Opinions today on the California housing market vs. the opinions of 2006

[cardinal2007]

Well if prices continue dropping at the rates they have been dropping in the last 3 months we will see prices drop over 30% in Bay Area, LA, and San Diego in 2008 alone!

Of course this is an average, but still I figured I might buy when prices dropped 26% from last Oct. so it might be a bottom then, if I can get a loan 6% or less, no PMI I would be paying less than rent then. This is not even counting the Central Valley, I've seen several listings in Tracy, CA for 50-60% off from the peak. Honestly it is dropping much faster than I expected, and so it might hit a bottom faster than I expected too, don't expect a big bounce though, if it is a crash I'm guessing it will fluctuate at the bottom for a while.

Rents might rise since subprimers, and mortgage walkers will have no choice but to rent. Investors would probably start buying up properties if they can rent them at 1/120 of the purchase price, nothing like that yet from what I can tell. Many properties are still listed at 220 - 280 times rent, some are more reasonable at 200 times rent. I won't consider it at all until it drops to 180 times rent. But the rate at which prices are currently dropping is huge, I wouldn't want to buy now.

[sheri257]

Originally Posted by cardinal2007

Honestly it is dropping much faster than I expected, and so it might hit a bottom faster than I expected too ....

This is why I'm moving now. I wasn't going to move back to the coast for a couple of years but these price drops are happening so fast, I'm afraid I'm might not be able to move fast enough when the bottom hits so ...

I'm making plans to move this summer and rent so I can jump on the right property at the right price if necessary.

However, if it takes five years for the bottom to hit then, that will be ok too. But, I just want to be ready to take advantage if prices bottom out a lot sooner.

[goodbyehollywood]

Well, good luck to all of you! I hope your timing pays off.

I'm only watching two zip codes, in about a two-mile radius, and I'm seeing a very different picture. My broker checks listing three times a day, I've looked at every comp, and the prices aren't dropping. Desirable properties still go with multiples. The only "bargains" are in fixers that would take $100K-$200K to make decent, and that would come out of your pocket, since the loan pool has gone shallow.

OTOH, I have a friend in Corona whose house has dropped $200K in the past year. She wants out, but hasn't had a nibble in more than a year.

Real estate really is local... and micro local at that.

[cardinal2007]

Originally Posted by goodbyehollywood

Well, good luck to all of you! I hope your timing pays off.

I'm only watching two zip codes, in about a two-mile radius, and I'm seeing a very different picture. My broker checks listing three times a day, I've looked at every comp, and the prices aren't dropping. Desirable properties still go with multiples. The only "bargains" are in fixers that would take $100K-$200K to make decent, and that would come out of your pocket, since the loan pool has gone shallow.

OTOH, I have a friend in Corona whose house has dropped $200K in the past year. She wants out, but hasn't had a nibble in more than a year.

Real estate really is local... and micro local at that.

Yeah, hence why I said on average, places like Tracy have dropped about 50% from peak, while where I live it has dropped more like 13% from peak for condos. I'm only looking at things I can afford so I don't really care if houses are holding their value or not in this town. Of course condos are not really impressive so I have no interest in paying more than rent for them, in a house one buys the land with it, for condos one buys some walls and that's it.

Not only does it vary by location, but also by class. I imagine a lot of people will shun condos in favor of moving from apts to houses instead when they feel like buying, condos have horrible price histories, I always see places where a person bought a condo in '89 and took a loss on it at some point.

I believe though when the market starts to recover people will drop off demand for some of the places that did not fall in price as the substitutes have now become cheaper, making the marginal cost to move up to the choice locations larger than some people will be willing to make. Many people are holding out for a quick recovery of the market, reducing inventory at some nice places, but I don't think most will be willing to ride out the entire slump, price-wise.

[sheri257]

Originally Posted by goodbyehollywood

My broker checks listing three times a day, I've looked at every comp, and the prices aren't dropping. Desirable properties still go with multiples. The only "bargains" are in fixers that would take $100K-$200K to make decent, and that would come out of your pocket, since the loan pool has gone shallow.

OTOH, I have a friend in Corona whose house has dropped $200K in the past year. She wants out, but hasn't had a nibble in more than a year.

Real estate really is local... and micro local at that.

I've noticed that even comps can be tricky and, even, misleading in some cases. Some areas may look like they're not going down but, then you see that only two properties sold versus 20 properties a year ago. So it doesn't really give you an accurate picture. Then you pick up the flyers and virtually of them have major price reductions that are changing daily.

You've got people who owe too much and are asking too much ... obviously those properties aren't moving. Then you get these short sales where people are trying to sell for a lot less but, it doesn't mean anything because the bank still has to approve it and, will more than likely ask for bids and more money so ... there's no telling where the real price levels will be in many cases.