[DWCAP]

[quote=cabal]

You need to consider two other factors in terms of sustainability. First, the 625K house is worth a lot less today, maybe 400K? Second, during normal times, home builders can create wealth above and beyond the cost of raw materials, land and labor. However, all subsequent transactions are governed by the “Zero Sum Game” rules. In other words, for every person who paid bubble prices, an equal number of persons sold at bubble prices and that so called “credit bubble” money is now sitting in their bank accounts. Here the number of qualified people does not really change, perhaps marginally due to changes in stricter lending standards, interest rates, etc. Only their identities have really changed and these people with their sideline money are tired of renting and salivating at the opportunities. You can call this shadow demand. Only potential buyers at the entry level were reduced with bubble pricing. But this has also changed since low end corrections from peak exceed 50% restoring prices to historical norms. Lastly, the people who sat out the bubble years were unaffected. In summary – has the number of potential qualified people really changed due to bubble prices? No, the reductions are primarily due to unemployment and consumer confidence.[/quote]

I disagree with this. Three points:

One, you are assuming a national, if not international market. Housing in San Diego is not interchangable with housing in Iowa, and so is a different market. I personally know of 5 people who sold at bubble heights and moved to other markets, some instate, others out of state. ( and I am in my 20’s, I dont know that many people who own homes) That money has left this market, and will not continue to supply demand here. You can argue that bubble money from other markets replaced it, but demographic trends dont support that thoery. Californians leave for other areas of the country, it is international immigration and birth rates (first time buyers both) who support our population. Though I know atleast two couples who bubble $ is supplying a nice retirment in the midwest.

Second, I dont know anyone really ‘salavating’ at the current market oppertunities with the exception of some strong RE perma-bulls who had the exact same glandular problems back in 2006. Prices are near normal levels, at the uppper end of normal levels. Mostly because of alot of market distorting actions taken by our government to restrict supply while generating demand and driving down interest rates to generational lows lower than those that set off the bubble in the first place. All of these will need to be unwound and paid for, one way or another.

Lastly, people who sat out the bubble years are most certainly effected. Many have been devisted in the stock declines of 2000 and 2008 and are all the poorer for it. They are now plowing their money more and more into bonds, which will likly give them lower returns in the long run, lowering the quatlity of life in the future. Not to mention that taxes WILL have to go up, on everyone, to pay for the programs inacted to deal with the fallout of the housing bubble.

I am not a doom and gloomer, never have been. Ca can have the same bright future we have had in my parents generation. But I do think that there are real problems facing this state. Problems without easy solutions. We are not becoming Detroit in state form, atleast not currently, but we do have problems.
This glossy, all is well if I just wish upon a star mentality isnt helpful either though. It gives people comfort to ignor real problems, and scammers room to rape our economy again. Just because we did ok last time doesnt mean we will this time. ‘Past performance is not indicative of future results’, no matter how much we want them to be.

[DWCAP]

[quote=cabal]

You need to consider two other factors in terms of sustainability. First, the 625K house is worth a lot less today, maybe 400K? Second, during normal times, home builders can create wealth above and beyond the cost of raw materials, land and labor. However, all subsequent transactions are governed by the “Zero Sum Game” rules. In other words, for every person who paid bubble prices, an equal number of persons sold at bubble prices and that so called “credit bubble” money is now sitting in their bank accounts. Here the number of qualified people does not really change, perhaps marginally due to changes in stricter lending standards, interest rates, etc. Only their identities have really changed and these people with their sideline money are tired of renting and salivating at the opportunities. You can call this shadow demand. Only potential buyers at the entry level were reduced with bubble pricing. But this has also changed since low end corrections from peak exceed 50% restoring prices to historical norms. Lastly, the people who sat out the bubble years were unaffected. In summary – has the number of potential qualified people really changed due to bubble prices? No, the reductions are primarily due to unemployment and consumer confidence.[/quote]

I disagree with this. Three points:

One, you are assuming a national, if not international market. Housing in San Diego is not interchangable with housing in Iowa, and so is a different market. I personally know of 5 people who sold at bubble heights and moved to other markets, some instate, others out of state. ( and I am in my 20’s, I dont know that many people who own homes) That money has left this market, and will not continue to supply demand here. You can argue that bubble money from other markets replaced it, but demographic trends dont support that thoery. Californians leave for other areas of the country, it is international immigration and birth rates (first time buyers both) who support our population. Though I know atleast two couples who bubble $ is supplying a nice retirment in the midwest.

Second, I dont know anyone really ‘salavating’ at the current market oppertunities with the exception of some strong RE perma-bulls who had the exact same glandular problems back in 2006. Prices are near normal levels, at the uppper end of normal levels. Mostly because of alot of market distorting actions taken by our government to restrict supply while generating demand and driving down interest rates to generational lows lower than those that set off the bubble in the first place. All of these will need to be unwound and paid for, one way or another.

