firefin
Posts:7
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| 10/10/2008 3:28 PM |
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| The stock market crash is going to cause another dramatic! crash in the housing sector 2009. Factors to consider San Diego ranks #3 for highest unemployment city in the U. S., People who had house money in stock market no longer have as much house money and are not willing to spend as much as they were 2 weeks ago, Houses are falling out of escrow at about a 30% level, Banks will not ease up lending standards ever especially when they know houses are still over priced, If the government stops houses from hitting the real estate market until the housing stabilizes and then lets the housing inventory out later( who wants to buy a house when the government is just going to flood the market with supply at a later point) boomers need to sell houses between now and 10 years from now. Look at North San diego house prices who in their right mind will pay .5 to 1 million dollars for a house- not investors, not people who make the average household income, not baby boomers who are looking to downsize, not people from surrounding areas or foreigners. San diego also has a plethera of very large mc mansions people simply cannot afford at the prices that are asked the future is smaller homes that cost less and have new york floor plans utilizing space, but good location. Assest/ commodities/stocks are not worth what they were a year ago all of things that cost money are recalibrating and San Diego housing will fall much more and at some point just be flat for 10 plus years. Look at Japan stock and housing they have not recovered what has it been 20 years. If you need to sell your house waiting is going to do less than nothing for you. You are better off selling immediately, asking for a touch lower than houses are selling for and putting your money into long term muni bonds tax free and get 3- 4% tax free long term. Don't wait for spring to put your house on the market for all others who are waiting for spring. carp a diem. |
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sandiego67
Posts:25
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| 10/10/2008 3:58 PM |
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Carp a diem?
Does that mean "one big goldfish a day"? |
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Interested Observer
Posts:7
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| 10/10/2008 4:41 PM |
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| Well, this is an interesting analysis. On behalf of my fellow "boomers", let me offer a rebuttal. Your argument appears to be an attemt to create a self-fulfilling prophecy (i.e., "panic now and avoid the rush"). The reality is that many boomers still have considerable resources that are not in the stock market, as well as being positioned to inherit the wealth of the "Greatest Generation Ever", who have been notorious for accumulating, and saving wealth. Additionally, we boomers have always been quite fond of real estate, seeing it as a usuable, as well as traditionally appreciating asset (what other investment can you make money on and pay no taxes, as least up to a $500,000 limit if you own as a couple). Lastly, given the recent debacle in the stock market, it's not likely that the boomers will be eager to put their non-stock assets nor their inherited wealth into equities. Over the last 40 years, residential real estate has always (over an extended period of time) outpaced inflation. I see no reason to believe that will not continue. |
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title
Posts:20
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| 10/10/2008 5:02 PM |
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firefn-
I'm not sure where your getting your stats but as a person in the business I'm seeing the opposite. The last two months have been busy. Lenders are tight with their guidelines but there are quite a few people with good credit and 20% down. FHA loans are available to just about everyone. Good luck buying a foreclosure, get in line. I believe I also just read the inventory of unsold homes is down around the 6 month level. That is pretty close to what the "experts"(using that term loosely) call a normal market.
Most of the people have only lost money on paper. Stocks will come back, housing will also. |
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firefin
Posts:7
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| 10/10/2008 6:09 PM |
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| Thanks for the opposing perspectives. Much appreciated. It is simply my opinion that real estate is still grossly over valued and that not one or a couple factor but many factors will contribute to its decline. I feel people should just rent instead of buy. I just saw on craigslist a 2800 square foot house newer house in encintas school district for $1200 a month why would someone pay 3x+ more to buy than rent, I honestly feel they would make more money investing their money in muni bonds and buying a house in 5-10+ years. I also have heard that if Obama is president that the tax benefit in reference to selling your house would change and not in favor of the seller, which would start a cascade of selling from boomers. I also believe the slight change in market reflecting small sales pickup or not falling as fast is due to the dead cat drop. The people on the sidelines who have been waiting what feels to them to be a long time jumping in.(which is why I feel people should sell now while they have dead cat drop mini rally). I also feel that the seasonal affect of people pulling their houses now in hopes of selling in spring is affecting the amount of houses for sale. I also feel rents are currently and in the future will decrease putting more pressure on the downside for pricing. People used to say housing prices will never see dramatic falls because it has never happened in the past in the U.S. since the great depression. I think from now to at least 10 years from now housing will still be lower than the prices today in San Diego. In 20-40 years that is a different story. |
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NCgirl
Posts:206
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| 10/10/2008 6:09 PM |
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I've been talking to a lot of (customers, my hairdresser) people that are getting FHA loans, 3% down and just under 6, or at 6 rates.
