[Fearful]

[quote=temeculaguy]
I also read the financials daily and despite the horror stories, I was battling for the rent positive listings, buyers with cash are lined up, even in temecula, yet I never saw dead old men that hated yardwork, I wished I had but instead the cash rich folks were there. I waited and hoped they would stop coming but they never did, still haven’t.

You have until 2010 (or 2011 in premium areas) to get your downpayment and credit score together, that’s my prediction, when renting becomes more expensive than buying, the clock starts ticking.[/quote]
The cash rich folks are like zombies, no? They just keep coming. This debt bubble created an enormous amount of wealth that will take quite a while to bleed off. This process will happen slowly because there are various levels of defensiveness people are assuming, with the most defensive lasting the longest. The final equilibrium point is affected by at least three major factors: Bailout and foreclosure moratorium possibilities, how the labor market affects rental demand, and how the supply of rental houses affects prices.

[Fearful]

[quote=temeculaguy]
I also read the financials daily and despite the horror stories, I was battling for the rent positive listings, buyers with cash are lined up, even in temecula, yet I never saw dead old men that hated yardwork, I wished I had but instead the cash rich folks were there. I waited and hoped they would stop coming but they never did, still haven’t.

You have until 2010 (or 2011 in premium areas) to get your downpayment and credit score together, that’s my prediction, when renting becomes more expensive than buying, the clock starts ticking.[/quote]
The cash rich folks are like zombies, no? They just keep coming. This debt bubble created an enormous amount of wealth that will take quite a while to bleed off. This process will happen slowly because there are various levels of defensiveness people are assuming, with the most defensive lasting the longest. The final equilibrium point is affected by at least three major factors: Bailout and foreclosure moratorium possibilities, how the labor market affects rental demand, and how the supply of rental houses affects prices.

[Fearful]

[quote=temeculaguy]
I also read the financials daily and despite the horror stories, I was battling for the rent positive listings, buyers with cash are lined up, even in temecula, yet I never saw dead old men that hated yardwork, I wished I had but instead the cash rich folks were there. I waited and hoped they would stop coming but they never did, still haven’t.

You have until 2010 (or 2011 in premium areas) to get your downpayment and credit score together, that’s my prediction, when renting becomes more expensive than buying, the clock starts ticking.[/quote]
The cash rich folks are like zombies, no? They just keep coming. This debt bubble created an enormous amount of wealth that will take quite a while to bleed off. This process will happen slowly because there are various levels of defensiveness people are assuming, with the most defensive lasting the longest. The final equilibrium point is affected by at least three major factors: Bailout and foreclosure moratorium possibilities, how the labor market affects rental demand, and how the supply of rental houses affects prices.

[Fearful]

[quote=sdrealtor]I dont have time to respond to everything but wanted to throw this out as a counter to all the econ prof type’s who think things will play out according to their textbooks.

[stuff about lots of offers snipped] Sorry rational thinking piggies but there are lots of folks out there who dont think as you do. It is not a rational market place. it is an emotional marketplace where many people fell a need to own a home as part of their lives. Right or wrong it just is……..

So much for macroeconomic trends and other such nonsense;)[/quote]
Yes, there is still a lot of cash out there. The debt bubble created a whole lot of money. The contraction of it will proceed slowly. My guess is waves of declines will gradually erode buyer confidence, so enjoy the buyer sentiment while it lasts.

[Fearful]

[quote=sdrealtor]I dont have time to respond to everything but wanted to throw this out as a counter to all the econ prof type’s who think things will play out according to their textbooks.

[stuff about lots of offers snipped] Sorry rational thinking piggies but there are lots of folks out there who dont think as you do. It is not a rational market place. it is an emotional marketplace where many people fell a need to own a home as part of their lives. Right or wrong it just is……..

So much for macroeconomic trends and other such nonsense;)[/quote]
Yes, there is still a lot of cash out there. The debt bubble created a whole lot of money. The contraction of it will proceed slowly. My guess is waves of declines will gradually erode buyer confidence, so enjoy the buyer sentiment while it lasts.

[Fearful]

[quote=sdrealtor]I dont have time to respond to everything but wanted to throw this out as a counter to all the econ prof type’s who think things will play out according to their textbooks.

[stuff about lots of offers snipped] Sorry rational thinking piggies but there are lots of folks out there who dont think as you do. It is not a rational market place. it is an emotional marketplace where many people fell a need to own a home as part of their lives. Right or wrong it just is……..

So much for macroeconomic trends and other such nonsense;)[/quote]
Yes, there is still a lot of cash out there. The debt bubble created a whole lot of money. The contraction of it will proceed slowly. My guess is waves of declines will gradually erode buyer confidence, so enjoy the buyer sentiment while it lasts.

[Fearful]

[quote=sdrealtor]I dont have time to respond to everything but wanted to throw this out as a counter to all the econ prof type’s who think things will play out according to their textbooks.

