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Old 11-07-2007, 02:44 PM
 
Location: West LA
723 posts, read 2,156,159 times
Reputation: 284
Quote:
Originally Posted by motoman View Post
Interesting that all of these major markets are now predicted to go down 20%+ over the next five years, where before they were going to stay flat while wages caught up, before heading up again.
I like money.cnn.com, they have some insightful business.

Too bad they consider LOS ANGELES one area. I bet they're right on average, I bet if you consider Lancaster to Long Beach, and from West LA to Ontario- ther numbers will be correct.

And frankly, I don't mind. It's an average. No way the Palisades are gonna drop 24%

And if I wasnt concerned with being moderated off this site, I'd wager you some cold hard cash, bub.
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Old 11-07-2007, 03:23 PM
 
830 posts, read 1,813,290 times
Reputation: 363
Quote:
Originally Posted by JackSparrow View Post
I like money.cnn.com, they have some insightful business.

Too bad they consider LOS ANGELES one area. I bet they're right on average, I bet if you consider Lancaster to Long Beach, and from West LA to Ontario- ther numbers will be correct.

And frankly, I don't mind. It's an average. No way the Palisades are gonna drop 24%

And if I wasnt concerned with being moderated off this site, I'd wager you some cold hard cash, bub.

I would take that bet. :-)

Obviously the changes, up or down, will vary widely be area. Even neighborhood. But given the tremendous run-up over past 5+ years, it only makes sense for prices in all areas to come down.

I ask myself this: If someone is willing to pay twice as much today for the same house they could have bought 5 years ago, why didn't they pay that for it 5 years ago? What has changed since then to justify the higher prices?

The answer is that not much has changed. Incomes haven't changed all that much. The population hasn't changed all that much. Interest rates only explain part of it. The only things left are the proliferation of crazy financing coupled with speculation. Remove those two from the equation, run some rough numbers on wage increases, population growth, and the impact of lower interest rates, and you can easily justify a 20%-30% decline in California prices as a whole. Some areas might drop more, others less. But I would be absolutely astonished if even the high-end areas did not suffer a little. And I think they will come down more than you think.

This isn't a doom and gloom situation. The world isn't coming to an end. But irrationality is irrationality, and it always loses in the end.

Remember the dot com bubble all those many years ago, way back when it bottomed in 2002? Wow, that was a different lifetime, five years ago. People have proven once again that they will never learn. From the dot com bubble to the real estate bubble.

The big question is what will be the next big bubble. Because I want in on it. I want to be the one to find the last sucker to buy my ridiculously overpriced asset from me so I can retire early.
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Old 11-07-2007, 03:28 PM
 
Location: West LA
723 posts, read 2,156,159 times
Reputation: 284
Quote:
Originally Posted by motoman View Post
I would take that bet. :-)

Obviously the changes, up or down, will vary widely be area. Even neighborhood. But given the tremendous run-up over past 5+ years, it only makes sense for prices in all areas to come down.

I ask myself this: If someone is willing to pay twice as much today for the same house they could have bought 5 years ago, why didn't they pay that for it 5 years ago? What has changed since then to justify the higher prices?

The answer is that not much has changed. Incomes haven't changed all that much. The population hasn't changed all that much. Interest rates only explain part of it. The only things left are the proliferation of crazy financing coupled with speculation. Remove those two from the equation, run some rough numbers on wage increases, population growth, and the impact of lower interest rates, and you can easily justify a 20%-30% decline in California prices as a whole. Some areas might drop more, others less. But I would be absolutely astonished if even the high-end areas did not suffer a little. And I think they will come down more than you think.

This isn't a doom and gloom situation. The world isn't coming to an end. But irrationality is irrationality, and it always loses in the end.

Remember the dot com bubble all those many years ago, way back when it bottomed in 2002? Wow, that was a different lifetime, five years ago. People have proven once again that they will never learn. From the dot com bubble to the real estate bubble.

The big question is what will be the next big bubble. Because I want in on it. I want to be the one to find the last sucker to buy my ridiculously overpriced asset from me so I can retire early.
Chicken little, sky falling, and yes, doom and gloom. Good luck with all that. I can't help you anymore in this thread.

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Old 11-07-2007, 03:37 PM
 
830 posts, read 1,813,290 times
Reputation: 363
Quote:
Originally Posted by JackSparrow View Post
Chicken little, sky falling, and yes, doom and gloom. Good luck with all that. I can't help you anymore in this thread.


I think it's funny how people are so adamant that housing prices will rise forever. That it's just "normal" for everyone to live in $500,000 starter homes. That a doubling of prices in 5 years with no rational justification is justifiable. Prices never fall, right? I guess the late '80s, early '90s in California real estate was just a government fabrication, just like when they faked us going to the moon.

