patrick.net

Many of you are forgetting that we're on the precipice of a global financial meltdown. Think I'm chicken little? I couldn't care less. Mark 20 June 2011 in your calendar and I'll meet you here next year on the same date and you can tell me all about your awesome equity.

Los Angeles Renter says

But wages would increase

It would be other way, when most people who lost their high paying jobs could not land another one closer to their last income.

StoutFiles says

solver says

I’m starting to think that the idea really is to bankrupt the middle class for control purposes. Why will prices keep falling? Maybe the power elites are really out to break the system so that they can reinvent it with new standards and a greater sense of control.
Was watching Money Masters (the full length version) on You Tube the other night and it really lends quite a bit of insight into the whole power structure of the world.
I think that there are simple explanations to it all. We just don’t want to see the handwriting on the wall.

Let me guess, you think 9/11 was a conspiracy as well?
The power elites have little to gain if the middle class falls. Breaking the system just results in revolutions, not in obedient slaves to the system.

I think two planes hit the towers and that's irrefutable. I also think that they may have served as a decoy. www.drjudywood.com If you can look at this and refute everything that is scientifically backed, then you should present your discoveries to her. Till then, much is in question STILL and I don't see anyone offering up 100% of the details.

Anyway, I would imagine that given the average shovel ready job that was presented to the unemployed only paid slightly over minimum wage, that would represent a much much lower housing market in the near future. How else are those low wage jobs going to stimulate the economy by buying and remodeling homes.

Hell, homes would have to come down like 75% for these new hires to buy. Maybe there is light at the end of the tunnel.

it doesn't take a rocket scientist to figure out that we're just getting out of the eye of the storm and we're going back into it.

Oh, by the way, a revolution is not to far off. If you educated yourself by keeping up with current events in the governmental system, you'll find that we really are in an Orwellian like society. It's no longer conspiracy, it's not reality and knuckleheads (sheeple) like yourself are the reason. There are some who were born to be followers and some who were born to leaders. Leaders question everything, because they know they have to in order to get the facts straight.

Everything is intertwined at the hip. One thing affects another and problems usually trickle down. Why do they want to break our society? Maybe, because it represents power. How else would you explain all of our current events?

I was in my bank about 3 weeks ago and I was sitting down with the mortgage specialist who was helping me sort my accounts since the other reps were occupied. I was told that their analyst had been in the day before briefing all the branches of what was coming ahead. In short I was told that they were told to simply brace themselves for something worse then what happened before.

He told me that he couldn't say anything more and that he too was a little nervous. That just goes to show you, that even the employees at some of these banks are human too. It's the big powerbrokers at the top who are creating all the havoc in the system. These are bastards that will soon be getting what is coming to them.

As the saying goes: "Be careful what you wish for, because you just might get it" and get it they will.

common_sense says

Gold, corporate bonds, and a farm

A farm is obviously a form of RE, so you second my case.

Corp. bonds denominated in what currency? That of "collapsing government"? You may well get your coupon, in nearly worthless currency. That happened with corp. bonds in Germany during Weimar times, btw.

Gold is good, I agree. But govts. of all stripes, when pressed, have a nasty habit of confiscating or outlawing it as a legal tender. That has happened in 1930-s in Germany, here in the US, and many other nations. But they didn't confiscate or outlaw RE ownership. Perhaps because they can't sell confiscated RE abroad to obtain foreign exchange to pay for critical imports.

StoutFiles says

Let me guess, you think 9/11 was a conspiracy as well?

The power elites have little to gain if the middle class falls. Breaking the system just results in revolutions, not in obedient slaves to the system.

Ugh - awful analogy. You honestly think the 21st century robber-barons believe, or care, that there's going to be some sort of armed uprising against them if they go too far? Don't make me laugh. The sheeple are too concerned with who's going to win on American Idol to take up arms. You're also forgetting that the power elite do not necessarily act in their own best interest. They are only concerned with grabbing as much wealth RIGHT NOW as possible. If the price of soup went up, they'd gladly throw the goose that lays golden eggs in a pot to make a little short-term profit.

And that's where your analogy falls apart:

The 9/11 conspiracy is bullshit for a very simple reason. Which is more likely, that a group of terrorists from Saudi Arabia hijacked some planes and crashed them, or that the U.S. government somehow secretly planted explosives in prominent buildings, then orchestrated the most complicated charade in history just to make us believe it was done by terrorists? Obviously the first one.

But which one of THESE is more likely: The wealthiest Americans are manipulating politicians, the stock market, and the economy for their own benefit, just as has happened in past centuries, OR those same people are afraid that the middle class will take up arms against them? Obviously the first one.

Zlxr says

Additionally - who’s to say that Cities and Counties will not raise property taxes? Look at the city of Albany, CA. I know of someone who’s paying $3800 per year (property taxes) on a $60,000 purchase. $800 goes to the State - the rest goes to the City of Albany for sewers and schools.

