[SDEngineer]

[quote=sobmaz]I keep hearing that line.

Need I point out that in San Diego during the early 80’s the average home price reflected 3 to 4 times annual income? So yes, when rates went up, prices stagnated rather than declined. Stagnation during inflation has the net affect of decreasing the REAL price.

Now, in North Park for example, the average house is anywhere between 7 and 10 times average wages.

It all seems pretty simple, never before have we had housing prices so out of whack. What happened in the past cannot be a predictor of the future.

Pretty simple if you ask me, interest rates will have a far far more drasitic effect compared to any other time. [/quote]

Depends on the area, of course – some places have felt significantly less pain than others, but, at least according to research done on this site by Rich (Mr. Pigg himself), prices are no longer fundamentally out of alignment. See here:

Shambling Towards Affordability (December 2008 Edition)

and you’ll note on the first chart that the Case Shiller median divided by per capita income is now about where it was in ’84 – well into the decline curve and fairly close to the historical bottoms.

BTW, median prices have never been as low as 3-4x individual incomes in San Diego – about the lowest they get is about 6.5x individual, or about 4x household income. There really is a “sunshine tax”, and it’s pretty well historically documented.

[SDEngineer]

[quote=ibjames]I carry no balances, and my wife and I use one card sparingly to make sure we keep it, I had Citi give me a use it or lose it warning a while ago, I didn’t believe they would actually cancel me..

they did! Bastards!

Eh… less junk in my wallet[/quote]

Yup, I’m in the same boat, and BofA just cancelled my largest limit card without any warning. Open up my BofA webpage to make sure I didn’t have to do a payment transfer, and the card was gone *poof*.

Really ticks me off, since I’ve been a customer of theirs for my checking/savings since they bought Security Pacific back in the 1980’s.

My personal opinion is if they don’t trust me enough to keep my credit card open after nearly 25 years as an account holder, I don’t trust them enough to keep my liquid and semi-liquid funds. Soon as my home loan funds I’ll be switching over our direct deposits to a new bank, closing out the BofA account, and cashing out CD’s as they mature.

Any suggestions for a new bank? I hear SDCCU is pretty good – any opinions on them or others?

[SDEngineer]

[quote=ibjames]I carry no balances, and my wife and I use one card sparingly to make sure we keep it, I had Citi give me a use it or lose it warning a while ago, I didn’t believe they would actually cancel me..

they did! Bastards!

Eh… less junk in my wallet[/quote]

Yup, I’m in the same boat, and BofA just cancelled my largest limit card without any warning. Open up my BofA webpage to make sure I didn’t have to do a payment transfer, and the card was gone *poof*.

Really ticks me off, since I’ve been a customer of theirs for my checking/savings since they bought Security Pacific back in the 1980’s.

My personal opinion is if they don’t trust me enough to keep my credit card open after nearly 25 years as an account holder, I don’t trust them enough to keep my liquid and semi-liquid funds. Soon as my home loan funds I’ll be switching over our direct deposits to a new bank, closing out the BofA account, and cashing out CD’s as they mature.

Any suggestions for a new bank? I hear SDCCU is pretty good – any opinions on them or others?

[SDEngineer]

[quote=ibjames]I carry no balances, and my wife and I use one card sparingly to make sure we keep it, I had Citi give me a use it or lose it warning a while ago, I didn’t believe they would actually cancel me..

they did! Bastards!

Eh… less junk in my wallet[/quote]

Yup, I’m in the same boat, and BofA just cancelled my largest limit card without any warning. Open up my BofA webpage to make sure I didn’t have to do a payment transfer, and the card was gone *poof*.

Really ticks me off, since I’ve been a customer of theirs for my checking/savings since they bought Security Pacific back in the 1980’s.

My personal opinion is if they don’t trust me enough to keep my credit card open after nearly 25 years as an account holder, I don’t trust them enough to keep my liquid and semi-liquid funds. Soon as my home loan funds I’ll be switching over our direct deposits to a new bank, closing out the BofA account, and cashing out CD’s as they mature.

