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Nor-LA-SD-guy.
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March 16, 2009 at 8:11 AM #367520March 16, 2009 at 8:22 AM #366932
(former)FormerSanDiegan
Participant[quote=Russell]Maybe FSD is being Facetious, I can’t tell anymore.[/quote]
I usually am, but the comment in question was made by FO.
March 16, 2009 at 8:22 AM #367223Participant[quote=Russell]Maybe FSD is being Facetious, I can’t tell anymore.[/quote]
I usually am, but the comment in question was made by FO.
March 16, 2009 at 8:22 AM #367386Participant[quote=Russell]Maybe FSD is being Facetious, I can’t tell anymore.[/quote]
I usually am, but the comment in question was made by FO.
March 16, 2009 at 8:22 AM #367424Participant[quote=Russell]Maybe FSD is being Facetious, I can’t tell anymore.[/quote]
I usually am, but the comment in question was made by FO.
March 16, 2009 at 8:22 AM #367535Participant[quote=Russell]Maybe FSD is being Facetious, I can’t tell anymore.[/quote]
I usually am, but the comment in question was made by FO.
March 16, 2009 at 8:27 AM #366928peterb
ParticipantTG, I dont think of myself as bearish, just rational. I’ve made plenty of money buying and selling residential RE over the years. And I’ve been a landlord. For me, it sucks. But for some, it works. And if you can hold a property in CA for 10 or more years, your odds are very good to make some great returns or have a great cash cow. But vacancies, repairs and tenants from hell can sour you for life.
Having said all this, if you can cash flow 30% or more positive, you’re probably in good shape to weather some tough times.My one caveat to all of this is that this is a credit contraction and not a normal recession. It could get a lot worse from here. If I thought this was an early 1990’s scenario recession, I would be one of the people going “all in” right now as well. But I dont think it is. This has been much more severe and much faster than I ever imagined it would be. This causes me great concern. Although it doesnt “feel” different to me yet, the numbers tell me otherwise. The research I’ve done indicates unemployment as the number one factor or indicator of RE price direction in CA. At anything above 7%, it starts to fall. Unemployment going from 6% to 10% 4 months ago… has got to be a record. 30% of all SD county mortgages upside down…has got to be a record. 12% of all mortgages going into non-performing status….has got to be a record.
I could start to site demographics as well, but I think you get my drift at this point. IMO, this is going to be a record level contraction. So, I’m keeping my powder dry for a while yet.There’s an old saying from the Great Depression, “The smart money was all lost after the 1929 crash.”. I would caution people to not be too smart here.
March 16, 2009 at 8:27 AM #367217ParticipantTG, I dont think of myself as bearish, just rational. I’ve made plenty of money buying and selling residential RE over the years. And I’ve been a landlord. For me, it sucks. But for some, it works. And if you can hold a property in CA for 10 or more years, your odds are very good to make some great returns or have a great cash cow. But vacancies, repairs and tenants from hell can sour you for life.
Having said all this, if you can cash flow 30% or more positive, you’re probably in good shape to weather some tough times.My one caveat to all of this is that this is a credit contraction and not a normal recession. It could get a lot worse from here. If I thought this was an early 1990’s scenario recession, I would be one of the people going “all in” right now as well. But I dont think it is. This has been much more severe and much faster than I ever imagined it would be. This causes me great concern. Although it doesnt “feel” different to me yet, the numbers tell me otherwise. The research I’ve done indicates unemployment as the number one factor or indicator of RE price direction in CA. At anything above 7%, it starts to fall. Unemployment going from 6% to 10% 4 months ago… has got to be a record. 30% of all SD county mortgages upside down…has got to be a record. 12% of all mortgages going into non-performing status….has got to be a record.
I could start to site demographics as well, but I think you get my drift at this point. IMO, this is going to be a record level contraction. So, I’m keeping my powder dry for a while yet.There’s an old saying from the Great Depression, “The smart money was all lost after the 1929 crash.”. I would caution people to not be too smart here.
March 16, 2009 at 8:27 AM #367381ParticipantTG, I dont think of myself as bearish, just rational. I’ve made plenty of money buying and selling residential RE over the years. And I’ve been a landlord. For me, it sucks. But for some, it works. And if you can hold a property in CA for 10 or more years, your odds are very good to make some great returns or have a great cash cow. But vacancies, repairs and tenants from hell can sour you for life.
