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August 13, 2007 at 7:17 AM in reply to: OT: Attention Walmart Shoppers, Disposable Car Coming to Walmart/Chrysler near you. #74269August 13, 2007 at 7:17 AM in reply to: OT: Attention Walmart Shoppers, Disposable Car Coming to Walmart/Chrysler near you. #74275Ex-SDParticipant
This is typical of the first generation products that come from Korea and China. I retired from the piano manufacturing business. When the Koreans first got into the business, the products were pure crap. There was an opportunity for them to make a lot of money because Japanese piano prices had gone through the roof. (which is how the Japanese stole the business from the U.S. manufacturers). I traveled to Korea many times in an attempt to get the owners of the factories to understand that their products had to be of a much higher quality if they wanted to have success in the USA. Some listened and some didn’t. The ones that listened finally produced acceptable products but never quite achieved the same level of quality of the Japanese pianos. Then, as prices got higher and higher, along came the Chinese. Their first attempt at making a piano for the U.S. market was far worse than what the Koreans had produced in their first attempt. But, the Chinese learn very quickly and it didn’t take long for them to equal what the Koreans were producing………..so the Korean companies starting building piano factories in Indonesia to combat the lower prices offered by the Chinese. Today, the highest, sales volume piano that is being sold by the majority of dealers may not have a Korean, Chinese or Indonesian name above the keys, but most are manufactured in China and Indonesia. I suspect that although this car is presently not very good, that within two to three years (at the most), it will be much better and capture a large amount of sales volume in the USA.
Ex-SDParticipantIMHO: It’s going to take 3-5 years to get to the bottom and then prices will sit there for a while…………and I believe that prices could drop 50% in some areas. The median price will NOW have to adjust to the loans that borrowers can qualify for. Everything will adjust around that one, simple factor. If prices stayed where they have been, everybody who presently owns a home would have to stay in them for the rest of their lives and a tiny number of people would ever be able to qualify for a loan to buy one that was for sale. You can either stay in CA and rent for 3-5 years until you can see the true bottom or move out of state for a few years and watch what happens. (That’s what we did).
CA is a great place to live but anyone who didn’t see this coming had to be an ostrich with their head in the sand.
Good luck with your decision.Ex-SDParticipantIMHO: It’s going to take 3-5 years to get to the bottom and then prices will sit there for a while…………and I believe that prices could drop 50% in some areas. The median price will NOW have to adjust to the loans that borrowers can qualify for. Everything will adjust around that one, simple factor. If prices stayed where they have been, everybody who presently owns a home would have to stay in them for the rest of their lives and a tiny number of people would ever be able to qualify for a loan to buy one that was for sale. You can either stay in CA and rent for 3-5 years until you can see the true bottom or move out of state for a few years and watch what happens. (That’s what we did).
CA is a great place to live but anyone who didn’t see this coming had to be an ostrich with their head in the sand.
Good luck with your decision.Ex-SDParticipantIMHO: It’s going to take 3-5 years to get to the bottom and then prices will sit there for a while…………and I believe that prices could drop 50% in some areas. The median price will NOW have to adjust to the loans that borrowers can qualify for. Everything will adjust around that one, simple factor. If prices stayed where they have been, everybody who presently owns a home would have to stay in them for the rest of their lives and a tiny number of people would ever be able to qualify for a loan to buy one that was for sale. You can either stay in CA and rent for 3-5 years until you can see the true bottom or move out of state for a few years and watch what happens. (That’s what we did).
CA is a great place to live but anyone who didn’t see this coming had to be an ostrich with their head in the sand.
Good luck with your decision.Ex-SDParticipantIn the end, only you & your wife can decide what is best for you but I think you already are aware that prices are going to fall. How much they will fall is up for debate. IMHO, the prices in SoCal will probably fall 30%+ in some areas like La Jolla, Del Mar and the other coastal towns……………. 40%+ in areas like Tierrasanta, Chula Vista, San Marcos…………and 50%+ in places like Temecula, Riverside/San Bernadino. I may be dead wrong but all the signs are there. Too many foreclosures that will eventually be sold to new buyers will set the standard for comps in the various areas and much tighter requirements for borrowers will weed out many people who “want” a home but simply can’t afford it. If you read the various blogs and statistics from some of the bubble markets, you will see the same problem that San Diego is experiencing:
*Rising inventory of unsold homes
*Rising foreclosures
*Lower sales each monthAll of these will force prices lower and lower until they reach a level where people can qualify for a mortgage. That’s the way the market is supposed to work and it will eventually correct itself. The median priced house must be affordable by the median income or the market stops dead in it’s tracks. Presently, it is not. Prices must go down. If not, there will be a much larger problem due to the majority of households being priced out of buying or renting if the exaggerated prices were to remain in effect. The median income household won’t even be able to rent anything more than tiny hovel in Bonsall if prices had continued the way they were. And for the investor: The rent has to cover the mortgage, insurance, and taxes……………. AND show a profit.
