You’d have to be an idiot to buy a house

[SDEngineer]

[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.

[Rt.66]

During GD1 the smart money lost the bulk of its fortunes during the second leg down. Where are we in the GD cycle?

FIRE economy is dead, on this we all agree? What is on the horizon to replace those jobs? The average household income in Temecula WAS around $50k, what is it now that unemployment is a rose colored glasses, 10%? The FIRE economy allowed people without degrees to make really good money.

Does anyone see some new high paying industry popping up in the next few years that will hire thousands and thousands and pay very well?

Three times incomes in Temecula is $150k. So historically the average house should be selling for $150k. I am sure the average income is down and dropping fast. Also, this is not an historical time when things should be selling for averages. In times like this things should sell for less than historical averages.

Where is Temecula now? Not many homes for $150k, and none that I would call an average Temecula home. IMO the average price for the average house in Temecula is about $250k. So buying today might earn you a cool $100k loss before things settle.

TG example of his neighborhood was interesting. I spend a bit of time looking at Temecula/Murrieta and the neighborhoods I see have a few new buyers, but those are severely outnumbered by homes lingering in REO status, currently in pre-foreclosure and many that have simply fell off the records. Then add in the many who are living free each month (on a side note, this explains why you still see restaurants full, not paying a mortgage gives you lots of free money) and the banks are ignoring them.

Then consider any tract built 2003 or later will see everyone in the tract way under water. IMHO all of those houses will eventually foreclose (with the exception of the cash and very large DP purchases). Its only a matter of when the loans reset, when the owners capitulate or when the bank finally decides to take the house. Obama is not going to save anyone who is underwater by $200k and that describes everyone in the newer tracts. Lots of resets coming later this year and 2010.

Right now, today on RealtyTrac I see tons and tons of homes in almost all areas of the IE. In many areas you have to zoom in on a neighborhood in order to fit the 300 max foreclosures which are able to display at one time. I am sure there are small hoods like TG’s that have a different story but most are in for trouble for a long time to come.

I know of people who bought REOs 12 months ago in Temecula and they are conservatively underwater $80k today. Will we see a second wave of forclosures as well?

[Rt.66]

During GD1 the smart money lost the bulk of its fortunes during the second leg down. Where are we in the GD cycle?

FIRE economy is dead, on this we all agree? What is on the horizon to replace those jobs? The average household income in Temecula WAS around $50k, what is it now that unemployment is a rose colored glasses, 10%? The FIRE economy allowed people without degrees to make really good money.

Does anyone see some new high paying industry popping up in the next few years that will hire thousands and thousands and pay very well?

Three times incomes in Temecula is $150k. So historically the average house should be selling for $150k. I am sure the average income is down and dropping fast. Also, this is not an historical time when things should be selling for averages. In times like this things should sell for less than historical averages.

Where is Temecula now? Not many homes for $150k, and none that I would call an average Temecula home. IMO the average price for the average house in Temecula is about $250k. So buying today might earn you a cool $100k loss before things settle.

TG example of his neighborhood was interesting. I spend a bit of time looking at Temecula/Murrieta and the neighborhoods I see have a few new buyers, but those are severely outnumbered by homes lingering in REO status, currently in pre-foreclosure and many that have simply fell off the records. Then add in the many who are living free each month (on a side note, this explains why you still see restaurants full, not paying a mortgage gives you lots of free money) and the banks are ignoring them.

Then consider any tract built 2003 or later will see everyone in the tract way under water. IMHO all of those houses will eventually foreclose (with the exception of the cash and very large DP purchases). Its only a matter of when the loans reset, when the owners capitulate or when the bank finally decides to take the house. Obama is not going to save anyone who is underwater by $200k and that describes everyone in the newer tracts. Lots of resets coming later this year and 2010.

Right now, today on RealtyTrac I see tons and tons of homes in almost all areas of the IE. In many areas you have to zoom in on a neighborhood in order to fit the 300 max foreclosures which are able to display at one time. I am sure there are small hoods like TG’s that have a different story but most are in for trouble for a long time to come.

I know of people who bought REOs 12 months ago in Temecula and they are conservatively underwater $80k today. Will we see a second wave of forclosures as well?

[Rt.66]

During GD1 the smart money lost the bulk of its fortunes during the second leg down. Where are we in the GD cycle?

FIRE economy is dead, on this we all agree? What is on the horizon to replace those jobs? The average household income in Temecula WAS around $50k, what is it now that unemployment is a rose colored glasses, 10%? The FIRE economy allowed people without degrees to make really good money.

Does anyone see some new high paying industry popping up in the next few years that will hire thousands and thousands and pay very well?

Three times incomes in Temecula is $150k. So historically the average house should be selling for $150k. I am sure the average income is down and dropping fast. Also, this is not an historical time when things should be selling for averages. In times like this things should sell for less than historical averages.

