[Bugs]

You don’t expect a car salesman to give you the real history on a car. You don’t have that expectation because regardless of what comes out of their mouth you know they are an advocate for selling that car.

Knowledge is power, and the best realty agents know the key to increasing their customer satisfation and build their reputations is to empower those clients with as much knowledge as it takes for them to feel comfortable with their decisions. Different people have different needs as far as what it takes to get to that comfort level.

As an example, if I wasn’t in the business myself I would still be a pretty cautious buyer. Not so much as a negotiation fanatic but in looking before leaping. You should see what my wife and I go through before we buy furniture or when I’m buying a car. I very much want to know what it is I’m getting, much more so than worrying about the price.

I’d want to check out the schools if I still had school aged kids, I’d want to check out freeway access and commute times, I’d want to see some sales data and drive by them to get a reading on pricing, I’d want to look at the structure and get a home inspector of my own choosing. I don’t need or want to be told; I need to be shown where I can find the information I’m seeking so I can see it for myself.

I’m pretty sure that if faced with a buyer like me, sdrealtor and SD Realtor would both recognize that I was seeking that type of hand-holding and they’d match their game plans to suit. I’m also sure that they know that the game plan that worked for me would overwhelm and throw off other types of buyers.

Regardless, I wouldn’t work with an agent who wasn’t in tune with my style; and I think this is where some of these buyers and agents fail to exercize common sense.

[Bugs]

Coronado is going to remain a destination neighborhood until it and the rest of San Diego falls into the ocean.

The main reason to watch it as a market is to demonstrate how widespread and systemic the trend for decline is. Declines in Coronado prove that it isn’t just the beater neighborhoods that are subject to losses while the rich neighborhoods escape unscathed. It proves that even wealthy people from out of town won’t pay more for a property than what their options are and emotion isn’t the only factor involved.

[Bugs]

Coronado is going to remain a destination neighborhood until it and the rest of San Diego falls into the ocean.

The main reason to watch it as a market is to demonstrate how widespread and systemic the trend for decline is. Declines in Coronado prove that it isn’t just the beater neighborhoods that are subject to losses while the rich neighborhoods escape unscathed. It proves that even wealthy people from out of town won’t pay more for a property than what their options are and emotion isn’t the only factor involved.

[Bugs]

I think it’s amazing how fire-prone those projects have become. Personally, I’d vote for the developer as being the primary person of interest.

[Bugs]

I think it’s amazing how fire-prone those projects have become. Personally, I’d vote for the developer as being the primary person of interest.

[Bugs]

I liked sdrealtor’s suggestion to slow down and really think through your next move. Booking a $60,000 cost-of-sale loss right now and jumping into the renter’s lifestyle is a drastic life-altering decision, and you may or may not be prepared to live with the downsides of that decision. On the other hand, the $60,000 won’t seem like a loss if you’re forced to sell at the bottom of the market and those prices turn out to be 30% lower than where they are right now.

Nobody KNOWS when or where this slide in prices will stop. We’re all just guessing, and there’s no doubt that some of us are just flat-out wrong.

Stick around for a while and read up on the analyses and the data that pops up here, and then decide how you feel about the reasonableness of those opinions. You may end up deciding that staying where you are and riding it out is the best choice to make for your family.

[Bugs]

I liked sdrealtor’s suggestion to slow down and really think through your next move. Booking a $60,000 cost-of-sale loss right now and jumping into the renter’s lifestyle is a drastic life-altering decision, and you may or may not be prepared to live with the downsides of that decision. On the other hand, the $60,000 won’t seem like a loss if you’re forced to sell at the bottom of the market and those prices turn out to be 30% lower than where they are right now.

Nobody KNOWS when or where this slide in prices will stop. We’re all just guessing, and there’s no doubt that some of us are just flat-out wrong.

Stick around for a while and read up on the analyses and the data that pops up here, and then decide how you feel about the reasonableness of those opinions. You may end up deciding that staying where you are and riding it out is the best choice to make for your family.

[Bugs]

I dunno about having a middle or the road perspective. If we go by the RE clock, a 1% per month change in value is a rapidly moving market. At 2% per month it’s flying. If I believe in a 1%/month declining market that makes me a pretty solid bear compared to anyone the Union-Trib interviews for RE stories.

When people here talk about big annual losses I always get the impression they’re thinking 30% or more at a whack. I guess that could happen, but I’m not anticipating that.

Of course, I was wrong about how long the last bust would last (I called it 2 years too early), I was wrong about when the last peak would top out (3 years early), and I was way wrong about how far that peak would reach (by 200%). It’s not like I have a great track record or anything.

I knew this peak would end at some point (duh); I knew there would be declines in volume and an increase in forced sales of various types (duh); and I knew that as those added up they would add to the decline (duh). In other words, I know about as much as anyone else who follows Piggington’s and probably not an ounce more.

You know what they say about opinions….

[Bugs]

I dunno about having a middle or the road perspective. If we go by the RE clock, a 1% per month change in value is a rapidly moving market. At 2% per month it’s flying. If I believe in a 1%/month declining market that makes me a pretty solid bear compared to anyone the Union-Trib interviews for RE stories.

