[pemeliza]

“It was a **credit bubble** that pushed prices up, in the aggregate, in the 2001-2007 period”

I would argue that the “credit bubble” period was more like 2003-2007.

Also, saying 1988 was near the last peak is like saying 2003 was near this peak. While certainly a true statement, things were changing incredibly fast during the 1988-1990 and 2003-2005 time periods.

[pemeliza]

“It was a **credit bubble** that pushed prices up, in the aggregate, in the 2001-2007 period”

I would argue that the “credit bubble” period was more like 2003-2007.

Also, saying 1988 was near the last peak is like saying 2003 was near this peak. While certainly a true statement, things were changing incredibly fast during the 1988-1990 and 2003-2005 time periods.

[pemeliza]

“It was a **credit bubble** that pushed prices up, in the aggregate, in the 2001-2007 period”

I would argue that the “credit bubble” period was more like 2003-2007.

Also, saying 1988 was near the last peak is like saying 2003 was near this peak. While certainly a true statement, things were changing incredibly fast during the 1988-1990 and 2003-2005 time periods.

[pemeliza]

Interesting question sdrealtor.

As another data point, I paid x dollars for a house last year in Mission Hills that sold for (3/5)x dollars in 1988. So I paid five thirds of the 1988 price which was around a 67% appreciation over the last 21-22 years. If you look at the government stats, that is under the rate of inflation for the same time period. Interest rates in 1988 where 8-9% and they are now 4-5%. Frankly I have seen better deals close over the last 12 months than mine but I loved my house and was willing to pay up for it.

Based on my study of sales history, I would say that 1988 prices were at least 10-15% under the peak prices of the last cycle which occurred closer to 1990. It has been a while since I looked at the numbers, but certainly 1988 prices were not the peak prices of the last cycle at least not in Mission Hills.

Also, again this is Mission Hills, but prices recovered to previous peak prices probably closer to 1998. Certainly, they were quite a bit higher than the prior peak by 2000.

[pemeliza]

Interesting question sdrealtor.

As another data point, I paid x dollars for a house last year in Mission Hills that sold for (3/5)x dollars in 1988. So I paid five thirds of the 1988 price which was around a 67% appreciation over the last 21-22 years. If you look at the government stats, that is under the rate of inflation for the same time period. Interest rates in 1988 where 8-9% and they are now 4-5%. Frankly I have seen better deals close over the last 12 months than mine but I loved my house and was willing to pay up for it.

Based on my study of sales history, I would say that 1988 prices were at least 10-15% under the peak prices of the last cycle which occurred closer to 1990. It has been a while since I looked at the numbers, but certainly 1988 prices were not the peak prices of the last cycle at least not in Mission Hills.

Also, again this is Mission Hills, but prices recovered to previous peak prices probably closer to 1998. Certainly, they were quite a bit higher than the prior peak by 2000.

[pemeliza]

Interesting question sdrealtor.

As another data point, I paid x dollars for a house last year in Mission Hills that sold for (3/5)x dollars in 1988. So I paid five thirds of the 1988 price which was around a 67% appreciation over the last 21-22 years. If you look at the government stats, that is under the rate of inflation for the same time period. Interest rates in 1988 where 8-9% and they are now 4-5%. Frankly I have seen better deals close over the last 12 months than mine but I loved my house and was willing to pay up for it.

Based on my study of sales history, I would say that 1988 prices were at least 10-15% under the peak prices of the last cycle which occurred closer to 1990. It has been a while since I looked at the numbers, but certainly 1988 prices were not the peak prices of the last cycle at least not in Mission Hills.

Also, again this is Mission Hills, but prices recovered to previous peak prices probably closer to 1998. Certainly, they were quite a bit higher than the prior peak by 2000.

[pemeliza]

Interesting question sdrealtor.

As another data point, I paid x dollars for a house last year in Mission Hills that sold for (3/5)x dollars in 1988. So I paid five thirds of the 1988 price which was around a 67% appreciation over the last 21-22 years. If you look at the government stats, that is under the rate of inflation for the same time period. Interest rates in 1988 where 8-9% and they are now 4-5%. Frankly I have seen better deals close over the last 12 months than mine but I loved my house and was willing to pay up for it.

Based on my study of sales history, I would say that 1988 prices were at least 10-15% under the peak prices of the last cycle which occurred closer to 1990. It has been a while since I looked at the numbers, but certainly 1988 prices were not the peak prices of the last cycle at least not in Mission Hills.

Also, again this is Mission Hills, but prices recovered to previous peak prices probably closer to 1998. Certainly, they were quite a bit higher than the prior peak by 2000.

[pemeliza]

Interesting question sdrealtor.

