link and tell me what you think.

I am not sure that it is explainable to say that the county stats by Rich are way out of whack compared to the zip stats you produced because his are more encompassing and that there were zips that pulled up the zips that you presented.

My post was based entirely on the statistical data that Rich has presented. If you indeed have data that shows that in essence, the data that Rich had gathered is incorrect, then yes I would agree with you and say it is possible. Consequently at 8-9% interest rates and a subsequently tight credit market, those who have sufficiently adequate downpayments are in great position. Those who don’t will be forced to continue to rent.

Mu

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