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Eugene
Participantwhy use Dec 2000 as your ‘base’ year, SD was already 3-4 years into the bubble at that point
I disagree, SD was barely out of the 90’s bust. Speculative bubble took off in 2003 because interest rates were falling a few years straight and it led people to believe that housing was taking off to the Moon.
What I ment was the people who the bank wants to lend to dont want to live in this area generally
One of the fallacies of the housing bubble was that you should buy the biggest house that the bank is willing to lend you money for. In a healthy market (especially in a declining market), living in a house costs you money because appreciation alone does not cover your interest payments. The bigger the house, the more it hurts your cash flow. So, you should buy the smallest house that will “work” for you. MM is not Carmel Valley but MM is not a ghetto, either. It’s like driving a Camry instead of a Lexus. Sure everyone likes Lexi but does it make most financial sense for everyone to stretch to make payments for them? or is it better to have 3-4 times the market value of the Lexus in your bank before you go and buy one?
That gives us a ratio of 5.1 years of income to cost of house (median income to median house).
Yes – ratio of median house to median income is higher than in 2000 – but all that money is borrowed and cost of borrowing is significantly lower today – so I say it’s a wash.
The same 1300 SFT home near Rancho Bernardo High school at Avinida Venusto end of street also ready to get at around 300K.
It’s a manufactured house …
ParticipantIn the graph Rich graphs wages since 2001 and they are up maybe 18%, not 30%.
I’m not sure where Rich gets his numbers. Median household income for San Diego County according to http://www.census.gov:
2001: $46,845
2006: $59,591 (27% increase)For San Diego proper:
2001: $46,315
2006: $58,815 (27% increase)this is a lower middle class area unless you are north of Calle Cristobal. Overall wages may be up ~18%, but the bottom half isnt feeling the good times.
In San Diego, bottom half / lower middle class does not get to own houses. There are not enough houses for everyone. Also, those numbers are median, not averages.
Third, it isnt like what wage growth was seen isnt being eaten away by gas, utilities, food and other inflation that is alot higher.
That’s true. Not sure how important that is though.
Most middle income people dont have $80000, let alone that in cash to invest.
How do you think people bought houses back in 2001 and before, when banks weren’t giving away zero-down loans with funny interest rates to anyone with a pulse? You had to bring some cash to the table, even to buy a house in MM.
People who can buy in carmel valley can easily buy in MM, but that doesnt mean that they want to live in MM.
The way I see it, MM is an entry level market, CV is a move-up market. You don’t buy your first house in CV. You buy in MM or Clairemont, you pay off your mortgage, you save money, then you trade up.
ParticipantIn the graph Rich graphs wages since 2001 and they are up maybe 18%, not 30%.
I’m not sure where Rich gets his numbers. Median household income for San Diego County according to http://www.census.gov:
2001: $46,845
2006: $59,591 (27% increase)For San Diego proper:
2001: $46,315
2006: $58,815 (27% increase)this is a lower middle class area unless you are north of Calle Cristobal. Overall wages may be up ~18%, but the bottom half isnt feeling the good times.
In San Diego, bottom half / lower middle class does not get to own houses. There are not enough houses for everyone. Also, those numbers are median, not averages.
Third, it isnt like what wage growth was seen isnt being eaten away by gas, utilities, food and other inflation that is alot higher.
That’s true. Not sure how important that is though.
Most middle income people dont have $80000, let alone that in cash to invest.
How do you think people bought houses back in 2001 and before, when banks weren’t giving away zero-down loans with funny interest rates to anyone with a pulse? You had to bring some cash to the table, even to buy a house in MM.
People who can buy in carmel valley can easily buy in MM, but that doesnt mean that they want to live in MM.
The way I see it, MM is an entry level market, CV is a move-up market. You don’t buy your first house in CV. You buy in MM or Clairemont, you pay off your mortgage, you save money, then you trade up.
ParticipantIn the graph Rich graphs wages since 2001 and they are up maybe 18%, not 30%.