Any suggestions for a new bank? I hear SDCCU is pretty good – any opinions on them or others?

[SDEngineer]

[quote=ibjames]I carry no balances, and my wife and I use one card sparingly to make sure we keep it, I had Citi give me a use it or lose it warning a while ago, I didn’t believe they would actually cancel me..

they did! Bastards!

Eh… less junk in my wallet[/quote]

Yup, I’m in the same boat, and BofA just cancelled my largest limit card without any warning. Open up my BofA webpage to make sure I didn’t have to do a payment transfer, and the card was gone *poof*.

Really ticks me off, since I’ve been a customer of theirs for my checking/savings since they bought Security Pacific back in the 1980’s.

My personal opinion is if they don’t trust me enough to keep my credit card open after nearly 25 years as an account holder, I don’t trust them enough to keep my liquid and semi-liquid funds. Soon as my home loan funds I’ll be switching over our direct deposits to a new bank, closing out the BofA account, and cashing out CD’s as they mature.

Any suggestions for a new bank? I hear SDCCU is pretty good – any opinions on them or others?

[SDEngineer]

[quote=ibjames]I carry no balances, and my wife and I use one card sparingly to make sure we keep it, I had Citi give me a use it or lose it warning a while ago, I didn’t believe they would actually cancel me..

they did! Bastards!

Eh… less junk in my wallet[/quote]

Yup, I’m in the same boat, and BofA just cancelled my largest limit card without any warning. Open up my BofA webpage to make sure I didn’t have to do a payment transfer, and the card was gone *poof*.

Really ticks me off, since I’ve been a customer of theirs for my checking/savings since they bought Security Pacific back in the 1980’s.

My personal opinion is if they don’t trust me enough to keep my credit card open after nearly 25 years as an account holder, I don’t trust them enough to keep my liquid and semi-liquid funds. Soon as my home loan funds I’ll be switching over our direct deposits to a new bank, closing out the BofA account, and cashing out CD’s as they mature.

Any suggestions for a new bank? I hear SDCCU is pretty good – any opinions on them or others?

[SDEngineer]

[quote=AN][quote=JohnAlt91941]

Prices may take a few months to adjust to higher interest rates, but they will adjust. And lots of folks just on this blog have been waiting for years to buy, not just a few months.

I can remember earning close to 10% on a CD in the mid 1980’s. What were mortgage rates then?
[/quote]
Mortgage rates in the mid 80s was around mid teens.[/quote]

It’s important to note though that in past cycles, even when interest rates were sky-high, it didn’t lead to a significant deflationary effect on price.

I think the issue is that in a growing population (and our population continues to grow), housing needs to continually be built – and an inflationary environment makes new homes even more expensive to build, which can lead to a supply shortage. It’s the old supply vs. demand curve.

[SDEngineer]

[quote=AN][quote=JohnAlt91941]

Prices may take a few months to adjust to higher interest rates, but they will adjust. And lots of folks just on this blog have been waiting for years to buy, not just a few months.

I can remember earning close to 10% on a CD in the mid 1980’s. What were mortgage rates then?
[/quote]
Mortgage rates in the mid 80s was around mid teens.[/quote]

It’s important to note though that in past cycles, even when interest rates were sky-high, it didn’t lead to a significant deflationary effect on price.

I think the issue is that in a growing population (and our population continues to grow), housing needs to continually be built – and an inflationary environment makes new homes even more expensive to build, which can lead to a supply shortage. It’s the old supply vs. demand curve.

[SDEngineer]

[quote=AN][quote=JohnAlt91941]

Prices may take a few months to adjust to higher interest rates, but they will adjust. And lots of folks just on this blog have been waiting for years to buy, not just a few months.

I can remember earning close to 10% on a CD in the mid 1980’s. What were mortgage rates then?
[/quote]
Mortgage rates in the mid 80s was around mid teens.[/quote]

It’s important to note though that in past cycles, even when interest rates were sky-high, it didn’t lead to a significant deflationary effect on price.

I think the issue is that in a growing population (and our population continues to grow), housing needs to continually be built – and an inflationary environment makes new homes even more expensive to build, which can lead to a supply shortage. It’s the old supply vs. demand curve.

