Lots of Piggs have opinions – Lots of Piggs have opinions – let’s hear them! If history is a guide, in 3 years the economy should be doing quite a bit better. Will real estate?
Scarlett
September 26, 2010 @
8:05 PM
I wouldn’t take history as a I wouldn’t take history as a guide, because what we have now here and globally is unprecedented…. This is a totally new beast. It will take MANY years before the economy will be doing “quite a bit” better. The worse is still to come. So far it has been a walk in the park.
bearishgurl
September 26, 2010 @
8:21 PM
In the CA SFR market, the In the CA SFR market, the “desirable areas” will be flat to slightly up and mostly comprised of custom homes. This is heavily dependent on block and house.
The “undesirable areas” or those besotted with heavy property taxes and/or HOA dues will be flat to slightly down. The only reason these areas won’t be heavily down is because many of them are currently so full of “shadow inventory” that the lenders will just trickle each “comp” out on the market, one by one, so as not to effect a “market crash” in these tracts.
That’s my take on three years from now.
Aecetia
September 26, 2010 @
8:48 PM
I think prices will continue I think prices will continue down as part of the lack of faith in the dollar. Real estate is going to drag like everything else. The State is in fiscal crisis and raising taxes is creating havoc with the economy. No where to go, but down, unless the tax code is gutted and sanity returns to government.
Zeitgeist
September 26, 2010 @
9:04 PM
I agree. “Lowering mortgage I agree. “Lowering mortgage rates may prove to be futile at stimulating housing demand (we actually think it would help) but we do not think that will deter the Fed from trying. As our economists have asserted, recovery is too fragile.” http://www.zerohedge.com/sites/default/files/BofA%20Securitization%20Weekly%209.17.pdf
Just look at Japan and the lost decade.
permabear
September 27, 2010 @
10:40 AM
Scarlett wrote:I wouldn’t [quote=Scarlett]I wouldn’t take history as a guide, because what we have now here and globally is unprecedented…. This is a totally new beast.[/quote]
Not entirely true. In fact the parallels between now and the Great Depression are very strong, even in housing.
In both cases there was a huge credit bubble and stock run-up (the 1920’s and early 2000’s). Housing prices also went through the roof in the 1920’s.
Housing then crashed in the 1930’s after the stock market crash, starting to recover roughly seven years later. Things we think of as “new” like loan modifications, strategic defaults, etc, are old hat:
While awesome data is not readily available regarding housing in the Great Depression, prices had generally recovered to pre-bubble valuations in the late 1930’s. Note I said pre-bubble, so if we were to draw direct parallels, housing would end up at 1998 valuations or so by 2015 or so.
All that is barring further Fed and Congress intervention, though.
This really depends on the This really depends on the area…in Orange County for example I see at least another 20-25% dip as the number of foreclosures rise. 3 bedroom, 1500-1700sqft houses are still asking $500-550k in Irvine (down from probably $600+k)… consider that these houses were only $200,000 10 yrs ago and the current job situation in Irvine is absolutely PATHETIC, there are no jobs whatsoever and the salaries are down by 20-30% for what jobs there are.
Recall also that Irvine has all sorts of EXPENSIVE assessments… Mello Roos, HOAs etc.
bearishgurl
September 27, 2010 @
2:10 PM
sdduuuude wrote:Some current, [quote=sdduuuude]Some current, relevant info regarding CA homeowner optimism:
I’v noted from this chart that the OC BEACH AREAS seem to be holding their own . . . even showing an uptick in prices. Within a mile of this coastline (and the hill overlooking) is 50-90 years old, no MR there . . . Since this area is relatively secluded, I’m fairly certain the demographic buying these properties are not the “worker-bee” types :=)
sdrealtor
September 27, 2010 @
2:46 PM
sold 3 condos in Huntington sold 3 condos in Huntington Beach last year. All bought by worker bees and all got clobbered in the downturn.