When people here talk about big annual losses I always get the impression they’re thinking 30% or more at a whack. I guess that could happen, but I’m not anticipating that.

Of course, I was wrong about how long the last bust would last (I called it 2 years too early), I was wrong about when the last peak would top out (3 years early), and I was way wrong about how far that peak would reach (by 200%). It’s not like I have a great track record or anything.

I knew this peak would end at some point (duh); I knew there would be declines in volume and an increase in forced sales of various types (duh); and I knew that as those added up they would add to the decline (duh). In other words, I know about as much as anyone else who follows Piggington’s and probably not an ounce more.

You know what they say about opinions….

[Bugs]

Truth to tell, I doubt the correction will include a big chunk, although I think the pace of correction might move relatively quickly for a couple years, starting at beginning of the year.

Looking at past swings, the pace of decreasing markets tends to be a little slower than that of the gains that preceded them. If we look at the slope of our recent spike we can see it went almost vertical between 2003 – 2005. Obviously it won’t track down at the same pace but I think it’s very possible that the pace of decline could move a bit faster than it is doing right now. A 10% or 12% decline in nominal prices doesn’t sound like a whole lot, but if you multiply it by 3 years it starts to add up.

As a number of people have already commented, any home owner who is at all able to hold on to their home will do so. At any rate, they are not the ones for whom we should be fearful. It is the people who cannot hold on who are sitting on a must-sell transaction, whether they realize it now or not.

I think it will eventually come down to the size of the must-sell inventory vs. the size of the pool of buyers. We can see that these two numbers are moving ever closer towards each other every month. I highly doubt they’ll actually meet, but I don’t doubt that the number of must-sells will eventually comprise enough of the listings to drive the pricing for the remainder of the listings.

[Bugs]

Truth to tell, I doubt the correction will include a big chunk, although I think the pace of correction might move relatively quickly for a couple years, starting at beginning of the year.

Looking at past swings, the pace of decreasing markets tends to be a little slower than that of the gains that preceded them. If we look at the slope of our recent spike we can see it went almost vertical between 2003 – 2005. Obviously it won’t track down at the same pace but I think it’s very possible that the pace of decline could move a bit faster than it is doing right now. A 10% or 12% decline in nominal prices doesn’t sound like a whole lot, but if you multiply it by 3 years it starts to add up.

As a number of people have already commented, any home owner who is at all able to hold on to their home will do so. At any rate, they are not the ones for whom we should be fearful. It is the people who cannot hold on who are sitting on a must-sell transaction, whether they realize it now or not.

I think it will eventually come down to the size of the must-sell inventory vs. the size of the pool of buyers. We can see that these two numbers are moving ever closer towards each other every month. I highly doubt they’ll actually meet, but I don’t doubt that the number of must-sells will eventually comprise enough of the listings to drive the pricing for the remainder of the listings.

[Bugs]

I think Barratt is in big trouble over at Magnolia Estates. They’re only selling about one unit per month, and they’re completely surrounded by neighborhoods of inferior quality and appeal. They need to something. I think they have five finished units over there that are just sitting, and another 6 or 8 in process.

[Bugs]

I think Barratt is in big trouble over at Magnolia Estates. They’re only selling about one unit per month, and they’re completely surrounded by neighborhoods of inferior quality and appeal. They need to something. I think they have five finished units over there that are just sitting, and another 6 or 8 in process.

[Bugs]

We’re patiently waiting for the end of the 3rd quarter this year, because by then the media will be harping on the effects of: the looming spike in ARM resets; the skyrocketing foreclosure rates; the reality that this has been a really horrible year for volumes and prices; and the normal downturn that occurs after the end of the summer.

I think the public’s recognition of all those factors is going to converge at about the same time. When that happens, if there’s any remaining doubt that now is NOT a great time to buy real estate, the tone of the reporting will be alarming enough to cause that tipping point that will push the market psychology firmly and decisively into negative territory. At that point the correction will take on a life of its own and nothing will stop that correction from playing out – not lowering interest rates, not bringing back free money, not even price reductions.

And don’t kid yourself about the builders not cutting pricing. There’s little difference between the builders’ positions in Riverside County and San Diego County, except that in SD County they actually have more margin between costs and sales prices.

[Bugs]

We’re patiently waiting for the end of the 3rd quarter this year, because by then the media will be harping on the effects of: the looming spike in ARM resets; the skyrocketing foreclosure rates; the reality that this has been a really horrible year for volumes and prices; and the normal downturn that occurs after the end of the summer.

I think the public’s recognition of all those factors is going to converge at about the same time. When that happens, if there’s any remaining doubt that now is NOT a great time to buy real estate, the tone of the reporting will be alarming enough to cause that tipping point that will push the market psychology firmly and decisively into negative territory. At that point the correction will take on a life of its own and nothing will stop that correction from playing out – not lowering interest rates, not bringing back free money, not even price reductions.

And don’t kid yourself about the builders not cutting pricing. There’s little difference between the builders’ positions in Riverside County and San Diego County, except that in SD County they actually have more margin between costs and sales prices.

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