Lastly, people who sat out the bubble years are most certainly effected. Many have been devisted in the stock declines of 2000 and 2008 and are all the poorer for it. They are now plowing their money more and more into bonds, which will likly give them lower returns in the long run, lowering the quatlity of life in the future. Not to mention that taxes WILL have to go up, on everyone, to pay for the programs inacted to deal with the fallout of the housing bubble.

I am not a doom and gloomer, never have been. Ca can have the same bright future we have had in my parents generation. But I do think that there are real problems facing this state. Problems without easy solutions. We are not becoming Detroit in state form, atleast not currently, but we do have problems.
This glossy, all is well if I just wish upon a star mentality isnt helpful either though. It gives people comfort to ignor real problems, and scammers room to rape our economy again. Just because we did ok last time doesnt mean we will this time. ‘Past performance is not indicative of future results’, no matter how much we want them to be.

[DWCAP]

This whole thread kinda makes me sad.

So the guy has financial issues, that isnt evidence of anything other than bad luck, poor accounting, or a bad economy. Bad things dont just happen to perfect people. I sure wish they did, cause then nothing bad would ever happen again.

I will wait for the review of the incident to find out if the guy faked it or not. The cops are usually not too bad at smelling stupidity (and faking this is the height of stupidity) and the cop on TV seemed to believe him. Good enough for me until the NTSB guys say otherwise, especially if he isnt sueing Toyota. (how does this help him financially if he doesnt sue???)

[DWCAP]

This whole thread kinda makes me sad.

So the guy has financial issues, that isnt evidence of anything other than bad luck, poor accounting, or a bad economy. Bad things dont just happen to perfect people. I sure wish they did, cause then nothing bad would ever happen again.

I will wait for the review of the incident to find out if the guy faked it or not. The cops are usually not too bad at smelling stupidity (and faking this is the height of stupidity) and the cop on TV seemed to believe him. Good enough for me until the NTSB guys say otherwise, especially if he isnt sueing Toyota. (how does this help him financially if he doesnt sue???)

[DWCAP]

This whole thread kinda makes me sad.

So the guy has financial issues, that isnt evidence of anything other than bad luck, poor accounting, or a bad economy. Bad things dont just happen to perfect people. I sure wish they did, cause then nothing bad would ever happen again.

I will wait for the review of the incident to find out if the guy faked it or not. The cops are usually not too bad at smelling stupidity (and faking this is the height of stupidity) and the cop on TV seemed to believe him. Good enough for me until the NTSB guys say otherwise, especially if he isnt sueing Toyota. (how does this help him financially if he doesnt sue???)

[DWCAP]

This whole thread kinda makes me sad.

So the guy has financial issues, that isnt evidence of anything other than bad luck, poor accounting, or a bad economy. Bad things dont just happen to perfect people. I sure wish they did, cause then nothing bad would ever happen again.

I will wait for the review of the incident to find out if the guy faked it or not. The cops are usually not too bad at smelling stupidity (and faking this is the height of stupidity) and the cop on TV seemed to believe him. Good enough for me until the NTSB guys say otherwise, especially if he isnt sueing Toyota. (how does this help him financially if he doesnt sue???)

[DWCAP]

This whole thread kinda makes me sad.

So the guy has financial issues, that isnt evidence of anything other than bad luck, poor accounting, or a bad economy. Bad things dont just happen to perfect people. I sure wish they did, cause then nothing bad would ever happen again.

I will wait for the review of the incident to find out if the guy faked it or not. The cops are usually not too bad at smelling stupidity (and faking this is the height of stupidity) and the cop on TV seemed to believe him. Good enough for me until the NTSB guys say otherwise, especially if he isnt sueing Toyota. (how does this help him financially if he doesnt sue???)

[DWCAP]

First off, I really dont understand the ‘throwing my money away renting’ mentality. Everyone needs a place to live, and everyone pays for it. If you are that unhappy renting, I submit you may be renting the wrong place. Owning a home is generally more expensive than renting on a month (compared to) month basis, so without appreciation or a 30year payoff, One could argue that owning is throwing your money away.
(I am mostly trying to show you that over the past 3 years, you have NOT been ‘throwing your money away’.)

As for worst case, that depends on the place you buy. How far is it from major employment centers, how old is it, how many other units are up a creek without a paddle? (How long will Americans allow our government to saddle future generations with debt they have little hope of ever REALLY paying back?) Some areas of SD have reset, others (I believe) are re-bubbleing, and some are still falling. Townhouses in Carmel valley are a different world than townhouses in Spring Valley.

[DWCAP]

First off, I really dont understand the ‘throwing my money away renting’ mentality. Everyone needs a place to live, and everyone pays for it. If you are that unhappy renting, I submit you may be renting the wrong place. Owning a home is generally more expensive than renting on a month (compared to) month basis, so without appreciation or a 30year payoff, One could argue that owning is throwing your money away.
(I am mostly trying to show you that over the past 3 years, you have NOT been ‘throwing your money away’.)