Having said all this, if you can cash flow 30% or more positive, you’re probably in good shape to weather some tough times.My one caveat to all of this is that this is a credit contraction and not a normal recession. It could get a lot worse from here. If I thought this was an early 1990’s scenario recession, I would be one of the people going “all in” right now as well. But I dont think it is. This has been much more severe and much faster than I ever imagined it would be. This causes me great concern. Although it doesnt “feel” different to me yet, the numbers tell me otherwise. The research I’ve done indicates unemployment as the number one factor or indicator of RE price direction in CA. At anything above 7%, it starts to fall. Unemployment going from 6% to 10% 4 months ago… has got to be a record. 30% of all SD county mortgages upside down…has got to be a record. 12% of all mortgages going into non-performing status….has got to be a record.
I could start to site demographics as well, but I think you get my drift at this point. IMO, this is going to be a record level contraction. So, I’m keeping my powder dry for a while yet.There’s an old saying from the Great Depression, “The smart money was all lost after the 1929 crash.”. I would caution people to not be too smart here.
March 16, 2009 at 8:27 AM #367419ParticipantTG, I dont think of myself as bearish, just rational. I’ve made plenty of money buying and selling residential RE over the years. And I’ve been a landlord. For me, it sucks. But for some, it works. And if you can hold a property in CA for 10 or more years, your odds are very good to make some great returns or have a great cash cow. But vacancies, repairs and tenants from hell can sour you for life.
Having said all this, if you can cash flow 30% or more positive, you’re probably in good shape to weather some tough times.My one caveat to all of this is that this is a credit contraction and not a normal recession. It could get a lot worse from here. If I thought this was an early 1990’s scenario recession, I would be one of the people going “all in” right now as well. But I dont think it is. This has been much more severe and much faster than I ever imagined it would be. This causes me great concern. Although it doesnt “feel” different to me yet, the numbers tell me otherwise. The research I’ve done indicates unemployment as the number one factor or indicator of RE price direction in CA. At anything above 7%, it starts to fall. Unemployment going from 6% to 10% 4 months ago… has got to be a record. 30% of all SD county mortgages upside down…has got to be a record. 12% of all mortgages going into non-performing status….has got to be a record.
I could start to site demographics as well, but I think you get my drift at this point. IMO, this is going to be a record level contraction. So, I’m keeping my powder dry for a while yet.There’s an old saying from the Great Depression, “The smart money was all lost after the 1929 crash.”. I would caution people to not be too smart here.
March 16, 2009 at 8:27 AM #367530ParticipantTG, I dont think of myself as bearish, just rational. I’ve made plenty of money buying and selling residential RE over the years. And I’ve been a landlord. For me, it sucks. But for some, it works. And if you can hold a property in CA for 10 or more years, your odds are very good to make some great returns or have a great cash cow. But vacancies, repairs and tenants from hell can sour you for life.
Having said all this, if you can cash flow 30% or more positive, you’re probably in good shape to weather some tough times.My one caveat to all of this is that this is a credit contraction and not a normal recession. It could get a lot worse from here. If I thought this was an early 1990’s scenario recession, I would be one of the people going “all in” right now as well. But I dont think it is. This has been much more severe and much faster than I ever imagined it would be. This causes me great concern. Although it doesnt “feel” different to me yet, the numbers tell me otherwise. The research I’ve done indicates unemployment as the number one factor or indicator of RE price direction in CA. At anything above 7%, it starts to fall. Unemployment going from 6% to 10% 4 months ago… has got to be a record. 30% of all SD county mortgages upside down…has got to be a record. 12% of all mortgages going into non-performing status….has got to be a record.
I could start to site demographics as well, but I think you get my drift at this point. IMO, this is going to be a record level contraction. So, I’m keeping my powder dry for a while yet.There’s an old saying from the Great Depression, “The smart money was all lost after the 1929 crash.”. I would caution people to not be too smart here.
March 16, 2009 at 9:02 AM #366944SDEngineer
Participant[quote=ralphfurley][quote=SDEngineer]Even if the downside is still significant, there is VERY good reason to believe that prices will rebound back to the trendline relatively quickly (certainly within 5 years I’d say).[/quote]
I’m not trying to be a jerk here, but what reason is that?This housing downturn seems worse than the one in ’89 (or did it peak there and go down a year or two later?). Anyway, housing didn’t go up much until ’98 or so.
If things are worse this time around, what makes you think the housing market will rebound in five years or so?[/quote]
I’m speaking primarily of the submarkets that people are currently buying in that have already seen a ton of depreciation (San Marcos, Mira Mesa, East country). BTW, I’m NOT predicting any sort of returns to the bubble highs – I think those numbers are at least 10-15 years off. I’m speaking mostly of any overshoot on the downward side, and a return to price/rent longterm ratios (ratios which have been relatively stable since the 40’s).
