patrick.net

David Lereah called to tell me that his prediction for 2037 was that the starting price for a new Honda Eichler parked on El Camino (great starter home!) would be $15 million - and that if you don't buy today, you'll be priced out forever.

Are you making predictions past December 21, 2012?

I predict meats will be banned from the menu and the average home will cost 100x median annual income.

Guys, we need to make a stand or my predictions will come true.

What happens on 12/21/2012?

http://www.december212012.com/

Again, tongue-in-cheek.

Part of the market psychology includes a strong favorable view of city living.

Huh?

For that price you can almost get a cruise condo.

http://www.residentialcruiseline.com/how_to_purchase/pricing/

(So no one will post a respond to my questions in the last post? You guys ARE cliquey. LOL)

Huh?

Just saw a pow wow session on MSNBC "Kudlow & Company". They were discussing the Subprime fallout. Two were optimists and the other were skeptics. It was interesting. One question was asked to what happens to those who are about to lose their homes because they can't afford it; foreclose or what. The optimist just nonchalantly said that the lenders will renegotiate the loan. !?"My Lord" The skeptics quickly berated him. Funny...

The optimist just nonchalantly said that the lenders will renegotiate the loan.

See, it is safe to borrow from loan sharks too. Just "renegotiate" the loan. :)

They may have their own evil idea of loan renegotiation though.

Has anyone else noticed that the inventory numbers in Los Angeles fell drastically?

I think data may have glitches. Check out this BA site. Pay attention to the past 2-3 week.

http://www.housingtracker.net/askingprices/California/SanJose-Sunnyvale-SantaClara/

Oops it's CNBC

A generation ago, much of New York’s middle and some of its upper class were departing for the suburbs. Today, many empty nesters are returning, which, together with the city’s strong attraction for young college grads, artists, media workers and other members of the sought after “knowledge economy,” have revitalized life in town.

That's actually a really interesting phenomenon that's happening in Manhattan. It's not just Realtor hype either. People who moved to the 'burbs for the kids or florida are now moving back because living in the burb's or Florida is death.

It's a "only in New York" thing.

As opposed to here in the West Coast where DinOR informs me that people about to retire upgrade to larger homes.

Reality will set in. Fundamentals will return. Lenders will insist on a comfortable margin to lend to homebuyers. No more cheap money and no more ARMs, except for the extremely well-qualified.

As homes in desirable areas remain unaffordable due to Prop 13 squatters and jobs relocate to North Carolina and Tennessee, there will be a massive out-migration of Californians. People will move to Raleigh, Memphis, Kansas City, Sioux Falls, St. Louis, Pittsburgh, Mexico, Canada...even Detroit. The spread between CA prices vs. the rest of the world prices will be too great to ignore. People would rather live like kings in Pittsburgh than live as mortgage slaves in Fresno, Bakersfield or even SF.

CA desert communities will take the worst pounding. The "prime" areas will do better, but not enough to make it worthwhile to buy. After all, even if nice homes in SF drop to $600K, that is still a ton of money for most people. You can already get a pretty nice place in most parts of the country for less than $400K.

So if they put 20k downpayment on a house and we STILL had crashes back then (before new loan technology! ha!) how large can we expect THIS crash to be?

That's kind of amusing that 30 years ago they had to put $20k down, but now people are up in arms that you have to put $15k down.

Wait until you need to put $200K down (probably $20K adjusted for inflation). That should reduce demand a tad.

I am against regulating the minimum downpayment. The market should make the decision.

Soon enough the rise of foreclosure will force the mortgage market to reconsider its generosity.

It is going to be bumpy but the market will survive. I hope policy makers have the will and "heart" to let people fail. Destruction is part of the creation process.

Comrade Peter is a master of the dialectic process (of which I know just bare enough to pass politics at school).

Hegel?

Or were you referring to dialectical materialism?

Oh. I also believe that only through conflict can resolution arise.

"there will be massive out-migration of Californians"

Glen, Jack Lessinger has already written extensively on this topic and introduced the term "Penturbia". Since we no longer require (or desire) much of the infrastucture cities provide we are now free to live where we want to live. He amplifies on the topic at www.predicting2020.com.

I'm told the concept of penturbia is based on the 4 previous mass migrations in this country. If you want "quality of life" in the future? Think college town! Interesting stuff. Oh btw, it won't just be an exodus from CA.

Meh.
The world ended last year.
We just haven't noticed yet.

http://www.youtube.com/watch?v=8Sjf4ELVeX8

@ Peter P,

That is so funny. Thanks for the laughs. I think I'll buy a t-shirt to wear to work.

