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  1. powayseller
    November 14, 2006 @ 9:50 PM

    Excellent analysis, Rich! I
    Excellent analysis, Rich! I can’t wait to read the next chapter, and I commend you for digging into the 90’s downturn. We’ve always been told it was the decline of the defense and aerospace industries that caused the housing bust, and you’ve debunked that myth.

    Toll’s CEO said this is the first housing bust to occur despite lack of a recession, in a time of low interest ratse and high employment, meaning that all prior busts were caused by a recession, high interest rates, and/or high unemployment. But he’s wrong, because housing busts cause recessions, not vice versa.

    • Anonymous
      November 14, 2006 @ 11:44 PM

      This market IS in a
      This market IS in a recession. The only difference is that people are living off of borrowed time and money…otherwise it would be a dismal market here. If it wasn’t for the stupid amounts of equity people made, people wouldn’t be blowing so much hot air right now and be acting so arrogant and cocky.

      It’s time we had a big correction in this country. People here need a bigtime reality check. They deserve nothing less in so many ways.

      • 4plexowner
        November 15, 2006 @ 6:04 AM

        I agree that Americans
        I agree that Americans deserve and need a major depression to restore the values that made America great.

        There’s only one problem – I live here too!

      • kev374
        November 15, 2006 @ 8:37 AM

        Most homeowners have seen
        Most homeowners have seen 100-150% appreciation in the last 5 years and percieve themselves to have gained wealth similar to winning the lottery. It’s amazing how many homeowners firmly believe that all their appreciation is permanent. Now that they see a declining market they are in denial because they have been living a lifestyle according to their newly found housing “wealth”.

        Most people think they will lose a little but still get to keep most of their gains. Nothing can be further from the truth, when this thing is finished and the bottom is reached most homeowners will be reeling from horrific amounts of shock! As they say the higher is goes the harder it falls 😉

      • limo_888
        November 15, 2006 @ 12:20 PM

        I sold my house in May 2005
        I sold my house in May 2005 and have been renting. I have tried to explain and warn my friends about the housing bubble based on info that I gathered here and there. But of course none of them listen. They think I’m a nut case or a weirdo for selling my house. Anyway, I leave in America too and I don’t want a recession, but I or we can stop it now.

      • Anonymous
        November 16, 2006 @ 8:51 PM

        Rich, glad to see you back
        Rich, glad to see you back in the saddle again, posting more frequently. It will be good to see your analysis of the predictors of the last upturn.

      • powayseller
        November 17, 2006 @ 3:29 PM

        160,000 people left San
        160,000 people left San Diego between 1991 and 1996, and a population decline just kills a real estate market. In the peak year, 1993, almost 50,000 people left San Diego. What caused people to leave? High prices, buyer exhaustion.

        I think that just like this time, first time buyers were priced out and started leaving, even though unemployment was still low, and this broke the chain of sales. The median lags by about one year, so prices were dropping for probably 1.5 years before the job losses began, due to the population decline. Thus, job losses did not cause the decline, because it was in process for over one year when the layoffs began.

        I think that as people left, inventory piled up and months supply rose, putting downward pressure on prices. Then the job losses made it even worse.

        Wasn’t there also a problem with overbuilding? Excess supply, lower demand, leading to high months supply.

        I look forward to the rest of the series.

      • FormerSanDiegan
        November 17, 2006 @ 5:03 PM

        I wonder if the three years
        I wonder if the three years of employement improvement from 1993 on was one of the early drivers of the housing price rebound. Can we count on watching employment as an indicator of a rebound of prices in the future ?

        By the way, the second installment of this series is already on the “voice” site.

      • Anonymous
        November 18, 2006 @ 8:15 AM

        Hey guys, these pages are
        Hey guys, these pages are really great. A quick question for Rich. No where on these pages does anyone account for the 6 million illegals that moved into california. They all had to live somewhere, and had some impact on what is going on. I suspect a significant impact. Your 50,000 people leaving san Diego seems immaterial to the impact of the unregistered in migration. Further, I suspect you can expect another 6 million over the next 5 years. They all have to live somewhere. What is your thought on this topic? The easy answer is, if realestate collapses, there are no jobs for them. The hard answer is, their still going to come because the alternative is worse for them in Mexico. Further, these people have been buying houses. Talk about loose lending standards. My old cleaning lady bought a condo, both her and her husband were cash only contract workers. No proof of imcome. That was the kicker that told me it was definately time to sell.

      • powayseller
        November 18, 2006 @ 11:26 AM

        My cleaning people own 2
        My cleaning people own 2 rental properties, and they are cash only mexican contractors. I think the illegal Mexicans are living at multiples of the recommended density in apartments in Escondido, San Ysidro, etc, and some are homeless. The City of Escondido could probably shed some light on where they are living, and the recent ordinance to prevent illegal renters is a result of the overcrowding.

        You raise a good point about the illegals. They are estimated at 1 million in CA, and are 10% of our employment.

        I think the illegal immigration rate into the US will slow once the construction jobs are lost and our recession starts. Why come here if there’s no work?

      • Anonymous
        November 18, 2006 @ 12:59 PM

        Free Benefits, and the
        Free Benefits, and the ability to work for a week and file a workers comp claim. Don’t be niave, their still coming, like it or not.

      • Anonymous
        November 18, 2006 @ 10:08 PM

        Many illegals will be
        Many illegals will be returning to their countries as the construction jobs dry up in the next few years. Good thing we are building the border fence so we can make it harder for them to go home.

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