I’m not sure where Rich gets his numbers. Median household income for San Diego County according to http://www.census.gov:
2001: $46,845
2006: $59,591 (27% increase)For San Diego proper:
2001: $46,315
2006: $58,815 (27% increase)this is a lower middle class area unless you are north of Calle Cristobal. Overall wages may be up ~18%, but the bottom half isnt feeling the good times.
In San Diego, bottom half / lower middle class does not get to own houses. There are not enough houses for everyone. Also, those numbers are median, not averages.
Third, it isnt like what wage growth was seen isnt being eaten away by gas, utilities, food and other inflation that is alot higher.
That’s true. Not sure how important that is though.
Most middle income people dont have $80000, let alone that in cash to invest.
How do you think people bought houses back in 2001 and before, when banks weren’t giving away zero-down loans with funny interest rates to anyone with a pulse? You had to bring some cash to the table, even to buy a house in MM.
People who can buy in carmel valley can easily buy in MM, but that doesnt mean that they want to live in MM.
The way I see it, MM is an entry level market, CV is a move-up market. You don’t buy your first house in CV. You buy in MM or Clairemont, you pay off your mortgage, you save money, then you trade up.
ParticipantIn the graph Rich graphs wages since 2001 and they are up maybe 18%, not 30%.
I’m not sure where Rich gets his numbers. Median household income for San Diego County according to http://www.census.gov:
2001: $46,845
2006: $59,591 (27% increase)For San Diego proper:
2001: $46,315
2006: $58,815 (27% increase)this is a lower middle class area unless you are north of Calle Cristobal. Overall wages may be up ~18%, but the bottom half isnt feeling the good times.
In San Diego, bottom half / lower middle class does not get to own houses. There are not enough houses for everyone. Also, those numbers are median, not averages.
Third, it isnt like what wage growth was seen isnt being eaten away by gas, utilities, food and other inflation that is alot higher.
That’s true. Not sure how important that is though.
Most middle income people dont have $80000, let alone that in cash to invest.
How do you think people bought houses back in 2001 and before, when banks weren’t giving away zero-down loans with funny interest rates to anyone with a pulse? You had to bring some cash to the table, even to buy a house in MM.
People who can buy in carmel valley can easily buy in MM, but that doesnt mean that they want to live in MM.
The way I see it, MM is an entry level market, CV is a move-up market. You don’t buy your first house in CV. You buy in MM or Clairemont, you pay off your mortgage, you save money, then you trade up.
ParticipantIn the graph Rich graphs wages since 2001 and they are up maybe 18%, not 30%.
I’m not sure where Rich gets his numbers. Median household income for San Diego County according to http://www.census.gov:
2001: $46,845
2006: $59,591 (27% increase)For San Diego proper:
2001: $46,315
2006: $58,815 (27% increase)this is a lower middle class area unless you are north of Calle Cristobal. Overall wages may be up ~18%, but the bottom half isnt feeling the good times.
In San Diego, bottom half / lower middle class does not get to own houses. There are not enough houses for everyone. Also, those numbers are median, not averages.
Third, it isnt like what wage growth was seen isnt being eaten away by gas, utilities, food and other inflation that is alot higher.
That’s true. Not sure how important that is though.
Most middle income people dont have $80000, let alone that in cash to invest.
How do you think people bought houses back in 2001 and before, when banks weren’t giving away zero-down loans with funny interest rates to anyone with a pulse? You had to bring some cash to the table, even to buy a house in MM.
People who can buy in carmel valley can easily buy in MM, but that doesnt mean that they want to live in MM.
The way I see it, MM is an entry level market, CV is a move-up market. You don’t buy your first house in CV. You buy in MM or Clairemont, you pay off your mortgage, you save money, then you trade up.
ParticipantI’m curious why you think it only needs another 10% haircut. Median household income is 60k.
Here’s my reasoning. Median resale price of a detached house in MM in 2000 was around 240k. Average interest rate on a conforming 30-year fixed mortgage was 8.1% (monthly payment $740 per $100,000 borrowed).
Today interest rates are around 5.8% or less ($585 per $100,000), incomes are up 30%. You get the same level affordability if median price is 240k * (740/585) * 1.30 = $395k. Monthly payment $1850, property tax $300-350, interest deduction at least $450.
