‘I Am Optimistic that House Prices Could Fall for 20 Years’


By HousingBoom   Follow   Sat, 17 Mar 2012, 12:57pm   12,145 views   126 comments
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http://wallstreetpit.com/76795-robert-shiller-i-am-optimistic-that-home-prices-could-fall-for-20-years

I do not see why people are even debating when home prices are going to bottom. For those who think we have already bottomed nationally, why the heck would one of the top housing forecasters in the US believe it will bottom in two decades!!!! That is 20 YEARS of declining home prices!!!

Unless you are an expert like Robert Shiller and co-founded an indicator to track home prices (Case Shiller Index), you might stand a chance against his predictions.

There is no way home prices have bottomed on a national level when foreclosures are still skyrocketing and the debt crisis is upon us. My point is, if Robert Shiller believes prices will bottom in 20 years, I would think calling the bottom in 10 years would be optimistic!!!! It is common sense!!

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  1. RentingForHalfTheCost


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    87   10:40pm Tue 20 Mar 2012   Share   Quote   Permalink   Like   Dislike  

    B.A.C.A.H. says

    Renting,

    Are you a local kid? Doesn't sound like it.

    Your nightmare scenario will create a shortage of housing and make the rents go up even more. All the reconstruction will cause delays and bottlenecks for the homeowners but will also be an opportunity for all sorts of upgrades and deferred maintenance, which is what happened from the quake and also after the Oakland Hills fire.

    You can pay for earthquake insurance to mitigate your financial disaster. The premium is not cheap and it is a sh*tty policy but it will prevent your property damage from wiping you out. Think of it as just another aspect of the high cost of housing in the region.

    I'm as local as most around here. I'm definitely on the conservative side when it comes to my high priced items. I wash my own car to make sure the paint doesn't get killed. I park away from other cars to avoid getting dinged. I don't mind the extra time it takes me for these things. It protects my large purchase items. I have and would treat a house purchase with even more care. Does it mean I am cheap? Not at all. I put good money into tipping, into charity, into eating well and living well. Assets are just assets to me. I'd rather overpay for service or better quality. I love that I live like this. I wouldn't change it for anything.

    I witnessed many people around me losing their homes during the 80's. Good people who really couldn't understand what a 15-18% interest rate meant, until they couldn't afford their payment. That was when I was a teenager and winning national math competitions. How adults couldn't take the time to use a scientific calculator when they were playing with leveraged money just amazed me. The need for greed just overpowers everyone. I am still amazed today, some 30 years later. On one hand I am very sad that more good people are now losing everything, but on the other we need this to survive. My worse fear is that we keep putting lipstick on this pig for the next 20 years. It could happen. 3 lost decades of growth for the US would be a disaster.

  2. RentingForHalfTheCost


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    88   10:48pm Tue 20 Mar 2012   Share   Quote   Permalink   Like   Dislike  

    iwog says

    RentingForHalfTheCost says

    "Ahh, it is only a tiny amount of houses that will be damaged. Nothing to worry about. Sign here quickly, I don't like having my M-class parked in this neighborhood"

    You DO understand that Loma Prieta in 1989 was a 7.1 earthquake on the San Andreas fault right? Uh right? I'm not sure where you got your map, but obviously either you or the person who created it are missing a few facts.

    How come 25% of the homes in San Francisco didn't fall down in 1989? How come 1% of the homes in San Francisco didn't fall down?

    Furthermore most people who live in the Bay Area don't live in San Francisco.

    I don't know where you get your thinking? Loma Prieta was a 15 second earthquake. It was no where near a big one. The fact that it did so much destruction in 15 seconds to me shows how vulnerable we are. You talk like there was no damage. There was huge damage in 15 seconds!

    http://nisee.berkeley.edu/loma_prieta/comerio.html

  3. RentingForHalfTheCost


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    89   10:54pm Tue 20 Mar 2012   Share   Quote   Permalink   Like   Dislike  

    Nice snippet from the berkeley link I referenced in the "Lessons Learned" section. That was 15 seconds folks. And in 1989 before the huge run up in prices. Even God couldn't help us if that same or worse things happens today.

    Don't believe the realtors here trying to downplay the risk. It is real and needs attention and risk management. Otherwise, you are living on hope.

