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4runner
ParticipantMostly long time owners with lots of equity who are moving on and willing to do so at these price levels.
Interestingly, these are the kind of people that drive the prices down. I always thought foreclosures will lead the way. I guess these are the only people who can afford to cut the price somewhat.
It makes sense from a foreclosure standpoint too. Take two cases:
1) You buy a house w/0 down for 600k$ and now try to sell. If you can’t sell for something close to that price, it doesn’t matter to you how far the price drops. In other word, if the lender forecloses, it doesn’t matter to you whether the house ultimately sells for 300k$ or 500k$. With California foreclosure laws, in either case, the only thing that you’ve lost is your credit rating. Why bother to chase the market down? There is always a chance that the price could suddenly rise back up to 600k$, so why not hold out?
2) You buy a house for 400k$ four years ago and now try to sell. The price at the peak was 600k$, but may have dropped in the meantime. You have every incentive to try and ensure that the place sells sooner rather than later because you actually have skin in the game. Rather than trying to hold out for 600k$, you may list at 550k$ and be happy to get what you can…
ParticipantIt is the SEC who would have to relax the reporting rules.
ParticipantActually– is your elderly auntie considering a 55+ community?
The baby-boomer demographics are actually in favor of increased demand for those communities. I also think that they are usually 1/2 the cost or so of comparable housing open to the general public…
ParticipantHow come prices have not dropped very fast?
Because people are often irrational in making decisions.
When a house in a neighborhood that formerly sold in the 800’s now sells for 750, we automatically think that the house is “cheap” and a “bargain.” Never mind that the house is now only 11 times the area’s median household income. Never mind that the fair market rent is around $2200. It looks like the buyer got a deal because the only thing people look at is the former sales prices for that neighborhood.
September 6, 2007 at 10:45 AM in reply to: San Diego Inventories flat year over year . . . other southwest/Calif. markets all higher. Why? Is SD near a bottom? #83576ParticipantBugs,
Thank you.
ParticipantI don’t know what the answer is but having our prime real-estate in the USA lose value is not the answer or good for anyone.
Actually, the best thing for the U.S. would be for a spectacular, quick drop in the price of real estate.
Price real estate as an asset. Homes are currently renting out for a pathetically small fraction of their market price. The rate of return cannot be sustained for the long term and represents overinvestment in a non-performing asset. For example, we sold a condo earlier this year. We could have been $100/month above water at current rental rates ($400 if you count the payments toward principal) on about 200k$ in “equity” in the condo. Guess what– we make more money giving that money to the Feds. Plus, Uncle Sam doesn’t call us when the toilet won’t flush.
This situation is repeated throughout San Diego and California. Hardworking, responsible people are spending wage income paying toward mortgages on houses that have a rate of return that is lower than the rate of return on government bonds. This is not a good situation, especially when most Americans don’t save.
If the price of housing doesn’t drop, it is possible that these people will continue spending a disproportionately large amount of their income on an asset than doesn’t generate a reasonable rate of return. This would be catastrophic for those people and for the U.S.
ParticipantI don’t know what the answer is but having our prime real-estate in the USA lose value is not the answer or good for anyone.
Actually, the best thing for the U.S. would be for a spectacular, quick drop in the price of real estate.
Price real estate as an asset. Homes are currently renting out for a pathetically small fraction of their market price. The rate of return cannot be sustained for the long term and represents overinvestment in a non-performing asset. For example, we sold a condo earlier this year. We could have been $100/month above water at current rental rates ($400 if you count the payments toward principal) on about 200k$ in “equity” in the condo. Guess what– we make more money giving that money to the Feds. Plus, Uncle Sam doesn’t call us when the toilet won’t flush.
This situation is repeated throughout San Diego and California. Hardworking, responsible people are spending wage income paying toward mortgages on houses that have a rate of return that is lower than the rate of return on government bonds. This is not a good situation, especially when most Americans don’t save.
If the price of housing doesn’t drop, it is possible that these people will continue spending a disproportionately large amount of their income on an asset than doesn’t generate a reasonable rate of return. This would be catastrophic for those people and for the U.S.
ParticipantI don’t know what the answer is but having our prime real-estate in the USA lose value is not the answer or good for anyone.
Actually, the best thing for the U.S. would be for a spectacular, quick drop in the price of real estate.
Price real estate as an asset. Homes are currently renting out for a pathetically small fraction of their market price. The rate of return cannot be sustained for the long term and represents overinvestment in a non-performing asset. For example, we sold a condo earlier this year. We could have been $100/month above water at current rental rates ($400 if you count the payments toward principal) on about 200k$ in “equity” in the condo. Guess what– we make more money giving that money to the Feds. Plus, Uncle Sam doesn’t call us when the toilet won’t flush.
This situation is repeated throughout San Diego and California. Hardworking, responsible people are spending wage income paying toward mortgages on houses that have a rate of return that is lower than the rate of return on government bonds. This is not a good situation, especially when most Americans don’t save.
If the price of housing doesn’t drop, it is possible that these people will continue spending a disproportionately large amount of their income on an asset than doesn’t generate a reasonable rate of return. This would be catastrophic for those people and for the U.S.
ParticipantEven after selling a house, a family needs a equivalent place to live in; perhaps for rich families, the hassle isn’t worth a few 100K.
Gotta love it. What is a few 100K nowadays, anyway?
ParticipantEven after selling a house, a family needs a equivalent place to live in; perhaps for rich families, the hassle isn’t worth a few 100K.
Gotta love it. What is a few 100K nowadays, anyway?
ParticipantEven after selling a house, a family needs a equivalent place to live in; perhaps for rich families, the hassle isn’t worth a few 100K.
Gotta love it. What is a few 100K nowadays, anyway?
ParticipantHis main point is that, for the past 30 years, the price of housing has generally been correlated with the prices of commodities (think oil, copper, lead, gold, pork bellies, etc.). In particular, over this time, the ratio of housing prices to an index of precious metals remains fairly constant. At present, the ratio is out of whack– precious metals have been increasing in price faster than housing– and he concludes that housing is underpriced.
I wouldn’t worry too much about his arguments. I think that much of the increase in precious metal prices over the last few years has been due to demand from overseas. Think of how much copper and silver China and India have been using.
However, I think that it is fair to say that there hasn’t been a similar demand from overseas for U.S. real estate. Hence his index is out of whack.
ParticipantHis main point is that, for the past 30 years, the price of housing has generally been correlated with the prices of commodities (think oil, copper, lead, gold, pork bellies, etc.). In particular, over this time, the ratio of housing prices to an index of precious metals remains fairly constant. At present, the ratio is out of whack– precious metals have been increasing in price faster than housing– and he concludes that housing is underpriced.
I wouldn’t worry too much about his arguments. I think that much of the increase in precious metal prices over the last few years has been due to demand from overseas. Think of how much copper and silver China and India have been using.
However, I think that it is fair to say that there hasn’t been a similar demand from overseas for U.S. real estate. Hence his index is out of whack.
ParticipantHis main point is that, for the past 30 years, the price of housing has generally been correlated with the prices of commodities (think oil, copper, lead, gold, pork bellies, etc.). In particular, over this time, the ratio of housing prices to an index of precious metals remains fairly constant. At present, the ratio is out of whack– precious metals have been increasing in price faster than housing– and he concludes that housing is underpriced.
I wouldn’t worry too much about his arguments. I think that much of the increase in precious metal prices over the last few years has been due to demand from overseas. Think of how much copper and silver China and India have been using.
However, I think that it is fair to say that there hasn’t been a similar demand from overseas for U.S. real estate. Hence his index is out of whack.
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