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an
ParticipantMira Mesa is also priced somewhere between 2003 and 2004 too. There are plenty of examples, just too lazy to dig it up.
Participant
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Base on this graph from DQnews, so-cal sales level is @ where it was in 1998 and well under the last boom as well.ParticipantPC, once again, I completely agree with you. I’m optimistic on the general economy and realist about the RE market. I don’t care how we reach fundamental. I know they will eventually get there. Be it rent and income rising and have massive inflation, or price falling.
I also agree on the same home sale price over median. That’s similar to analysts looking @ same store sale for retailer instead of just total revenue. It gives you a much better picture of the condition on the floor.
ParticipantPC, I agree completely. If there’s proof of misrepresentation like you described, then it would definitely be ground for a lawsuit. That would also be ground for lawsuit if anyone selling anything say that on paper, be it cars, stocks, or houses. So it really depend on the exact case. I’m just trying to say that if the lawsuit is just based on price reduction from builder, it won’t hold up in court.
ParticipantBesides unrealistic sellers, I think some agents are still drinking the cool-aid too. I’ve emailed a several agents listing on craigslist and some are telling me price is not negotiable because they believe price are going up, not down.
ParticipantIt doesn’t matter what they know or expect, all I’m saying is it won’t hold up in a court of law. Buying a house is like buying everything else. Just because a house over a long term always go up doesn’t mean that over a short term, it never fall. All lawyers have to say is, over past history, it fell, so the rate of depreciation now is just dramatize by the rate of increase. Common knowledge from people who know the cycle of the market, any kind of market will tell you that there are cycles.
If you don’t like my car buying analogy, then how about buying stocks. Over the long term, stock has always out performed housing, so stock will always go up too. Does that mean I get to sue my brokerage when I lose $ on one of my purchase? It’s just as crazy as people who lost their $ from the .com suing brokerage and analysts.
ParticipantNSR, what are you talking about. As you know, I believe the market will go down. If it is going down, why would I not sell the house? I’m not arguing about delay selling. I’m talking about delay buying. If you sell now, invest the $164k @ 5.3%, in 3 years, that $164k will be $191k. Granted it drops 20% in 3 years, That $800k house will be $640k. You down $191k and your mortgage will be 449k.
$449k @ 7% = $2987.21/month (PI)
$449k @ 9.75% = $3857.60/month (PI)Now, does it make sense to buy now compare to buy later IF it drops 20%? Moving, some hassle for 3 years will save you $850/month for the next 30 years. How’s that for a payoff for a little of hassle?
ParticipantBeebo, seems like we can be right. You predicted 10-15% while others are predicting 30-50% decline on the actual house since most on the board not median price doesn’t mean much. In one post, you proved that everybody can be right :-). 850k drop to 700k is 17% drop from 2004. Who knows how high it would be if it was sold in 2005.
ParticipantNSR, how do you come up with paying more if it drop 20% and interest increase 1%. Here’s the # I came up with:
$800k @ 6% w/20% down = $3837.12/month (PI)
$640k @ 7% w/20% down = $3406.35/month (PI)
$640k @ 8% w/20% down = $3756.87/month (PI)
$640k @ 8.23% w/ 20% down = $3839.29/month (PI)So rates would have to go up 2.23% from 6%, which is a 37% jump in order for your payment to be higher when waiting compare to not waiting. Then there’s the $32k difference in down payment that either you can invest and make more $ or put that into the down payment. If you put that into the down payment:
$640k @ 9% w/$160k down = $3862.19/month (PI)
Which means rates would have to jump 50% from 6% in order for it to be more economical to buy now.ParticipantSo if you say you didn’t know and didn’t expect the car to lose 20% driving off the lot, then you have the same case as these home owner. Pleading ignorance doesn’t make it a valid reason.
ParticipantI have some money in eastern Europe, Oil, Gold/minerals, and international. Those have been doing well for me in the last 3-4 months as well. I have some play money that I use and try to buy over sold stocks that might have some dead cat bounce possibilities.
ParticipantI doubt they’ll have much of a case in court. If they win, then everyone would sue new car dealerships since as soon as you drive the car off the lot, you lost 20% already.
ParticipantNothing goes down or up in a straight line. If you follow something close enough, you’ll see dead cat bounce. That’s my theory. In regards to demand, I think buyer demand will always be there. The big question is, how much of those demand is from ABLE buyers. Right now, lending is still very relaxed, so the # of ABLE buyers are still high. But what if bank start to tighten lending requirement to the level it was in the early 90s. I think that will decrease # of ABLE buyers dramatically. Fed is still worry about inflation, hence the hold on rate instead of cutting. I think there are two things that will kick the decline into high gears: 1 is the jump in defaults. Which will then cause #2, the tightening of lending standard because of high default.
ParticipantCongrats, seems like you caught it at the exact bottom or dead cat bounce point, depending on how it perform the next year or so. CHB did great in the past 3 months, but CAV was negative from August to November, then a massive 50% jump after November. If you kept both until now, you did great for the year.
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