bearishgurl
September 27, 2010 @
3:09 PM
sdrealtor wrote:sold 3 condos [quote=sdrealtor]sold 3 condos in Huntington Beach last year. All bought by worker bees and all got clobbered in the downturn.[/quote]
Acc. to the dataquick chart in the article, HB’s YoY prices were up 16.2% and sales numbers up 11.8%
It doesn’t show how many of these sales were condos, but if any of your “clients” were buyers, it doesn’t seem like they got a good deal, then.
sdrealtor
September 27, 2010 @
6:56 PM
I was the listing agent on I was the listing agent on all of them. You need glasses. The biggest ZIP in HB is 92646 and prices were down 22% according to your link. I sold two identical units one above/below the other. One at the beginning of the year and one at the end. The one at the beginning of the year sold for $285K. At the end of the year they were lucky to get $270K for the same exact unit.
poorgradstudent
September 27, 2010 @
7:35 PM
I said Flat or up somewhat, I said Flat or up somewhat, going by nominal prices. Inflation adjusted, I think we’ll be slightly below current values, but in terms of nominal dollars, a slight increase.
Aecetia
September 28, 2010 @
12:30 PM
As Wall Street goes, so goes As Wall Street goes, so goes real estate. “Another revolution will cost investors 20% more losses: political chaos will translate into extreme volatility and a highly unpredictable stock market. Result: Wall Street will lose another 20% of the value of your retirement portfolio in the next decade, just as Wall Street did the last decade.”
September 26, 2010 @ 7:20 PM
Lots of Piggs have opinions –
Lots of Piggs have opinions – let’s hear them! If history is a guide, in 3 years the economy should be doing quite a bit better. Will real estate?
September 26, 2010 @ 8:05 PM
I wouldn’t take history as a
I wouldn’t take history as a guide, because what we have now here and globally is unprecedented…. This is a totally new beast. It will take MANY years before the economy will be doing “quite a bit” better. The worse is still to come. So far it has been a walk in the park.
September 26, 2010 @ 8:21 PM
In the CA SFR market, the
In the CA SFR market, the “desirable areas” will be flat to slightly up and mostly comprised of custom homes. This is heavily dependent on block and house.
The “undesirable areas” or those besotted with heavy property taxes and/or HOA dues will be flat to slightly down. The only reason these areas won’t be heavily down is because many of them are currently so full of “shadow inventory” that the lenders will just trickle each “comp” out on the market, one by one, so as not to effect a “market crash” in these tracts.
That’s my take on three years from now.
September 26, 2010 @ 8:48 PM
I think prices will continue
I think prices will continue down as part of the lack of faith in the dollar. Real estate is going to drag like everything else. The State is in fiscal crisis and raising taxes is creating havoc with the economy. No where to go, but down, unless the tax code is gutted and sanity returns to government.
September 26, 2010 @ 9:04 PM
I agree. “Lowering mortgage
I agree. “Lowering mortgage rates may prove to be futile at stimulating housing demand (we actually think it would help) but we do not think that will deter the Fed from trying. As our economists have asserted, recovery is too fragile.” http://www.zerohedge.com/sites/default/files/BofA%20Securitization%20Weekly%209.17.pdf
Just look at Japan and the lost decade.
September 27, 2010 @ 10:40 AM
Scarlett wrote:I wouldn’t
[quote=Scarlett]I wouldn’t take history as a guide, because what we have now here and globally is unprecedented…. This is a totally new beast.[/quote]
Not entirely true. In fact the parallels between now and the Great Depression are very strong, even in housing.
In both cases there was a huge credit bubble and stock run-up (the 1920’s and early 2000’s). Housing prices also went through the roof in the 1920’s.
Housing then crashed in the 1930’s after the stock market crash, starting to recover roughly seven years later. Things we think of as “new” like loan modifications, strategic defaults, etc, are old hat:
http://economix.blogs.nytimes.com/2010/03/31/strategic-defaults-lessons-from-the-great-depression/
While awesome data is not readily available regarding housing in the Great Depression, prices had generally recovered to pre-bubble valuations in the late 1930’s. Note I said pre-bubble, so if we were to draw direct parallels, housing would end up at 1998 valuations or so by 2015 or so.