[stuff about lots of offers snipped] Sorry rational thinking piggies but there are lots of folks out there who dont think as you do. It is not a rational market place. it is an emotional marketplace where many people fell a need to own a home as part of their lives. Right or wrong it just is……..

So much for macroeconomic trends and other such nonsense;)[/quote]
Yes, there is still a lot of cash out there. The debt bubble created a whole lot of money. The contraction of it will proceed slowly. My guess is waves of declines will gradually erode buyer confidence, so enjoy the buyer sentiment while it lasts.

[Fearful]

[quote=sdrealtor]I dont have time to respond to everything but wanted to throw this out as a counter to all the econ prof type’s who think things will play out according to their textbooks.

[stuff about lots of offers snipped] Sorry rational thinking piggies but there are lots of folks out there who dont think as you do. It is not a rational market place. it is an emotional marketplace where many people fell a need to own a home as part of their lives. Right or wrong it just is……..

So much for macroeconomic trends and other such nonsense;)[/quote]
Yes, there is still a lot of cash out there. The debt bubble created a whole lot of money. The contraction of it will proceed slowly. My guess is waves of declines will gradually erode buyer confidence, so enjoy the buyer sentiment while it lasts.

[Fearful]

[quote=sdrealtor]Many of the type of folks Stan refers to live in my area. Most have lived here pre bubble. Their billable hours will be done, their commissions will be done, their stock portfolios will be down, their bonuses will be down. They will be hunkering down and not looking to move but rather to maintain the status quo. My hypothesis is that the vast majority will have no problem doing so.[/quote]
If they were forced to sell, yes, that would drive prices down fast. I think the important point is they are “hunkering down” and are not out there buying. So we see sluggishness, not cataclysm. A market with falling prices but low transaction volume.

[Fearful]

[quote=sdrealtor]Many of the type of folks Stan refers to live in my area. Most have lived here pre bubble. Their billable hours will be done, their commissions will be done, their stock portfolios will be down, their bonuses will be down. They will be hunkering down and not looking to move but rather to maintain the status quo. My hypothesis is that the vast majority will have no problem doing so.[/quote]
If they were forced to sell, yes, that would drive prices down fast. I think the important point is they are “hunkering down” and are not out there buying. So we see sluggishness, not cataclysm. A market with falling prices but low transaction volume.

[Fearful]

[quote=sdrealtor]Many of the type of folks Stan refers to live in my area. Most have lived here pre bubble. Their billable hours will be done, their commissions will be done, their stock portfolios will be down, their bonuses will be down. They will be hunkering down and not looking to move but rather to maintain the status quo. My hypothesis is that the vast majority will have no problem doing so.[/quote]
If they were forced to sell, yes, that would drive prices down fast. I think the important point is they are “hunkering down” and are not out there buying. So we see sluggishness, not cataclysm. A market with falling prices but low transaction volume.

[Fearful]

[quote=sdrealtor]Many of the type of folks Stan refers to live in my area. Most have lived here pre bubble. Their billable hours will be done, their commissions will be done, their stock portfolios will be down, their bonuses will be down. They will be hunkering down and not looking to move but rather to maintain the status quo. My hypothesis is that the vast majority will have no problem doing so.[/quote]
If they were forced to sell, yes, that would drive prices down fast. I think the important point is they are “hunkering down” and are not out there buying. So we see sluggishness, not cataclysm. A market with falling prices but low transaction volume.

[Fearful]

[quote=sdrealtor]Many of the type of folks Stan refers to live in my area. Most have lived here pre bubble. Their billable hours will be done, their commissions will be done, their stock portfolios will be down, their bonuses will be down. They will be hunkering down and not looking to move but rather to maintain the status quo. My hypothesis is that the vast majority will have no problem doing so.[/quote]
If they were forced to sell, yes, that would drive prices down fast. I think the important point is they are “hunkering down” and are not out there buying. So we see sluggishness, not cataclysm. A market with falling prices but low transaction volume.

[Fearful]

[quote=sdrealtor] a low end property in escrow that looks like it is going to sell for about 75X monthly rental income. A cash buyer would get nearly a 20% return on their cash.[/quote]
Actually, that is 16%, but still in the area in which I would imagine investors would be interested.

My profession is poking holes in financial scenarios, so it comes easy to me: How vulnerable will rental prices be to weakening economic conditions, and to increasing supply of rental housing stock purchased by investors such as this client?

I don’t know the answers to these questions, just raising them.

[Fearful]

[quote=sdrealtor] a low end property in escrow that looks like it is going to sell for about 75X monthly rental income. A cash buyer would get nearly a 20% return on their cash.[/quote]
Actually, that is 16%, but still in the area in which I would imagine investors would be interested.

My profession is poking holes in financial scenarios, so it comes easy to me: How vulnerable will rental prices be to weakening economic conditions, and to increasing supply of rental housing stock purchased by investors such as this client?

I don’t know the answers to these questions, just raising them.

[Author]

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