December median was around 440k.
Two caveats. First, some of the 30% increase in incomes is bubble money, it may go away. Second, 5.8% interest rates may not stick around for too long.
P.S.
average detached sales price in 92126 in December 2000: $265kaverage detached sales price in 92126 in December 2007: $458k
ParticipantI’m curious why you think it only needs another 10% haircut. Median household income is 60k.
Here’s my reasoning. Median resale price of a detached house in MM in 2000 was around 240k. Average interest rate on a conforming 30-year fixed mortgage was 8.1% (monthly payment $740 per $100,000 borrowed).
Today interest rates are around 5.8% or less ($585 per $100,000), incomes are up 30%. You get the same level affordability if median price is 240k * (740/585) * 1.30 = $395k. Monthly payment $1850, property tax $300-350, interest deduction at least $450.
December median was around 440k.
Two caveats. First, some of the 30% increase in incomes is bubble money, it may go away. Second, 5.8% interest rates may not stick around for too long.
P.S.
average detached sales price in 92126 in December 2000: $265kaverage detached sales price in 92126 in December 2007: $458k
ParticipantI’m curious why you think it only needs another 10% haircut. Median household income is 60k.
Here’s my reasoning. Median resale price of a detached house in MM in 2000 was around 240k. Average interest rate on a conforming 30-year fixed mortgage was 8.1% (monthly payment $740 per $100,000 borrowed).
Today interest rates are around 5.8% or less ($585 per $100,000), incomes are up 30%. You get the same level affordability if median price is 240k * (740/585) * 1.30 = $395k. Monthly payment $1850, property tax $300-350, interest deduction at least $450.
December median was around 440k.
Two caveats. First, some of the 30% increase in incomes is bubble money, it may go away. Second, 5.8% interest rates may not stick around for too long.
P.S.
average detached sales price in 92126 in December 2000: $265kaverage detached sales price in 92126 in December 2007: $458k
ParticipantI’m curious why you think it only needs another 10% haircut. Median household income is 60k.
Here’s my reasoning. Median resale price of a detached house in MM in 2000 was around 240k. Average interest rate on a conforming 30-year fixed mortgage was 8.1% (monthly payment $740 per $100,000 borrowed).
Today interest rates are around 5.8% or less ($585 per $100,000), incomes are up 30%. You get the same level affordability if median price is 240k * (740/585) * 1.30 = $395k. Monthly payment $1850, property tax $300-350, interest deduction at least $450.
December median was around 440k.
Two caveats. First, some of the 30% increase in incomes is bubble money, it may go away. Second, 5.8% interest rates may not stick around for too long.
P.S.
average detached sales price in 92126 in December 2000: $265kaverage detached sales price in 92126 in December 2007: $458k
ParticipantI’m curious why you think it only needs another 10% haircut. Median household income is 60k.
Here’s my reasoning. Median resale price of a detached house in MM in 2000 was around 240k. Average interest rate on a conforming 30-year fixed mortgage was 8.1% (monthly payment $740 per $100,000 borrowed).
Today interest rates are around 5.8% or less ($585 per $100,000), incomes are up 30%. You get the same level affordability if median price is 240k * (740/585) * 1.30 = $395k. Monthly payment $1850, property tax $300-350, interest deduction at least $450.
December median was around 440k.
Two caveats. First, some of the 30% increase in incomes is bubble money, it may go away. Second, 5.8% interest rates may not stick around for too long.
P.S.
average detached sales price in 92126 in December 2000: $265kaverage detached sales price in 92126 in December 2007: $458k
ParticipantIMHO a portion of NODs and trustee sales somehow got bumped from November to December. Maybe because of October fires, or Thanksgiving, or maybe even because lenders were waiting for details of the bailout plan.
ParticipantIMHO a portion of NODs and trustee sales somehow got bumped from November to December. Maybe because of October fires, or Thanksgiving, or maybe even because lenders were waiting for details of the bailout plan.
ParticipantIMHO a portion of NODs and trustee sales somehow got bumped from November to December. Maybe because of October fires, or Thanksgiving, or maybe even because lenders were waiting for details of the bailout plan.
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