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Ex-SD
Participantasianautica: I’ve got news for you. I saw this thing coming as far back as the middle of 03 and started making a plan where we would sell our home and move out of CA in the spring of 05. We did just that and although we may have missed the tip top by several months, we were pretty close. You don’t have to be a rocket scientist with a PHD to see what was going to happen to the housing market in CA. Demographic information on each city and state is only as far away as a Google search and when you look at income vs the price of housing in CA………anyone who paid any attention to this matter would come to the conclusion that home owners in bubble markets were likely to be where they are today. I have several friends who did exactly what we did and sold within a month or two of when we sold our home. They either became renters or moved out of state to places where housing prices were in line with median incomes.
You can spin it anyway you want but there ARE plenty of people on this site and others who called this bubble-burst within months of the initial downturn and they called it as much as two to three years before it happened.ParticipantI think that just about everyone on this forum agrees that there will be a lot of houses on the market due to foreclosures, sellers who have to sell, etc. What we have to keep in perspective is the huge decrease in available, qualified buyers in relationship to the amount of inventory. Unless a whole new round of creative loan products for deadbeats hit the market, it’s going to take quite a while to get the inventory in line. I believe that you shouldn’t buy a home until late 2010 (at the earliest) and that the bottom won’t actually be seen until late 2011 or 2012 (if you want to pay the lowest price. Keep in mind that if you miss the bottom by just $50k, your taxes on that extra $50k will stay with you as long as you own that house. An extra $500 per year (if you stay in the house for 10 years) is $5000 more than you would have had to pay if you just wait until you know that the bottom has settled. The chances that prices will start ramping up again quickly after the bottom has revealed itself are slim to none………..so you’ll have plenty of time to look around and find exactly what you want/where you want…….. if you have a 20% down payment plus closing costs and a good credit score. Bottom line: There’s no reason to rush to be a homeowner anywhere in CA before you are convinced that the bottom has revealed itself.
ParticipantLot’s of good advice in this thread.
The unknown variable is how many condo’s will be tossed into the rental market? There is an absolute glut of new, unsold condo’s with more being built because the projects were already too far underway when the housing market crashed. Someone posted a list from SD Lookup yesterday that showed 85 newly foreclosed condo’s, with the overwhelming majority being in downtown. With the huge number of ARM’s resetting to much higher payments for the owners over the next two years and with ever-decreasing values of their properties, the foreclosures will grow at a tremendous rate and you’re going to have a lot of competition for available, qualified renters. This problem will not go away quickly. The bottom line is that you’d better factor in all of these problems when you calculate how much you can realistically get for rent on a condo if you want to attract and keep a paying renter. This could severely affect your R.O.I.
ParticipantNobody has a crystal ball but if you take all the facts into consideration, it’s not much of a leap to see that the more desirable areas may only suffer 30-35% drops from peak prices but most will drop as much as 50-60%. I believe that Fullerton is in the 50-60% loss group that will drop to 1996-1997 price levels.
Cyphire: Good on you! You will have the last laugh. Although Olivenhain is on the highly desirable list for many people, prices in that area are highly likely to drop to 2001-2002 levels. I sold my home in Leucadia in the spring of 2005 for top dollar and got out before the values starting dropping.
September 3, 2007 at 3:24 PM in reply to: cannot wait anymore, buying a condo now instead of a house at 4S Ranch, and wait to buy a bigger house later? #83171ParticipantNicmm:
FYI: I’ve been married to the same woman for over 33 years so I’m not bitter about marriage or anything else. I just can’t understand how a man who is capable of earning a decent enough living to afford a $650k+ home (so he is apparently intelligent), can let a woman (or anyone else) persuade him to make such a BAD investment. FYI: over 50% of people who get married get divorced and most of those don’t make it for seven years. I was just pointing out that shit happens when you least expect it. “Want to Buy” made it perfectly clear that his wife was the driving force behind this ludicrous idea so I merely responded the same way that I would have talked to one of my children or my best friend if they found themselves in the same situation. I happen to be married to a rational, logical woman who does not have to have the biggest house on the block or the newest doodad that comes off the assembly line and I believe that too many people today don’t think logically or rationally about major purchases and that is the major reason that things have arrived at this point in the housing market. Learning to control one’s buying impulses and emotions before running through the door with your wallet hanging out of your mouth when you walk through the door to see a salesman who is selling big ticket items is NOT a bad thing.
Nicmm….if you think that things will NOT go as the majority of us on this forum believe that they will, you are more than welcome to go out and buy a dozen properties in SoCal tomorrow………….but don’t come back here crying when your newly acquired assets depreciate 40-50% within the next 3-5 years.September 3, 2007 at 12:56 PM in reply to: cannot wait anymore, buying a condo now instead of a house at 4S Ranch, and wait to buy a bigger house later? #83139ParticipantWhy are you giving in to your wife? Just to make her happy? There are heavy, heavy odds that you are going to wind up losing hundreds of thousands of dollars by paying way too much for a house and then having to pay it back with interest, not to mention the higher property taxes that you will be saddled with. What happens if several years from now, the wife gets another wild hair and decides that she wants a divorce? What happens if next year when the recession hits…..you lose your job or three years from now, you decide that you’re not happy with your life and want a divorce? You will be soooooo upside down in this house that you will wind up in bankruptcy court. This is a major problem today: people have to have what they want and they have to have it, TODAY! They can’t be patient even when it makes absolutely no sense to make a major purchase like a house. Dude, it’s your money but you may as well just go down to Home Depot and buy a 50 gallon, metal trash can and throw a couple of hundred thousand dollars in there and start a fire because that’s what you’re going to do if you buy a house in SoCal in this price range this year. Those houses sell for $250-$300k around the majority of the USA. In Southern CA, they are probably really worth no more than $350-$375k (due to the VAT for living in SoCal) and that’s probably where they’re going to wind up within the next 3-4 years. A house will not make your wife happy for a lifetime, especially if the both of you overpay by $200-$300k for it. Let the buyer beware.