From the 2020 site:
In 2006, a large part of the U.S. population stands ready to pull the plug on Squanderville.

Maybe I'm just being cynical here... but what crack is the guy smoking. 2006?

Exurbs are still the rage.

The inflation calculator I just tried said:

What cost $20,000 in 1977 would cost $68,425.49 in 2006.

$68k... that would just barely be 10% these days.

Hurray for looser lending!

"A generation ago, much of New York’s middle and some of its upper class were departing for the suburbs. Today, many empty nesters are returning, which, together with the city’s strong attraction for young college grads, artists, media workers and other members of the sought after “knowledge economy,” have revitalized life in town."

Yeah I think I'll sell my house in Jersey for 1M and buy one of those 4 bedrooms in Manhattan for 7M.

Hurray for looser lending!

Did you intentionally misspell "loser?" :)

@ MrBubble Says,

I'm with Jim S. on the China thing. I don't believe china will liquidate US dollar holdings but simply slow or stop the accumulation of new pieces of US Federal Reserve notes. This will be more than enough to through things into chaos!

"“It’s an absolute fact that people want to live here. That keeps housing prices high. If it wasn’t for the demand, prices would drop,” said Richard Calhoun, real estate broker and owner of Creekside Realty in San Jose."

LOL! Oh the humanitity of it!!!!

Hm… Silicon Valley attractions. Let’s see…

" Washington DC has the Smithsonian -
we have the San Jose Museum of Art "

LOL! I been here for a long time .. but frankly we suck when you look at weekend activity! We had better night clubs back in the 80s then over the past 10 years 1995-2007. Few people venture outside SantaCruz boardwalk.. say a drive on Highway 1 towards Pacifica. or cut to the mountains. ....

We do get huge traffic jams in Valley Fair... We do spend and drive to the malls ... but thats pretty much it.

@ Peter P,

"For that price you can almost get a cruise condo."

Are these condos in preperation for Waterworld when Al Gore's vision becomes reality?

” Washington DC has the Smithsonian -
we have the San Jose Museum of Art ”

Someone said this, I am merely quoting:

The Middle Kingdom has Great Wall of China
We have Great Mall of the Bay Area

Are these condos in preperation for Waterworld when Al Gore’s vision becomes reality?

Probably. :)

People in NYC are sending kids to public schools again not because they have confidence in the crappy public school system, but because they cannot afford to send kids to private school, after buying a $2M condo.

I don't know of anyone in my generation who would rather send their kids to public schools, even those situated in the best public school areas. If money is not an issue, most people prefer to send kids to private schools, at least this is the case with California. Have you checked out the credentials of the public school teachers even at the best schools? Anybody in our generation with a tiny bit of aspiration and intelligence would not end up becoming a public school teacher.

Parents struggle to get into good school districts because this is the most economical way for a household with 2 or more kids.

I am more intrigued to read some housing related article dated back to 1981 and 1982 after gold and oil peaked.

It will be interesting to see how many ounces of gold it took in 1980 or 1981 to buy a nice home in, say, Portola Valley.

Parents struggle to get into good school districts because this is the most economical way for a household with 2 or more kids.

True. Renting in good school districts requires less struggle though.

I think that by 2037 the majority of us will be of Latin extraction, that coastal areas will have problems with high water more frequently than today, that we will continue to drive cars.

People who are only youngters today will believe they possess a perfect understanding of real estate and personal finance thirty years from now, and this will shape their own boom and bust cycles. The busts will take them by surprise. Someone will coin a fresh way of saying 'new paradigm'.

There will not be enough young workers to support GenX retirement.

Survivalists will begin to concentrate in urban areas.

China Disney will celebrate its 20th anniversary, and Woody Allen will awaken from his cryonic slumbers.

This you got to love! Man, 102, takes out 25-year mortgage

I think the UK financial bubble will not end pretty.

Patrick,

How about a buyers resource for buying REOs. A master list of lender links perhaps.

I am much more skeptical about UK economy than ours. Apart from money, what else do the Brits manufacture these days?

When I am doing stock research, I am still finding comfort in lots of tech stuff that we do in this country (although the mundane manufacturing processes are increasingly outsourced, perhaps justifyingly so). The key is that we crash before we start to outsource the proprietary knowledge-based stuff to China or India, and I am glad that we are on the right path. The earlier the crash, the better for us.

UK? I really can't seem to find anything the Brits can do that the rest of the world cannot, except for being the money laundry center for the Eastern European drug lords. London will end much worse than the Bay Area, at least we have the weather.