People are getting REO's and these people are not the sharpest tacks in the box either.
As for you boomers...I was just giving my dad a hard time about that this morning..all you ex hippies have run this country into the ground. Leave it to gen x and y to clean up...not very groovy. |
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firefin
Posts:7
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| 10/10/2008 6:29 PM |
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| Hi NC girl, I believe what you say to be accurate. I also have heard their are two to remain nameless banks which are still doing irresponsible lending and that that will be addressed and will cease( possibly even on a federal level). I think that real estate moves slowly especially relative to the stock market what took weeks in stock market time takes years in housing market time. If you want a 3% down loan that door is closing very quickly close that escrow. |
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title
Posts:20
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| 10/11/2008 7:58 AM |
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Firefn-
Like I said I can only tell you what i'm seeing and not trying to start a argument. I believe San Diego RE has always been overvalued. I don't believe rents are coming down. I do see people pulling money out of the stock market and buying real estate. I happened to be in a office this week and heard a realtor discussing just that with a prospective buyer. What will happen I have no idea and will never say I do. $1200 for a house in Encinitas, in a good school district, 2800sqft is a unbelievable deal, sure it wasn't a typo.
I always appreciate someone who can post a opinion on this site and have a conversation, not "my post is the end all!", If I see anything else out there that will add to this post I will be back.
hope you have a great weekend, |
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jakob
Posts:473
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| 10/11/2008 8:11 AM |
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Investors are definitely flocking buying cashflow properties around 200k. Everyone is reporting that the low end is on fire.
As for rents, anecdotally, rents in Pacific Beach are declining. About 10% less than last year. All the invest buying will further depress rents. Not to mention the job losses we are seeing. |
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Caligirl43
Posts:133
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| 10/11/2008 11:31 AM |
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| I agree with Firefin that real estate in San Diego is still grossly overvalued and until that changes things won't get much, if any, better. We are in an unprecedented economic freefall right now and it'll be interesting to see where it takes us. |
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punstress
Posts:123
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| 10/11/2008 12:54 PM |
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Firefin: I just saw on craigslist a 2800 square foot house newer house in encintas school district for $1200 a month
Since there are 1BR apts going for that price, I would seriously question the validity of that ad. It had to be either a typo or a scam of some kind. Even if it was a dump they could get more than that, and I don't know many landlords who leave money on the table. |
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Eugene
Posts:258
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| 10/11/2008 1:12 PM |
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| Like others said, 1200/month for a 2800 square foot house in encinitas is about a third of what it should rent for. It must have been a scam. Re: Obama and taxes: that's a right-wing lie. |
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ownhomeinSD
Posts:163
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| 10/11/2008 1:59 PM |
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[quote]Posted By firefin on 10/10/2008 3:28 PM
Factors to consider San Diego ranks #3 for highest unemployment city in the U. S..[/quote]
Where did you get that? Here are rankings for San Diego and other cities in U.S:
http://www.forbes.com/2008/01/11/jobs-economy-growth-lead-careers-cx_mk_0110cities_table_2.html
Latest unemplyment data for San Diego and California:
http://www.calmis.ca.gov/file/lfmonth/sand$pds.pdf
SAN DIEGO-CARLSBAD-SAN MARCOS METROPOLITAN STATISTICAL AREA (SAN DIEGO COUNTY)
San Diego County adds 500 jobs month-over; loses 5,700 year-over
The unemployment rate in the San Diego County was 6.4 percent in August 2008, down from a
revised 6.5 percent in July 2008, but above the year-ago estimate of 4.8 percent. This
compares with an unadjusted unemployment rate of 7.6 percent for California and 6.1 percent
for the nation during the same period.
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firefin
Posts:7
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| 10/11/2008 2:13 PM |
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Thanks for all the input. It is possible a typo on rental I don't know. Rents vary.
I ran it another way, but basicly how I view rent vs buy. I pulled a rental listed today in encintas school district 2600 square feet house for rent asking $2700 per month. The lowest priced house in that neighborhood is asking $749,000(may be short sale) couple blocks away same or smaller size than rental. If you put 20% down your mortgage payment would be $3,597.30 at 6% interest. mello roos $67.00, insurance100, HOA 100, tax 625 which would make your monthly payment $4,489 not including any maintenance, yard work etc. which is included in rentals. If you did not buy house and put that $ 150,000 into tax free muni bonds at 4% you would have at 10 years $223,624.90 with the increase of $73,625 having no tax ramifications for you. In addition your monthy out put would be $2700 versus $4,489. It is only my opinion that renting is a better option. I believe rents are going to stay fairly stable over the next ten years. I believe housing will drop and at best stay flat for 10 years. I don't want to put specific addresses of peoples homes you can run this same thing as I have for la Jolla, del mar, solana beach etc very similar. Let someone else own the house just live in it for less and keep your money growing.
