[rockclimber]

dude, banks don’t buy houses.

[rockclimber]

I love the u-haul test! Similar % spread for various locations? Or is LV an anomoly?

[rockclimber]

Just thinking out loud here… Let’s limit the analysis to SFR rentals.

If people cash out in favor of renting, who’s buying their house? Is it someone currently renting? If so, then the demand for rentals does not increase, it’s just a swap. Although, I could be convinced that few people currently renting a SFR are likely to be buying any time soon.

Let’s consider population flux: I’d guess that if we start to see significant housing price declines, very few people coming to town who would normally buy, will do so. So this is an argument for an increase in demand for rentals. However, some portion of the people leaving town will be owners and have to make the choice of either; a) selling in an unfavorable market possibly under distress; b) Grit their teeth, hang on to the property waiting for the cycle to come back… and of course rent out that property. So, at least some will choose option b thus putting more SFR inventory on the market for rent. This could have a balancing effect on supply/demand. It really depends on the flux rate. I bet there will not be as many people coming to town as leaving.

If the psychological effects of the loss of all that paper wealth cause people to spend less, resulting in a real impact on the local economy, people will become much more cost conscience and this could put downward pressure on the SFR rental market. (Wow, that was a long sentence… Sorry to the grammar police out there…)

I think I can convince myself that the SFR rental market could stay flat or decline. Knowing what happened in the last downturn would be interesting. Is there any historical record of rental prices out there?

[rockclimber]

Thanks for the info, RightSide,

Your reply in more in line with my understanding. So, what are your thoughts on the health of commercial real estate?

[rockclimber]

sdr: Some very good suggestions. Thanks for your input. I, for one, appreciate your views.

Now that I’ve said nice things, will you promise not to figure out who I am, hunt me down and kill me? 😉

[rockclimber]

Did anyone else think that sdrealitors post giving personal information was pretty creepy? Rich, what’s up? Is there a way people can get our personal info? I don’t want some wack-a-doo hunting me down if I make them mad…

[rockclimber]

Powayseller,

I can identify with you feeling sorry for the person to whom you sold. I felt the same when I sold my Scripps Ranch house last Nov. But, don’t forget that the “early adopters” on the housing bubble bandwagon were saying the market had topped out in late 2002. Some “really smart data driven” person who sold then would miss 2 years of 20%+ increases in San Diego.

Who can predict irrationality? By definition it cannot be scheduled or predicted except as a probability function.

So, I figured the 27 year old single guy who borrowed over $600k to buy my place could just as easily be boasting about his impeccable timing a year or two from now…

Anyone who seeks advice from a real estate agent on whether or not to buy or sell a house is just plain stupid and will probably learn a hard lesson in the meaning of “conflict of interests.”

[rockclimber]

A note about Rich’s comment on depreciation: I rented out my place for about 2.5 years before selling last Oct. I had to “pay back” all the depreciation that I claimed upon selling the property. If you plan to sell in the future, you should look into this.

[rockclimber]

Gee, what a great idea… just what I want to be doing on my day off… NOT!

You did not create this bubble. You cannot pop it. It will do that on it’s own.

Go for a walk on the beach or a hike in the hills. Enjoy the weather. It’s hot here in Singapore.

Rock

[rockclimber]

Hey teatsonabull,

You sound happy that a lot of lives are going to be ruined. This will be very painful for a lot of people. The only bright side that I can see (other than selfish gain) is that people will learn a valuable lesson. Hopefully we will not see another bubble like this for a while (wishful thinking).

Bubbles are bad for economies. The irrational volitility they create make it very difficult for a prudent intelligent investor to make sound decisions.

I hope a lot of the people who get “cut” by this falling knife, are young enough to recover and smart enough to apply the lessons learned.

Let’s get back to viewing a home as “shelter” instead of an investment.

Rock

[rockclimber]

Just sold my Scripps Ranch house and was renting it for 3 years prior to good tenants for $2200/mo

4bed, 2.5 bath 2050sqf in Huntington with a view, gardener, community pool, etc.

I guess I always thought I was giving them a good deal, but it looks like I was priced right, eh?

Just wanted to give you a data point…
rock

[rockclimber]

Noticed this uses “median HOUSEHOLD income”. My guess is that household income has risen much faster than salaries over the period considered due to the increase in multiple earners under the same roof (anyone got data on that?). If so, then this analysis is somewhat watered down. Another way to look at it… In SD, for many people, it now takes two incomes to afford the same house that one income could buy in 1980… this is where those of us who lived in SD in 1980 say, “No duh!”

rock

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