patrick.net

:-) Yeah! 1997 prices at 4% will work. Here in the San Fernando Valley, some non-prime cities like Canoga Park, Van Nuys, Reseda, etc. are at pre-recession 1993 prices. (Which in my opinion are higher than 1997 prices)

David9 says

at pre-recession 1993 prices. (Which in my opinion are higher than 1997 prices)

1997 was probably the bottom of the market after the 1990-1991 peak during the 90s housing bust. It is probably more than your opinion that 1993 prices are higher than 1997 -- probably fact for the market as a whole, especially when you adjust for inflation.

Big :-) Yes, even at work everyone says how diplomatic I am.

Hi, Thomas, sorry to keep on you, but I am curious. If prices will go back to 97, that's perhaps a 50% drop from today in higher-end areas like LG. So, why not sell if your asset will drop in price by 50%? If I knew that a stock, or a house, would drop like that, I would sell. Tell you what, I will even pay you 1999 price for your house; that should be a great deal, since that was higher than 1997.

Regarding salaries, my experience is that salaries are higher than in 1997. Not only for me personally, but for a given title (e.g. Sr Engineer). The company where I work is profitable, and is hiring even now (and even in the US). I understand that this is not the case for everyone, and I am fortunate - but, I am not the only person who is employed and making more money than in the past, as evidenced by the fact that people are still able to buy Fortress houses at prices higher than 1997.

SiO2 says

If prices will go back to 97, that's perhaps a 50% drop from today in higher-end areas like LG.

Not if you adjust for inflation, is it? At least, when I did this calculation recently on this forum for Marin County's median sales price (not that median tells you the whole story), I got a much lower percentage -- maybe 20% when adjusted for inflation.

SiO2 says

Regarding salaries, my experience is that salaries are higher than in 1997. Not only for me personally, but for a given title (e.g. Sr Engineer). The company where I work is profitable, and is hiring even now (and even in the US).

Friend of mine was a Vp at 3Par, its hard to say how long before he will pick up a gig. HP bought out 3Par. Others have seen their job vanish and they took jobs they once had some 10-15 years ago with paycut. Controller to Accounting Manager, Accounting Manager down to Sr Accountant or Some Consulting gig.

Engineers ? There is a glut of them in the US. Especially since there are currently fewer employers in SV and many options to relocate elsewhere. Half of my employers R&D is overseas. Im not pleased with any of that.

SiO2 says

If prices will go back to 97, that's perhaps a 50% drop from today in higher-end areas like LG. So, why not sell if your asset will drop in price by 50%?

Asset ? My financial assets which I started by saving back in '82 have and are doing well. When I bought, LG was a city in SCC like many others. My focus has been career, not trying to get rich. Nothing special about LG when I bought. But it was far enough from work. Of course, some people from elsewhere believe its special. Where were they back in the 80s?

Corntrollio - I'm not sure if the claim of 1997 prices should be inflation adjusted or not. But even if so, if you look at Thomas Wong's chart, the SJ index is now about 580, but the inflation line is 300. So if it will go back to that line, that's almost 50% drop.

Thomas, I'm sorry to hear about your friend. Like I said, not everyone has a job. Maybe that's part of the widening separation between Fortress and elsewhere - those with jobs are doing well or better than before, those without, not so much. So if the average salary is increasing, it will create demand in certain areas, but if the number of jobs is declining, the area with demand will shrink.
If the number of jobs decreases by a lot, the salary will ultimately decrease based on supply and demand, but for now at least it is still difficult to find skilled engineers, therefore they can command a good salary.

I consider the house to be an asset, as it has some value, and I could sell it. Unlike some clothes, even if I spent $1000 on a suit I couldn't really sell it for $1000 or even $500. If I thought my house (or any other asset) would drop in value by 50%, I would sell it. I don't think the house will drop that much, therefore I keep it. I wonder why people who think prices will drop by 50% would keep a house; I suppose that the enjoyment of ownership (which has been discussed before) outweighs the financial loss.