[PerryChase]

I believe that the Chinese (and others) have an interest lending us money so we can buy their stuff. America is still the engine of world economic growth. If the American consumers stop spending then China wouldn’t need to make all the consumers products to sell to us. China has an overcapacity as it is. If the US economy goes into recession, commodity prices will drop.

Bush should fire Condi Rice and give Henry Kissenger the job. He’ll make a pragmatic (rather than ideological) deal with Iran thus solving the Middle East problems in one swoop. That’ll bring stability back to oil prices. I was listening to Dr. Kissinger on Charlie Rose and it seems to me that if we could make a deal with Iran, we’d neutralize Hezbolah, Syria and the Shiites in Iraq all at once. If your can’t fight your ennemy, make him your friend.

So, if things work out, with low priced consumer goods and lower oil prices, we would withstand a recession quite well.

I still however think that we’ll have a housing crash regardless of the overall economy. As was mentioned before, assets prices have nothing to do with economic growth.

[PerryChase]

Lendingbubble, I beleive that the tour you mentioned might be a good independent film project. Such a film might even make it on PBS or HBO.

I enjoy posts by people who have forceful opinions. Better than the politically correct stuff. Come on let’s have some humor here and laugh at ourselves and others.

[PerryChase]

Did anyone of you see your ZipRealty reviews get published?

[PerryChase]

LA_Renter. I’m with you on this. Sellers who need to sell will drive pricing. They will go through the 5 stages of grief… then they’ll do whatever it takes to sell.

I anticipate that by fall of 2007, we’ll see some drastic adjustments.

Like you said, the disintegration of lending standards will lead to a hard landing.

[PerryChase]

svferris, yeah i’ve seen those tri-level townhouses. I think they’re the way of the future since they allow more buildable units per acre.

In my opinion, we should change the building restrictions to allow 3 story structures in residential areas.

[PerryChase]

Mini storage has always been a profitable business. Americans store more junk than ever before.

Exchange stock tips is fine but investment club sounds like a bad idea to me. The bookkeeping is is a nightmare.

[PerryChase]

I believe that since the times of the Normans until WWI, the British aristocrats ate French cuisine and spoke French at home. What does the Queen eat today?

I went to school overseas and my Brit Lit professor was the wife of the British Consul. She was quite proud and insisted that everyone spoke the Queen’s English in her class. She explained that the Queen’s English is the best English and that French cuisine is the best food.

[PerryChase]

I was one of the fools who bought a house in 1989 so I should know. You live and learn. 🙂

At that time, there were ARMs but I had not heard of interest-only loans and all the other exotics we have today.

Loan officers were affiliated with builders but they did not sit in the sales offices running buyers through various iterations to see what maximum monthly payments they could afford. There were no 1%, 2%, or 3% buydown loans. At that time my loan was 9.5% fixed.

Most people would put down 20% or had to pay PMI. Buyers generally did not do 100% loans nor the 80/20 loans we see today.

Loan equity loans were available. But HELOCs were rare.

Today, the marketing machine is much more effective and buyers are not really aware of what they are getting into. They still think that so long as they can afford the monthly payments, they are “investing” in their future (not throwing money away in rent).

I believe that the exotic loans and payment resets will have the effects today that the mass lay-offs had in 1990.

If we have a recession in 2007 then unemployment and loan resets will be double whammys on the real estate market.

[PerryChase]

Yes they did. I remember, in 1990, the Pardee development in Sorrento Valley sold starting at $175k for a single story at the low. That area sold, in 1989, in the upper $200k – $350k originally. In Carmel Valley (then called North City West), several developments went bankrupt taking along with them some S&Ls. HomeFed and Imperial Savings were 2 San Diego casualties — along with S&Ls accross the country.

[PerryChase]

I beg to disagree Diego. I believe that all new develpment prices will drop 25% within then 18 months. The resale property will follow a little later.

I don’t have rigorous analysis but that’s exactly what happened in 1990. I expect to see a repeat this time around.

[PerryChase]

unbiasedobserver, I’ve thought about moving downtown for a while now. However, I always hesitated for the reason you mentioned. 10 years ago, no one wanted to live there.
In my view, living in an apartment should be less expensive than living in a house. A two-bedroom apartment for the price of a spacious house always seemed ridiculous to me.

I’ll wait and see how things turn out in the next few years.

Mr. Brightside, I agree that Cortez and Little Italy have more life than other parts of downtown. However, I hate the architecture of Little Italy. And what about that hideous new tall tower in the middle of Cortez? What kind of architecture is that supposed to be?

[PerryChase]

I’d like to live downtown also, that’s why I asked. I was just wondering if downtown will have the critical mass to be a real city.

What do you think of Smart Corner? It’ll have the trolley station right in front and the office building will house the San Diego Housing Commission. Will that corner be full of transcients who urinate everywhere? I walked downtown near there last week and the smell of urine wasn’t pleasant.

[PerryChase]

So Mr. Brightside, in a few years, after the new projects are completed, what prices do you think downtown condos will settle at? Say for a 1 bedroom.

My gut feeling about SD downtown condos is that they are selling a sleek minimalist urban lifestyle. However, as people move in they’ll find the space too cramped and will want to return to the suburbs. Afterall, this is not Manhattan or SF where people are stuck on an island/peninsula.

What is your take on the viability of downtown SD?

[PerryChase]

I see plenty of resale downtown condos on the MLS. But most of the new projects are sold through builders sales centers.

I too am very interested in downtown. I wonder who’s going to line up to buy those new projects coming down the pike. I suspect a few projects will get cancelled.

My friend’s building downtown is mostly empty. Lots of flippers still holding on.

[PerryChase]

I asked my Navy friend to answer me honestly on why he joined the Navy. He said for the opportunity to learn to fly. Then I asked about love of country. He said that was one reason but not the primary reason. I asked him why he remains in the reserves to this day. He said for the specialized training and the retirement. I asked why he thought people enlist in the military. He said for the job opportunity and the training. Did he feel that enlisting is in itself an act of heroism? No.

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