Why? Because when the price of a house drops significantly below the price to rent, the smart investors (the ones who primarily sat out this bubble, and always buy during lows – experienced long term RE investors) start buying units to rent out. That’s what happened in all the previous bubbles. This may have been a record setting bubble, but there is still a floor that will be set by rents – the investors will see to that.
The economic downturn might push rents a bit lower, but the economy will rebound at some point, and rents will at that point return to their long term trends, which, ultimately, is what supports housing prices.
March 16, 2009 at 9:02 AM #367234Participant[quote=ralphfurley][quote=SDEngineer]Even if the downside is still significant, there is VERY good reason to believe that prices will rebound back to the trendline relatively quickly (certainly within 5 years I’d say).[/quote]
I’m not trying to be a jerk here, but what reason is that?This housing downturn seems worse than the one in ’89 (or did it peak there and go down a year or two later?). Anyway, housing didn’t go up much until ’98 or so.
If things are worse this time around, what makes you think the housing market will rebound in five years or so?[/quote]
I’m speaking primarily of the submarkets that people are currently buying in that have already seen a ton of depreciation (San Marcos, Mira Mesa, East country). BTW, I’m NOT predicting any sort of returns to the bubble highs – I think those numbers are at least 10-15 years off. I’m speaking mostly of any overshoot on the downward side, and a return to price/rent longterm ratios (ratios which have been relatively stable since the 40’s).
Why? Because when the price of a house drops significantly below the price to rent, the smart investors (the ones who primarily sat out this bubble, and always buy during lows – experienced long term RE investors) start buying units to rent out. That’s what happened in all the previous bubbles. This may have been a record setting bubble, but there is still a floor that will be set by rents – the investors will see to that.
The economic downturn might push rents a bit lower, but the economy will rebound at some point, and rents will at that point return to their long term trends, which, ultimately, is what supports housing prices.
March 16, 2009 at 9:02 AM #367398Participant[quote=ralphfurley][quote=SDEngineer]Even if the downside is still significant, there is VERY good reason to believe that prices will rebound back to the trendline relatively quickly (certainly within 5 years I’d say).[/quote]
I’m not trying to be a jerk here, but what reason is that?This housing downturn seems worse than the one in ’89 (or did it peak there and go down a year or two later?). Anyway, housing didn’t go up much until ’98 or so.
If things are worse this time around, what makes you think the housing market will rebound in five years or so?[/quote]
I’m speaking primarily of the submarkets that people are currently buying in that have already seen a ton of depreciation (San Marcos, Mira Mesa, East country). BTW, I’m NOT predicting any sort of returns to the bubble highs – I think those numbers are at least 10-15 years off. I’m speaking mostly of any overshoot on the downward side, and a return to price/rent longterm ratios (ratios which have been relatively stable since the 40’s).
Why? Because when the price of a house drops significantly below the price to rent, the smart investors (the ones who primarily sat out this bubble, and always buy during lows – experienced long term RE investors) start buying units to rent out. That’s what happened in all the previous bubbles. This may have been a record setting bubble, but there is still a floor that will be set by rents – the investors will see to that.
The economic downturn might push rents a bit lower, but the economy will rebound at some point, and rents will at that point return to their long term trends, which, ultimately, is what supports housing prices.
March 16, 2009 at 9:02 AM #367435Participant[quote=ralphfurley][quote=SDEngineer]Even if the downside is still significant, there is VERY good reason to believe that prices will rebound back to the trendline relatively quickly (certainly within 5 years I’d say).[/quote]
I’m not trying to be a jerk here, but what reason is that?This housing downturn seems worse than the one in ’89 (or did it peak there and go down a year or two later?). Anyway, housing didn’t go up much until ’98 or so.
If things are worse this time around, what makes you think the housing market will rebound in five years or so?[/quote]
I’m speaking primarily of the submarkets that people are currently buying in that have already seen a ton of depreciation (San Marcos, Mira Mesa, East country). BTW, I’m NOT predicting any sort of returns to the bubble highs – I think those numbers are at least 10-15 years off. I’m speaking mostly of any overshoot on the downward side, and a return to price/rent longterm ratios (ratios which have been relatively stable since the 40’s).
Why? Because when the price of a house drops significantly below the price to rent, the smart investors (the ones who primarily sat out this bubble, and always buy during lows – experienced long term RE investors) start buying units to rent out. That’s what happened in all the previous bubbles. This may have been a record setting bubble, but there is still a floor that will be set by rents – the investors will see to that.
The economic downturn might push rents a bit lower, but the economy will rebound at some point, and rents will at that point return to their long term trends, which, ultimately, is what supports housing prices.
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