    "The Loma Prieta earthquake deepened an already existing housing crisis in the Bay Area. Many home owners and multi-family building owners were probably carrying as much debt as the property could carry, and could not afford to take further loans to rebuild or rehabilitate the property. It was apparent that the normal single-family housing-oriented recovery programs would not be sufficient to enable real housing recovery. Furthermore, because the earthquake hit hardest in areas of concentrated multi-family low-income housing, the market was not able to provide alternative or replacement housing at affordable rents, without some assistance from the public. Overall, only 40% of the housing losses were served through the normal disaster assistance process, and 60% can be described as a residue of unmet needs. Of these, half found some assistance through the one-time solutions, but these are not models for future disaster relief and recovery programs."

  4. thomas.wong1986


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    90   10:58pm Tue 20 Mar 2012   Share   Quote   Permalink   Like (1)   Dislike  

    If we have a Loma Prieta earthquake at peak prices, only damaging similar number of homes and property it would bankrupt many parties, families, insurance companies, and industries. Your dealing with highly inflated values...

    Whats the damage come out to.. Trillions! and who is going to pay or would want to pay for damage in Fortress areas of Marina or Palo Altos... Who would pay for a fire in Beverly Hills.

  5. thomas.wong1986


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    91   11:00pm Tue 20 Mar 2012   Share   Quote   Permalink   Like   Dislike  

    RentingForHalfTheCost says

    Nice snippet from the berkeley

    Yes.. a sobering period afterwards...and for some who were here, do not want to see a repeat.

  6. RentingForHalfTheCost


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    92   11:03pm Tue 20 Mar 2012   Share   Quote   Permalink   Like   Dislike  

    B.A.C.A.H. says

    Your nightmare scenario will create a shortage of housing and make the rents go up even more.

    And? I would lose at most 1 month rent. I'd probably stick around and help the owner pick through the pill trying to collect my stuff for a while though. I'd rather he did all the financial heavy lifting and I just get a workout and feel like I'm helping as well. ;)

  7. ThreeBays


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    93   11:06pm Tue 20 Mar 2012   Share   Quote   Permalink   Like   Dislike  

    iwog says

    RentingForHalfTheCost says

    "Ahh, it is only a tiny amount of houses that will be damaged. Nothing to worry about. Sign here quickly, I don't like having my M-class parked in this neighborhood"

    You DO understand that Loma Prieta in 1989 was a 7.1 earthquake on the San Andreas fault right? Uh right? I'm not sure where you got your map, but obviously either you or the person who created it are missing a few facts.

    How come 25% of the homes in San Francisco didn't fall down in 1989? How come 1% of the homes in San Francisco didn't fall down?

    Furthermore most people who live in the Bay Area don't live in San Francisco.

    The magnitude of Loma Prieta varies depending where you read. I read 6.9 (Richter scale) which is actually 3 times less energy magnitude than a 7.2

  8. iwog


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    94   6:57am Wed 21 Mar 2012   Share   Quote   Permalink   Like   Dislike   Protected  

    ThreeBays says

    The magnitude of Loma Prieta varies depending where you read. I read 6.9 (Richter scale) which is actually 3 times less energy magnitude than a 7.2

    USGS says 7.1, but it doesn't really matter because that .3 still isn't gonna collapse 25% of the homes in San Francisco.

    The 1906 earthquake was 8.0 and more homes were destroyed by fire than by the ground shaking.

  9. SubOink


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    95   6:58am Wed 21 Mar 2012   Share   Quote   Permalink   Like   Dislike  

    Has this forum gotten so desperate to find reasons why not to buy as having to go to the earthquake scare?

  10. Nomograph


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    96   7:07am Wed 21 Mar 2012   Share   Quote   Permalink   Like (1)   Dislike  

    SubOink says

    Has this forum gotten so desperate to find reasons why not to buy as having to go to the earthquake scare?

    Mudslides, wildfires, locust plagues, and cannibal anarchy coming to a neighborhood near you soon.

  11. dunnross


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    97   7:51am Wed 21 Mar 2012   Share   Quote   Permalink   Like   Dislike   Protected  

    B.A.C.A.H. says

    Your nightmare scenario will create a shortage of housing and make the rents go up even more.

