Time to sell in Cali?

[motion]

That's just sick Lendaddy. You should be ashamed of yourself! (PM with a pic of your wife).

[lendaddy]

That's not what I meant..............Well just how wealthy are you

[nostatic]

Originally posted by pbs911
I hear ya on wanting to sell and get out of CA.

My wife an I purchased our 900 sq ft home a little over three years ago in Eastbluff, Newport Beach. I've been wanted to move back to Hawaii and have been looking at homes in South Kona (Big Island). We could actually sell out NB home and pay cash for a 3-4 bd rm house on 3-6 acreas of land with an active coffee farm and still have plenty to live on for the next 5 years. I could live the rest of my days paddling, surfing, diving and selling 1 lb bags of coffee to the tourists on Wednesdays and Saturdays at the local market. Now if I could only get my wife to agree.

hmmm....my wife would agree to that. PM me the info on the property. We'll send you pictures every week

[Moneyguy1]

I went into "Realtor.com" and keyed on two area codes, 92870 and 94580 ( have friends/relatives in both areas) and looked at homes for sale. All I can say is for $500k you can buy a fairly big closet!!

I would have to conclude that, if the trend continues, first time buyers will be shoved completely out of the housing market. It would also be fair to say that if a person took their "paper profits" and were fortunate enough to sell, moved to practically any other state, moving back to CA would be like the words in the song "Toyland"

"Once you leave its portal, you may never return again"

However, on the bright (to some) side, a recent report shows there has been a definite turndown in a number of states re: housing costs.

Average home price in the 12 months ending this past March rose 7.7%, but for the first three months since then they have risen only .96%. Six states show price declines: Vermont, Alaska, both Dakotas, Iowa and Nebraska. On the flip side, increases in Hawaii and Nevada are 15% for the past 12 months and slightly less than that in California. Home prices are up nearly 60% on average since 1995, adjusted for inflation this is 37%.

If interest rates go up only one percent, according to Goldman Sachs, average home prices are overvalued by 15%, moreso in California, Nevada and Hawaii.

Given the rush to turn equity into cash, and the fact that, should there be a correction that brings the property value below the value of outstanding loans, this could mean big trouble to the housing market. With the surrent low interest rates, policy makers have very little opportunity to ease this downturn and reduce the consuler's pain.

[Bob's Flat-Six]

[QUOTE]Originally posted by SoCal911SC
[B]It all depends on timing.

If one would have taken the "paper profits," sold in Calif. in 1990 and moved back in 1996, one would have made out quite handsomely.


I have a friend that did just that. He went to Idaho in the early 90's when everybody was leaving.
Didn't like Idaho, so his timing was good when he came back to Cali. in 96. He bought a house in Canyon country for around 250K. The house was built around 90 and they sold new for over 300K back then.
He was lucky, I have other friends that moved early in this upturn, They made 150K and moved way out to Tahachapi Ca.( SP? ) Now they want to come back and can't.

I hate to see it happen again because when people feel good about having positive equity in their house they spend more money. When it turns negative they don't, And it trickles into everything.
And If you need to sell you can't find a buyer.

Three houses went up for sale down the street and I don't think their selling so quick as a month ago.

I said to one of the owners, "Now there's several houses for sale on the block" She said, "I know it's Crazy"

I think that one word summed it up.

[motion]

I was looking at houses in the early 90s for around 300k that are now selling for 2.5-3mm. If one's timing is right, a smart purchase in SoCal around 5 years from now can turn into a retirement, literally. Just hold for 6-7 years and sell on the next peak. Its really very easy and quite predictable, if you look at the historical cycles.

[Moneyguy1]

Timing is everything, but it takes luck to "know when to hold em, know when to fold em". There is a saying in the equities market "Leave a little profit for the next guy". And, I know folks that, despite advice to the contrary, held on during the last turndown. Some lost virtually everything.

If some of you think you can time it just right, God bless. Most can't;
some are lucky, most are not.

I, for one, do not believe strongly in cycles; they change too.

[Moses]

Originally posted by motion
Its really very easy and quite predictable, if you look at the historical cycles.

