[hipmatt]

In 1990 my parents sold their home in Diamond Bar, CA for a huge profit from what they paid for it in 79 I think. They moved us out to Temecula, bought a nice Ranch style custom home on 1 acre in a nice area of the city. I think they paid about $350k for it at the time. I remember in 95 it was worth about $250k after my dad put another $100k into a patio, landscape, and other upgrades. At one point it was about 33% off of what we paid though. It probably didn’t start going up significantly until 1997 though. I think we weathered the price decline better then all the tract homes, I think they were hit harder.

They complained about it a bit, but since the mortgage was only $1400 per month at the time(I think they had combined income of about $90K), and the fact that they made decent money on the first house, kept them from whinnying too much. Since then they have refied the house to a 15 year, and it will be paid off in 2 years. It’s currently worth about $700k, if my parents would perform the needed upgrades and updates, it could easily be worth $950k.

[hipmatt]

The Breeze…
please try and keep it related to “housing bubble content”.. note the slogan underneath the logo. Especially if your political prophesy is completely insane.

BTW.. no one cares what Pelosi did and only a looney toon would give her any credit for the release of hostages, not that they are President Bushes responsibility in the first place. hmm… Iran captures a few UK and wacky dems blame Bush…Instead of flipping out about Bush, you should be asking yourself, why were they taken captive, without warning at least, in the first place?

[hipmatt]

Good idea, it could be that, it could be the trigger happy buyers out there waiting for some kind of price reduction no matter how small, and had to pull the trigger on buying a home.

But whatever it is, I believe it is short lived, and the bulls shouldn’t be celebrating as much as they are. All the analysts on CNBC are calling the soft landing scenario as true and a success. LOL! Its all over then, lets go borrow some more money and buy a home!

The foreclosures, short sales, and negative momentum has started its downhill roll. It may hit a few bumps that spit out strange data, but obviously, we have our reasons for expecting a continued decline.

[hipmatt]

He never called an end to it in 00, calm down. If anything he was off by 2 years, which still would be damn close, and anyone who sold in 05 is doing just fine.

[hipmatt]

Check out http://www.patrick.net for more info on Bay Area housing correction.

I would still recommend NOT buying a home in CA for a few more years. It makes no sense to me. Just be patient, and you will be rewarded with much cheaper housing, not everyone is gonna be making over $100k up there, and the job market might not be strong much longer. Just now on the news, they are talking about how the socal economy is struggling, i don’t see how the risky tech savy area up north is not just as vulnerable if not more so.

[hipmatt]

Chris..
Can you really blame anyone who thought the correction was gonna start earlier? It was common sense to believe things weren’t gonna last as long as they did or get as high as they did. I sure expected things to stop long before 06/07. Who really thought that it would be common place for an average family to take out a 100% loan for $400k or more. I mean, the events that have taken place in the last 3 years have been mind blowing as far as ignoring common sense goes.

If anything I feel it is more impressive to call a correction before it happens even if it is a bit early, then to jump on the bandwagon after the obvious.

An when you say he “may eventually be right” .. sounds to me like you don’t expect a housing drop?

In any case, I appreciate him voicing valid concerns in the midst of a media that wants to pretend that everything is all good.

[hipmatt]

Heres a benefit to correction…(its not a crisis, its a correction)

5) Hopefully it will teach us a lesson on lending standards and why abandoning them is a huge mistake. And why re-instating them is even more important.(probably should be even tighter standards)

6) Speculators will think twice in the future before ruining the markets again.

[hipmatt]

JG.. nice charts and I agree with you.. there are plenty of reasons and fundamentals that prove that this correction is going to much more severe than the 1990s.

[hipmatt]

This flipper bought the house on 10/30/06 for $935K. The same house on the same street sold for $893K on 1/30/07. That is 4.5% price drop in 3 months. Now, the greedy flipper wants 215K or 23% profit. This flipper is not fooling the buyers, but he is only fooling himself:

 

Defies any reasonable common sense.  Blows me away either the greed or ignorance that man possesses.  Hopefully this person learns a tough lesson, and many others hear about it.