[SDEngineer]

[quote=AN][quote=JohnAlt91941]

Prices may take a few months to adjust to higher interest rates, but they will adjust. And lots of folks just on this blog have been waiting for years to buy, not just a few months.

I can remember earning close to 10% on a CD in the mid 1980’s. What were mortgage rates then?
[/quote]
Mortgage rates in the mid 80s was around mid teens.[/quote]

It’s important to note though that in past cycles, even when interest rates were sky-high, it didn’t lead to a significant deflationary effect on price.

I think the issue is that in a growing population (and our population continues to grow), housing needs to continually be built – and an inflationary environment makes new homes even more expensive to build, which can lead to a supply shortage. It’s the old supply vs. demand curve.

[SDEngineer]

[quote=AN][quote=JohnAlt91941]

Prices may take a few months to adjust to higher interest rates, but they will adjust. And lots of folks just on this blog have been waiting for years to buy, not just a few months.

I can remember earning close to 10% on a CD in the mid 1980’s. What were mortgage rates then?
[/quote]
Mortgage rates in the mid 80s was around mid teens.[/quote]

It’s important to note though that in past cycles, even when interest rates were sky-high, it didn’t lead to a significant deflationary effect on price.

I think the issue is that in a growing population (and our population continues to grow), housing needs to continually be built – and an inflationary environment makes new homes even more expensive to build, which can lead to a supply shortage. It’s the old supply vs. demand curve.

[SDEngineer]

[quote=Enorah]Vees, Leslie Appleton Young gets paid to say stuff like that[/quote]

True, however, the information is actually useful – although the implication made that the housing market has turned the corner is one that shouldn’t be drawn from a median sales price.

What the median sales price is relevent for though is that it implies that the bottom of the market (entry level housing) may have hit a floor – especially since we know that the low end has made up the lions share of sales for most of the past year or more (so any shifting of the distribution of home sales would presumably be away from primarily low end, not towards yet more low end, which could result in a lower median price).

One can’t draw conclusions though about mid and high end housing though, and where they are in the boom-bust cycle.

[SDEngineer]

[quote=Enorah]Vees, Leslie Appleton Young gets paid to say stuff like that[/quote]

True, however, the information is actually useful – although the implication made that the housing market has turned the corner is one that shouldn’t be drawn from a median sales price.

What the median sales price is relevent for though is that it implies that the bottom of the market (entry level housing) may have hit a floor – especially since we know that the low end has made up the lions share of sales for most of the past year or more (so any shifting of the distribution of home sales would presumably be away from primarily low end, not towards yet more low end, which could result in a lower median price).

One can’t draw conclusions though about mid and high end housing though, and where they are in the boom-bust cycle.

[SDEngineer]

[quote=Enorah]Vees, Leslie Appleton Young gets paid to say stuff like that[/quote]

True, however, the information is actually useful – although the implication made that the housing market has turned the corner is one that shouldn’t be drawn from a median sales price.

What the median sales price is relevent for though is that it implies that the bottom of the market (entry level housing) may have hit a floor – especially since we know that the low end has made up the lions share of sales for most of the past year or more (so any shifting of the distribution of home sales would presumably be away from primarily low end, not towards yet more low end, which could result in a lower median price).

One can’t draw conclusions though about mid and high end housing though, and where they are in the boom-bust cycle.

[SDEngineer]

[quote=Enorah]Vees, Leslie Appleton Young gets paid to say stuff like that[/quote]

True, however, the information is actually useful – although the implication made that the housing market has turned the corner is one that shouldn’t be drawn from a median sales price.

What the median sales price is relevent for though is that it implies that the bottom of the market (entry level housing) may have hit a floor – especially since we know that the low end has made up the lions share of sales for most of the past year or more (so any shifting of the distribution of home sales would presumably be away from primarily low end, not towards yet more low end, which could result in a lower median price).

One can’t draw conclusions though about mid and high end housing though, and where they are in the boom-bust cycle.

[Author]

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