    That is if there is still anyone left who would want to live here. Rents in Chernobil are not scheduled to go up for another 348,000 years.

  12. RentingForHalfTheCost


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    98   8:17am Wed 21 Mar 2012   Share   Quote   Permalink   Like   Dislike  

    SubOink says

    Has this forum gotten so desperate to find reasons why not to buy as having to go to the earthquake scare?

    As opposed to the "rates are going up", "you will be priced out forever", and my favorite "real estate never goes down" scares?

    Whoever says that there is no risk of earthquakes in Northern California is a fool. Remember the saying about fools and money.

  13. RentingForHalfTheCost


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    99   8:20am Wed 21 Mar 2012   Share   Quote   Permalink   Like   Dislike  

    Helloeeze says

    Your doomsday knickers are showing, people. Why not just let the housing charts speak for themselves. Prices have gone down. That should make you happy. You dilute your argument with all this earthquake/Chernobil talk.

    This whole things started by some realtor saying that renting insurance is the same as owners insurance. It is not by a mudslide. Here is what he was really doing.

  14. rootvg


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    100   9:00am Wed 21 Mar 2012   Share   Quote   Permalink   Like (1)   Dislike   Protected  

    RentingForHalfTheCost says

    SubOink says

    Has this forum gotten so desperate to find reasons why not to buy as having to go to the earthquake scare?

    As opposed to the "rates are going up", "you will be priced out forever", and my favorite "real estate never goes down" scares?

    Whoever says that there is no risk of earthquakes in Northern California is a fool. Remember the saying about fools and money.

    You could say the same thing about tornadoes in Ohio. I lived there thirty years and have never been in one.

    What this is about is (yet again) what Michael Bloomberg and Judd Gregg have been saying for years. There will be certain places in the United States that are not affordable for middle class people in which to live. The Bay Area is most certainly in that category.

  15. bmwman91


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    101   9:48am Wed 21 Mar 2012   Share   Quote   Permalink   Like (1)   Dislike  

    rootvg says

    There will be certain places in the United States that are not affordable for middle class people in which to live. The Bay Area is most certainly in that category.

    This is a bitter, bitter pill, but I am slowly swallowing it. It is extra hard to do since I grew up here, more than 80% of my family is here and I love that the weather enables me to go outdoors year-round. Unfortunately, RE here is a sick game designed to milk every last penny out of middle-class folks, and I will not be so foolish as to try to play. None of the players of this game actually win; it has been devised for the service and pleasure of the large interests that run it (NAr/CAr, state & local government).

  16. SubOink


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    102   9:50am Wed 21 Mar 2012   Share   Quote   Permalink   Like   Dislike  

    RentingForHalfTheCost says

    As opposed to the "rates are going up", "you will be priced out forever", and my favorite "real estate never goes down" scares?

    It's been a long time that I have heard anybody say that...other than the bears quoting it from 6 years ago.

    Show me a recent thread where anybody posts that, other than you rephrasing it.

    The earthquake scare on the other hand was actually mentioned. And the doomsday cannibal anarchy scare gets mentioned in about every post. The prices will go down forever scare happens every day. And 1975 prices coming to your neighborhood too.

    You don't realize just how similar you are to the old "prices will go up forever".

    Maybe that's the biggest sign of a recovery. When the dow was at 6500, everyone said it was going to 1000.

    But it didn't. It's now double that. Despite cannibal anarchy.

    I got a feeling the anarchy won't happen, but don't bite the messenger now...:)

  17. rootvg


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    103   10:52am Wed 21 Mar 2012   Share   Quote   Permalink   Like (1)   Dislike   Protected  

    bmwman91 says

    rootvg says

    There will be certain places in the United States that are not affordable for middle class people in which to live. The Bay Area is most certainly in that category.

    This is a bitter, bitter pill, but I am slowly swallowing it. It is extra hard to do since I grew up here, more than 80% of my family is here and I love that the weather enables me to go outdoors year-round. Unfortunately, RE here is a sick game designed to milk every last penny out of middle-class folks, and I will not be so foolish as to try to play. None of the players of this game actually win; it has been devised for the service and pleasure of the large interests that run it (NAr/CAr, state & local government).

