[powayseller]

Why aren’t those big investment dollars in the Nasdaq now? As the NASDAQ fell, why didn’t all those investors plunge back in, to scoop up those good deals? After Lucent fell from $90 to $7, why wasn’t it bought back up? Instead, demand kept falling until it went down to $2.50.

The statement that large price drops bring in investors is not what history has shown. Price drops create fear. Eventually, price drops revert to the mean, are backed by fundamentals, and investors come back in.

Housing is the same. Once it really falls, people will be fearful of further drops, so demand slows further.

My guess is that once rentals are cash flow positive, investors will come back in and start buying. This will create more activity in the low end, making the median KEEP dropping. Those who are only looking at the median, won’t even know the buyers are back in the market for one or two years, since the median appears to be 1-2 years behind.

I think the low end picks up first, and then ripples up to the mid and high end homes. So once rent = cost of ownership, the investors will come back in and turn this thing around. That will be when price/income = 7.

Those of us tracking the market closely will be the first to know when buyers are back in the market, and can buy our houses then. I am ready to wait 5-7 years.

[powayseller]

The buyer only found out *after* the purchase, that the realtor was paid more in lieu of a cheaper listing price. Still, the buyer overpaid, so why?

[powayseller]

VCJIM, I sold my Vanguard index funds. When the US recession starts, the Asian recession will follow. I expect the Pacific and emerging markets index funds to be down 30% next year. If so, what good is a 10% rise in the yen?

bob007 – I would invest in euros, canadian dollars, and swiss francs. So it doesn’t matter to me if the dollar strengthens against any other currencies.

[powayseller]

For housing prices, we have data going back to the 1800’s showing prices rise with inflation. For San Diego, we have data going back 2 other cycles, to see how they revert.

Housing prices are basically dependent on the fundamentals: jobs and wages. So it comes down to the price/income ratio or HAI (home affordability index).

I thought bringing in data would keep the emotion out of it. Why can’t we make predictions around here, using proven methods such as reversion to the mean, without people getting upset?

sduude, you sold your house, so why do you care how much houses go down?

[powayseller]

Yes, here’s another one with good understanding of the market
John Hokkanen
Hokkanen Real Estate Team
http://www.SurfTheTurf.com

The other realtor who posts wishes to remain anonymous.

[powayseller]

I can buy Treasury bills at auction through my 401(k), but not foreign currencies; Vanguard limitation. I may switch to a full service brokerage so I can buy foreign currencies. Does anyone have a recommendation?

[powayseller]

Yes, that’s right, Daniel.

Residential investment is a big part of the economy. Curerntly, it carries the economy. It is a leading indicator of the economy, and it correlates with housing prices. The other chart shows that the homebuilder stocks are overvalued.

This leads me a second thought: does it seem right that the “greatest country in the world” is sustained by building houses? Shouldn’t we be making our mark by researching and building new medicines, alternative energy, robotics, new communications and computers? I personally find it concerning that housing leads the economy. It’s not sustainable and it is “brawn” over “brain”.

[powayseller]

The Voice has a story today about overspending by the City of Chula Vista: high promised pension benefits, a new convention center at the bayfront, and a possible stadium, financed by record revenues received from their development last year. Scott Lewis cautions in the article that they will be in trouble, just as the City of San Diego, over promised pension benefits, and that the building boom revenue stream won’t last.

I was told Arnold listens to Thornberg and his UCLA Forecast. The Forecast warns about lower state revenue next year, decreasing for a few years. I heard Arnold on a media soundbite saying that “these temporary increased funds will be spent on temporary programs only; we will not make a permanent burden on the state with temporary increased revenue” (paraphrased).

Poway runs a tight ship; they were one of the only cities with money during the last recession.

[powayseller]

I wanted to post these, because some people on this forum don’t want to believe that housing prices in San Diego could drop 35% or more. Even amont us bears, there are some who think that “this time is different”.

[powayseller]

waiting hawk, yeah, let’s find out if this story is for real. If it is, and he really needs help, someone in the forums could point him in the right direction. If he’s making it up, well, then it’s a sign of the times as La Jolla Renter said.

[powayseller]

What’s OC doing with all that extra revenue? I hope they are saving it for a rainy day, i.e the 2007-2009 recession.

[powayseller]

I’m learning so much today about this market. First, competing REOs on the same street. Now, a homeowner so dependent on MEW to sustain his lifestyle, he is willing to give the deed to his home just to get an extra $25K because he doesn’t qualify anymore for a refinance or HELOC. Either his credit is bad, as he claims, or he lacks equity, or has a prepay penalty. Who knows? Should we e-mail him, just to check out the story?

[powayseller]

Yes, SD Realtor is knowledgeable and honest. He put many posts about what to ask your agent before you hire him, including negotiating the commission. [email protected]

I read on Jim Klinge’s site that if you have no showing, you are >10% overpriced, showing and no offers is 5-10% overpriced, and getting offers you are in the right range.

You get showings by having good pictures on the MLS listing and a good price. There’s 1 buyer for every 8 homes on the MLS, and 80% of buyers start their home search on the internet. Often they show the realtor which homes they want to see, based on their internet search. That’s why the good photos matter. It’s too easy to pass on a home and go on to another one.

Are you having no showings? Then you’re at least 10% too high on price.

SD Realtor, where are you?

[powayseller]

If the guy really has a job, why doesn’t he work out a deal with the lender? Won’t the lender work with people through temporary difficulties? It’s better for the lender to keep that loan, than to foreclose and sell the property for less money, right?

Perhaps this guy is fishy…just looking for some easy cash, and is willing to put his house as collateral to get the $25K?

[powayseller]

anxvariety, that’s good common sense, and will come in handy if there’s an earthquake or virus outbreak too. I really need to get back to Costco to finish my 3-week food and water supply. Gas is a great idea to add. I keep the food/water in my kids’ closets. My Mormon friends told me to put cans under the bed, in closets, a little bit all over the house.

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