I'd love to see a chart of California historical real estate values that goes back 50 years or so. I've searched the net and can't find one.

[nostatic]

My parents bought their house in San Diego in 1958, paying $12K. I remember looking at houses in the early 70's in a nicer neighborhood and they were $60K. My brother bought a series of homes, and his last one was in the 80's and I think it was $100K or so (big new house, but out in the far suburbs).

Two years ago my dad's house was appraised at $400K. Last week the house next to my dad's appraised at $500K. My dad's house is probably at $600K now (its bigger than the neighbors).

[Moneyguy1]

appraised or assessed?

[CamB]

That might only be a modest amount in excess of inflation.

[nostatic]

appraised. And in fact he had buyers lining up at $400K 2 years ago. Given the current comps in the neighborhood, his house would bring in easily over $500K. The sad fact is that in SD that is "affordable", and he lives in an area that isn't out in the sticks, but instead if pretty centrally located.

[Moneyguy1]

I dunno...still trying to figure out how a first time buyer ever buys a house?

Not trying to be difficult; but even with a lenient mortgage lender going up to, say, 40% of monthly gross income for PITI, a 500 k house at 6% just for principal and interest (assuming no money down) would be about $3 k a month, meaning an income of, say, $7 k a month or $84 k a year.. How many 24 YOs make that kind of money?

[Moses]

Originally posted by Wayne at Pelican Parts
It is my estimation that property values will go down about 30-60% over the next five years...
-Wayne

Put me down as one who disagrees.

There is no investment that carries the tax benefits of home ownership. Also, the California real estate market is truly global. When prices dip just a bit, Asian and European buyers step up. You may see prices soften in outlying areas that are not as desirable, but the better addresses in California are rock solid. (Just my opinion )

In my area, the houses over $2 million fluctuate a lot, but the "average" homes seem to appreciate continually despite economic changes.

[widebody911]

Damn Wayne! Cute new kid, expanding Pelican, making a mint on the house - you must have the freakin' Midas Touch!

[on-ramp]

Originally posted by motion
I think I'm leaning towards unloading.... LOL, Dork, I don't consider it "day-trading". I like to think of it more as "I'd rather have a couple hundred thousand more in the bank for my retirement". Buying something smaller is really not an option. 2 bdr condos are selling for $480k here... they'll be the first to slide 50% when the market collapses, so I'm right back where I started. Renting something for 1800 a month and minimal utilities, no landscapers, pool maintenance, property taxes, etc sounds like the way to go for a year.

I'll be moving to Montana in a year and will have very strong purchasing power, relative to Cali.

so what if you sell and the price keeps going up. it's a gamble. however, if you've made a substantial profit and want to cash out, you may be better "sitting in the sidelines" for a couple years with hundreds of thousands of dollars in the bank waiting for the market to "cool off". i dont live in Cali, you have a better pulse on the market by being there, just go with gut
feeling. good luck

[Moses]

Originally posted by Wayne at Pelican Parts
particularly if you look at the past history of the market...

Know where I can find any good RE valuation charts?

[JavaBrewer]

Originally posted by Wayne at Pelican Parts
It is my estimation that property values will go down about 30-60% over the next five years as credit is tightened, and the buyer pool dries up.

Just think of all those people who were happy to invest in the Nasdaq when it was at 5000 (it's under 2000 today, a 60% drop). I believe that CA real estate will perform similarly.

I'll have to disagree on your higher end 60% value decline estimation. CA real estate in no way resembles investing in an "unknown" commodity (dot.com bust). It's obvious the market is slowing down (in some areas) and with pending rate hikes the trend will continue. We all saw that coming. I have a few friends in the realty circle who see a gradual 15%-20% drop in values. Short of a natural disaster or radical terroist act I think the 60% figure is pretty doomsday thinking. I'd rather be in CA during a realty slump than anywhere else.

[nostatic]

funny, I was thinking about an earthquake this morning.

[techweenie]

I am aware of one local house that has undergone a 25% price reduction in the space of five weeks. (down to only $7.5 million!)