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Sdrealtor,

As an aside, how are you defining a depression?

I have mixed feelings about this, as the coming defaults are going to affect different folks in different ways. My dearly departed gran-dad lived through the ‘Great’ depression and I remember him telling me that some folks made bank during the time. For example, a friend of his that was in the repo business.

My point is that while RE-related industries will be hit hard, others may be unaffected or even feel a stimulus. For example, I work in higher education where we often see increased enrollment during recessionary periods as people stay in school longer, or return for more advanced degrees.

I’ve seen elsewhere the excellent point that should RE end up in the toilet, those that still have jobs will end up spending less on housing and pump more money into the general economy. This might make up somewhat for the shortfall created when folks can no longer use their homes as ATM’s.

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Sigh.

Go watch footage from 9/11. One can clearly see the tops of the towers begin to list just minutes prior to the collapse. The fire didn’t need to get hot enough to ‘melt steel’, just hot enough to soften the steel supports until they could no longer bear the load of the upper floors. I noticed this the day of the attacks, as did other observers on the ground. Including a friend of mine who worked in building 7 (whom felt the heat from the fireball of the second blast and could see the steel supports glowing with heat).

Speaking of building 7…

“NIST has released video and still photo analysis of Building 7 prior to its collapse that appears to indicate a greater degree of structural damage from falling debris than originally assumed by FEMA. Specifically, a large 10-story gash existed on the south facade, extending a third across the face of the building and approximately a quarter of the way into the interior. A unique aspect of the design of 7 WTC was that each outer structural column was responsible for supporting 2,000 square feet (186 square meters) of floor space, suggesting that the simultaneous removal of a number of columns would lead to a severely compromised structure. Consistent with this theory, news footage shows visible cracking and bowing of the building’s east wall immediately prior to the collapse, which started from the penthouse floors.”

The only ‘conspiracy’ here is to cover up the fact that there were plenty of warning signs that these attacks were coming and nothing was done about it. Don’t give Dubya and his cronies the credit to have masterminded anything. They are simply incompetent.

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People believe this is a ‘blip’ because they *want* to.

Its the same reason people believe in faith healers, they have a strong emotional interest in that belief being correct.

However, reality does have a bad habit of catching up with us all.

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Lets see, a modern, fully fueled jet aircraft weighing nine times as much as B-25 and moving twice as fast would, in my mind, would result in a fair bit more damage to anything it collided with.

Beyond that, the ESB is based on a 3D grid design, with columns and beams throughout the structure. This leads to a very robust design, at the expense of open floor space. Contrast this with the WTC, which is a ‘tube’ design. The majority of the load bearing structure is on the outside of building, which unfortunately turns out to be a weak spot vs. jumbo jets piloted by suicidal terrorists.

If anyone is interested in the science behind exactly WTF happened I’ll suggest checking the Nova special on it.

http://www.pbs.org/wgbh/nova/wtc/

…though I guess PBS could be part of the conspiracy as well.

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Indeed, any one who literally cashed out will be in good shape to snap up properties after the correction. However, I suspect the number of people that actually did this in the literal sense, i.e. actually have cash, not more debt, is rather small.

Additionally, these people are shrewd and are not going to buy back into RE until the market has hit absolute rock bottom and simmered a bit. Who knows when that will be.

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Actually, I think I’ve figured this out.

This was a massive *left-wing* conspiracy.

The Democrats were behind the 9/11 attacks, which they timed to coincide exactly with Dubya reading a children’s book about goats. Just to make him look extra-dumb.

This in turn was a setup to lead us into a futile war in Iraq, inciting unrest and returning control of both the senate and the house to the Dem’s. And ultimately, most likely, the White House. The end of the Bush dynasty will be an added bonus.

Makes sense to me!

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I hate to comment on this, but I can’t let the ‘logic’ comment slide.

If we are looking at this ‘logically’…

Given that 9/11 is the *only* example of large jet planes hitting a modern skyscraper, how is it possible to make the claim its ‘not possible’ for them to fall in the manner described as a result? Who could even suggest that without a counter-example?

There were other accelerants present beside the jet fuel that increased the temperature of the fire to the temperatures required to melt steel. Numerous eye-witnesses and video evidence have confirmed that the temperature of the fire heated the steel supports white-hot.

If this *was* a controlled detonation, where is the evidence of the same? Why don’t we hear the explosions, or see visual evidence of them? Why did the portion of the building above the point of impact remain intact? Most importantly, why is there not any chemical residue left over in the debris?

Lastly, the reason the buildings collapsed the way they did is that they were designed to. All modern skyscrapers are. If they fell over like a tree it would piss off the neighbors!

Really, this is not the appropriate forum for this crap and posting it casts some serious doubt on your previous analysis. If this does indeed seem logical to you maybe the perma-bulls are right about SD RE!

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DaCounselor,

I think its great that you are the (real) owner of multiple investment properties and should not have to defend yourself to anybody or anyone. My only comment is that I feel that fiscal bubbles are a ‘special case’ of investment cycles and really the best course long-term is to sell off near the peak and diversify into more stable holdings. I did this during the dot-com bubble with some stock I held in a tech company; which never returned to anywhere near its former frothy glory.

My question to you is; if you feel prices are going to drop so much in the short term, why not sell now, earn some interest on your cash and buy on the next up upswing? Do you really like the properties, or are you just not interested in the headache involved in getting them off the market?

I think the point of this thread is not to attack folks like you that have made sane, stable, long term investments. Especially for properties in prime locations. And you are correct that you are better off than folks like me that are priced-out and sitting on the sidelines (I’m not hoping for a crash btw, I just happen to think one is inevitable at this point).

However, we are definitely *both* better off than those folks whom have over-extended themselves during the run-up and are going to have to pay the piper if there is a significant drop in SD RE prices. Even if prices crash and stay low, you will still come out ahead. Myself, I’ll be able to (hopefully) purchase a home to live in. Those caught in the middle are going to be up that famous creek without a paddle.

To powayseller, while I agree with you in general on many of your points, I feel that going after a long-term owner of RE assets is counter-productive. There is really no way to lose other than destruction of the physical properties (which is admittedly a very real risk in so cal). Even then, provided the properties are properly insured it would not be a total loss.

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Here’s an idea:

It becomes *more* profitable to get an education, work hard and provide a valuable service to society than to flip properties or stocks.

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NO MORE SIGN SPINNERS!!!

Or, possibly, new ones pointing to liquor stores and bankruptcy attorneys.

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Sell your current wife and rent a new one.

Why is everyone looking at me like that?

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Three things have to happen, in my opinion, before anyone is going to have a solid idea how this will play out.

1. The fact that home prices are dropping in SD reaches the public at large (and sinks in).

2. The speculators jump ship.

3. The folks with exotic financing either sell, foreclose or refinance.

As Rich has said, this is only JUST beginning.

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Whoops, looks like Craig clears out old listings around midnite each night. 11pm is a good time to track the daily peak.

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The big point you are missing (perhaps intentionally), is that a substantial chunk of SD RE assets are vacant investment properties. The owners have no emotional investment, other than the sticker price, and moving is a non-issue. They will unload these as soon as they realize the markets turned. Expect the frenzy to increase as the speculators move from profiting to minimizing losses. This is turn will put pressure on everyone with an exotic loan to bail out or eventually foreclose.

True, folks that have been here since pre-bubble days and aren’t dependant on the RE industry will probably stick around. I don’t think anybody doubts that.

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I setup a script to track this daily, I’ll post the results in a month (if they flatter my bias). 🙂

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