As another data point, I paid x dollars for a house last year in Mission Hills that sold for (3/5)x dollars in 1988. So I paid five thirds of the 1988 price which was around a 67% appreciation over the last 21-22 years. If you look at the government stats, that is under the rate of inflation for the same time period. Interest rates in 1988 where 8-9% and they are now 4-5%. Frankly I have seen better deals close over the last 12 months than mine but I loved my house and was willing to pay up for it.

Based on my study of sales history, I would say that 1988 prices were at least 10-15% under the peak prices of the last cycle which occurred closer to 1990. It has been a while since I looked at the numbers, but certainly 1988 prices were not the peak prices of the last cycle at least not in Mission Hills.

Also, again this is Mission Hills, but prices recovered to previous peak prices probably closer to 1998. Certainly, they were quite a bit higher than the prior peak by 2000.

[pemeliza]

“We are as far away from price compression as one can get”

CAR, I just saw a post of years saying that the high-end (over 1M) is trading at 2000-2002 levels. That sounds like price compression to me.

“with the lower half closer to “normal””

I would say it is the opposite in that the high end (over 1M) is closer to normal because there is little government intervention in that market. I guess it depends on what you mean by high end. The low end is what is benefiting from the ultra low interest rates, tax credits, and FHA program. At the high end people tend to bring their own $$$ to the table.

[pemeliza]

“We are as far away from price compression as one can get”

CAR, I just saw a post of years saying that the high-end (over 1M) is trading at 2000-2002 levels. That sounds like price compression to me.

“with the lower half closer to “normal””

I would say it is the opposite in that the high end (over 1M) is closer to normal because there is little government intervention in that market. I guess it depends on what you mean by high end. The low end is what is benefiting from the ultra low interest rates, tax credits, and FHA program. At the high end people tend to bring their own $$$ to the table.

[pemeliza]

“We are as far away from price compression as one can get”

CAR, I just saw a post of years saying that the high-end (over 1M) is trading at 2000-2002 levels. That sounds like price compression to me.

“with the lower half closer to “normal””

I would say it is the opposite in that the high end (over 1M) is closer to normal because there is little government intervention in that market. I guess it depends on what you mean by high end. The low end is what is benefiting from the ultra low interest rates, tax credits, and FHA program. At the high end people tend to bring their own $$$ to the table.

[pemeliza]

“We are as far away from price compression as one can get”

CAR, I just saw a post of years saying that the high-end (over 1M) is trading at 2000-2002 levels. That sounds like price compression to me.

“with the lower half closer to “normal””

I would say it is the opposite in that the high end (over 1M) is closer to normal because there is little government intervention in that market. I guess it depends on what you mean by high end. The low end is what is benefiting from the ultra low interest rates, tax credits, and FHA program. At the high end people tend to bring their own $$$ to the table.

[pemeliza]

“We are as far away from price compression as one can get”

CAR, I just saw a post of years saying that the high-end (over 1M) is trading at 2000-2002 levels. That sounds like price compression to me.

“with the lower half closer to “normal””

I would say it is the opposite in that the high end (over 1M) is closer to normal because there is little government intervention in that market. I guess it depends on what you mean by high end. The low end is what is benefiting from the ultra low interest rates, tax credits, and FHA program. At the high end people tend to bring their own $$$ to the table.

[pemeliza]

“Also, I think it’s wise to consider what our debt situation was then vs. now, and also what our economic prospects look like in the future.”

The economic prospects always look dismal in a trough.

My starting salary as a software engineer in Sorrento Valley in 1993 was 38k. I had a B.S. in Computer Science from a top college. The job market then was terrible and very few people were getting jobs at all.

I think that people are forgetting just how awful the job market and the economic prospects were in the early to mid 90’s. Of course, in a few years that all changed in the blink of an eye and times were good again.

Also keep in mind that during the 90’s the low in the fed funds rate was 3% in 1992. We are now at 0% with additional QE measures. Money is far cheaper now than during any time period in the 90’s. Yet in the 90’s we still managed to recover.

Is it different this time? Who knows. As CAR says place your bets. I think it really is a coin flip at this point.

[pemeliza]

“Also, I think it’s wise to consider what our debt situation was then vs. now, and also what our economic prospects look like in the future.”

The economic prospects always look dismal in a trough.

My starting salary as a software engineer in Sorrento Valley in 1993 was 38k. I had a B.S. in Computer Science from a top college. The job market then was terrible and very few people were getting jobs at all.

I think that people are forgetting just how awful the job market and the economic prospects were in the early to mid 90’s. Of course, in a few years that all changed in the blink of an eye and times were good again.

Also keep in mind that during the 90’s the low in the fed funds rate was 3% in 1992. We are now at 0% with additional QE measures. Money is far cheaper now than during any time period in the 90’s. Yet in the 90’s we still managed to recover.

Is it different this time? Who knows. As CAR says place your bets. I think it really is a coin flip at this point.

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