patrick.net

Mark_LA says

Mr.Fantastic says

There are plenty of homes in La Canada that are sinking back towards 2002-2003 levels.
Here’s one that had $150,000 chopped off the top in two months and still isn’t sold. Now it’s actually listed for below your magical $1m barrier. That’s nearly 15% in two months.

http://www.redfin.com/CA/La-Canada-Flintridge/1336-Olive-Ln-91011/home/7246160

This home sold for $750k in 2003. It’s currently listed at $950k, 25% above its 2003 price, doesn’t seem like any bubble is bursting in La Canada.
This home has always been sold at a discount relative to other La Canada homes because it’s next to 2 hideous gigantic water tanks and a flood-control basin:

Mark one real estate sale does not make a market. I have friends living in La Canada Flintridge (thats the area we are talking about). I doubt houses will be selling around $775 simply because a lot of retirees live there. Their entire income is just social security. It's most likely going to drop a lot.
In many places 2003 was already in the middle of the bubble. I remember because in our neighborhood prices doubled by 2003 and of course quadrupled by 2006 and now are not quite back to 2000 levels yet...

Mark_LA says

Mr.Fantastic says

Ben Bernanke wasn’t purposefully trying to take a shit on our economic system in 2007.

If he succeeds, we should have nice inflation, while those who buy at low fixed interest rates will continue to enjoy their low fixed monthly payments for the next 30 years. The bank will assume all inflation risk.
If he succeeds extra well, the $800k home the OP buys in Almaden or Willow Glenn will certainly go up with inflation over the next 15 years to $1.6 million. The OP will still be paying relatively low income taxes thanks to prop 13.
So, let’s cheer on Bernanke and hope he causes quite a bit of inflation to occurr over the next 5-10 years.

What are your support points on the inflation(in housing) theory? Mine against inflation(n housing) are:

1) Weak job market for another 5 years(I'd like to see UE back to 6%).
2) No salary increase in sight for another 5 years.
3) No easy loans...forget about loans to finance that $1M La Canada home.
4) The last decade of house price inflation was not enough that you think more is in the making.

When market heads south there a buyers all the way to the bottom from the start of decline. How many of those who bought 2007 until now will default in 2012 an later? Lots of questions coming up. GL with your home price appreciation theory.

Mr.Fantastic says

We both send checks to Patrick.

Patrick may want a piece of the action. Does he get a commission?

Thanks for sharing info on pricing in Vacaville and LA. La is way too far and Vacaville is....well, Vacaville. :)

Seems that the majority here believes we should wait. I agree that we should still look and try to save money. Reevaluate come spring time.

Menya says

Thanks for sharing info on pricing in Vacaville and LA. La is way too far and Vacaville is….well, Vacaville.
Seems that the majority here believes we should wait. I agree that we should still look and try to save money. Reevaluate come spring time.

If I was convinced that housing prices will decline by 5% a year every year for the next 10 years, I wouldn't buy a house for next 10 years. At the same time, if I was convinced that housing prices will decline by 1% a year every year for the next 10 years, then given my financial situation I would still buy a house due to the inherent personal value and mental stratification that I attach to owning and living in a SFH with nice front and backyard. In short, I would say that my threshold of NOT buying a house would be a steady 1.5% decline in housing prices every year for the next 10 years.

So just out of curiosity, I am wondering what your threshold and that of others who plan to buy a house to live in it for say the next 20 years is? Would you wait for next 10 years to buy a house if it was reasonably well known that housing prices will continue to decline by 1% a year for the next 10 years? What about 0.5% or 0.25% decline per year for the next 10 years. Obviously if prices remain stable for the next 10 years, you and others who can would buy.

P.S: this is off course with the caveat that no one can predict the future 5 to 10 years out.

I currently rent in Almaden, and, I agree that it's no Monte Carlo or Manhattan. The reality is that this place and most other cities around here are still in a bubble and it will take at least 5 years or more + a 50% drop from current price levels, until all the dust clears. My children attended public schools in the area, and schools are worse than many of the schools in other parts of the country where houses are at least 60% cheaper. The weather is nice, but not nearly as nice as in Southern Cal where prices are also cheaper. Pay is also a little higher for tech professionals, but, as we already know only 100K of the 8M Bay Area residence are actually employed in the tech profession. Another point, is that you can not even compare prices around here to prices in other parts of the country, because quality of housing stock in this area is much inferior. Even though the weather outside is much nicer here than in Chicago, for example, I spend most of my time in the house, where heat insulation is not as good, so I actually feel much colder in the Bay Area than I did in Chicago. As far as Almaden is concerned, it doesn't even have a nice downtown area, so would not even be considered as a town, in other parts of the country, and most houses around here, are definite demolition material elsewhere.