[peterb]

Start searching for homes that have been listed for over 4 or 5 months. Since many listing agreements are on a 6 month term, people may be more “open” to lower offers and have not yet pulled their home off the market by the 5th month. This one in Pt. Loma looks to have been listed for 7 months before they took this offer. And I would say that their $899K asking price was probably lower than the 2005 peak prices for this house in this area!! So this probably constitutes a 35% to 40% decrease from 2005 peak prices and in one of the more “upscale” areas of SD.
As I was once told in a RE seminar,”The way you get deals is to make offers!!” And I would say that capitulation of the “hold-outs” and those in denial to the price decline is starting to happen.

[peterb]

Start searching for homes that have been listed for over 4 or 5 months. Since many listing agreements are on a 6 month term, people may be more “open” to lower offers and have not yet pulled their home off the market by the 5th month. This one in Pt. Loma looks to have been listed for 7 months before they took this offer. And I would say that their $899K asking price was probably lower than the 2005 peak prices for this house in this area!! So this probably constitutes a 35% to 40% decrease from 2005 peak prices and in one of the more “upscale” areas of SD.
As I was once told in a RE seminar,”The way you get deals is to make offers!!” And I would say that capitulation of the “hold-outs” and those in denial to the price decline is starting to happen.

[peterb]

Start searching for homes that have been listed for over 4 or 5 months. Since many listing agreements are on a 6 month term, people may be more “open” to lower offers and have not yet pulled their home off the market by the 5th month. This one in Pt. Loma looks to have been listed for 7 months before they took this offer. And I would say that their $899K asking price was probably lower than the 2005 peak prices for this house in this area!! So this probably constitutes a 35% to 40% decrease from 2005 peak prices and in one of the more “upscale” areas of SD.
As I was once told in a RE seminar,”The way you get deals is to make offers!!” And I would say that capitulation of the “hold-outs” and those in denial to the price decline is starting to happen.

[peterb]

Start searching for homes that have been listed for over 4 or 5 months. Since many listing agreements are on a 6 month term, people may be more “open” to lower offers and have not yet pulled their home off the market by the 5th month. This one in Pt. Loma looks to have been listed for 7 months before they took this offer. And I would say that their $899K asking price was probably lower than the 2005 peak prices for this house in this area!! So this probably constitutes a 35% to 40% decrease from 2005 peak prices and in one of the more “upscale” areas of SD.
As I was once told in a RE seminar,”The way you get deals is to make offers!!” And I would say that capitulation of the “hold-outs” and those in denial to the price decline is starting to happen.

[peterb]

Start searching for homes that have been listed for over 4 or 5 months. Since many listing agreements are on a 6 month term, people may be more “open” to lower offers and have not yet pulled their home off the market by the 5th month. This one in Pt. Loma looks to have been listed for 7 months before they took this offer. And I would say that their $899K asking price was probably lower than the 2005 peak prices for this house in this area!! So this probably constitutes a 35% to 40% decrease from 2005 peak prices and in one of the more “upscale” areas of SD.
As I was once told in a RE seminar,”The way you get deals is to make offers!!” And I would say that capitulation of the “hold-outs” and those in denial to the price decline is starting to happen.

[peterb]

I remember when the Euro traded for about $.90 USD in 2001 or 2002. Now it’s about $1.53 USD. Gold was much less as well. These are investments. They go up and down. Buying a house is an investment as well. They go up and down. There are fundemental reasons as well as emotional reasons that these investment move in price. Although one could argue that the cost of a house in the OC is now less than it was in 2000 (when valued in inflation adjusted dollars), using this as a marker for the “Ending of the Bubble Bursting” is premature given other factors, IMO.
A median house in SD County has historically cost about 7 times what the median income is when housing has been a relatively negative emotional purchase..i.e..3rd or 4th year of a RE down cycle. I think using this as a gauge is a more accurate measure of when the prices will stop dropping. This shows the level at which people are willing to buy even when the investment does not look that appealing. Of course other factors have an effect, like interest rates, availability of credit, etc…but this ratio seems to have a strong track record even when all other variables are considered.