    I hear you. It is a pure freak of nature that my wife and I are here. We're in tech and built our resumes to the point where no one else could afford us. That's what happens when you're from the midwest and they pound it into you that you should focus and work your ass off and hope for the best. You end up in a place you don't think you can afford (we can, on paper) and with a culture you barely understand. It's hard to keep the values we grew up with here. It's damn near impossible.

  18. freak80


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    104   11:02am Wed 21 Mar 2012   Share   Quote   Permalink   Like   Dislike  

    rootvg says

    We're in tech and built our resumes to the point where no one else could afford us. That's what happens when you're from the midwest and they pound it into you that you should focus and work your ass off and hope for the best. You end up in a place you don't think you can afford (we can, on paper) and with a culture you barely understand. It's hard to keep the values we grew up with here. It's damn near impossible.

    I hear you there. I lived in Santa Rosa (North Bay) for 3 months due to a job. I quickly realized there was no future there for me: a totally foreign culture and shacks going for half a million.

    CA is a great place to visit, like New York City. Not a place for your average middle-class person to live.

  19. RentingForHalfTheCost


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    105   11:24am Wed 21 Mar 2012   Share   Quote   Permalink   Like   Dislike  

    rootvg says

    You could say the same thing about tornadoes in Ohio. I lived there thirty years and have never been in one.

    The same logic as my Dad used to use on me when I was training in college towards my first national title. He really didn't understand exercising, so justified it by saying that he heard of someone who died in a marathon from a heart attack. That then excused himself from keeping fit. So, just because people have lived for 30 years in a high risk area, doesn't mean it is suddenly riskless. I am not saying it will happen soon, what the hell do I know. However, I am saying there is a risk, and you need to do some research and give the proper energy to the risk. Earthquake insurance seems like a no brainer to me. If you disagree then send me an email a few days after the big one, if it hits, and see if it has changed your mind. Your life.

  20. bob2356


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    106   11:29am Wed 21 Mar 2012   Share   Quote   Permalink   Like   Dislike  

    RentingForHalfTheCost says

    http://www.spur.org/publications/library/report/safe-enough-stay

    As much as I would love to believe everyone all the time, I'd trust a report funded by the "US Geological Survey" over any BA realtor.

    These guys must be making this stuff up right Iwog

    Did you actually read the report, not the summary? You are really basing you argument on this? The 25% number include multi family, mostly apartments. Lots of multi family. Everyone here is talking single family houses. Your contention is 25% of homeowners will lose their homes.

    Not only that their own examples don't support the 25% damage to private homes number.

    Lets See their examples of unoccupiable housing in earthquakes:
    Loma Prieta: 10% in Watsonville/Santa Cruz-60% multifamily
    Northridge: 3% of San Fernando valley 1.5% LA-88% multifamily
    Kobe: 25% center city 15% city wide-50% multi family:
    The report failed to mention that most single family houses in Kobe have very heavy tile roofs for typhoon protection and are very lightly framed. Oops, guess they didn't want you to know that.
    Christchurch: 2-3% city wide-multi family 1%.

    Lets look at Christchurch since I've been there 6 times since the quake. There are virtually no single family homes affected. All the damage is to big buildings down town.

    There were actually 2 earthquakes a 7.1 then a 6.3 about 6 months later. These were very, very shallow, less than 10k and less than 5k. The epicenters were very close to the city 30k and 10k. So the both earthquakes were pretty much right in the city. The lateral and vertical accelerations were the highest ever recorded, up to 2.2g. These were very long quakes, almost a minute.

    What the report also doesn't mention is New Zealand has the crappiest built houses in the entire first world. They just put up the framing with a couple of cross braces then side over it. No sheathing of any kind. All the shear strength is in the cross bracing.

    Yet in 2 long close powerful earthquakes only 2-3% of houses were uninhabitable. Most of those were from liquification problems, not structural damage. I may not be one of the whole host of high powered engineers whose name is on the report (which actually draws all its engineering data from another report call cpss WTF???), but how the hell could a 7.1 quake that was right in Christchurch make 2-3% of the crap box kiwi houses uninhabitable, while a 7.2 in the bay area would make 25% of much, much stronger, better built houses uninhabitable.

