[rankandfile]

Follow the money. I couldn’t agree more with LookoutBelow. All it takes is an informal phone call or conversation during a golf outing between those in real estate and the newspaper. A few words here and there are changed or moved from the top of the article to the bottom, and now you have what they call “spin”.

[rankandfile]

I tend to agree with LookoutBelow. I think that the decline will be much more steep and will take place in the next 2-3 years. I think that many of the estimates for 2009-2011 are based on past declines. Like I’ve mentioned in another post, this upswing went so high and so fast, that it is bound to return to normalcy in a somewhat similar fashion. We also need to define what the bottom-out level will be. It will likely be a level that properties would be at considering a normal, historical appreciation level. Or then again, maybe they’ll drop further. I think that jobs, wages, and cost of living need to be considered. Job growth is ok, wages are stagnant, and COL is increasing. If wages remain stagnant and costs for things like gas keep rising, lookout.

[rankandfile]

It’s a staring contest at this point. Not buying at these outrageous prices is the best way to reduce the price. The problem is that the price has pushed so high so fast, that owners (with some leverage) can stand to wait a while. Even if prices drop by 50% they will still make money.

[rankandfile]

Bugs, you must have recited that recipe from memory. No eggs with your SPAM? I’ve heard Imran on the radio before. He’s got some balls for posting that here. I am going out on a limb here, but I don’t think he’ll get a lot of business from this site.

[rankandfile]

Excellent point Bugs! Having only two north-south freeways is a bitch. It’s never too late for displacing people for the greater public good (freeways in this case). It just depends on who’s being displaced and how much money and political clout they have to fight it. Just ask those people in Connecticut who are getting displaced for a development project! It’s not even a necessity. The city is basically calling for it to increase tax revenues.

I’d also like to see the infrastructure in San Diego improved. The streets are crap and things like power lines, storm drains, curb/gutter, and sewer lines are old and could use an upgrade. I’m not an expert, but I don’t think sewer spills contribute to a city being called “America’s Finest”.

[rankandfile]

There are so many factors that need to be taken into account that it’s a moving target. I don’t think that SoCal will ever be a ghost town. But I do think that many of the positive reasons for moving/living here or opening a business here are decreasing relative to all the negative reasons. Firstly, California is not a business-friendly state. Ask any business owner. There are so many regulations and costs (ex. worker’s comp) that it’s just not as enticing as a state that cares more about employers. A good, recent example of a business leaving the San Diego area is the Buck Knife factory. They packed up and moved to Idaho (I think) because it got too expensive to operate in San Diego. I am a small business owner here and I actually incorporated my biz in Nevada. I am also considering outsourcing some of my labor elsewhere, such as India. You want to talk about educated, motivated people? India workers are some of the best and they speak English very well. No, I’m not Indian, either. As for the motivated Mexican worker, the first generation are usually highly motivated, but I have seen first hand that the next generation can become Americanized and isn’t as motivated as the first.

In terms of how population growth is affected, it all depends on the type of population you are talking about. Immigrant population can be a factor in housing because many immigrants (particularly Hispanic) that come here come from nothing and don’t have much to lose. Living in an undesirable city or town is actually an upgrade for them. You are right in that both sides of the argument can’t be argued. I made an earlier post where I hypothesized that illegal immigration will have a net increase effect on home prices. But this may not be the case if the increasing population is not able to afford the home prices here.

Who knows all the reasons why people move? The main reason is to simply make a better life, whatever that constitutes. Many middle-class Californians have (and are continuing) to leave the state for greener pastures. Businesses are doing the same. I don’t have hard numbers to back this up, but I believe it to be true. The American dream is simply more attainable and less taxing elsewhere. If the only affordable housing in SoCal is way out in the desert, why not go to Arizona or Nevada? The desert is much cheaper there.

[rankandfile]

I think that the illegal immigration issue comes down to the same thing that most everything comes down to: money. The government benefits from more taxes, industries benefit from cheaper labor, and healthcare, insurance, legal, and home buying industries benefit from more customers.

I think that the loser (in general) is the American middle and lower classes. They still pay a full array of taxes and help to foot the exhorbitent healthcare and insurance costs when illegals don’t pay…you know these industries are going to get paid one way or another.

In terms of the real estate market, I think that the net effect of illegal immigration is an overall increase in demand and the rise in prices that goes along with it. This is an unscientific generalization based on common sense. More people=greater need for a place to stay. No, many of them may not be purchasing a home, but they are likely to affect the supply of rental housing. Anyone who has been in SoCal for any length of time has come across entire apartment complexes and neighborhoods occupied by Latinos. What percentage of them are legal is anyone’s guess.

Again, I don’t have any problem with those that have come here the legal way and are working hard to make it in American. My forebears and many others came here in this way. It’s another thing to sneak in and subvert the system by brute force of population.

And no, making Mexico a better place to live is not the answer! If I hear that answer from one more person I will start to pull my hair out. That is much too large and difficult solution to the problem. Maybe if we had a timetable of 100-200 years, then I’d say give it a shot.

