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(former)FormerSanDiegan
ParticipantNot sure I understand the following comment from the article …
“Rents have been held down over the past couple of years and they seem to be pushing up a little bit,” he said. “We might see, over the course of the next year, instead of 3 percent increases, more 4 to 5 percent increases.”As vacancies go up, doesn’t pricing power decrease ?
ParticipantIT IS spring 07, anyone check Poway sellers web site?
Just follow the sounds of the chirping crickets.ParticipantHappy Vernal Equinox !
ParticipantEveryone wants to live in Detroit.
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Participantlittle lady – I think we are on the same page.
I’d guess a total 40-45% real price drop over 5-7 years. Some due to inflation, some due to nominal price declines. Somewhere in the archives I put my guess at 19-25% nominal price decline and another 15-20% due to inflation.For perspective, consider the period from 1990 to 2000. The median rent in San Diego county was $564 in 1990 and grew to $761 in 2000 … and that decade included a recession, local unemployment that exceeded the already high national levels, and a fairly prolonged housing bust. With those headwinds there was still an increase in rents of about 35 percent over a decade. Or an average of about 3%+ per year.
In fact inflation may be worse this decade.ParticipantAnother 10% isn’t even close to closing the gap to within reason between rents and mortgages.
It depends on how long it takes. If another 10% decline happens this year, then yes I’d agree with Bugs on this. But, consider the effect if it happens over a longer time frame. Assume we are already down 10% over the past 1.5 years for comparable property. If the next 10% down-leg in nominal price occurs over say 5-6 years, we could easily be looking at a 40% or more real decline. 20% due to nominal price drops and 20% (or more) due to the cumulative effects of inflation. I would not discount a 10-15% further nominal price decline, since it depends on how long it takes to be carried out.
ParticipantNot to be paranoid, but maybe they are just out looking for lawsuits. The seller rejected a full-priced offer, primarily because the buyer included construction financing to accomodate renovations to make the property accessible. Are there laws protecting those with disabilities in housing ? How far do these laws reach ?
ParticipantWhat’s even stranger is that the amount of the purchase option of 875K after three years comes to about 1777 per month over the three years, exactly what they have in negative cash flow (excluding expenses). Even if the price appreciated at a rate that would make sense for the renter/buyer to purchase at the end of the three years, the original buyer would not have made any money.
Smells fishy.
ParticipantBelieve 1/2 of what you read
I agree. But which half ? 🙂
ParticipantDo it like the pros …
relax, go to Disneyland, get yourself a ring, get into some off-season mischief.ParticipantI have to agree with B M salsa on this one.
If you scroll down to the bottom of this page you will note that it reads “In God We Trust. Everyone Else Bring Data.”
When you look at the data, it is interesting to note that as of 2005, according to the census bureau, 53.75% of families in the city of Irvine make over 100K. The Mr and Mrs Irvine example of a couple making 130K is not really too far out of line with what these data show.
March 13, 2007 at 4:16 PM in reply to: A.H. LENDERS: how many people in San Diego will be fired? #47587ParticipantYes! It means there will be additional 4,196 houses being foreclosed in SD!!
Wow. Those lender company’s employees sure have a high ownership rate.
Participant1997 prices ?
Maybe on a relative basis. But not in absolute terms.
Incomes in San Diego (median household) have risen by about 50% from 1995 to 2005 from 37K to 55.6K. Inflation (even in low inflation environments) does amazing things to the value of a dollar.
I think 2002/2003 prices are a safer bet.
Participantbigmoneysalsa –
I agree with you that loose lending standards led to excessive home price appreciation.
Based on rational lending standards, in my view the current (well almost current since the numbers are from 2005) income profile of Irvine is consistent with median house prices near 470-550K. That means they are perhaps 25-40% overvalued based on my guess-timate using half-baked assumptions.
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