ParticipantFools and their money are soon parted. It’s an old adage but it’s still applicable to many fools who attempt various endeavors.
Why ANYONE who can read and has an I.Q. over 80 would buy a home for investment or as a principal residence before late 2009 (at the earliest) simply escapes my comprehension.August 31, 2007 at 4:03 PM in reply to: Hey SD R, sd r, bugs, HLS, anyone else in the business care to comment? #82854ParticipantThat house was turned into a rental for several years, back in the late 90’s. A business acquaintance of mine was the renter. I was in the home several times and it was very nice. I lost touch with him and then moved out of San Diego a couple of years ago so I didn’t know if he was still renting it……apparently not.
ParticipantI never cease to be amazed at how many people in bubble markets thought that the appreciation would never end. It’s as though people have absolutely no common sense. How in the hell can you continue to sell houses (or any product) to people if they don’t have the income to actually pay back the loan? It’s like a bunch of first grader’s playing with Monopoly money. What’s sad is that I have friends who live in CA and FL who believed that prices would just keep going up with no end in site. I warned them back in 2004 that they probably had less than two more years before this giant Ponzi scheme started blowing up…………None took my advice. I took my own advice and cashed out of my Leucadia home in the early spring of 2005 and moved to the high-country part of SC where housing prices are sane, taxes are cheap and we have everything that we had in CA…………except for the great coastal weather. I do NOT have one ounce of sympathy for the people who bought into this foolishness.
August 31, 2007 at 4:44 AM in reply to: Bailout : No comprehensive plan just “death by a thousand cuts.” More evidence . . . #82748ParticipantBush is numb from the neck-up. (and yes, I voted for the idiot the first time around). The solution is that you don’t give loans to people who couldn’t afford to pay them back in the first place. Most of these people bought a home only because they thought they would make a bundle from appreciation or to use it like an ATM. Hey GWB: YOU DON’T GIVE CREDIT TO PEOPLE WHO HAVEN’T EARNED THE RIGHT TO HAVE IT! (end of rant)
August 31, 2007 at 2:40 AM in reply to: cannot wait anymore, buying a condo now instead of a house at 4S Ranch, and wait to buy a bigger house later? #82743ParticipantExplain it to her this way:
*Foreclosures are rising rapidly.
*Home and condo sales have fallen and the rate of fall is increasing
*Standing inventory of unsold homes continues to rise.
*Mortgages are no longer being handed out like free food samples at Costco.
*This is now putting tremendous pressure on sellers who will continue to lower their selling prices if they want to sell their SFR or condo.
*If she just has to buy that condo or SFR, NOW……….you’re going to be saddled with a property that you paid way too much for and you will be stuck with the higher property tax that will be based on what you paid for it plus close to $100k of extra interest that you will pay over the life of the loan.
*A condo that is now selling at $330k will most likely be selling for no more than $250k within 2-3 years.
*If she can’t see the logic and rationale…………you’re just going to have to say, NO!
*Anyone who buys any type of home in SD right now is going to regret it. (unless they have so much money that they just don’t care about throwing $100’s of thousands down the drain).August 30, 2007 at 4:24 AM in reply to: San Diego area zips in “Top 500” foreclosure zip codes in US #82537ParticipantIt’s going to take a while for larger numbers of foreclosures to hit across the full spectrum of San Diego. We’re not likely to see the bottom for three or four years and even if you find a foreclosure that you like right now, you will be overpaying for the property. Then, you’ll be stuck with a mortgage and taxes on a property that you paid too much for. You may be frustrated but imagine how frustrated you will feel if you overpay by 20-30-40%?
Just look at these numbers that were posted in another thread:
Submitted by North County Jim on August 21, 2007 – 1:22am.
August 20 Report
283 NODs
161 NOTs
100 REOsSubmitted by North County Jim on August 30, 2007 – 2:30am.
August 29 Report
534 NODs
356 NOTs
254 REOsLook at how the numbers are climbing in just a short period of time. Believe me……………they’re going to get a lot worse.
The smartest thing you can do is to just keep renting and if you don’t like the rental you’re in, move to another.
ParticipantAlex, there are a LOT of people who will not even look at a home “for sale” that has the Mello Roos tax penalty associated with it. When I lived in SD, I worked with a man who made over $200k a year and managed his money wisely. He and his wife were looking for a home and he wouldn’t even go with the RE agent to look at any property that had the idiotic M.Roos tax. So, don’t assume that everyone, no matter what their income will just hand over an extra $1750 per year for no good reason.
ParticipantBsrsharma said: “the effect of the 417K threshold Is not just interest rate & availability.” He hit the nail right on the head with his post. And of the potential house buyer pool, that small number of qualified buyers would be looking all over SD……….so that reduces the number of people in the pool who want to live in that specific area. It’s a whole different ball game. I strongly suspect that homes like this will go back to the $275k-$300k range when the bottom settles.
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