One of our Porsche-driving friends is a Big Sneeze in the mortgage industry, and he's predicting a bloodbath, having seen way too many people going for those interest-only or'negative amortization' loans and committing to up to 45% of their incomes to mortgage payments.

However, there is no simultaneous 'big bang' happening in So Cal.

What goes up..........will come back down, it is cycles,and on this one the rubber band is stretched the tightest, I have every seen, have been developing properties since 1979.............

I don't know what the actual sale prices were. All 3 homes sold in the same week and are currently in escrow. Two were agressively priced (high end) and the remaining was attractively priced though I heard had zero upgrades and even for a newer home did not show well. The highest priced had a value range where the bottom range value is what that same floorplan was getting 4-5 months ago.

A recent housing report states -

"The consensus in the industry is that we're in for a soft landing - and the affordability issue will remain top concern of public agencies charged with balancing a need for lower housing costs against the concerns of vocal constituents fearful of increased density, deteriorating quality of life and declining propery values. A decade ago, the real estate bubble did burst, and property values dipped 10 percent or more. But the economy was suffering, and people were leaving the region. Today, the San Diego area has one of the strongest economies of the nation, with higher-than-expected job growth and low unemployment, which is driving the housing market. "We'll see a cooling off, but no major decline is coming - not as long as San Diego and Southern California continue to inadequately produce housing that keeps pace with prosperity and population growth." The San Diego Association of Governments (FWTW) says 314K new homes are needed by 2030 to accomodate the 800K additional people expected to be living in the area. Most of the growth is expected sooner rather than later.

My take on this, the minute interest rates go North of ~ 7% we're going to see a big cooling off - nation wide. What is going to compound that problem are the folks who have no forsight and are in a home by the skin of their teeth on interest only/ARM loans. A bit hit to the job market or economy could force these folks out and cause a decline in values as they default or sell for less than they owe. The flip side to that coin is that a lot of people buying homes here are folks "upgrading" their current living conditions by rolling their new found equity into a nicer home. Many, many folks I know have traded their $200K mortgage for a $300K mortgage and put $300K- $400K down on a bigger/newer/nicer/location (pick) type home. Obviously these folks are not as threatened about a 10% or 20% decline in value. It's all a crap shoot if you're a prospector. The only expectation I have is that when I hit 70+ years old (if I survive that long) the house will be long paid off (15-20 year plan) and worth well North of what I paid for it a 16 months ago.

My neighborhood here in LV, has 3 homes for sale

1. 2000 sq ft for 539K..overpriced, on the market 6 weeks, retiree owned...1/2 acre lot

2. 3000 sq ft for 585K...pool/spa, nice landscaping..for sale about 4 to 5 weeks

3. 4000 sq ft...for 769K..1/2 acre, pool/spa, nice landscaping, covered patio for sale for 4 weeks...

Last sale was a 3700 sq ft house...1/2 acre, pool/spa, nice interior and backyard..sold in 8 days closed in mid July for 675K

Looks like things have slowed..but prices havn't seemed to decline.

they're still selling in West LA. A small number of houses are sitting on the market, but they are crazy overpriced ($1.1M for a 3br/2ba fixer on a 6K sq ft lot). The ones that are "reasonably" priced (same house/lot for $800K plus or minus) are selling as soon as they go on the market.

There seems to have been a shallowing of the price curve, but we're not flat, and the market isn't slow...at least here.

Anyone have new statistics or anecdotes about the state of real estate these days? Some landlords are complaining about large property tax increases. One fellow said property taxes are higher than his mortgage!!!

This thread is insteresting to me. I sold a small apartment building the end of June. Since I will be retiring next year, I cashed out and will pay the capital gains. I want to build on bare land I own in east San Diego County. I'm waiting (hoping) for the housing market (especially new construction) to slow. Right now it's keeping the construction industry busy. In addition the reconstruction from the fire destruction last year has added on to that. The prices of labor and materials have gone up a bunch. I guess I will try to wait it out for a while. The quicker things in the housing and construction industries slow down, the better for me at this point.

this thread is more that RE interesting. It's the real deal.

my .02 is some hard info that builders, in the Coachella Valley/west of Palm Springs area, are still willing to pay big bucks for small plots in somewhat desired La Quinta style towns. They're hungry and want to build these condos, gated track houses, etc.. so there's plenty of RE $ around in SoCal. I don't think they have seen much of a "flatening" of prices as some other parts of the country. To further the issue it seems like every white-collar US northerner that lives west of the Miss R thinks SoCal is retirement heaven.. 110 golf courses within 60mi of La Quinta, wheather, rest, shows, air ports, fast roads, etc.. Many boomers are mobile. I think finding an outskirt plot and waiting for them to reach you is a good long term RE investment. probably the best in the US imo. So I don't think that E SoCal shows any sign of slowing down.

La Quinta is hot as HE11 in the Summer time...along with LV< Pheonix and Tucson....