As for worst case, that depends on the place you buy. How far is it from major employment centers, how old is it, how many other units are up a creek without a paddle? (How long will Americans allow our government to saddle future generations with debt they have little hope of ever REALLY paying back?) Some areas of SD have reset, others (I believe) are re-bubbleing, and some are still falling. Townhouses in Carmel valley are a different world than townhouses in Spring Valley.

[DWCAP]

First off, I really dont understand the ‘throwing my money away renting’ mentality. Everyone needs a place to live, and everyone pays for it. If you are that unhappy renting, I submit you may be renting the wrong place. Owning a home is generally more expensive than renting on a month (compared to) month basis, so without appreciation or a 30year payoff, One could argue that owning is throwing your money away.
(I am mostly trying to show you that over the past 3 years, you have NOT been ‘throwing your money away’.)

As for worst case, that depends on the place you buy. How far is it from major employment centers, how old is it, how many other units are up a creek without a paddle? (How long will Americans allow our government to saddle future generations with debt they have little hope of ever REALLY paying back?) Some areas of SD have reset, others (I believe) are re-bubbleing, and some are still falling. Townhouses in Carmel valley are a different world than townhouses in Spring Valley.

[DWCAP]

First off, I really dont understand the ‘throwing my money away renting’ mentality. Everyone needs a place to live, and everyone pays for it. If you are that unhappy renting, I submit you may be renting the wrong place. Owning a home is generally more expensive than renting on a month (compared to) month basis, so without appreciation or a 30year payoff, One could argue that owning is throwing your money away.
(I am mostly trying to show you that over the past 3 years, you have NOT been ‘throwing your money away’.)

As for worst case, that depends on the place you buy. How far is it from major employment centers, how old is it, how many other units are up a creek without a paddle? (How long will Americans allow our government to saddle future generations with debt they have little hope of ever REALLY paying back?) Some areas of SD have reset, others (I believe) are re-bubbleing, and some are still falling. Townhouses in Carmel valley are a different world than townhouses in Spring Valley.

[DWCAP]

First off, I really dont understand the ‘throwing my money away renting’ mentality. Everyone needs a place to live, and everyone pays for it. If you are that unhappy renting, I submit you may be renting the wrong place. Owning a home is generally more expensive than renting on a month (compared to) month basis, so without appreciation or a 30year payoff, One could argue that owning is throwing your money away.
(I am mostly trying to show you that over the past 3 years, you have NOT been ‘throwing your money away’.)

As for worst case, that depends on the place you buy. How far is it from major employment centers, how old is it, how many other units are up a creek without a paddle? (How long will Americans allow our government to saddle future generations with debt they have little hope of ever REALLY paying back?) Some areas of SD have reset, others (I believe) are re-bubbleing, and some are still falling. Townhouses in Carmel valley are a different world than townhouses in Spring Valley.

[DWCAP]

Should a new house really command a big premium over an ~10 year old house? Serious question. I just dont really understand the facanation with ‘brand new’. There have been tons of reports in the media of problems with ‘new’ houses, remember the whole chinese dry-wall thing? And the community usually has little character or anything yet, as trees are 10 days post homedepot and the grass usually could just be rolled up and resodded somewhere else. You dont get to know your neighbors before they move in, and all so often alot of the infrastructure doesnt exist yet.

I have only been in 1 new development, and it wasnt in SD, so I have little frame of reference on this and could be wrong. But you will have to fix any defects and repaint etc etc when you try to sell anyways, cause when you sell it aint new anymore, so I dont really know what the big deal is.

Anyone care to enlighten me?

[DWCAP]

Should a new house really command a big premium over an ~10 year old house? Serious question. I just dont really understand the facanation with ‘brand new’. There have been tons of reports in the media of problems with ‘new’ houses, remember the whole chinese dry-wall thing? And the community usually has little character or anything yet, as trees are 10 days post homedepot and the grass usually could just be rolled up and resodded somewhere else. You dont get to know your neighbors before they move in, and all so often alot of the infrastructure doesnt exist yet.

I have only been in 1 new development, and it wasnt in SD, so I have little frame of reference on this and could be wrong. But you will have to fix any defects and repaint etc etc when you try to sell anyways, cause when you sell it aint new anymore, so I dont really know what the big deal is.

Anyone care to enlighten me?

[DWCAP]

Should a new house really command a big premium over an ~10 year old house? Serious question. I just dont really understand the facanation with ‘brand new’. There have been tons of reports in the media of problems with ‘new’ houses, remember the whole chinese dry-wall thing? And the community usually has little character or anything yet, as trees are 10 days post homedepot and the grass usually could just be rolled up and resodded somewhere else. You dont get to know your neighbors before they move in, and all so often alot of the infrastructure doesnt exist yet.

I have only been in 1 new development, and it wasnt in SD, so I have little frame of reference on this and could be wrong. But you will have to fix any defects and repaint etc etc when you try to sell anyways, cause when you sell it aint new anymore, so I dont really know what the big deal is.

Anyone care to enlighten me?

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