Well you convinced me. Real Estate markets can therefore never go down. Thats why they went straight down for 7 years in a row during the last crash in san diego. Forget the fact that the magnitude of the over extenstion is 3X the previous market crash. Thats just noise.
Gonna get Ugly, ugly, Ugly Won't happen till Spring cause thats when existing hits. Bye bye. One Mil homes are going to go for 750. It WILL happen. I listen to TOLL BROS. They say the bottom is not even close. Have fun specs...
Traderdragon, I would like to make 2 points. #1 the numbers your are quoting for "all listings" are NOT the entire MLS data base. So your fiugures for percent of forecloures is skewed. #2 100% increase sounds bad, but in the context of the overall market, it's not. You would think that lenders would like a default rate of "0". You would be wrong. They know that in order to gain maximum market share they need to have some defaults. So going from 1.5% to 3% is 100% increase, but overall it's still not that bad. It's a blip. In six months, defaults will be down.
That's already happened here in Boston Metro, houses on the market for a year(new construction) at 1.1M selling for 850K. Profit of about $350K nevertheless. Yes it will get worse mortgage requirements continue to tighten and apprasials too.
ha - profit of $350k - but it will get worse. This slowdown is in fact very very healthy for the real estate market and will improve the market efficiency and shake out the speculative component and improve the market structure. The dirty little truth that the doom and gloomers want everyone to forget is that the national population is SOARING due to massive immigration (legal - not just illegal immigration). PEOPLE ARE COMING TO AMERICA IN DROVES. Also the dollar is way down globally and America is on sale at A BARGAIN! Given the massive amount of global liquidity caused by EXCESSIVE WORLD SAVINGS (e.g. surplus capital in foreign bank accounts) that money is looking for a home. My PREDICTION - ITS COMING TO AMERICA! All the doom and gloom campaign is designed to shake out the speculators and to free up unrealized capital gains so the government can bank its TAX REVENUE in 2006-2008 to help the current administration look like white knights. Already the US Treasury has WINDFALLS in tax income as a result of people taking their profits/equity and moving it into other investments (e.g. the sizzling stock market). The other little dirty truth is that NEVER AGAIN will Real Estate be able to be purchased for anything close to current prices since global competition for scarce commodities is DRIVING MATERIAL PRICES through the roof. At this moment in time we have a fortuitous confluence of events with relatively cheap oil, cheap labor and temporarily moderate material costs. Real estate can NOT be replaced at the cost of the existing inventory on the market. That MEANS BUY NOW FOOLS or kiss your chances goodbye over the next 2 years. Just as soon as the attitudes are adjusted and the tax is collected the sentiment will be re-engineered and it will be back to the hoard buying mentality again. Just as soon as the low hanging cheap fruit starts to gets picked from the surplus inventory prices will skyrocket up again. That is when home builders will start cranking up the machine again. Understand the game - and profit by it. BUY BUY BUY the biggest you can afford right now to get best $/sq-ft advantage inherent in larger homes. The sweet spot is in homes and condos built about 2 years ago before price of material shot up. They have the most equity luxury to bargain with right now and developers can't compete with new offerings until the old inventory clears. BUY BUY BUY TS
So you think that these 3 bedroom, 2 bath 1800 square foot 50 year old homes around CA, NJ, and NY will actually go from its current absurd price of 650k to 1 million over the next few years? What are you smoking? Most young couples looking for a starter home cannot afford these ridiculous prices in these overpriced areas.
but alot of other people can and you cant make oceanfront or near the sizzle ( where top dollar wants to be at)...its a toss up...but im thinking this kid may be right..i have no idea..peace
I guess you are addressing me. My comments are directed to the areas of the country where people really want to live. A lot of CA, NJ and parts of NY are going to be hurting. But the South , sunbelt and various other places are going to soar again soon. What will happen in the old dead and decaying areas like NJ that you are talking about is that the demographics and social norms will adapt to accommodate those who want to stay there. That means 40 years mortgages, kids moving in with parents and sharing living costs with others etc. Personally I'd hate to be living in CA, NJ or NY and would gladly pay out every bit of any equity I had in a home to get the hell out of there. I'd be looking at "loss mitigation" or "loss reduction" rather than even thinking about trying to break even. At some point these area state govs will have to assess even higher taxes to compensate for lower valuations - that means the millage rate is going up for everyone and services are going DOWN. My advise RUN from these areas while you still can or expect to pay for the lower class tier bail and social upheaval that is going to follow. Its either that or take out a home equity loan and buy power ball and lotto tickets as fast as you can. TS
Obivously not true in some of the bubble markets. Because the census graph clearly shows that people have been moving out of san diego for several years now. The population is going DOWN. There is nothing supporting the real estate market here but the still low interest rates and stubborn sellers who will get burned. Less than 5% of the population can even afford a home here at the current insane prices. There is no room for prices to go up. There are no buyers. Homes sitting on the market here for 9,10,11,12 months. Homes selling 20% below their ZILLOW estimate. The majority of ARM resets and interest only resets havent even occured yet. All the fundamentals point in one direciton, down. Youre on crack if you think stuff is going way up from here. This is Naz2000, but in slow motion. Market psychology is slowing changing as more and more news articles hit the airwaves about home price declines, record inventory, record foreclosure rates, etc.
I don't know what planet you're on if you think San Diego is a "bubble" market. San Diego is CHEAP compared to the OC and San Diego had might as well be Detroit when compared to Los Angeles prices.