BTW: You can sell your home in CA for a flat fee of only $4k + closing costs through Redfin. You don’t have to pay a realtor 6%. If they had been in SD when I sold in 2005, I would have used Redfin. Back then, houses were selling within days of listing (if you had a really nice property) so I negotiated with several realtors and listed mine for only 4%. Of course, things have changed now with a glut of inventory on the market so if you didn’t use Redfin, you would probably have to pay 6%. Good luck with your decision.
Ex-SDParticipantIn the end, only you & your wife can decide what is best for you but I think you already are aware that prices are going to fall. How much they will fall is up for debate. IMHO, the prices in SoCal will probably fall 30%+ in some areas like La Jolla, Del Mar and the other coastal towns……………. 40%+ in areas like Tierrasanta, Chula Vista, San Marcos…………and 50%+ in places like Temecula, Riverside/San Bernadino. I may be dead wrong but all the signs are there. Too many foreclosures that will eventually be sold to new buyers will set the standard for comps in the various areas and much tighter requirements for borrowers will weed out many people who “want” a home but simply can’t afford it. If you read the various blogs and statistics from some of the bubble markets, you will see the same problem that San Diego is experiencing:
*Rising inventory of unsold homes
*Rising foreclosures
*Lower sales each monthAll of these will force prices lower and lower until they reach a level where people can qualify for a mortgage. That’s the way the market is supposed to work and it will eventually correct itself. The median priced house must be affordable by the median income or the market stops dead in it’s tracks. Presently, it is not. Prices must go down. If not, there will be a much larger problem due to the majority of households being priced out of buying or renting if the exaggerated prices were to remain in effect. The median income household won’t even be able to rent anything more than tiny hovel in Bonsall if prices had continued the way they were. And for the investor: The rent has to cover the mortgage, insurance, and taxes……………. AND show a profit.
BTW: You can sell your home in CA for a flat fee of only $4k + closing costs through Redfin. You don’t have to pay a realtor 6%. If they had been in SD when I sold in 2005, I would have used Redfin. Back then, houses were selling within days of listing (if you had a really nice property) so I negotiated with several realtors and listed mine for only 4%. Of course, things have changed now with a glut of inventory on the market so if you didn’t use Redfin, you would probably have to pay 6%. Good luck with your decision.
Ex-SDParticipantIn the end, only you & your wife can decide what is best for you but I think you already are aware that prices are going to fall. How much they will fall is up for debate. IMHO, the prices in SoCal will probably fall 30%+ in some areas like La Jolla, Del Mar and the other coastal towns……………. 40%+ in areas like Tierrasanta, Chula Vista, San Marcos…………and 50%+ in places like Temecula, Riverside/San Bernadino. I may be dead wrong but all the signs are there. Too many foreclosures that will eventually be sold to new buyers will set the standard for comps in the various areas and much tighter requirements for borrowers will weed out many people who “want” a home but simply can’t afford it. If you read the various blogs and statistics from some of the bubble markets, you will see the same problem that San Diego is experiencing:
*Rising inventory of unsold homes
*Rising foreclosures
*Lower sales each monthAll of these will force prices lower and lower until they reach a level where people can qualify for a mortgage. That’s the way the market is supposed to work and it will eventually correct itself. The median priced house must be affordable by the median income or the market stops dead in it’s tracks. Presently, it is not. Prices must go down. If not, there will be a much larger problem due to the majority of households being priced out of buying or renting if the exaggerated prices were to remain in effect. The median income household won’t even be able to rent anything more than tiny hovel in Bonsall if prices had continued the way they were. And for the investor: The rent has to cover the mortgage, insurance, and taxes……………. AND show a profit.
BTW: You can sell your home in CA for a flat fee of only $4k + closing costs through Redfin. You don’t have to pay a realtor 6%. If they had been in SD when I sold in 2005, I would have used Redfin. Back then, houses were selling within days of listing (if you had a really nice property) so I negotiated with several realtors and listed mine for only 4%. Of course, things have changed now with a glut of inventory on the market so if you didn’t use Redfin, you would probably have to pay 6%. Good luck with your decision.
Ex-SDParticipantI don’t think that ‘ole George sounds too happy, does he? Calling a spade…..a spade…….. is totally different than shouting “the sky is falling” for no apparent reason. There are more than enough apparent reasons to recognize this situation as “a SPADE”.