In SD County the median price is still about 11 times the median income. So it’s still very high, historically speaking. And RE now has a very negative investment appeal. No matter how you measure inflation, which I personally think is vastly under reported, using historical ratio’s of income to prices will probably be a more accurate way to predict the bottom than calculating the effects of inflation on the USD.

[peterb]

I remember when the Euro traded for about $.90 USD in 2001 or 2002. Now it’s about $1.53 USD. Gold was much less as well. These are investments. They go up and down. Buying a house is an investment as well. They go up and down. There are fundemental reasons as well as emotional reasons that these investment move in price. Although one could argue that the cost of a house in the OC is now less than it was in 2000 (when valued in inflation adjusted dollars), using this as a marker for the “Ending of the Bubble Bursting” is premature given other factors, IMO.
A median house in SD County has historically cost about 7 times what the median income is when housing has been a relatively negative emotional purchase..i.e..3rd or 4th year of a RE down cycle. I think using this as a gauge is a more accurate measure of when the prices will stop dropping. This shows the level at which people are willing to buy even when the investment does not look that appealing. Of course other factors have an effect, like interest rates, availability of credit, etc…but this ratio seems to have a strong track record even when all other variables are considered.

In SD County the median price is still about 11 times the median income. So it’s still very high, historically speaking. And RE now has a very negative investment appeal. No matter how you measure inflation, which I personally think is vastly under reported, using historical ratio’s of income to prices will probably be a more accurate way to predict the bottom than calculating the effects of inflation on the USD.

[peterb]

I remember when the Euro traded for about $.90 USD in 2001 or 2002. Now it’s about $1.53 USD. Gold was much less as well. These are investments. They go up and down. Buying a house is an investment as well. They go up and down. There are fundemental reasons as well as emotional reasons that these investment move in price. Although one could argue that the cost of a house in the OC is now less than it was in 2000 (when valued in inflation adjusted dollars), using this as a marker for the “Ending of the Bubble Bursting” is premature given other factors, IMO.
A median house in SD County has historically cost about 7 times what the median income is when housing has been a relatively negative emotional purchase..i.e..3rd or 4th year of a RE down cycle. I think using this as a gauge is a more accurate measure of when the prices will stop dropping. This shows the level at which people are willing to buy even when the investment does not look that appealing. Of course other factors have an effect, like interest rates, availability of credit, etc…but this ratio seems to have a strong track record even when all other variables are considered.

In SD County the median price is still about 11 times the median income. So it’s still very high, historically speaking. And RE now has a very negative investment appeal. No matter how you measure inflation, which I personally think is vastly under reported, using historical ratio’s of income to prices will probably be a more accurate way to predict the bottom than calculating the effects of inflation on the USD.

[peterb]

I remember when the Euro traded for about $.90 USD in 2001 or 2002. Now it’s about $1.53 USD. Gold was much less as well. These are investments. They go up and down. Buying a house is an investment as well. They go up and down. There are fundemental reasons as well as emotional reasons that these investment move in price. Although one could argue that the cost of a house in the OC is now less than it was in 2000 (when valued in inflation adjusted dollars), using this as a marker for the “Ending of the Bubble Bursting” is premature given other factors, IMO.
A median house in SD County has historically cost about 7 times what the median income is when housing has been a relatively negative emotional purchase..i.e..3rd or 4th year of a RE down cycle. I think using this as a gauge is a more accurate measure of when the prices will stop dropping. This shows the level at which people are willing to buy even when the investment does not look that appealing. Of course other factors have an effect, like interest rates, availability of credit, etc…but this ratio seems to have a strong track record even when all other variables are considered.

In SD County the median price is still about 11 times the median income. So it’s still very high, historically speaking. And RE now has a very negative investment appeal. No matter how you measure inflation, which I personally think is vastly under reported, using historical ratio’s of income to prices will probably be a more accurate way to predict the bottom than calculating the effects of inflation on the USD.

