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scruffydog
ParticipantMedian price complainers…give it a rest already! It’s been debated here endlessly. Everyone is aware of the limitations.
I would use some other historical measure if it were readily available.ParticipantNoticeably missing from this story –
1. The 90s economic downturn in CA was second only to the great depression
2. unemployment was ~8%The 90s housing downturn did not magically happen in a vacuum; the CAUSE was loss of jobs due to aerospace downsizing. ~500,000 jobs total lost statewide.
If the current economy was as sick as the 90s economy I would also jump on the 25 – 30% or more median price loss bandwagon.ParticipantNoticeably missing from this story –
1. The 90s economic downturn in CA was second only to the great depression
2. unemployment was ~8%The 90s housing downturn did not magically happen in a vacuum; the CAUSE was loss of jobs due to aerospace downsizing. ~500,000 jobs total lost statewide.
If the current economy was as sick as the 90s economy I would also jump on the 25 – 30% or more median price loss bandwagon.ParticipantEveryone is aware SD median price has declined ~6% from its peak from ~18-24 months ago. That’s the whole point – it is such a small decline over an almost 2 year period. Such a tiny decline does not portend the huge declines you predict.
Expensive areas LED the price declines last time. LA Times article noted Bev Hills experienced a 40% decline from 1989 to 1993. If housing market is so bad as you say why such a tiny median decline this time (at least in SD…in LA median is STILL increasing).
You would expect to see something much larger than 6% after almost 2 years from the peak!
Not only are expensive areas not decreasing now they are still increasing and sales are robust. This is a major difference is this r/e cycle from the 90s. Plus the economy is still relatively strong and unemployment low. Doom and gloom 50% median price declines for typical sfrs in this r/e cycle in SoCal will NOT occur.
50% decline is not gonna’ happen in SoCal due to demand and limited supply. (In FL different story; we’ve already seen 50% decline in Ft Myers tract housing project)ParticipantEveryone is aware SD median price has declined ~6% from its peak from ~18-24 months ago. That’s the whole point – it is such a small decline over an almost 2 year period. Such a tiny decline does not portend the huge declines you predict.
Expensive areas LED the price declines last time. LA Times article noted Bev Hills experienced a 40% decline from 1989 to 1993. If housing market is so bad as you say why such a tiny median decline this time (at least in SD…in LA median is STILL increasing).
You would expect to see something much larger than 6% after almost 2 years from the peak!
Not only are expensive areas not decreasing now they are still increasing and sales are robust. This is a major difference is this r/e cycle from the 90s. Plus the economy is still relatively strong and unemployment low. Doom and gloom 50% median price declines for typical sfrs in this r/e cycle in SoCal will NOT occur.
50% decline is not gonna’ happen in SoCal due to demand and limited supply. (In FL different story; we’ve already seen 50% decline in Ft Myers tract housing project)ParticipantEasily explained; supply and demand.
I agree there is no housing recession in metro LA! Most of metro LA county is built out, very few new projects can be built, therefore new supply is somewhat restricted and the underlying demand supports the prices. Contrast this with San Diego where numerous large projects have been built adding to the supply. If buyers get spooked, prices can soften. Even then I read on this site that projects are selling and there are some price increases.
Look at Sacramento and other CA areas where builders are able to add lots of new product. These are the areas that are experiencing the price drops.
Foreclosure noise at the lowest end of the market has the bears excited. In LA, rate is still 50% of the peak of mid 90s. Nothing to worry about.
Median SFR price declines of 50% in LA (or even SD?) NOT GONNA’ HAPPEN. (**itty El Cajon apt conversions is another story)ParticipantEasily explained; supply and demand.
I agree there is no housing recession in metro LA! Most of metro LA county is built out, very few new projects can be built, therefore new supply is somewhat restricted and the underlying demand supports the prices. Contrast this with San Diego where numerous large projects have been built adding to the supply. If buyers get spooked, prices can soften. Even then I read on this site that projects are selling and there are some price increases.
Look at Sacramento and other CA areas where builders are able to add lots of new product. These are the areas that are experiencing the price drops.
Foreclosure noise at the lowest end of the market has the bears excited. In LA, rate is still 50% of the peak of mid 90s. Nothing to worry about.
Median SFR price declines of 50% in LA (or even SD?) NOT GONNA’ HAPPEN. (**itty El Cajon apt conversions is another story)ParticipantDemand is what is keeping the prices of properties in SD from declining (much).
Overall SD county supply is steady ~ 20k. There is no panic selling.
Because there is no recession currently, foreclosed homes are finding eager buyers.