The housing market in the bubble cities around the country couldn’t go on the way it was going because the majority of people who have been buying homes for the last few years couldn’t really afford them in the first place. If the old standard rules for getting a mortgage had still applied, this run-up in prices would have never reached this level of insanity. Not only would a large majority of these people never have been granted a loan for the mortgage, many people who purchased in CA before 2001 and actually had some real equity in their homes would not have had all this extra, paper equity and would not have been allowed to take out so many $$$$ in loans against their properties because those artificial values wouldn’t have been there to borrow against.
‘Ole George Chamberlin can point his finger and get huffy all he wants but the root of the blame lies with the regulators for ever allowing these types of loans to be generated, much less, to borrowers with sub-standard credit, no money down, no documents for proof of income, etc, etc, etc. Foolishness at it’s finest and now the market is going to fall…………I think at least 30% in the most desirable areas to live and as much as 55% in places like the Temecula area. It’s not going to be pretty but in the end, the economy will be much healthier than this artificial Fantasy-Land that SoCal & other bubble markets have been for the last 8-9 years.
Ex-SDParticipantI don’t think that ‘ole George sounds too happy, does he? Calling a spade…..a spade…….. is totally different than shouting “the sky is falling” for no apparent reason. There are more than enough apparent reasons to recognize this situation as “a SPADE”.
The housing market in the bubble cities around the country couldn’t go on the way it was going because the majority of people who have been buying homes for the last few years couldn’t really afford them in the first place. If the old standard rules for getting a mortgage had still applied, this run-up in prices would have never reached this level of insanity. Not only would a large majority of these people never have been granted a loan for the mortgage, many people who purchased in CA before 2001 and actually had some real equity in their homes would not have had all this extra, paper equity and would not have been allowed to take out so many $$$$ in loans against their properties because those artificial values wouldn’t have been there to borrow against.
‘Ole George Chamberlin can point his finger and get huffy all he wants but the root of the blame lies with the regulators for ever allowing these types of loans to be generated, much less, to borrowers with sub-standard credit, no money down, no documents for proof of income, etc, etc, etc. Foolishness at it’s finest and now the market is going to fall…………I think at least 30% in the most desirable areas to live and as much as 55% in places like the Temecula area. It’s not going to be pretty but in the end, the economy will be much healthier than this artificial Fantasy-Land that SoCal & other bubble markets have been for the last 8-9 years.
Ex-SDParticipantI don’t think that ‘ole George sounds too happy, does he? Calling a spade…..a spade…….. is totally different than shouting “the sky is falling” for no apparent reason. There are more than enough apparent reasons to recognize this situation as “a SPADE”.
The housing market in the bubble cities around the country couldn’t go on the way it was going because the majority of people who have been buying homes for the last few years couldn’t really afford them in the first place. If the old standard rules for getting a mortgage had still applied, this run-up in prices would have never reached this level of insanity. Not only would a large majority of these people never have been granted a loan for the mortgage, many people who purchased in CA before 2001 and actually had some real equity in their homes would not have had all this extra, paper equity and would not have been allowed to take out so many $$$$ in loans against their properties because those artificial values wouldn’t have been there to borrow against.
‘Ole George Chamberlin can point his finger and get huffy all he wants but the root of the blame lies with the regulators for ever allowing these types of loans to be generated, much less, to borrowers with sub-standard credit, no money down, no documents for proof of income, etc, etc, etc. Foolishness at it’s finest and now the market is going to fall…………I think at least 30% in the most desirable areas to live and as much as 55% in places like the Temecula area. It’s not going to be pretty but in the end, the economy will be much healthier than this artificial Fantasy-Land that SoCal & other bubble markets have been for the last 8-9 years.
Ex-SDParticipantLet me propose another scenario:
I suspect that you think your present house is worth around $450k because you say you have $270k in equity and your payments are only $2k per month including PITI and the kitchen sink.
If you hold on to your present house while the $700k dream house falls to the $420-$490k range over the next 3 to 4 years, your present home will then be worth $270k- $310k and your equity will be down to $100k-$125k.If you can truly get $270k in clear equity out of your present home, I would run, not walk, to the nearest computer and get in touch with Redfin and aggressively price your house to move ASAP, even if you have to go $15-$20k under the competition in the neighborhood to do it, you will be far ahead in the long run. You can put that money in a CD and earn some safe interest while you’re waiting to see how low the housing market will fall. One thing is for sure: Housing is NOT going back UP in SoCal anytime soon (with the possible exception of super-luxury homes that are bought by the very, very rich). When all of this finally settles, cash will be king and you will have a large amount of $$$$ to purchase that dream home.