[rankandfile]

It’s not about not embracing illegals and accepting their differences in culture. It’s more a matter of principle about coming here under the radar and exploiting the altruism of our society. Illegals are fully aware that they can come here, have a baby for free that can then be used as a reason to bring more family members in from Mexico. Once here, they are fully aware of the various medical, educational, and other programs that are available that they can exploit. A perfect example are programs such as affirmative action that give preference to someone that is of a non-white nationality. You think they do not know about this?! This is the type of stuff they tell their fellow countrypeople in Mexico who hate their own country! “Come to America. You get free healtcare, a free education, and when your kid goes to college or applies for a job, they’ll get preferential treatment because they are a minority!” The funny thing is that Latinos are actually the majority, not the minority, in many SoCal cities (ex. Los Angeles).

Of course not all immigrants think this way. Many come here and play by the rules. I personally think that the net effect on home prices, 20-30 years from now, will be negative. We are already experiencing a decline in the aging infrastructure in many SoCal cities. Just drive through some cities and you’ll think you’re in Tijuana.

Many legal immigrants who came here legally are pissed as well. They say that they came here to get away from a hole like Mexico. Now they are bringing Mexico to America.

[rankandfile]

I agree that Bugs has reason, but I disagree that they’ll just pack up and go once the boom is over. It is well known that many of them are here to raise a family and have a child that is an American citizen. Considering the $hithole that is called Mexico, can you blame them? Another example that goes on everyday is the pregnant lady who comes across the border just to give birth. They KNOW that the hospitals here will not and cannot turn them away. Once born they are American citizens. This is how the whole anchor baby process begins.

As far as Bush not doing anything, I agree with Powayseller. I actually voted and helped campaign for Bush back in ’04. I feel betrayed by his administration’s immigration policies (or lack of policies). The Republican party’s logic behind allowing illegals in is that they (along with the Democrats) are fighting for a huge block of potential voters 20 years or more from now. They are investing in their future.

What rouses my ire most is how turning a blind eye to illegal immigration slaps the faces of all those who came here the right way.

In terms of real estate and housing, these people are going to need a place to live at some point. I think that it’s as simple as more people = more demand, and more jobs for those in the real estate biz. I’d be interested to see if any of the various real estate industries (NAR, developers, construction, mortgage banking, etc.) have helped fund pro-illegal immigration groups or activities. Follow the money trail.

[rankandfile]

What you mention is very nonchalant and simple, yet profound. There are many educated, hardworking people in SoCal who just can’t enjoy the American dream of owning a home. Sure, renting provides a roof, electricity, and running water, but it’s not the same. Many of us are content on renting for now because we know the housing market is out of whack and it’s a staring contest at this point.

What’s profound is that there seems to be a strange feeling that there’s something fundamentally wrong with the economy here in SoCal. I don’t have the economic mind or motivation to break it all down. It just feels that, in general, the inflationary price pressures and relatively stagnant wage growth are bound to crash together at some point unless things change. It’s like driving a car whose engine malfunction sensors are broken. We have been driving with our pedal to the metal for way too long and don’t know that something very bad is about to happen. –Enter worsening economic and housing stats — We have a feeling that something bad could happen, yet we keep on driving.

[rankandfile]

Good point Bugs. It would be one thing if developers needed to lower labor costs in an effort to be more competitive on price. But when homes are slated to sell in a new development for $800K-$900K or more, the lower labor costs simply pad the profit margins or help to offset any potential downturns in the market…which were unthinkable until recently.

Like other industries, I imagine that developers/construction companies are in favor of continuing using cheap, illegal immigrant labor, even though they’ll never admit to it. But what sort of effect does this have on those jobs projections and figures that are affected by a housing slowdown? If many of the lost jobs are held by illegal immigrants, and we assume that many are not homeowners, then will there not be as much an impact on making those rising ARM payments? Will there instead be more of an indirect ripple effect on other businesses that depend on the consumption of the illegal immigrants?

[rankandfile]

You present an interesting dynamic, nin_sis. You have the older upper managers directing all of the worker ants who are doing their best to make a living and can’t afford to own a home on their average (if not low) wages. How long will they be content with long hours and long commutes, and not have any home or equity to show for it? A similar dynamic can be seen in other industries as well. I think one thing that ends up happening is that some (if not many) of these young, educated, hard-working folks try the SoCal thing for about 1-3 years or more and then just give up. Many end up moving to places like Arizona, Nevada, etc. or back to where they came from, so that they can start/raise a family and not go broke doing so.

I think that this further adds to the loss of the middle class in SoCal. There are mostly the haves and the have nots…and the have nots are in much greater numbers considering illegal immigration. No wonder why healthcare still thrives. People will always get sick or injured, no matter what demographic they are a part of. Who pays for their healthcare services, well, that’s another thread altogether.

[rankandfile]

I don’t think over-pricing by a large margin is going to fly anymore, especially not with the greater amount of information available to buyers and decreasing optimism in the housing market. Besides, would realtors ethically over-price a home knowing that it is not going to move? I can understand testing the waters a bit, but they know they are not going to fool anyone worth their salt. Perhaps gross overpricing isn’t a question of ethics, but then again, maybe it is. Maybe some of the experts can list some reasons why it is not good to overprice a home?

[rankandfile]

This is like the theory that there’s an increase in missing dog and cat ads in newspapers just before an earthquake hits.

[rankandfile]

Is there any way to obtain the cumulative DOM stats, such as how long it was listed and when? The latest DOM do seem like a joke if past listings aren’t considered.

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