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Old 09-23-2013, 09:25 PM
 
Location: San Diego
306 posts, read 550,016 times
Reputation: 262

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Looks like they are just going UP, UP and UP and buyers just keep buying like it's a mania...will there be a price point at which buyers will just stop buying? And what happens then? Will prices just be flat with nobody buying?? If nobody buys then what exactly happens to the market from that point?

A realtor just called me today and said prices are GREAT and it's the best time to buy!! He says he has been a realtor for 20 years and prices will never ever go down since those lows are permanently gone.
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Old 09-23-2013, 09:59 PM
 
806 posts, read 1,275,678 times
Reputation: 439
We all wish we knew what will happen .

The first house I bought was back in '95. My family could never ever have purchased it had there not been a slump in the market. We didn't know that. We were ready to get out of the ghetto and instead of renting in a better area of Long Beach, we looked into buying a house and this time, we got lucky.

What was it in '95? I think we lost a lot of aerospace jobs, so people were out of work, maybe many of them lost their homes?

Well, I keep thinking about those times, those good ol' days, hoping prices would back down under $200k . I know it won't, but people have lost jobs and homes this time, but the market did not tank...

I don't think prices will go down.
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Old 09-23-2013, 10:05 PM
 
Location: RSM
5,113 posts, read 17,476,883 times
Reputation: 1892
It dies down in the winter. We'll see how the market reacts to lower demand. If it continues to move up this winter, then it's fair to say it won't stop advancing as the market improves. How fast is a different story
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Old 09-23-2013, 10:40 PM
 
Location: LA/OC
1,082 posts, read 1,742,104 times
Reputation: 598
I'm not sure where you're looking, but prices have been staying flat or going down for the past month or so in most of the areas I work in. Homes are staying on the market longer and there's more inventory out there.
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Old 09-24-2013, 10:17 AM
 
Location: San Diego
306 posts, read 550,016 times
Reputation: 262
The problem is that prices are unaffordable currently.. an example, friend bought a home in Buena Park for $350,000 at 3.5%, typical middle class family with two kids, household income around $80,000 typical for that area. They could barely just about afford the home.

Now the same homes are listed for $460,000!!! and the rate is 4.7%! How does a middle class family afford a starter home in Buena Park for close to half million?
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Old 09-24-2013, 12:13 PM
 
Location: SoCal
542 posts, read 1,263,709 times
Reputation: 749
Quote:
Originally Posted by redrocket2 View Post
Looks like they are just going UP, UP and UP and buyers just keep buying like it's a mania...will there be a price point at which buyers will just stop buying? And what happens then? Will prices just be flat with nobody buying?? If nobody buys then what exactly happens to the market from that point?

A realtor just called me today and said prices are GREAT and it's the best time to buy!! He says he has been a realtor for 20 years and prices will never ever go down since those lows are permanently gone.
The market is cyclical, which you probably already knew. The cycle always goes like this:
- Crash. Lending standards tighten.
- Prices bottom out. Lending standards are super tight.
- Investors jump in and buy all the cheap deals, leading to low inventory
- More investors, coupled with normal buyers, buy what's left, and you get some minor bidding wars, and we have the ~15% pop in prices. Lending has slightly started to loosen.
- As prices pop, more people list their homes for sale, and prices stabilize due to the increased inventory (supply/demand becomes more balanced).
- Prices continue on a slow, healthy growth rate. Lending standards continue to slowly loosen.
- Lending gets loose, under-qualified people jump in, and increased demand (coupled with "this boom will last forever!" mentality) leads prices to skyrocket
- Next crash

Happens every time. Each stage can take different amounts of time, and some cycles last longer than others, so it's not always easy to know exactly which stage you're in. Obviously, this is subject to outside forces. For example, if we had "the big one" tomorrow, housing prices would plummet as people panicked due to property damage around SoCal. The cycle would have to start over.

Regarding your statements/questions, now is still not a bad time to buy, although you missed the best time (which was around 2010-2012). Since you still have most of the next upswing of the market ahead of you though, buying would be better than renting (assuming you plan to stay in the area for a while). Right now we appear to have just finished the pop, as prices have stabilized the past couple of months. We will likely have slow steady growth for a while; assuming the economy continues to (very) slowly improve, there's no real reason to fear a major pullback of buyers, since values are still pretty good.

Hope that answers your questions.
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Old 09-24-2013, 12:16 PM
 
Location: SoCal
542 posts, read 1,263,709 times
Reputation: 749
Quote:
Originally Posted by russlancea View Post
We all wish we knew what will happen .

The first house I bought was back in '95. My family could never ever have purchased it had there not been a slump in the market. We didn't know that. We were ready to get out of the ghetto and instead of renting in a better area of Long Beach, we looked into buying a house and this time, we got lucky.

What was it in '95? I think we lost a lot of aerospace jobs, so people were out of work, maybe many of them lost their homes?

Well, I keep thinking about those times, those good ol' days, hoping prices would back down under $200k . I know it won't, but people have lost jobs and homes this time, but the market did not tank...

I don't think prices will go down.
Yes, due to the end of the cold war, CA lost a lot of aerospace and military, and we had a recession. Most of the rest of the country had no idea, but locally, we were hurting. The recovery started in the late 1990s.
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Old 09-24-2013, 12:34 PM
 
Location: Portland, Oregon
558 posts, read 440,289 times
Reputation: 989
Prices have definitely cooled off. I signed with a realtor in late July in anticipation of getting a job transfer to Portland that wasn't supposed to happen for a few months. My home is an older house and needed some upgrades before listing. My transfer happened a lot sooner than expected and the upgrades were finished last week. Because of the cooling market, we listed it for about $15,000 less than we originally planned on in July. My realtor has one other listing in my neighborhood, and that house has been on the market for 3 weeks with no offers. Just 2 months ago it would have been gone in days.
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Old 09-24-2013, 04:42 PM
 
Location: San Diego
306 posts, read 550,016 times
Reputation: 262
It's not a question of timing but of affordability... woukd like to buy something that I can grow into for a while, thinking 1600 sqft townhouse in a decent area. However with a $85,000/yr household income and $30,000 for a down what would be my options?
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Old 09-24-2013, 05:36 PM
 
26,591 posts, read 52,392,336 times
Reputation: 20439
Could you get into a duplex or home with in-law where the rental income will help?

I did this right out of college and it was a springboard into Real Estate I could not have otherwise afforded...

Help several friends to the same... all 4 units or less.

All have since cashed out and bought their forever homes... would not have been possible without the rentals.
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