All that is barring further Fed and Congress intervention, though.
September 27, 2010 @ 10:34 AM
The macro-economic situation
The macro-economic situation is a disaster-waiting-to-happen. See thread on Greenspan’s comments here:
http://piggington.com/greenspan_very_dangerous_possibilities_of_extending_bush_tax_cut
Three years is enough time for the effects of our current situation to be felt in the local housing market. 2014 or 2013 may be time to buy.
I voted “down significantly” just to go out on a limb. I’m somewhere between the last two.
September 27, 2010 @ 11:47 AM
Some current, relevant info
Some current, relevant info regarding CA homeowner optimism:
http://lansner.ocregister.com/2010/09/27/only-15-of-calif-homeowners-see-rising-prices/82674/
September 27, 2010 @ 1:46 PM
This really depends on the
This really depends on the area…in Orange County for example I see at least another 20-25% dip as the number of foreclosures rise. 3 bedroom, 1500-1700sqft houses are still asking $500-550k in Irvine (down from probably $600+k)… consider that these houses were only $200,000 10 yrs ago and the current job situation in Irvine is absolutely PATHETIC, there are no jobs whatsoever and the salaries are down by 20-30% for what jobs there are.
Recall also that Irvine has all sorts of EXPENSIVE assessments… Mello Roos, HOAs etc.
September 27, 2010 @ 2:10 PM
sdduuuude wrote:Some current,
[quote=sdduuuude]Some current, relevant info regarding CA homeowner optimism:
http://lansner.ocregister.com/2010/09/27…[/quote]
I’v noted from this chart that the OC BEACH AREAS seem to be holding their own . . . even showing an uptick in prices. Within a mile of this coastline (and the hill overlooking) is 50-90 years old, no MR there . . . Since this area is relatively secluded, I’m fairly certain the demographic buying these properties are not the “worker-bee” types :=)
September 27, 2010 @ 2:46 PM
sold 3 condos in Huntington
sold 3 condos in Huntington Beach last year. All bought by worker bees and all got clobbered in the downturn.
September 27, 2010 @ 3:09 PM
sdrealtor wrote:sold 3 condos
[quote=sdrealtor]sold 3 condos in Huntington Beach last year. All bought by worker bees and all got clobbered in the downturn.[/quote]
Acc. to the dataquick chart in the article, HB’s YoY prices were up 16.2% and sales numbers up 11.8%
http://lansner.ocregister.com/2010/09/24/home-sales-fall-in-52-zips-yours/82814/
It doesn’t show how many of these sales were condos, but if any of your “clients” were buyers, it doesn’t seem like they got a good deal, then.
September 27, 2010 @ 6:56 PM
I was the listing agent on
I was the listing agent on all of them. You need glasses. The biggest ZIP in HB is 92646 and prices were down 22% according to your link. I sold two identical units one above/below the other. One at the beginning of the year and one at the end. The one at the beginning of the year sold for $285K. At the end of the year they were lucky to get $270K for the same exact unit.
September 27, 2010 @ 7:35 PM
I said Flat or up somewhat,
I said Flat or up somewhat, going by nominal prices. Inflation adjusted, I think we’ll be slightly below current values, but in terms of nominal dollars, a slight increase.
September 28, 2010 @ 12:30 PM
As Wall Street goes, so goes
As Wall Street goes, so goes real estate. “Another revolution will cost investors 20% more losses: political chaos will translate into extreme volatility and a highly unpredictable stock market. Result: Wall Street will lose another 20% of the value of your retirement portfolio in the next decade, just as Wall Street did the last decade.”
http://www.marketwatch.com/story/america-on-the-brink-of-a-second-revolution-2010-09-28?siteid=nbch