patrick.net

Also a longtime lurker. I have owned 6 homes in my life, in every imaginable market with interest rates from 18% to 4.75%. In different cities, seen up and down markets, lost money and made money. Marin county native, back when the policeman, the teacher, the mailman lived on your same block and we rode bikes to school...not in the back of a 60K SUV with a movie playing! My last 2 homes where in the East Bay, sold one in 2001, bought another and sold in 2005 pretty near the height of the bubble. Got out...I now live in Colombia South America. The US is crazy and so is the Bay Area economy. The average person does not make enough to afford a shit-box house, and who wants to? Yes, sometimes I miss it but to work only to pay 50% of your salary to a structure and never have a vacation is not a lifestyle. Here, my husband and I have a business doing tours and paragliding. We have health insurance better than in US for both of us where the premiums are equivalent to $600 USD/year. Oh yeah, and dental care is fantastic...I have orthodontia and an aesthetic plan to redo everything in my mouth (I am 50 this year)...for about $800 USD. See, here orthodontists don´t live in Mcmansions and drive BMWS. US quote was $15,000 to $20,000 for the same work. We live in a paradise (it is rustic and I hang my clothes out to dry) but our rent is 400,000 pesos (about $180 USD month). There are better lifestyles to be had, and while the SF Bay Area is "special"...it isn´t all that special if you must be a slave. My prediction (ex bond and stock trader talking)...The numbers do not lie. An economy cannot continue with only the rich living in an area and the necessary workers...teachers, gardeners, police, waiters, busboys,firemen, nurses, having to live 2 hours away by car. Who will work in those nice restaurants? And when the generation that is 70-80 years old or older is dying and those children inheriting estates need to sell the parental homes to divvy things up, what happens? Those kids, and their kids, cannot afford to pay the prices for these BA homes. There will be many sales from this and from foreclosures on recent bad loans. Look for it to be like Japan...10 years or more of real estate deflation. The wages do not justify the real estate prices.

Randy,

we are in a similar timeframe as yourself.

We have been renting forever, but have a substantial downpayment. Can't see uprooting from our nice rent controlled townhouse complex to buy a house until the premium comes down around 20%.

I'm targeting around at $350,000 average in the local area for single family homes, in my dreams, but I may not wait that long.

If the local average comes down from $530,000 to around $400,000 to $415,000, we can start looking at places with rentals (suites).

Should happen by next year (I think), these economic trends in Canada seem to follow US trends, but about a year later.

So if there is a lot of housing pain in California this year, maybe next year will be the time here in Victoria.

Peace.

I’m still unsure of how long the correction will take. I’m still sure it is underway. I’m vindicated in my sticky price calls. I’m also sad I was right.

I think if it gets more stickier, I'm going to have to rename it the WD40 housing market!