[poorgradstudent]

“The watercooler talk has started and it won’t be long before everybody knows somebody in trouble.”

I agree totally. The last time I got my hair cut, which was in November, the woman who cuts my hair, who is bright, personable, but not especially formally educated seemed to agree with me that housing prices are going down. She had a friend who bought a condo she couldn’t really afford with an exotic loan and tried to convince my stylist to do the same, who luckily for her ultimately decided not to. I think her reasons were more based on not wanting to change neighborhoods and liking her current situation/roommates/neighbors, but since she’s from SD originally she’s seen the ridiculous run-up in prices.

Her friend who bought in is in definite trouble. It really put me in a position of mixed emotions, because so often individuals experience personal pain in order for a system to correct itself.

[poorgradstudent]

Is he “lying”, or has he just ‘drank the Kool-Aid’ and honestly believes what he says?

I actually wonder if the latter isn’t true. If you want to believe something, and surround yourself with people who believe the same thing, it can become true in your mind.

Either way, he’s wrong 🙂 Although, I do feel like the National Market is closer to it’s bottom than the San Diego market.

[poorgradstudent]

Maybe it’s because no one wants to buy a Ford?

In the next few years I really expect a major buyout/merger in the auto industry, be it Toyota buying one of the “big three” or a merger between American companies.

[poorgradstudent]

UCSD has several good coffee shops on campus, although they’re really only open 9-5 M-F. UCSD students on a whole seem content to just go to Starbucks for coffee. I imagine the rent in the UTC area is pretty high, which keeps out your more interesting coffee shops, although “Wired” isn’t bad – It’s off near the 805 on the other side of Towne Center Drive near Le Peep.

[poorgradstudent]

I expect 7-8% growth in the Dow and S&P 500 in 2007, with the Nasdaq lagging a bit behind.
Year end projections:
S&P: 1520
Dow: 13,340

If we get to or near those levels by mid-summer, I’d definitely be concerned about a major drop brewing.

[poorgradstudent]

“What is so great about UTC area?”
Nothing?

Seriously, it’s a very safe area, aside from bikes being stolen and cars broken into the crime is pretty minimal. Part of this may be the complete lack of any sort of night life in the area. There are NO decent bars within walking distance of the area (Sorry El Torito and Rock Bottom, I refuse to acknowledge you as “decent bars” although I do enjoy your restraunts).

It’s close to UCSD, which does have the perks of having a strong demand for renters, who seem accustomed to having to pay for a full year of rent to get an apartment. The flip side of that is they are mostly undergraduate college students, and while as a whole UCSD students tend to be more docile and studious than the typical undergrad, college students are still notorious for wear and tear on properties.

Another Pro/Con depending on your position is the cops tend to be pretty aggressive in busting up parties, especially on weekday nights.

It’s also very close to “Biotech Eden”, which would be advantageous if you worked there.

[poorgradstudent]

“Bush had to clean up Clinton’s mess.”

Wow. Just… wow.

Clinton’s middle class tax cuts were what made the 90s so great. Well, that and having a divided government, that reigned in wasteful spending.

2002-2006 will be remembered as the awful “rubber stamp” years, where a quagmire of a war dragged down our economy (please, no one use the “war helps the economy” crap. That was really only true in WWII which was a special case.)

Clinton cleaned up Reagan’s mess, and Bush has mucked things up again. But, the American people elected him in 2004 (and the supreme court appointed him in 2000), so we’re stuck with him for another two years. I’m cautiously optimistic that this divided government will be a lot more financially responsible than the rubber stamp congress was.

[poorgradstudent]

Insider running as an outsider… coke sniffing… why am I getting 2000 flashbacks? 🙂

[poorgradstudent]

I think we’ve all been taken in buying something that was “on sale” for 10-20% off the “regular price” without stopping to think about how overpriced the product was originally.

To me, that’s this housing market. It’s walking into a store where everything was overpriced, but now is “on sale” with modest discounts. Still not great values, but enough to trick some people into thinking they’re getting a deal.

[poorgradstudent]

I’ve occasionally paid for sites for a month or so in the past, but I loathe renewing costs. I am a member of a couple sites that simply charge one time or modest, <$30, annual fees. For larger sites free content with advertising seems to be the model that works best. Smaller ones often get by with merchandising and asking for donations. Another model that sometimes works is providing decent, free, advertising driven content, with extra premium content that requires a subscription fee. It depends a lot on the site, but the ones that seem to work are those that are labors of love or recreation by the site creators who manage to attract enough traffic to break even or turn a small profit through advertising.

[poorgradstudent]

“The Lebodas bought the home in 2005 with the intention of starting a second home-care business, but it’s being used as personal storage space. It’s also the most expensive property of the bunch, costing them $3,159 a month.”

Wow, that’s an expensive storage space!

The good news for them is even if they take a 10-20% loss of the stated price on the properties, at least they can cover the mortgages. That’s assuming they can find a buyer.

[poorgradstudent]

Some interesting points, although I disagree with you on a lot of your conclusions.

The US has one of the highest birth rates of any industrialized country, largely due to immigration. It’s quite hard to project how those trends will continue or change in the near and distant future. It’s well documented that recent immigrants have more children than 2nd, 3rd, etc generation citizens of industrialized nations.

If San Diego’s growth does come from immigrants, it’s unlikely they’re going to drive up housing prices. Stereotypically they’re willing to live in much denser homes, and aren’t usually going to make the kind of incomes to afford homes. Also, in the case of illegals, they’re not going to be able to have the paperwork to get the big loans needed.

If 9% of individuals can afford the median home, it doesn’t necessarily mean only 9% own. 50% of homes cost less than the median, and you’d imagine that those are being bought by people below the median income. Still a problem, but not QUITE as dire as 8-10% makes it sound.

Agriculture and entertainment are two industries the United states has huge advantages in and is unlikely to outsource. The reality is the US has a low population density for an industrialized nation (Easy to forget when you live on the California Coast, but when you’re from the midwest you know what most of the country looks like). We have a lot of arable land, and as a consequence have some of the cheapest food in the world. The government actually buys excess dairy products to prop up the price to keep farms in buisiness. There’s a cost factor too: with the rising price of oil, transporting food long distances isn’t very practical.

I tend to believe the economy drives housing, and not the other way around. I also believe in cycles. We’re headed for a downcycle, though the exact timing is tough to predict. Regardless, we’re living in the richest period of history to date, and it’s hard to imagine that technology won’t continue improving.

[poorgradstudent]

It sounds like Detroit is a bit ahead of the curve, thanks to its almost constantly weakening job market. Detroit very well may have hit bottom in terms of its local market.

San Diego ranked #35 on their foreclosure list. I wouldn’t be shocked to se it move up in the next year.

[poorgradstudent]

fuggy wrote:
“The “rule” that 18 year olds need to move out and rent their own apartment will start to seem bizarre.”

This hasn’t been a “rule” for a long while. Unlike the housing bubble, the trend for young people living with their parents longer has been well characterized by the mainstream media for some time now.

I do agree that we may see a trend towards more multigenerational homes in the future.

[poorgradstudent]

I just read that article before coming here. It’s pretty clear the husband is being stubborn regarding his ill timed “investment” idea. The horse probably isn’t helping much, but I almost guarantee that if they sold the rental properties they’d be quite comfortable.

[Author]

Posts