[peterb]

I remember when the Euro traded for about $.90 USD in 2001 or 2002. Now it’s about $1.53 USD. Gold was much less as well. These are investments. They go up and down. Buying a house is an investment as well. They go up and down. There are fundemental reasons as well as emotional reasons that these investment move in price. Although one could argue that the cost of a house in the OC is now less than it was in 2000 (when valued in inflation adjusted dollars), using this as a marker for the “Ending of the Bubble Bursting” is premature given other factors, IMO.
A median house in SD County has historically cost about 7 times what the median income is when housing has been a relatively negative emotional purchase..i.e..3rd or 4th year of a RE down cycle. I think using this as a gauge is a more accurate measure of when the prices will stop dropping. This shows the level at which people are willing to buy even when the investment does not look that appealing. Of course other factors have an effect, like interest rates, availability of credit, etc…but this ratio seems to have a strong track record even when all other variables are considered.

In SD County the median price is still about 11 times the median income. So it’s still very high, historically speaking. And RE now has a very negative investment appeal. No matter how you measure inflation, which I personally think is vastly under reported, using historical ratio’s of income to prices will probably be a more accurate way to predict the bottom than calculating the effects of inflation on the USD.

[peterb]

Take a look at Mr. Toscano’s article titled,”What’s in store for 2008″. Located in the upper right-hand frame of this web sites home page. I have to agree with him. Monetary policy in the US has been to lower rates in times of economic slow down. Inflation takes a big back seat to economic growth. Greenspan brought the rate down to about 1% during the 2002 recession. The recession of 2002 is going to look like a picnic at the lake compared to what’s coming this year! You dont think the Fed’s going to lower rates again and again this year as the bad news keeps coming in? Hard assets that are in global demand will probably be the only things that rise in price.

[peterb]

Take a look at Mr. Toscano’s article titled,”What’s in store for 2008″. Located in the upper right-hand frame of this web sites home page. I have to agree with him. Monetary policy in the US has been to lower rates in times of economic slow down. Inflation takes a big back seat to economic growth. Greenspan brought the rate down to about 1% during the 2002 recession. The recession of 2002 is going to look like a picnic at the lake compared to what’s coming this year! You dont think the Fed’s going to lower rates again and again this year as the bad news keeps coming in? Hard assets that are in global demand will probably be the only things that rise in price.

[peterb]

Take a look at Mr. Toscano’s article titled,”What’s in store for 2008″. Located in the upper right-hand frame of this web sites home page. I have to agree with him. Monetary policy in the US has been to lower rates in times of economic slow down. Inflation takes a big back seat to economic growth. Greenspan brought the rate down to about 1% during the 2002 recession. The recession of 2002 is going to look like a picnic at the lake compared to what’s coming this year! You dont think the Fed’s going to lower rates again and again this year as the bad news keeps coming in? Hard assets that are in global demand will probably be the only things that rise in price.

[peterb]

Take a look at Mr. Toscano’s article titled,”What’s in store for 2008″. Located in the upper right-hand frame of this web sites home page. I have to agree with him. Monetary policy in the US has been to lower rates in times of economic slow down. Inflation takes a big back seat to economic growth. Greenspan brought the rate down to about 1% during the 2002 recession. The recession of 2002 is going to look like a picnic at the lake compared to what’s coming this year! You dont think the Fed’s going to lower rates again and again this year as the bad news keeps coming in? Hard assets that are in global demand will probably be the only things that rise in price.

[peterb]

Take a look at Mr. Toscano’s article titled,”What’s in store for 2008″. Located in the upper right-hand frame of this web sites home page. I have to agree with him. Monetary policy in the US has been to lower rates in times of economic slow down. Inflation takes a big back seat to economic growth. Greenspan brought the rate down to about 1% during the 2002 recession. The recession of 2002 is going to look like a picnic at the lake compared to what’s coming this year! You dont think the Fed’s going to lower rates again and again this year as the bad news keeps coming in? Hard assets that are in global demand will probably be the only things that rise in price.

[Author]

Posts