[sdduuuude]

My “SWAG” analysis is – this seems 2 to 3 times worse than the last bubble, which resulted in a trough-to-peak reduction in median price of about 10%. So, call it 25%.

Why median price? Because it is measureable. Why predict something you can’t measure, practically – like same house value.

Depending on the figure you use, 7 years of inflation could put this pretty close to 50%, inflation-adjusted, by the way.

[sdduuuude]

Again – when I talk about predictions, I predict a specific measure that can be verified. To me, the “peak” is the highest median price, so it is easy to see the peak because it is specific.

For predictions that include only a number, without clarification – yes, the peak is hard to define.

[sdduuuude]

rankandfile

P.S. The error of stating 80% when the numbers calculate to %59 is a bit more than a “nuance”

[sdduuuude]

I have a couple analyses on this forum – many months ago.

That line moves between %16% and 25% depending on my mood and the analysis I do. I’m at about 22% now.

Also, I make it very clear that my prediction is for actual peak-to-trough median price reductions in SFRs. Many who post predictions will say “50%” OK. 50% what? 50% real? 50% actual? The biggest drop in any zip code is 50%? The average? Condos? SFR? What? Be clear.

In 5 years, some will go find 3 houses that dropped by the exact amount they predicted and say “see, I told you” when in fact those examples don’t behave anywhere near the median price.

Also, some will predict a 50% drop in actual prices and mean real prices (or vice-versa), forgetting to adjust for inflation, which is significant when discussing a 7 year outlook in an environment where you hear the word “hyperinflation” on occasion.

So, when I draw a line in the sand, you know where that line is and you know when it has been crossed or not.

I don’t mind “gut feel”, “SWAGS” (Stupid, wild-ass guesses), and the newly founded “RSI”, as long as they are presented as such.

What I don’t like is to see numbers and analysis tuned to meet SWAGS that were formulated before the analysis began.

[sdduuuude]

sdrealtor

Thanks for this post. I value your “in the field” numbers but I also value the Case-Schiller index, which only show us down 3% or so. Those are county-wide numbers, though. Why so different? Was North County’s boom a bit more aggressive than the rest of the county?

It is certainly important to distinguish between “early 2004” and “late 2004” prices, thats for sure. The peak was maybe 8 or 10 percent up from late 2004, and up over 30% from early 2004.

[sdduuuude]

Oh, and a 10% drop, followed by another 10% drop, followed by a 20% drop and another 20% drop and another 20% drop is only a 59% drop, not an 80% drop, but what’s 20 percentage points?

100 * .90 = 90
90 * .90 = 81
81 * .80 = 64.8
64.8 * .80 = 51.84
51.84 * .80 = 41.472

100 – 41.472 = 58.52%

[sdduuuude]

reanalyst:

I just want to say I love your first post (6:40 p.m.)
I hope to see more of your comments here.

The “patient” analogy is a decent one. The thing about markets is that they tend to be self-medicating. The market finds the problem and fixes itself, (which doesn’t mean it isn’t painful) as long as government doesn’t muck with it too much. I mean, the government would drag a back injury patient to the hospital by their head, thinking they are helping the situation.

I put my faith in the entrepreneurs of the world to give us alternative energy when the time is right. I put my faith in people to be cheap bastards, too and they’ll reduce consumption when the price is high enough.

I do wonder what we’ll do without plastic and nylon, though.

[sdduuuude]

Do you know my housing situation?
Did I say I couldn’t handle the ride down?
No. I just can’t handle your analysis.

[sdduuuude]

“as I keep explaining to people”

You state it, but don’t necessarily explain it or prove it.

[sdduuuude]

From the :
Case-Schiller Methodology

“The main variable used for index calculation is the
price change between two arms-length sales of the same single-family home.”

From the Case-Schiller chart, it is very clear that same-home values have not reverted to 2004 pricing.

[sdduuuude]

Again – “It’s been noted that in North SD County, prices have been flat since the middle of 2004”

If prices revert back to 2004 prices and prices have been flat since 2004, that isn’t a 10% drop.

[sdduuuude]

I am angry about the low quality of your analysis and data, not the results of such.

[sdduuuude]

I must say, not only am I underwhelmed by your analysis, I am truly apalled at your misuse of data. In fact, it isn’t really data at all.

You have stated someone’s predictions as fact, and didn’t even provide the source in your original post. In fact, the guy never really says “we are down 10% in the first year.” anywhere. His prediction about the future of the market is a guess, not a data point, and they may not come true for another year, which further throws off your “analysis” which assumes prices have been coming down for a year.

Then, you based your guess on his guess by filling in numbers to match what you already believe, and then reduced his 20% number to 10%. A total, complete mess.

You also assume prices have been dropping for two years ?!?!?! Where does that one come from?

The only thing price-related in that article which is close to a fact is this comment “It’s been noted that in North SD County, prices have been flat since the middle of 2004”

Huh. I’m missing the “down 10%” part in that one.

The closest thing I have seen to facts about the North County prices is the Case-Schiller SFR Home price chart here (even though it is county wide):
Housing Market.

This shows prices are down about 2% from a peak that occurred in Nov, not a year ago. Not two years ago.

It isn’t a guess, it is data. So, maybe you should start your analysis over with 2% or 3% down in the first year and see what happens.

Your analysis is no more robust than those who have been saying “housing never goes down.” Please don’t ruin this site, which was founded on the use of good, solid data by playing off other people’s opinions as fact, and rewording their numbers to match yours.

If you have some facts on the true price reductions in North County, lets see it. Otherwise, your post is worthless.

[sdduuuude]

Who says we are already down 10% in north county?
What data supports this?

[sdduuuude]

“I bet you can get that same condo in 5 years for half the price. ”

I would take that bet.

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