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I think when starbucks tanks that is officially the bottom of the house market. I believe so much of the over priced sheite was bought with heloc money.
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A 2% mortgage = -3% inflation. AKA deflation. Now that means everythign including rents will ahve to drop 3% YOY.
Printing notes causes inflation, so I dont see how adding 1.2 trillion = deflation.
Inflation has been artificially kept low due to china and other factors. House prices have been artifically pushed up due to low interest, high demand for bonds also from china and wild speculation and funky loans.
The trend is towards a reversal to normal. 10-12% interest rates, 5-6% inflation a fall in house prices and a rise in rents. In 10 years we’ll be balanced again and probably house prices of today will be back in nominal numbers.
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Sounds plausible … hope that it fails, or better yet, the FB’s reaslise they are screwed even more, by now having to pay the inflated amount at a even more drawn out time frame and appreciation isn’t bailing them out at all … cos inflation = higher interest and that = lower affordability … blah blah blah … so I can sell my house and run …
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I know, I totally agree … That’s why I am thinking 70% down.
Lets see, its shot up 3X in the last 8 years based on funky financing and liar loans and massive speculation, and roll back 8 years to 99 lets say, and that itself was propped up by a pets.com and web van based economy, so lets take that factor out, so 97 and that would be a decent fall back price, except that the engineering and technical jobs which we were importing high $$$ immigrants for (like me) are now being exported en masse to india and china along with the cheapo call centers and lower $$ medical billing jobs.
Ergo, 97 is also too high … but we dont have a definite fall back location though from 97. So I am pegging it at 97 prices – … or an approximate 70% drop from the 05 peak. It will take time … 1-2 years minimum, maybe 5-6 years, then baby boomers dump their built in the 70’s loaded with lead paint and asbestos crap and all bets are off …
The 50% drop yahoo’s are just crazy out of left field … I’ll agree.
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The land bubble is the mother of all bubbles … you see they aren’t maing any more land … so you know you’ll have to do anything you can to get it … see.
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Information Tech, to be more specific, software engineering. The 70K entry jobs. The only problem is, they aren’t in San Diego, they are all in India … :-)).
I know. In 99 I easily made 100K, in 2006 I made 77K (I got myself to a cheaper city from my 99 (Northern CA). I can currently make 120K in Northern CA with the same job, but I think I’d seriously run the risk of being axed and replaced by a clone in india and be trying to make it on unemployment.
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Can rising incomes offset
Submitted by HereWeGo on April 30, 2007 – 8:15pm.
Can rising incomes offset the effect of housing tumbles on the greater economy? Maybe, maybe not.

Can rising incomes buoy housing markets in the rabidly frothy coastal areas? Doubtful.

Rising incomes = rising interest rates because they both are a measure of inflation. That will cause a drop in prices as more people are “priced out” by interest rates, they’d have to be priced back in by lower house prices.
Rents will rise with income.
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Submitted by ltokuda on May 1, 2007 – 10:48am.
I think they’re both right. There is no national housing market. Some markets are going to crash and others are going to continue to grow. So for a real estate investor, there are always opportunities … as long as you know which market to invest in.

I beg to differ. There is a national market.
Its like this in crude terms. say at some point in time, 2 cities a and b have prices Pa and Pb for 2 specific houses.
Assuming Pa is 2X Pb, at a different point in time when nothing has changed between these 2 cities they are at Ra and Rb. Ra will also be 2X Rb. That is a global or a national market.
Of course that might never happen, they may build a road by a, a school by b, an airport on top of a, and a shipyard by b. All of those is local.
Needless to say, we can have these factors count in equally in both a and b and they still have the same 2X or there can be a complete lopsided change like Michigan and say CA from 70-2005 etc etc.
There is a national market, but local factors can overwhelm it and skew it in favor of one or the other.
Now the credit bubble it was national, every 2 bit drunk bought a house, be it in Illinois or be it in CA, and every area is bubblicious. Some more bubblicious than others.
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Submitted by bubble_contagion on April 28, 2007 – 12:15am.

The median price for March was up, but the price per square foot was down. Interpret the data anyway you like. To me, there is no sign of a bottom yet.

This means a bigger house sold at the median price right ???
Something similar ???
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Yup, but a house has intrinsic value …
You know, these days the thugs are smarter about the internet etc, they will find the houses that are occupied by “out of state investors” and break in those and trash those without fear of the owner calling the cops. We know, the 2 houses that have foreclosure notices in our neighborhood have the worst activity, people having sex in there, bottles on the lawn which is a foot high to help hide even the kegs … lovely …
And this dumbass is going to get his butt busted for buying 100 miles away and then sueing someone 100 miles away and if that’s not all, at the very least putting some soon to be senior citizen out of a house he could have bought before this clown pushed up the prices there.
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Yup, gas prices going up $1 will kill outlying areas and bump up the value of my motorcycles. For every dollar gas goes up, I plan to increase the price atleast 500 bucks. Take that you 60 mile 1 way commuters …
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If builders ask for a larger and larger deposits, say from the current 0% it goes to say 5%, the available pool of buyer will shrink to 10% of what it is now. Make it 10% on a 500K house and you’re looking at 1% or less of the available current looky lou’s. BTW a 10% drop will cut me out of the market, and I am a steadily employed software engineer who cleared close to 80K last year and dont have a 1000 expensive worthless toys I wasted my $$ on. essentially I dont have debt at all except my house which cost 150K brand new in 03 and its financed at 5% fixed on a 15 year fully amortising mortgage which I always paid atleast 10% more each month.
Tighten credit standards, same result. Even a small amount will rapidly shrink the pool of eligible buyers.
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Are you pulling this out of
Submitted by deadzone on April 25, 2007 – 11:18pm.
Are you pulling this out of your rear? A tech rebound will have no affect on the local housing crash. Also, Qualcomm is not the largest employer in SD. I’ll guarantee there are fewer highly paid tech jobs in SD today than in 2000, yet housing prices doubled or tripled since then. That proves there is absolutely no relationship between local tech jobs and the housing boom.

Correct, and it includes me. OK make it 2001 and I am like so in. Of course I am the minority, I just went across the country. Most of the other jobs like mine went clear across the pacific.
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Its happening in charlotte and other towns too.
2005’s median house was 500K say and it was a 1500 sqft old crap house on a 4000 sqft lot in a OK area with OK schools.
Today’s highest selling house is also 500K, but its a new 2500 sqft house on a 5000 sqft lot in a great area and great schools.
Its the same 500K but the house is entirely different.
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LA is also actually losing immigrant population.
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