Where is Temecula now? Not many homes for $150k, and none that I would call an average Temecula home. IMO the average price for the average house in Temecula is about $250k. So buying today might earn you a cool $100k loss before things settle.

TG example of his neighborhood was interesting. I spend a bit of time looking at Temecula/Murrieta and the neighborhoods I see have a few new buyers, but those are severely outnumbered by homes lingering in REO status, currently in pre-foreclosure and many that have simply fell off the records. Then add in the many who are living free each month (on a side note, this explains why you still see restaurants full, not paying a mortgage gives you lots of free money) and the banks are ignoring them.

Then consider any tract built 2003 or later will see everyone in the tract way under water. IMHO all of those houses will eventually foreclose (with the exception of the cash and very large DP purchases). Its only a matter of when the loans reset, when the owners capitulate or when the bank finally decides to take the house. Obama is not going to save anyone who is underwater by $200k and that describes everyone in the newer tracts. Lots of resets coming later this year and 2010.

Right now, today on RealtyTrac I see tons and tons of homes in almost all areas of the IE. In many areas you have to zoom in on a neighborhood in order to fit the 300 max foreclosures which are able to display at one time. I am sure there are small hoods like TG’s that have a different story but most are in for trouble for a long time to come.

I know of people who bought REOs 12 months ago in Temecula and they are conservatively underwater $80k today. Will we see a second wave of forclosures as well?

[Rt.66]

During GD1 the smart money lost the bulk of its fortunes during the second leg down. Where are we in the GD cycle?

FIRE economy is dead, on this we all agree? What is on the horizon to replace those jobs? The average household income in Temecula WAS around $50k, what is it now that unemployment is a rose colored glasses, 10%? The FIRE economy allowed people without degrees to make really good money.

Does anyone see some new high paying industry popping up in the next few years that will hire thousands and thousands and pay very well?

Three times incomes in Temecula is $150k. So historically the average house should be selling for $150k. I am sure the average income is down and dropping fast. Also, this is not an historical time when things should be selling for averages. In times like this things should sell for less than historical averages.

Where is Temecula now? Not many homes for $150k, and none that I would call an average Temecula home. IMO the average price for the average house in Temecula is about $250k. So buying today might earn you a cool $100k loss before things settle.

TG example of his neighborhood was interesting. I spend a bit of time looking at Temecula/Murrieta and the neighborhoods I see have a few new buyers, but those are severely outnumbered by homes lingering in REO status, currently in pre-foreclosure and many that have simply fell off the records. Then add in the many who are living free each month (on a side note, this explains why you still see restaurants full, not paying a mortgage gives you lots of free money) and the banks are ignoring them.

Then consider any tract built 2003 or later will see everyone in the tract way under water. IMHO all of those houses will eventually foreclose (with the exception of the cash and very large DP purchases). Its only a matter of when the loans reset, when the owners capitulate or when the bank finally decides to take the house. Obama is not going to save anyone who is underwater by $200k and that describes everyone in the newer tracts. Lots of resets coming later this year and 2010.

Right now, today on RealtyTrac I see tons and tons of homes in almost all areas of the IE. In many areas you have to zoom in on a neighborhood in order to fit the 300 max foreclosures which are able to display at one time. I am sure there are small hoods like TG’s that have a different story but most are in for trouble for a long time to come.

I know of people who bought REOs 12 months ago in Temecula and they are conservatively underwater $80k today. Will we see a second wave of forclosures as well?

[Rt.66]

During GD1 the smart money lost the bulk of its fortunes during the second leg down. Where are we in the GD cycle?

FIRE economy is dead, on this we all agree? What is on the horizon to replace those jobs? The average household income in Temecula WAS around $50k, what is it now that unemployment is a rose colored glasses, 10%? The FIRE economy allowed people without degrees to make really good money.

Does anyone see some new high paying industry popping up in the next few years that will hire thousands and thousands and pay very well?

Three times incomes in Temecula is $150k. So historically the average house should be selling for $150k. I am sure the average income is down and dropping fast. Also, this is not an historical time when things should be selling for averages. In times like this things should sell for less than historical averages.

Where is Temecula now? Not many homes for $150k, and none that I would call an average Temecula home. IMO the average price for the average house in Temecula is about $250k. So buying today might earn you a cool $100k loss before things settle.

TG example of his neighborhood was interesting. I spend a bit of time looking at Temecula/Murrieta and the neighborhoods I see have a few new buyers, but those are severely outnumbered by homes lingering in REO status, currently in pre-foreclosure and many that have simply fell off the records. Then add in the many who are living free each month (on a side note, this explains why you still see restaurants full, not paying a mortgage gives you lots of free money) and the banks are ignoring them.