    That doesn't make any frigging sense at all. Ok I could buy 25% of dwellings in the city of San Francisco proper if you included all the apartment buildings and considered each apartment a dwelling. Since the report is very vague on the issue of apartment buildings vs private houses you could stretch the conclusions that far maybe. But your argument is about 25% of privately owned homes bay area wide. That's just nonsense. I would expect numbers in line with Christchurch.

  21. freak80


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    107   11:30am Wed 21 Mar 2012   Share   Quote   Permalink   Like   Dislike  

    A lot of people are probably betting the Federal Gummint will ride to the rescue after the "big one" hits.

    Sort of like how the banks were betting the Gummint would bail them out if they took huge risks. And they were right.

  22. RentingForHalfTheCost


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    108   11:30am Wed 21 Mar 2012   Share   Quote   Permalink   Like   Dislike  

    SubOink says

    It's been a long time that I have heard anybody say that...other than the bears quoting it from 6 years ago.

    I just went to an Open House 2 weeks ago and got fed the vomit by a realtor. I wish what you said above was true. I wish people talked about risk, about the real problems. There are times and situation where buying makes sense, absolutely. However, most realtors wouldn't know them if it hit them in the face.

  23. RentingForHalfTheCost


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    109   11:34am Wed 21 Mar 2012   Share   Quote   Permalink   Like   Dislike  

    bob2356 says

    Did you actually read the report, not the summary? You are really basing you argument on this? The 25% number include multi family, mostly apartments. Lots of multi family. Everyone here is talking single family houses. Your contention is 25% of homeowners will lose their homes.

    Not only that their own examples don't support the 25% damage to private homes number.

    My contention? So, in your 30 minutes you just poked a bunch of holes in a report done by some of the best in the field. Your incredible. Not believable, but incredible. Keep on your blinders. It'll do you well in life.

    Crazy talk from all realtors and home owners. I'll feel for the innocent when this crap hits the fan, but for you and others that think their decision are so great to buy. You deserve it!

  24. BoomAndBustCycle


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    110   11:37am Wed 21 Mar 2012   Share   Quote   Permalink   Like   Dislike  

    RentingForHalfTheCost says

    Earthquake insurance seems like a no brainer to me. If you disagree then send me an email a few days after the big one, if it hits, and see if it has changed your mind. Your life.

    Earthquake insurance only makes sense if you have more equity in your home than the ultra-high deductible. (Which runs $40K-80K). So say you have $60K in damage to your home from an earthquake and for 10 years were paying $1K a year for insurance.

    The earthquake insurance still wouldn't cover squat and you'd be out $70K.. ($60K repairs + $10K in premiums).

    If you own the home outright or have a very large equity stake.. THEN earthquake insurance makes sense. Otherwise you just walk away... accept your FEMA aid... and start with a CLEAN SLATE when the big one hits.

    Maybe rent for 5 years and then buy when the housing shortage really kicks in when people start forgetting and migrating back to CALI, and half the homes aren't habitable and rents and homes skyrocket.... after being rebuilt with even better earthquake resistant codes.

  25. RentingForHalfTheCost


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    111   11:46am Wed 21 Mar 2012   Share   Quote   Permalink   Like (1)   Dislike  

    BoomAndBustCycle says

    If you own the home outright or have a very large equity stake..

    But but but. There was a big argument back a few weeks ago saying that people with no equity (mortgage) do own their home? I'm confused. From what realtors tell me these are the different stages of housing.

    Rent - own nothing, you are useless
    Own - have no to some equity but large mortgage
    Close to own outright - large equity and little mortgage
    Own outright - house with no mortgage

    I like my definitions better

    Rent house
    Rent money to use house while saving so one day you 'own house'.
    Own house

    Simple and makes more sense.

    Own outright sounds like I am left outside in the cold. Brrr...

  26. RentingForHalfTheCost


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    112   11:55am Wed 21 Mar 2012   Share   Quote   Permalink   Like   Dislike  

    BoomAndBustCycle says

    than the ultra-high deductible.

    Spoiler ALERT!!! There are people that are paid to analyze risk. You know the ones trained in looking at probabilities, historic similar situations, analyzing liabilities and expenses, etc. etc. That is what they studied, not the any fool can pass the realtors exam. When they say that in order to provide you insurance there needs to be a high deductible, then what they are telling you hints at their conclusions. Listen to them as opposed to the realtor that wants/needs you to buy. There is money (their money) behind their conclusion. There is also money (your money) behind the realtors views. Let the realtor do what their job (not really sure what that is, but maybe something), and let the insurance company do their job. Insurance companies manage risk, that is their business model. If they have a high deductible it is for a reason. Beware.