[hipmatt]

Here is his most recent TV appearance if you want to know a bit more about Peter..
http://www.europac.net/Schiff-CNBC-3-30-07_lg.asp

[hipmatt]

I still feel confident that price declines around 50% are very likely. This event is completely different from previous cycles. This ere, has lending products, that weren’t around before. Literally anyone who wanted a home, could go buy one. This lead to RAMPANT speculation. Homeowners were getting rich, lenders, RE agents, construction, etc. So many people were behind this and supported it and devoted a lot of time and effort into promoting this boom.

It became common knowledge, that the easiest way to get rich was to buy a home, regardless of your financial condition or the price of the home. Homes have never been looked at this way in our history. In the 90s, a home was barely an investment, but after y2k, a home was considered FREE money. Emotions ran high, as did the peer pressure to go buy a home, cause everyone else is, and everyone else is getting rich. The psychological impact that this current housing boom experienced is also a first for RE.

There is no argument that easy credit, speculation, and a whole new market psychology all have played a crucial role into creating a housing boom that is beyond compare to anything we have previously seen. This correlates the fact that interest rates have been at or near historical lows now for over 4 years.

Some have assumed, that buyers in a tight spot will magically “figure out a budget” to allow them to afford ballooning payments. While if this was possible in theory, which it is not, it would still spell disaster for housing prices. If households facing rate increases, all of a sudden, drastically reduced non mortgage spending, in order to make their payments, these impacts would be felt in the rest of the economy. This trickle down effect has already been felt in the financial markets, and this is just the beginning. The people that try to live life w/ the ridiculous mortgages that they recently have signed up for, will not be buying as many Hummers, Dinner and a Movie Dates, Starbucks lattes, and stamped concrete patios, like they have been in recent years. You will and have already seen corporate downsizing, layoffs, and unemployment. Once again, we are at the beginning. Just as the boom builds momentum slowly on its way up, the same effects will happen on the way back down.

Unfortunately, the only thing that can fix things is a huge market correction. It has begun, but it will take years to reach bottom. My humble advice…be patient sell your home if you have one. Rent for about three years. Save the difference between rent, and what a toxic mortgage would cost you. And after everyone has learned their lesson on cheap excess credit, buy aging. Save yourself 50%

[hipmatt]

SELL SELL SELL!!! If you don’t it sounds like you could be in for a rough ride. It would be lucky for you to sell and break even. Good luck!

[hipmatt]

A. Taxes and HOA are really high there.
B. I wouldn’t pay more than 350k for that little house. I know it is nice and upgraded, but don’t get all emotional. There are already homes in Temecula that are listed in the mid 300k.
C. There is no way in HELL she is gonna take $300k.
D. Save up for a down payment, by the time you have some cash, you will find better deals than $300k.
E. You have posted this proposition before, I don’t care what you do, but if you are smart, you will forget about buying this Harveston house on a small lot, and RENT, then in at least 2-3 years, you will consider buying a home again. Homes will be much cheaper in 2010 than in 2007.
F. How bad would you feel buying a home with 0% down, only to have it loose value in the coming years?

[hipmatt]

Two stroy, wonderful home and location!!Near shopping centers and schools! Great for commuters.Commuter speacial we will pay your Gasoline and fast track for one year!! Max $3,200 value!!Saler Very Motivated!!!!Saler will pay ALL closing cost….. ZERO down ZERO closing cost!!!

 

What a feakin joke.  I wouldn't pay over $375 for that in craptacular Murrieta, CA 

[hipmatt]

BTW, historically speaking rates are still VERY VERY low. I don’t know if the fed can lower rates again, or if it will even matter..

[img_assist|nid=2959|title=Rates Chart|desc=|link=node|align=left|width=466|height=257]

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