I know that in my old home town of Upland, Altal Loma prices have flattened and seemingly have come down a bit...But this is the Holiday season and nothing sells this time of year.

Here in my neck of the woods in LV it seems to be the same thing...

I have to qualify myself herer a bit ...the price range I am looking at is the over 600K market...which is low cost housing in SO CA now...

I checked the median price of homes in LV .....303K

San Bernardino/Riverside ....311K

Anaheim/ San Ana ...648K

LV had a 53.6% appreciation last year followed by some place in Bugville Florida at 40% and then San Bernardino/ Riverside with 36%....these were the 3 fastest appreciating areas in the USA....

The median home price in California is something like $405K.

Only 19% of Californians can qualify for a house purchase at that price.

Something's gotta give.

The duplex across the street from me just sold for $405k :eek:

I've been waiting for the prices to dip all year. As tabs indicated the holiday season is a buyers market as we have a lot of homes on the market right now.

Early this year my Mother in law was in the market for a condo, $285K was her limit. In a few short months the market roared past her number and she missed out. She was really depressed and thought instead of buying a new car with her down payment savings. I've been advising her to sit tight (don't buy a new car - get used w/20K miles) and wait for the real estate price dip, maybe not such good advice. Several real estate financial folks and realtors friends recently told me that they expect San Diego and North County to appreciate 15% next year. If that's the case then no more homemade apple cobbler for me :(

I suspect that a weak stock and bond market is funneling $ into RE. Greenspan's large increase in the money supply the past 2yrs gives the banks plenty of liquidity to make these easy to get mortgages. If Greenspan raises the Fed Funds rate and lowers money supply to curtail inflation the $hit can easily hit the RE fan imo.

Having been actively looking at the market for the past two years, I can see there is very little change. The homes are sitting on the market a little longer in my neighborhood, but that is normal for this time of year. I also think people are sitting back thinking the values have to drop. All this does is let the home sit on the market a little longer. The homes are eventually selling for more than similar homes sold for 6 months ago. Once spring comes around I anticipate you will begin to see multiple offers at or above asking price again.

With a 5.76% 30 yr mortgage rate, it is still a good time to buy. Until people start leaving So Cal faster than they are immigrating, I don't see why the prices would go down - its basic supply and demand. And if you want to live here, you have to pay.

After looking at buying a new home for the past two years my wife and I finally had an offer accepted on a new house. It's about 1/2 mile from our current one, but double the sq footage. We did get a "good deal" as the couple were going through divorce and had gone through a bankruptcy about four years ago. Saved about 5% off the listing price. However, we were very limited in our bargining power to correct items that turned up in the inspection because of other interested buyers. A homes across the street is listed at $1.4m.

Anyone interested in an uprgaded 2bd, 1 bth PUD in the Newport Beach Bluffs? Its listed at $599k. And that is the least expensive listing in the bluffs.

I'd settle for a decent small apartment on the westside...its frickin' nuts out there.

I have looked at most of the replys. If you think prices are wack here...look at No.Cal. in the bay area and silicon valley. Look almost every where there is nice property and houses are poping up 1M+++. just unreal. Monterey area, i was up during the alms races...Pebble Beach area 2.7 million and 3.5 million and up. i bought my home in 81 and have just used a small loan to replace the roof and some upgrades. I now live in a 1/2 million dollar house. I cant move because what i can afford is just what i have, plus my son is headed off to college next year and that's most likely when i'll borrow some. the last thing..there are so many financing programs around. if you really need a house, you can get a loan, also some new loans are 35, 40 years to repay.

I had a nice conversation with my Construction Defect Attorney...he is of the opinion that prices have topped out...and if you buy now your gona be upside down...in a short while...

Nobody knows which way this thing is going to go....Up, Down Flat...???? Everybody has gotta live some place....

My guess is that the smart money is moving it to an undervalued asset class....there has been quiet a run up in RE and the Bull market for Bonds which has lasted for the last 20 years is over...collectables have been strong since 98.....Which leaves the Stock Market...which has been beaten down for 4 of the last 5 years...

Remember the place to put your money is the place where the shoe shine boy thinks it is a sure loser....hehehehe...shoe shine boy....whereever the average P Head suscriber thinks is death for his money is when I want to invest it......

Time to sell in Cali - have we seen the top or is it still
coming

Everybody who doesn't buy, now, will be priced out forever. Anybody who does buy will be rewarded with a lifetime of riches, as their property will continue its 25% yearly price increase.

Renters, and anybody born in a future generation, will not be able to afford a $5,000,000 starter home in 15 years. They will live in tent cities, and hondas.

This asset bubble is different than all of the others - it will never slow down, or pop. The gains are permanent.

I no longer make predictions. It's crazy out west.

However, I cannot avoid looking at the numbers. Short-term rates are up 1%. Long term rates are still low, though. As long as those rates stay low, the buyer still has power. I do not believe there will be a correction until money tightens. I see no reason for the CA market to falter now. It will probably continue this upward spiral.

Well, I told you I wouldn't make a prediction. I lied. :)