  27. RentingForHalfTheCost


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    113   12:01pm Wed 21 Mar 2012   Share   Quote   Permalink   Like   Dislike  

    SubOink says

    I got a feeling the anarchy won't happen, but don't bite the messenger now...:)

    Yah, lets ignore the giant elephant in the room. The US Debt that just won't stop growing. You don't think this will have an effect on housing? It is growing trying to stop housing from collapsing. At some point we have to pay the price for that and housing will not be spared.

    http://www.usdebtclock.org/

  28. BoomAndBustCycle


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    114   12:11pm Wed 21 Mar 2012   Share   Quote   Permalink   Like   Dislike  

    RentingForHalfTheCost says

    here are people that are paid to analyze risk. You know the ones trained in looking at probabilities, historic similar situations, analyzing liabilities and expenses, etc. etc.

    Only 12% of Californians own Earthquake insurance... that might have SOMETHING to do with the high deductible. Imagine how high automobile insurance deductibles and premiums would be if only 12% owned car insurance.

    And the Northridge Quake in CA happened in 1994... That put a lot of downward pressure on Real Estate in Los Angeles in 1994-1997... Which makes the 1997 values that so many quote as "FAIR prices"... more likely a post-disaster drop below fair value.

    The funny thing is if prices fall to 1997 prices in Los Angeles.. We are really at 1989-1990 prices. Home prices in 1989-1990... were higher in most areas than 1997.

    So in reality, home prices in Los Angeles, if we keep dropping will fall back to 1989 prices BEFORE 1997 prices... wrap your head around that!

  29. freak80


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    115   12:35pm Wed 21 Mar 2012   Share   Quote   Permalink   Like   Dislike  

    RentingForHalfTheCost says

    But but but. There was a big argument back a few weeks ago saying that people with no equity (mortgage) do own their home? I'm confused.

    I recall that argument as well. ;-)

    How does house insurance work? If I only own 10% of the house, than do I have to insure 100% of the house or 10% of the house? I thought I had to insure 100% of the house, even if I only had 10% equity.

  30. tatupu70


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    116   12:48pm Wed 21 Mar 2012   Share   Quote   Permalink   Like   Dislike  

    wthrfrk80 says

    How does house insurance work? If I only own 10% of the house, than do I have to insure 100% of the house or 10% of the house? I thought I had to insure 100% of the house, even if I only had 10% equity.

    I'm really confused. Because earlier in the thread Renting made a big point about the difference between homeowner's insurance and renter's insurance. If I have a mortgage, shouldn't I be buying renter's insurance??

  31. RentingForHalfTheCost


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    117   12:57pm Wed 21 Mar 2012   Share   Quote   Permalink   Like   Dislike  

    BoomAndBustCycle says

    So in reality, home prices in Los Angeles, if we keep dropping will fall back to 1989 prices BEFORE 1997 prices... wrap your head around that!

    Me likey. 1989 here we come!

  32. freak80


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    118   1:16pm Wed 21 Mar 2012   Share   Quote   Permalink   Like   Dislike  

    I guess if you're worried about earthquakes, live in a mobile home. They have shock absorbers to smooth out any "bumps." ;-) And CA doesn't get too many tornadoes.

  33. BoomAndBustCycle


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    119   1:27pm Wed 21 Mar 2012   Share   Quote   Permalink   Like   Dislike  

    RentingForHalfTheCost says

    Me likey. 1989 here we come!

    If you add the past 23 years of inflation... to 1989 home prices... We may already be there.

    My neighbors bought their home in 1983 according to Zillow. They paid $130K...

    Zillow estimates the home to be worth $410K today.... that's an annual rate of 4% inflation...

    Maybe a tad high, but not by a ridiculous amount... I'd say 3% appreciation isn't outlandish for premium cities, so maybe 4% appreciation is fair.

  34. SubOink


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    120   1:33pm Wed 21 Mar 2012   Share   Quote   Permalink   Like   Dislike  

    RentingForHalfTheCost says

    I just went to an Open House 2 weeks ago and got fed the vomit by a realtor

    Big surprise! A realtor tells you to buy a house...he gets paid that way. HELLO?