Then consider any tract built 2003 or later will see everyone in the tract way under water. IMHO all of those houses will eventually foreclose (with the exception of the cash and very large DP purchases). Its only a matter of when the loans reset, when the owners capitulate or when the bank finally decides to take the house. Obama is not going to save anyone who is underwater by $200k and that describes everyone in the newer tracts. Lots of resets coming later this year and 2010.

Right now, today on RealtyTrac I see tons and tons of homes in almost all areas of the IE. In many areas you have to zoom in on a neighborhood in order to fit the 300 max foreclosures which are able to display at one time. I am sure there are small hoods like TG’s that have a different story but most are in for trouble for a long time to come.

I know of people who bought REOs 12 months ago in Temecula and they are conservatively underwater $80k today. Will we see a second wave of forclosures as well?

[peterb]

I just did a quick scan of 3 bedroom homes for rent in Temecula for $2000 and under on Craiglist. There were 443 of them available. I did the same thing for the city of SD. SD had 645 of them. SD has 1.1M people and is an employment center. What is Temecula’s population and employment capabilities? Does it warrent being 2/3 of the city of SD?
I dont know, just asking. Seems high to me. But I dont honestly know. Maybe Temecula is just a lot cheaper place to live? Probably. For people who live there, does 443 sound like a lot?

[peterb]

I just did a quick scan of 3 bedroom homes for rent in Temecula for $2000 and under on Craiglist. There were 443 of them available. I did the same thing for the city of SD. SD had 645 of them. SD has 1.1M people and is an employment center. What is Temecula’s population and employment capabilities? Does it warrent being 2/3 of the city of SD?
I dont know, just asking. Seems high to me. But I dont honestly know. Maybe Temecula is just a lot cheaper place to live? Probably. For people who live there, does 443 sound like a lot?

[peterb]

I just did a quick scan of 3 bedroom homes for rent in Temecula for $2000 and under on Craiglist. There were 443 of them available. I did the same thing for the city of SD. SD had 645 of them. SD has 1.1M people and is an employment center. What is Temecula’s population and employment capabilities? Does it warrent being 2/3 of the city of SD?
I dont know, just asking. Seems high to me. But I dont honestly know. Maybe Temecula is just a lot cheaper place to live? Probably. For people who live there, does 443 sound like a lot?

[peterb]

I just did a quick scan of 3 bedroom homes for rent in Temecula for $2000 and under on Craiglist. There were 443 of them available. I did the same thing for the city of SD. SD had 645 of them. SD has 1.1M people and is an employment center. What is Temecula’s population and employment capabilities? Does it warrent being 2/3 of the city of SD?
I dont know, just asking. Seems high to me. But I dont honestly know. Maybe Temecula is just a lot cheaper place to live? Probably. For people who live there, does 443 sound like a lot?

[peterb]

I just did a quick scan of 3 bedroom homes for rent in Temecula for $2000 and under on Craiglist. There were 443 of them available. I did the same thing for the city of SD. SD had 645 of them. SD has 1.1M people and is an employment center. What is Temecula’s population and employment capabilities? Does it warrent being 2/3 of the city of SD?
I dont know, just asking. Seems high to me. But I dont honestly know. Maybe Temecula is just a lot cheaper place to live? Probably. For people who live there, does 443 sound like a lot?

[UCGal]

[quote=nostradamus]Property taxes going up.

link[/quote]

I read that article. It pretty much says that property taxes are going up the same amount they’ve gone up most of the last 20 years. The only people who might be exempt from the increase, that happens every year, are those that are getting re-assessed because they bought at the peak. Because of Prop 13 – your taxes are based on your purchase price, not the current value. And go up, about 2%, each year.

This year is not an exception. Why would it be?

[UCGal]

[quote=nostradamus]Property taxes going up.

link[/quote]

I read that article. It pretty much says that property taxes are going up the same amount they’ve gone up most of the last 20 years. The only people who might be exempt from the increase, that happens every year, are those that are getting re-assessed because they bought at the peak. Because of Prop 13 – your taxes are based on your purchase price, not the current value. And go up, about 2%, each year.

This year is not an exception. Why would it be?

[UCGal]

[quote=nostradamus]Property taxes going up.

link[/quote]

I read that article. It pretty much says that property taxes are going up the same amount they’ve gone up most of the last 20 years. The only people who might be exempt from the increase, that happens every year, are those that are getting re-assessed because they bought at the peak. Because of Prop 13 – your taxes are based on your purchase price, not the current value. And go up, about 2%, each year.

This year is not an exception. Why would it be?

[UCGal]

[quote=nostradamus]Property taxes going up.

link[/quote]

I read that article. It pretty much says that property taxes are going up the same amount they’ve gone up most of the last 20 years. The only people who might be exempt from the increase, that happens every year, are those that are getting re-assessed because they bought at the peak. Because of Prop 13 – your taxes are based on your purchase price, not the current value. And go up, about 2%, each year.

This year is not an exception. Why would it be?

[Author]

Posts