The good thing is that by the time this fiasco hits the bottom, I hope to have enough money to take a few properties off of some poor souls' hands. I'll rent one to you for twice the market rent.
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Old 11-07-2007, 04:10 PM
 
Location: West LA
723 posts, read 2,156,159 times
Reputation: 284
Quote:
Originally Posted by motoman View Post
I think it's funny how people are so adamant that housing prices will rise forever. That it's just "normal" for everyone to live in $500,000 starter homes. That a doubling of prices in 5 years with no rational justification is justifiable. Prices never fall, right? I guess the late '80s, early '90s in California real estate was just a government fabrication, just like when they faked us going to the moon.

The good thing is that by the time this fiasco hits the bottom, I hope to have enough money to take a few properties off of some poor souls' hands. I'll rent one to you for twice the market rent.
I think it's funny how people think housing prices remain at a flatline (or hover thereabout) forever... See also: History.
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Old 11-07-2007, 05:45 PM
 
1,297 posts, read 3,658,822 times
Reputation: 536
The market in west los angeles is unique and cannot be compared to the County of Los Angeles.

When you group the san fernando valley, antelope valley, lancaster, and westwood together, you get false info on westwood.

That said, did anyone read the article in la times re: Fred Sands. His suggestion to valley realtors: "Move your operation to West Los Angeles" or at least the better parts of the valley: encino, sherman oaks, westlake village.
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Old 11-07-2007, 06:28 PM
 
Location: West LA
723 posts, read 2,156,159 times
Reputation: 284
Quote:
Originally Posted by greggd View Post
The market in west los angeles is unique and cannot be compared to the County of Los Angeles.

When you group the san fernando valley, antelope valley, lancaster, and westwood together, you get false info on westwood.

That said, did anyone read the article in la times re: Fred Sands. His suggestion to valley realtors: "Move your operation to West Los Angeles" or at least the better parts of the valley: encino, sherman oaks, westlake village.
Thank you.

I haven't read the Fred Sands article, but I didn't really need to. Do you have a link to it by chance? I'd be curious to see what he has to say. Maybe we can educate some of these people- bringing wisdom to those who may be lacking?
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Old 11-07-2007, 06:40 PM
 
830 posts, read 1,813,290 times
Reputation: 363
Quote:
Originally Posted by JackSparrow View Post
Thank you.

I haven't read the Fred Sands article, but I didn't really need to. Do you have a link to it by chance? I'd be curious to see what he has to say. Maybe we can educate some of these people- bringing wisdom to those who may be lacking?

So what you're saying is that prices in these areas will go up forever? Never taking a breath? Even after doubling in 5 years, which is about three times the long-term average increase? We'll just continue from this point right? We'll slow down to 5% annual growth instead of 15%. Maybe 10%. Yeah, I think 10% would be a good number. Because rich people don't care about making a good investment. They'll just pay up for real estate to no end. Back in the '90s, did these areas buck the trend and continue their double digit gains all the way to the present? I'm just curious.
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Old 11-07-2007, 07:10 PM
 
Location: West LA
723 posts, read 2,156,159 times
Reputation: 284
Quote:
Originally Posted by motoman View Post
So what you're saying is that prices in these areas will go up forever? Never taking a breath? Even after doubling in 5 years, which is about three times the long-term average increase? We'll just continue from this point right? We'll slow down to 5% annual growth instead of 15%. Maybe 10%. Yeah, I think 10% would be a good number. Because rich people don't care about making a good investment. They'll just pay up for real estate to no end. Back in the '90s, did these areas buck the trend and continue their double digit gains all the way to the present? I'm just curious.
[slowed increase] breather =/= prices going down

Now, where is that "backpedal" smilie located? You seem to need it.
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Old 11-07-2007, 08:11 PM
 
Location: Las Flores, Orange County, CA
26,362 posts, read 54,337,502 times
Reputation: 16314
"In the short term, the local real estate market "is not going to get better," Sands said.

.....but Sands said those in the business needed to remember the last slump and realize "the last five or six years were not normal."

The soaring market of a few years ago will be followed by a correspondingly sharp decline, he said: "The longer the up cycle, the more excess there is, and the worse it is for what follows....

An estimated 12% of Californians will sell their homes at a loss this year, said Realtors association economist Leslie Appleton-Young, up from about 2% in 2006....

Prices have remained stronger on the Westside and in other affluent areas, in part because buyers there are less likely to use loans with low teaser rates that are now adjusting higher.

But wealthy areas won't escape unscathed, Sand said."



from the Fred Sands article

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