BTW: I did part of this in 2005 when I was convinced that what is happening now……would happen. The only difference is that since I retired at the age of 54, I didn’t have a job to keep me in CA so we moved to South Carolina where we’re sitting comfortably and watching the mess unravel itself. When we’re convinced it’s done, we will sell our home here and move back. South Carolina and the majority of the south did not get caught in the high-house price frenzy like San Diego and the other bubble markets did so houses are relatively inexpensive and appreciate at a rate of 2-3% per year.Ex-SDParticipantLet me propose another scenario:
I suspect that you think your present house is worth around $450k because you say you have $270k in equity and your payments are only $2k per month including PITI and the kitchen sink.
If you hold on to your present house while the $700k dream house falls to the $420-$490k range over the next 3 to 4 years, your present home will then be worth $270k- $310k and your equity will be down to $100k-$125k.If you can truly get $270k in clear equity out of your present home, I would run, not walk, to the nearest computer and get in touch with Redfin and aggressively price your house to move ASAP, even if you have to go $15-$20k under the competition in the neighborhood to do it, you will be far ahead in the long run. You can put that money in a CD and earn some safe interest while you’re waiting to see how low the housing market will fall. One thing is for sure: Housing is NOT going back UP in SoCal anytime soon (with the possible exception of super-luxury homes that are bought by the very, very rich). When all of this finally settles, cash will be king and you will have a large amount of $$$$ to purchase that dream home.
BTW: I did part of this in 2005 when I was convinced that what is happening now……would happen. The only difference is that since I retired at the age of 54, I didn’t have a job to keep me in CA so we moved to South Carolina where we’re sitting comfortably and watching the mess unravel itself. When we’re convinced it’s done, we will sell our home here and move back. South Carolina and the majority of the south did not get caught in the high-house price frenzy like San Diego and the other bubble markets did so houses are relatively inexpensive and appreciate at a rate of 2-3% per year.Ex-SDParticipantLet me propose another scenario:
I suspect that you think your present house is worth around $450k because you say you have $270k in equity and your payments are only $2k per month including PITI and the kitchen sink.
If you hold on to your present house while the $700k dream house falls to the $420-$490k range over the next 3 to 4 years, your present home will then be worth $270k- $310k and your equity will be down to $100k-$125k.If you can truly get $270k in clear equity out of your present home, I would run, not walk, to the nearest computer and get in touch with Redfin and aggressively price your house to move ASAP, even if you have to go $15-$20k under the competition in the neighborhood to do it, you will be far ahead in the long run. You can put that money in a CD and earn some safe interest while you’re waiting to see how low the housing market will fall. One thing is for sure: Housing is NOT going back UP in SoCal anytime soon (with the possible exception of super-luxury homes that are bought by the very, very rich). When all of this finally settles, cash will be king and you will have a large amount of $$$$ to purchase that dream home.
BTW: I did part of this in 2005 when I was convinced that what is happening now……would happen. The only difference is that since I retired at the age of 54, I didn’t have a job to keep me in CA so we moved to South Carolina where we’re sitting comfortably and watching the mess unravel itself. When we’re convinced it’s done, we will sell our home here and move back. South Carolina and the majority of the south did not get caught in the high-house price frenzy like San Diego and the other bubble markets did so houses are relatively inexpensive and appreciate at a rate of 2-3% per year.Ex-SDParticipantWhen you factor in that you won’t be able to get a jumbo loan (over 417k) at a reasonable interest rate and that qualified buyers will be in very short supply, my guess is that the price by the end of 2008 will be closer to $440-$450k. I also think that if you wait until the end of 2009-2010, these types of properties will sell for around $375-$400k.
Why? (1) Investors won’t buy them to rent out unless they can receive a better return on their money than they can get from a CD or the stock market. (2) Foreclosures are going to get a lot worse than they already are which means lower prices and a glut of homes to sell. This means that anyone who is NOT in trouble with a re-setting, adjustable ARM and who will not be upside down on their loan…… but who has to sell their property due to job loss, health problems, job transfer, etc……….will have to match or beat the prices that the foreclosures will be selling for. Right now, the inventory of listed, unsold homes in L.A., Orange and SD counties combined is almost double of what it was a little over a year and a half ago. You can’t have rising foreclosures, rising inventories, lack of qualified buyers due to new loan restrictions, etc. without having drastically falling prices. They may fall in chunks or start free-falling within the next month……who knows? But………they WILL fall. When they fall, they won’t recover for years and incomes are not going to rise enough/fast enough to enable enough new buyers to qualify for a mortgage. I can’t imagine any more foreign banks or brokerages buying any more horse-crap, sub-standard home loans from the USA or anywhere else after what happened the last couple of weeks in France, Japan and the USA. Be patient, save your money and you will know when the time is right to buy.
BTW: I sold my house in SD in April of 2005……..cashed out and moved out of state. When the time is right, I will move back and buy again. My wife and I saw this coming like an elephant running in our back yard back in 2004. -
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