Can someone who strongly believes buying now is key run thru all the specific reasons why they think now is the time to buy a house? I am not looking to attack just want to hear full support of the other side. Would like to hear other peoples opinions. I am just voicing my point of view. Please no offense meant to anyone. Thanks |
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firefin
Posts:7
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| 10/11/2008 2:38 PM |
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| Hi ownhomeinSD, I read it online in a article, I read alot, looked could not locate. I cannot back that ranking #3. I dont save any articles I read online. if I find I will post, but I am not going to knock my self out looking for info. I will go with your data of 7.6% for california in general compared to 6.1% for nation for unemployment rates . California and the nation have high and rising unemployment which reasons to reduce the amount of people who will buy or be able to hold onto houses. Did find new article to me in Forbes 9/15/08 while looking which compiled varoius data and ranked San Diego #6 on list of most stressful cities in America due to cost, unemployment etc. I love San Diego, but it can be stressful if you cannot afford to live in your house you bought. |
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Dirtcheap
Posts:28
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| 10/11/2008 9:35 PM |
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Firefin, I agree with much, but not all of what you are saying. But if your main premise for not buying over the next ten years is no appreciation, then under those circumstances you would be right. There are plenty of good deals out there right now, and there are many properties that still have a ways to fall, knowing which is which is the key. You haven't factored in the tax deductions related to owning, the hassle/price factor of owning and not having to move as a renter, and the capital gains are tax free if there was some appreciation over the next ten years. And Inflation.
It could be ten years or more for the prices to get back to the peak prices, but many prices are already down 40-50% from that point, so I think its fair to expect some appreciation depending on where you buy.
Also, not sure what specific part of encinitas you are referring to, but i have seen some nice places in encinitas at prices much less than that. |
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fernie
Posts:5
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| 10/12/2008 12:25 AM |
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so much talk about political, social, conspiracy theories, and other factors that may influence real estate prices. as an economist i would suggest going to the basics:
http://en.wikipedia.org/wiki/Supply_and_demand |
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Goingup?
Posts:150
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| 10/12/2008 12:33 PM |
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For those that think the recent stock market crash is going to have a major effect on housing simply look back to the last crash how housing reacted.
During the 2000 market crash the NASDAQ dropped 80% and SP500 50% (compare that to the 40% drop on average so far).
How was housing effected?
Well, that was the beginning of the largest housing bubble in history.
Round two coming up? Not saying it will, but if you ran with that logic in 2000 clearly you missed a large investment opportunity.
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bobh
Posts:9
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| 10/12/2008 1:28 PM |
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[quote]Posted By Goingup? on 10/12/2008 12:33 PM
Round two coming up? Not saying it will, but if you ran with that logic in 2000 clearly you missed a large investment opportunity.
[/quote]
LOL
From the Onion "Recession-Plagued Nation Demands New Bubble To Invest In"
http://www.theonion.com/content/news/recession_plagued_nation_demands
Maybe we can oscillate between two bubbles forever.
Do you think they will go for the securitized sub-prime mortgages again?
For the leveraged credit default swaps?
It's worth a try.
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ownhomeinSD
Posts:163
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| 10/12/2008 3:35 PM |
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Yes, pleople are buying homes for different reasons. SD home inventory keeps declining. It is 17,597 for the county and 4641 for the city. Inventory in some areas decline steadily. Here is the inventory for Mira Mesa (92126). In September alone, 52 homes were sold in the area comparing with about 200 homes for sale in the market.
10/12/2008 99 77 177
10/05/2008 105 81 187
09/28/2008 114 77 192
09/21/2008 115 72 189
09/14/2008 112 74 188
09/07/2008 115 76 192
08/31/2008 119 77 198
08/24/2008 122 77 202
08/17/2008 126 76 206
08/10/2008 134 78 215
08/03/2008 135 82 220
07/27/2008 133 82 218
07/20/2008 142 82 227
07/13/2008 141 80 224
07/06/2008 142 82 227
06/29/2008 143 84 230
06/22/2008 144 87 233
06/15/2008 143 89 234
06/08/2008 145 93 239
06/01/2008 144 97 241
05/25/2008 148 94 243
05/18/2008 148 100 249
05/11/2008 144 103 248
05/04/2008 143 102 246
04/27/2008 143 105 249
04/20/2008 147 108 256
03/09/2008 ? ? 293 |
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