Well most people, especially the ones who needed to result to using childish language, missed the point of my post.
I never said housing wasn’t over-valued, I said its not a “bubble.” There is a lot of literature and study on the subject of speculative bubbles, and the San Diego housing market does NOT meet the criteria and characteristics of “bubbles.”
Secondly, I do think there will be a real value decline in housing, I just don’t think there will be much more of a nominal price decline. That means that maybe in five years, the one million dollar house is going to still sell for one million dollars, but your dollar is going to be worth somewhat less then that.
I’m not the one who said “its different this time…” you know who keeps saying those words? Uh,oh, its our man Rich here is the one who keeps talking about how “this time is different.” He said those words again in the last Voice of San Diego article when he wondered aloud why the market kept going up, unlike in past instances.
I agree with him that it is different. What’s different, is that paper money is losing value and investors are rationally bidding up the price of assets with intrinsic value.
Can anyone show me a chart of the San Diego housing market in terms of the price of gold? Anyone? Oh, suddenly it doesn’t seem so out of whack does it?
We had double digit price inflation in the 70’s, we are going to have double digit price inflation once again. The only reason it hasn’t shown up yet in the data is that producers keep dropping costs. (ie China).
I would not advocate speculating on a single family house, not now, not ever in fact.
But would I suggest taking on a fixed rate mortgage right now and buying a house you planned to live in for some time? Absolutely. Owning a home IS the American Dream and if we see the price inflation that I expect is going to shortly be upon us, then a fixed rate mortgage at today’s low interest rate will not seem so bad at all….
For those who are waiting for that beachfront property to be trading at rental value…well, you are going to have a long, long wait.
One final thought, I live here in San Diego and there is not an educated person in the city that will tell you with a straight face that they think now is a good time to buy. The “housing bubble” headline has made it on to every single national magazine’s cover and has been featured ad nausem on TV and in the newspapers.
The amount of people “waiting to buy” when the bubble crashes is something I’ve never seen before.
When is the last time every major magazine’s cover story called it right? Your going to tell me this time its different? No way, the herd always gets it wrong.
I’m a lone voice, of the 29 posts responding, some vehmently to my suggestions, not a single person agreed with me.
Indeed, the only bubble is the group of “housing bubble” message boards, which I do predict will prove to have no intrinsic or lasting value. Instead they will only serve to scare some people away from buying a house and living the miserable life of a renter. A true shame in my opinion.
