8/17 For the sake of posterity, San Diego County had its first year-over-
year decline in median home price in June 2006 (for the current cycle).
L.A. and the Bay Area have not gone negative year-over-year, yet.
Also, if you look at month-to-month, I believe San Diego County
went negative Jan 2006, but not certain about that.
http://csua.org/u/gpa (signonsandiego.com)
\_ Keep dreaming if you think the real estate markets in L.A. and
the Bay Area are going to crash. Maybe there will be a slight
market correction and a 10 percent price dip, but if you ride
out the dip over the next couple of years, your home price will
be fine. To all you renters out there, you are still screwed.
\_ All renters are screwed, huh? By "renter", you mean anyone
who wants to live and work in california, but who does not
already own a home. In other words, any recent college,
highschool or professional school graduate, any immigrant,
or anyone from out of state--i.e. the workforce that would
be required to grow or even continue the california economy
at its current levels. When one of you California homeowners
retires, who's going to replace you? When you want to grow
your business, who are you going to hire? You'll only be able
to get so many suckers to spend 10 times their annual salary on a
home, which means that when there are no more suckers, the
california economy will shrink hard and fast. It's already
happening, as business leave your state in droves to Texas
and other parts of the southwest to escape your la-la-land
prices.
prices. And as the economy continues to shrink, the number of
people willing to pay your prices will continue to drop. Do
you really think that in the face of a rapidly shrinking economy,
these prices will be sustainable? Or perhaps you think there
will always be another sucker willing to move to california to
either be a serf to the landowning class forever or pay 10 times
their yearly salary for a home?
\_ Try to come up with a convincing argument. Your entry just
says that you think houses prices will crash because: (1) CA
homewoners will retire someday, (2) people are going to get
tired of over-paying for homes, and (3) CA business are going
to move to Texas, Arizona, and New Mexico. Now, it may be
true that CA residential real estate prices drop, but it won't
be because of CA homeowners retiring, people suddenly becoming
smart about home prices, or because of this supposed future
max exodus of CA business to dust bowl crappy states like
Texas, Arizona, and New Mexico. The truth is that because
there are so many more professionals and people in general in
California, that has increased the demand for homes, as there
is a limited amount of space here. And unfortunately, people
don't all of a sudden realize that they should correct market
prices. People are stupid. And trust me, no one in CA is
worried about the "threat" of its neighboring crappy states.
The SF Bay Area, which is the financial and technology center
of the West, and Los Angeles, which is the entertainment capital
of the world, aren't worried about New Mexico. Believe me. But
anyway, in the meantime, have fun in your 750 square foot studio.
\_ Your summary of those reasons is generally correct; the crash
or whatever you wish to call it will happen for basic economic
reasons. When most homes are bought for speculation, an
increase of value of say, >10% is needed to cover the various
fees for the sale, any upgrades you added, and the cost of
of the house itself (assuming this is a 2nd home).
Without such growth, the speculators lose money. When most
of the GDP growth, increase in jobs, etc. is from the real
estate boom, a pause in real estate is sufficient to gut the
economy. Which, of course, will go back to house prices.
Oh, and DQ News reports 30-40% decline in sales volume for the
BA. Pull up a chair, pop a beer, and wait for the fun.
of the West, and Los Angeles, which is the entertainment
capital of the world, aren't worried about New Mexico.
Believe me. But anyway, in the meantime, have fun in
your 750 square foot studio.
\_ Your summary of those reasons is generally correct;
the crash or whatever you wish to call it will happen
for basic economic reasons. When most homes are bought
for speculation, an increase of value of say, >10%
is needed to cover the various fees for the sale, any
upgrades you added, and the cost of of the house itself
(assuming this is a 2nd home). Without such growth, the
speculators lose money. When most of the GDP growth,
increase in jobs, etc. is from the real estate boom, a
pause in real estate is sufficient to gut the economy.
Which, of course, will go back to house prices. Oh,
and DQ News reports 30-40% decline in sales volume
for the BA. Pull up a chair, pop a beer, and wait for
the fun.
\_ As a home owner for several years I don't care *at all*
what happens to housing pricing. The only time the
prices matter to me is when I'm trying to sell my
current home to buy a new one. I tried to explain this
to a renter-wannabe-home-owner at work several times
but he keeps gloating as prices in the area slowly
decline. I'd love to see housing prices crash to the
price of a cup of coffee so I could easily sell my home
in 5 minutes and buy anything I wanted much closer to
work where homes are nicer and going for over a million.
Housing prices going up and down is normal and healthy
and good for home owners overall. As a home owner I am
not losing money when prices drop since I choose when
I sell and since I want a more expensive house than I
have now prices compressing downwards saves me money
when I move to a nicer place even though my house has
also dropped in price. It will not have dropped as
much as the place I want. --someone else
\_ Exactly. So your house is worth $700K and drops
20% to $550K. The house you want is worth $1M
and drops to $800K. The gap is now $50K less.
If you bought your place for, say, $350K then
this can be a boon depending on rates. If
housing prices drop then it's a buying opportunity,
if you can afford it. If they don't drop, then
you've lost nothing. That said, I certainly
wouldn't buy now if I didn't already own.
\_ I am a homeowner in LA and also studying to be a real estate
broker. I think a 10% decline is optimistic. We will see
perhaps as much as a 30% decline. However, so what, unless
you're sitting on a huge pile of cash?
\_ If you think a million-dollar home will suddenly
depreciate in value to 700K in the span of 1 year or 2
years, and if you think starter homes in middle-class
neighborhoods currently at about 600K will suddenly drop
to about 400K, you are living in fantasyland.
\_ I don't know what the span of time will be, but I
think that this will happen as long as interest rates
continue to rise. It's happened before. However, like I
said, so what?\
\_ The last time it happened was the early '90s when the
drop in prices was due to a serious national economic
recession, high unemployment rates, and increased
taxes (thank you George Bush Sr.). Somehow, we have
\_I'm glad you truthfully wrote that Mitchell
pushed for this as Senate Majority leader.
\_ "Read my lips. No new taxes."
-George H. Bush, Sr.
been able to avoid a recession, significant rises in
the unemployment rate, and any tax hikes. If that
stuff DOES all happen in the near future, housing
prices will be the least of all our worries.
\_ I think that all of this is possible, but the
driver will be rising interest rates. As for how
important this is to "you", that is your own
list of priorities.
\_ Dude, anything is "possible." But the
reason for rising interest rates is to
put a damper on inflation. Rising
interest rates do not lead by themselves
to a recession, increased unemployment,
or added taxes. |
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