Under Prop 13, that can't be right. Did I miss something? Are you from California? There's no way the property tax on a $60K purchase would be $3800/year.

In addition, property tax being so low in California largely makes it so that local government is highly dependent on the state legislature, which is highly incompetent and unaccountable. This is one of the big effects of Prop 13 that most people ignore -- loss of local control.

On a $60,000 home, the highest taxes would go for a heavily Melloed district is $1000 a year.
I was curious, so I looked up my neighbor's house as they have been around forever; they have a Prop 13 basis of around $55k. Their Ad Valorem taxes (at 1.2555%) come out to around $600. PRoB is one of the worst cities for special assessments. The Fixed Charges and Special Assessements component of proptery taxes (schools, parks, stormwater, libraries, mosquito, fire etc) tally up to be $1,350. The size of their home looks to be slightly less than 1400 sq.ft.

bob2356 says

Cash purchases will sink in the future

It will, with economy further going into pits.

I think, from now on, before every post you should list if you own a house or rent. I think a lot of stances on this thread are just people rooting for Team House or Team Rent to win, only because they're on that team.

chip_designer says

Apple planning to build UFO new campus

Yes, Apple's new UFO building will certainly raise housing prices in the Bay Area. Duh.

Of course in reality, Pandora is in Oakland, not Silicon Valley.

thanks cornrollio

Sorry to disappoint you all. But the next RE report that comes out will show that prices have went higher than 2009 prices again. In my area at least. I guess every so often there will be a good deal on a short sale/REO. But it doesn't seem to be stopping people from bidding it up again. Maybe because of the interest rates?

PIMCO says, "We anticipate an average decline from here of about 6% to 8% in prices across the country."

vain says

Sorry to disappoint you all. But the next RE report that comes out will show that prices have went higher than 2009 prices again

http://dqnews.com/Articles/2011/News/California/Bay-Area/RRBay110615.aspx

“Given the sluggish start to this spring’s home-buying season, with sales 20 to 30 percent below average, it’s no surprise we’re logging sharper declines from 2010. Sales got a big shot in the arm a year ago, when people rushed to take advantage of expiring homebuyer tax credits. Today the market must stand on its own, and it’s having a hard time doing that in the absence of stronger job growth and consumer confidence. So far, low mortgage rates and lower home prices aren’t enough to overcome the concern some potential buyers have that prices could fall more. Other would-be buyers are unemployed or underemployed, or can’t qualify for a loan. Scores of would-be move-up buyers owe more than their homes are worth; so they’re stuck,” said John Walsh, DataQuick president.

Distressed home sales made up about 45 percent of the Bay Area’s resale market last month.

How Low ?

Dqnew.com August, 2000

The median price paid for a resale house in the Bay Area was $372,000 in July, another record. That was up 0.5 percent from $370,000 in June and up 20.0 percent from $310,000 for July last year.

uffthefluff says

PIMCO

Yeah, right? Back at the peak in 2006, they said - "Nationwide, flat, but 10-20% drop in some areas":

http://www.youtube.com/watch?v=de1lQZjJkkc

mdovell says

Foreign buyers are not enough to prop up the housing market. Don’t get me wrong they can make some gains but it won’t restore it to where it was.

The fact that foreign buyers are buying is an indication of a top, not the bottom. Foreigners always come in at or near the top of the cycle. The fundamental reason for this, is that it takes longer for news to travel and spread from the source to remote locations.

vain says

It went down for a little and down to mid-high $400k’s for a month or two. Now it’s back at $550k again and again.

Your problem is that you are having a ride with the asking price. Asking price means complete BS in this market. I have not heard of any market in USA where homes were selling at 400K in 2009 and comps are now selling 550K in 2011.

klarek says

LOL a few months ago, weren’t you using foreign cities as a benchmark, to make a case that housing is cheap in the U.S.?

Yep--and obviously you didn't get his point.

Looking at the graphs above, tell me why housing prices wont revert back to the mean? After all, if they can go up by X percent, they can go back down by the same percent, yes?

People are not making that much more than in 2000 (if any). The population, if you include retirees, is not increasing. Interests rates can't really go lower. And, I feel that rent is increasing only because people don't want to buy- and that is creating rental demand- it's a dislocation, not a correlation. Now, in my area of NJ prices are no where near even their 2000 levels.

Tell me why prices won't DEPRECIATE (not crash) back to the mean, over a number of years?

odin says

Tell me why prices won’t DEPRECIATE (not crash) back to the mean, over a number of years?

1970s style inflation.

Don't see it happening, but I can't say it won't.

The minimum wage in Calif doubled between 1968 and 1981. It could double in the next 12 years.

That's the general trend; the system desperately needs wage inflation. Maybe we'll actually get it.