There are property markets that are basket cases – Florida for example. A lot of people on this site wish SD market was like FL so they can buy at 50% discount. Not gonna’ happen in SD though.ParticipantDemand is what is keeping the prices of properties in SD from declining (much).
Overall SD county supply is steady ~ 20k. There is no panic selling.
Because there is no recession currently, foreclosed homes are finding eager buyers.
There are property markets that are basket cases – Florida for example. A lot of people on this site wish SD market was like FL so they can buy at 50% discount. Not gonna’ happen in SD though.ParticipantScene: Present day. Veterinarians office. Scruffydog is on the examination table being checked for distemper.
Vet: Bad Scruffydog!!!… I read you got all the other dogs in the Piggington kennel barking furiously
Scruffydog: (whimpering) It was unintentional…
Vet: I’ll bet! And what’s this I hear? The kennel administrator even had to admonish xxx!
Scruffydog: (tail between legs) I’ve learned my lesson…never question
Vet: That’s right NEVER, EVER question “The Pack” or they will bite your head off.
Scruffydog: …but they said I was delusional and…
Vet: Life. It’s all about attitude. Some peer at their water bowl and see that it’s half empty and full of dead bugs and others see that it’s half full and full of bugs.
Scruffydog: Huh?…
Vet: You know the Bush and Cheney neocons have engineered the house price runup and subprime meltdown so their rich friends can scoop up property at firesale prices?
Scruffydog: (sighing) All this negativity and conspiracy theory is making my head ache
Vet: Here…lap up this Kool-Aid the other Piggington dogs made for you. It will make you *better*.
later…
Scruffydog: (appears frightened) Thanks for the Kool-Aid…I guess. But now I feel fearful and panicky about my future.
ParticipantScene: Present day. Veterinarians office. Scruffydog is on the examination table being checked for distemper.
Vet: Bad Scruffydog!!!… I read you got all the other dogs in the Piggington kennel barking furiously
Scruffydog: (whimpering) It was unintentional…
Vet: I’ll bet! And what’s this I hear? The kennel administrator even had to admonish xxx!
Scruffydog: (tail between legs) I’ve learned my lesson…never question
Vet: That’s right NEVER, EVER question “The Pack” or they will bite your head off.
Scruffydog: …but they said I was delusional and…
Vet: Life. It’s all about attitude. Some peer at their water bowl and see that it’s half empty and full of dead bugs and others see that it’s half full and full of bugs.
Scruffydog: Huh?…
Vet: You know the Bush and Cheney neocons have engineered the house price runup and subprime meltdown so their rich friends can scoop up property at firesale prices?
Scruffydog: (sighing) All this negativity and conspiracy theory is making my head ache
Vet: Here…lap up this Kool-Aid the other Piggington dogs made for you. It will make you *better*.
later…
Scruffydog: (appears frightened) Thanks for the Kool-Aid…I guess. But now I feel fearful and panicky about my future.
Participant4plex – sorry I thought my post was clear. You will not get your predicted r/e financial Armageddon unless unemployment returns to 90s levels or worse.
Rust – Yes, yes sales are down but so what? When it starts to translate into meaningful lower home prices then I will take notice. So far price fluctuations are statistical noise – not like the minus 40% in above article.Participant4plex – sorry I thought my post was clear. You will not get your predicted r/e financial Armageddon unless unemployment returns to 90s levels or worse.
Rust – Yes, yes sales are down but so what? When it starts to translate into meaningful lower home prices then I will take notice. So far price fluctuations are statistical noise – not like the minus 40% in above article.ParticipantHey I’m back!
Data hounds: look at the posts earlier in the thread.
Also here’s something from the LA Times today. Interesting quote and supports my earlier post on unemployment in 90s vs now.http://www.latimes.com/business/la-fi-platinum7jul07,0,5564845.story?page=1&coll=la-home-business
The Platinum Triangle wasn’t always on fire. During Southern California’s real estate downturn in the 1990s, Beverly Hills was among the first neighborhoods to slump. From 1989 to 1993 prices declined 40%.
“The last time, the high end was leading the charge on the way down,” says G.U. Krueger, who in the 1990s was the chief economist for the California Assn. of Realtors. “Now things are totally different.”
Krueger notes that the 1990s drop was triggered by job losses amid a broad economic downturn. The current housing malaise is largely driven by an affordability crunch at the lower end of the market, he says, as adjustable-rate loans ratchet higher and lenders tighten standards to counter rising defaults on mortgages.
From LA land blog:
Odd Fact: For all the hype, real estate prices in the “Platinum Triangle” have not kept pace with the rest of L.A. Over the last nine years, median sales prices in the “triangle” are up 127%; prices for all of L.A. County are up 229%. -
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