    That doesn't mean you have to listen to it. A dentist wants to drill and fill holes, a showmaker wants to make shoes...an aspect of life, you gotta take everyone's opinion with a grain of salt, especially those that have an agenda. Mortgage brokers, realtors, doctors, insurance reps...blablabla

    Everybody wants to make a living. It's your job to figure out what's best for you.

    But just because realtors all wanna sell sell sell...doesn't mean buying isn't a good option if it makes financially sense in your own situation.

  35. thomas.wong1986


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    121   1:45pm Wed 21 Mar 2012   Share   Quote   Permalink   Like   Dislike  

    BoomAndBustCycle says

    If you add the past 23 years of inflation... to 1989 home prices... We may already be there.

    However, 1989 was the peak where prices declined 20-40% in various metros nationwide. After 1989 foreclosures spiked for several years. So skip using 1989 as base and look to mid 90s (1995-97) as a starting point.

  36. David9


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    122   1:52pm Wed 21 Mar 2012   Share   Quote   Permalink   Like   Dislike  

    thomas.wong1986 says

    After 1989 foreclosures spiked for several years. So skip using 1989 as base and look to mid 90s (1995-97) as a starting point.

    So Agree. But I'm not sure if prices will go that low, the fraudsters have done a pretty good job so far.

  37. thomas.wong1986


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    123   2:09pm Wed 21 Mar 2012   Share   Quote   Permalink   Like   Dislike  

    Yes, they are trying.. but even when we didnt have the intenet back in 1989-95 they couldnt stop the market from melting down.

    it happens...$160 * 1.35 = $216 another 50K to go or so..

    mid 90s prices... $160K

    http://archive.dqnews.com/AA1997SCA05.shtm

    inflation 35-40%

    Current ...$264

    http://dqnews.com/Articles/2012/News/California/Southern-CA/RRSCA120314.aspx

    http://www.housingbubblebust.com/OFHEO/Major/SoCal.html

  38. BoomAndBustCycle


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    124   2:43pm Wed 21 Mar 2012   Share   Quote   Permalink   Like   Dislike  

    thomas.wong1986 says

    However, 1989 was the peak where prices declined 20-40% in various metros nationwide. After 1989 foreclosures spiked for several years. So skip using 1989 as base and look to mid 90s (1995-97) as a starting point.

    I did one better.. I went back to 1983.. (pre-late 1980s run up)... Like I said, my neighbors home sold for $130K back in 1983.. and is Zillow priced at $410K today. A pretty fair price considering it's 30 years later and assuming 4% annual appreciation.

    Couldn't 1997 be an OVERSHOOT to the panic sell side? If historically we ALWAYS overshoot to the downside.. Then 1997 is by no means a starting point.. but a post-quake, post-bust, overshoot to the downside.

  39. thomas.wong1986


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    125   3:02pm Wed 21 Mar 2012   Share   Quote   Permalink   Like   Dislike  

    BoomAndBustCycle says

    Couldn't 1997 be an OVERSHOOT to the panic sell side? If historically we ALWAYS overshoot to the downside.. Then 1997 is by no means a starting point.. but a post-quake, post-bust, overshoot to the downside.

    Depends where you live..

    I would say on the surface.. Florida looks appealing.

    http://www.housingbubblebust.com/OFHEO/Major/Florida.html

  40. RentingForHalfTheCost


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    126   3:24pm Wed 21 Mar 2012   Share   Quote   Permalink   Like   Dislike  

    SubOink says

    RentingForHalfTheCost says

    I just went to an Open House 2 weeks ago and got fed the vomit by a realtor

    Big surprise! A realtor tells you to buy a house...he gets paid that way. HELLO?

    That doesn't mean you have to listen to it. A dentist wants to drill and fill holes, a showmaker wants to make shoes...an aspect of life, you gotta take everyone's opinion with a grain of salt, especially those that have an agenda. Mortgage brokers, realtors, doctors, insurance reps...blablabla

    Everybody wants to make a living. It's your job to figure out what's best for you.

    But just because realtors all wanna sell sell sell...doesn't mean buying isn't a good option if it makes financially sense in your own situation.

    Very well said.

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