[Bob G]

Declining sales indicate the pool of buyers is shrinking. Who are these people that are still buying?

1)Sellers with equity in current house. People tend to be risk adverse. If someone sells their house and wishes to avoid risk, (and taxes), the safe course of action is to but another. As pointed out here, this doesn’tprovide a boast to the market because a house goes on the market to repalce the one that was sold.

2)High wage earners? Wothout toxic loan a $1,000,000 house requires about $300,000 family income. I’m not poor, but this is still more than I make.

3) Lotto winners? You better win the big one, cause 5 out of 6 won’t be enough money.

4) Immigrants, Columbian drug lords, and deposed dictators? Maybe, but I don’t have the data.

[Bob G]

Declining sales indicate the pool of buyers is shrinking. Who are these people that are still buying?

1)Sellers with equity in current house. People tend to be risk adverse. If someone sells their house and wishes to avoid risk, (and taxes), the safe course of action is to but another. As pointed out here, this doesn’tprovide a boast to the market because a house goes on the market to repalce the one that was sold.

2)High wage earners? Wothout toxic loan a $1,000,000 house requires about $300,000 family income. I’m not poor, but this is still more than I make.

3) Lotto winners? You better win the big one, cause 5 out of 6 won’t be enough money.

4) Immigrants, Columbian drug lords, and deposed dictators? Maybe, but I don’t have the data.

[Bob G]

Prop 13 Discussion – Why not open a new thread.

I hate Prop 13.

1) It was caused by mismanagement by the State Legislature and Ron Reagan. In 1967 he said, “Taxes should hurt”.

2) Property tax funds many things besides schools. Some of the longest time property owners (LTPO) are also the most needy and demanding of local servcies.

3) The artifically low assesed values of the LTPO’s reduces their liability to pay for new bonds and assesments, yet they have the same voting power to approve those new bonds.

4) Paying the fair share of property tax should be condidered a basic owner’s expense. When the owner cannot afford the expense, they should move. I have observed many, many large homes occupied by LTOP’s empty nesters. These houses should be filled with childeren, not the elerly waiting to die. Why should the rest of us subsidize them to live in a big house they don’t need anymore.

[Bob G]

Prop 13 Discussion – Why not open a new thread.

I hate Prop 13.

1) It was caused by mismanagement by the State Legislature and Ron Reagan. In 1967 he said, “Taxes should hurt”.

2) Property tax funds many things besides schools. Some of the longest time property owners (LTPO) are also the most needy and demanding of local servcies.

3) The artifically low assesed values of the LTPO’s reduces their liability to pay for new bonds and assesments, yet they have the same voting power to approve those new bonds.

4) Paying the fair share of property tax should be condidered a basic owner’s expense. When the owner cannot afford the expense, they should move. I have observed many, many large homes occupied by LTOP’s empty nesters. These houses should be filled with childeren, not the elerly waiting to die. Why should the rest of us subsidize them to live in a big house they don’t need anymore.

[Bob G]

Alex,

You need to study the data. Housing prices are sticky, you’re correct that they won’t drop by half overnight. Based on historical data it will probably take two to five years for the correction in prices to work through.

I make a great income, and could buy a crappy house for 1/2 a million now. I just refuse to do so.
Signed,
Dumpsh_t

[Bob G]

Dear Fat and Lazy,

If the average American spends more than they earn, then gets someone else to pay for it, they’re not stupid. They may be morally reprehensible, but not stupid.

Signed,
Dipsh_t

[Bob G]

BAILOUT- ugh.
I think in fairness renters should
1)recieve tax credits equal to bailout amount for owners.
2) recieve income tax deductions as if we were paying for home interest.

Hell, lets have the feds write a check to all of us for $100,000.

The problem of the electorate raiding the cookie jar has always been a fear of havinv a democracy. This is so f_cked up.

[Bob G]

If one isn’t saving, then their is no need to diferenciate between savings for a down payment, saving for retirement, saving for kids college, or saving for a new car.
It’s all moot.

[Bob G]

IMHO, the buyer is taking a risk at 1.15 million. Look at the actual sales price in 2002:
11/25/2002: $345,000

What the chances prices will retrace to this level?

Another thing. You need an annual salery of almost $400 k to $ 1/2 million to afford a 1.9 million dollars house payments. Could everyone that makes this much please raise your hands? I don’t, maybe I’m an underachiever.

[Bob G]

I e-mailed him about a week ago when I read his story. I told him he should be sitting in prison next to Jeff Skilling for mortgage fraud. The Casey Serins of this country are part of what put us in this situation.

[Bob G]

People tend to believe what they what to believe. Most folks are “homeowners” now. They want to believe that there house;s value holds up. RE industry will feed into their need. Only an actual collaspe will convince them. It’s kinda like the O.J. jury. Blood DNA evidence wasn’t convincing enough. In terms of RE, glut, credit contraction, oversuppy, increased forclosures, ARM reset aren;t enough evidense.

If the glove don fit, you mus aquit.

[Bob G]

I suggest option 5 for you. I call it the Martha Ray. Find an elderly widow with loads of money and marry her.

[Bob G]

Bailout will make me a triple victim.

1) Victim of being priced out of housing market for the last three years of insanity.

2) Victim of losses in my employer’s defined benefit pension fund from default on AAA bonds, which will translate into higher co-pays for me, or pay cuts.

3) Victim of having to subsidize bad decisions by the fed with increased taxes for taxpayer bailout bonds.

If bonds for this purpose go though in my state, I’ll be forced to do like Anikin Skywalker in Star Wars 3. Ugh.

[Bob G]

I’m in SoCal, but not in San Diego. I haven’t seen prices drop yet. I think my hood is sticky. There is a lot of foreign money used to buy homes, and some were bought with cash! I don’t think the party will start for me for a few more months.

[Bob G]

Great artical, thanks.

“Great time to buy” phrase will never go away. Article means that mainstream media can no longer support this view. This is a hard position for them to take, because 20 percent of theier ad revenue comes from RE industry.

I.D.

[Author]

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