Where are home prices headed? (Oxnard, Orange: to rent, credit card, house)

[sheri257]

Again, I am NOT a realtor. Just a buyer who's seeing a lot of buy signals.

If you guys can't figure out that I'm not a realtor then ...

I hope you can do a better job of predicting the marketplace.

[eclipxe]

Originally Posted by sheri257

Exactly. Pretty much all of the major lenders have moratoriums now.

Besides, I never was convinced the Alt-A hit was going to be that bad anyway. These are higher income areas with a lot of wealth. There just isn't the huge number of Notices of Default in these areas indicating a massive crash. Of course, the wishful thinkers will say it will take a couple of years but even most of the pessimists think the market will start to recover by then.

Besides, now that the government and the banks are getting more aggressive in renegotiating these loans ... I seriously doubt you're going to see a 50+ percent drop in any of the primo areas.

Of course the wishful thinkers will say that these workouts won't work out in the end but ... these are in demand primo areas. It's just unrealistic to expect them to get that cheap.

The moratoriums only slow the bleed and prolong the problem. And good luck renegotiating that loan that has been HELOC'ed to hell (I mean, who DIDN'T take money out of their home during the boom?) or all the speculative "investments".

If you would research a bit more you would see that these renegotiation and government assistance programs have "poison pills" which require the borrower to still be liable for the "missing" principal (in the case of a write-down) and also to share in any future appreciation. Needless to say, the adoption rate for these programs is laughably low. Besides, home values are headed RIGHT back up, right? Who would be dumb enough to lose that guaranteed 10% return every year!!!!!111

I wish you the best Sheri - I just think that you have convinced yourself of a certain outcome and you refuse to look at the facts of the situation. That is fair enough, maybe I am too bearish on housing myself and am ignoring certain things because it suits me well. I can agree that you have good points but I think your analysis of the big picture is ignoring the global economic situation. Without job and wage growth, housing declines. It's a simple, repeatable fact. Do you see large job and wage growth over the next year? I sure don't!

[sheri257]

Originally Posted by eclipxe

I just think that you have convinced yourself of a certain outcome and you refuse to look at the facts of the situation. That is fair enough, maybe I am too bearish on housing myself and am ignoring certain things because it suits me well. I can agree that you have good points but I think your analysis of the big picture is ignoring the global economic situation. Without job and wage growth, housing declines. It's a simple, repeatable fact. Do you see large job and wage growth over the next year? I sure don't!

Well ... I'm also buying stocks so ... I think we've hit bottom on all fronts. I got out of the market a year ago and now I'm back in so ... obviously I'm bucking conventional wisdom here but, it's served me pretty well.

Sure ... I'm biased because I've decided to buy. But I think people who can't afford current prices are also biased because they want prices to be lower than they will actually be.

Look: I would love it if Monterey would get down to $300K and I wouldn't have to live in a 500 square foot box to do it but ... it just ain't gonna happen. At least, that's the way I see it.

[sheri257]

Originally Posted by eclipxe

Besides, home values are headed RIGHT back up, right? Who would be dumb enough to lose that guaranteed 10% return every year!!!!

No ... that's not what I'm saying. What I do know is that I can't totally predict a bottom with complete certainty.

When I got out of stocks last year, I missed some gains but I also missed the big crash. There's always going to be some variations up and down. If I can get it right at least within 2-3 months, that's probably the best I'll ever do and I'm happy.

Maybe this house I'm buying may drop $20K or so, maybe not. It will definitely go up more than that over the long term. I don't know about the immediate future but, what I do know is that inventory is tightening for where and what I want to buy ... and with 55 percent price depreciation it's a pretty good bet.

[Scott5280]

I bought a beach property in the 92663 area code of Newport Beach in 99, of course
I have watched it continue upward in price, that was until about four months ago...
I have been looking for another condo in that area code to purchase..... Prices are coming down... no question--even in the desirable places... I live in Denver, however
I am a market advisor and analyst--- I receive closing and bidding details to my cell
phone in real time for the Newport Beach area and frankly it does not look good....
My observation is that recovery time will be quicker in the desired beach OC communities and will not sink as far,but that is in part due to the out of state buyers.
About 20% of the current owners in the Laguna/Newport market are from out of state; we will typically buy in almost any market condition within reason to be near water...Much of the OC. however has been over leveraged,and become a black listed
commodity for many mortgage backed security firms...They themselves are having to
adjust to new regulatory conditions..About a tenth of the MBS'S are now under new
ownership. The REITS ,and lenders are still waiting to adopt to the unannounced stategies of the Obama administration.... Even best case scenario for OC, Hypothetically (Mortgage backed securities rebound next week some how record high
returns, and a national high consumer confidence) The initial shock wave from the damage already done high Reo's,reit and SEC regs.. the OC will recover at earliest 2012...It is so not out of line to expect a 10-15% drop...I unfortunatly, but sincerely
believe the OC. will take a bigger hit, even though it is a great place to be...

[Winkelman]

Originally Posted by sheri257

Again, I am NOT a realtor. Just a buyer who's seeing a lot of buy signals.

If you guys can't figure out that I'm not a realtor then ...

I hope you can do a better job of predicting the marketplace.

Never said you were a Realtor. I said you were repeating their mantra. During the height of the market the said prices have never decreased on a national level year to year and won't this time either. When prices declined year to year they said the price correction will be short and shallow and rebound in 2008. Now they are saying buy now because they could shoot up at any minute.

The market will confirm the bottom, no need to predict anything.

One more time, feel free to give details on that 85K profit flop.

[Charles]

I get news pushed to me using Google Alerts (you set it up with keywords and when something hits the news wires or internet, you get an email).

For some reason, this got pushed to me yesterday. It looks like it is from 2004. Not sure why I got it yesterday. It's hilarious.

"It Still Makes Sense to Buy a Home in Mission Viejo Versus Renting

If you are renting and can afford to buy, but have decided to put off buying a home due to all of the chatter about a housing bubble… you may be sorry. Is there a ‘real estate bubble’? The simple answer is ‘No’. Even if interest rates due move up a little bit higher, it won’t be enough to cause a slide in Real Estate prices here in Mission Viejo. The key to a healthy real estate market is the jobs market… and in south Orange County, has some of the lowest un-employment in the Nation, with a good forecast for job growth for years to come.

Even though the payment on a home may be slightly higher due to increased interest rates, it generally won’t stop someone from buying the home of their dreams… but if they feel their job is in jeopardy, it usually will stop most people in their tracks from purchasing a home.

A major mortgage industry group recently release it’s three year economic forecast, projecting robust economic growth for the Nation and projecting a small rise in long term home mortgage rates to about 6.5% by the year 2007. Again, making the likelihood of a real estate bubble bursting unlikely in Orange County.

Price declines are unlikely, but we do expect a slowing in real estate appreciation in the years to come to a level of 3% to 6% per year, which is still good. Unfortunately, the talk of a real estate bubble, has been going on for some years and has victimized many renters who could afford to buy. Is it too late? No it’s not, but here is an example of what can happen if one continues to procrastinate on buying a home.

For example, if one is paying rent in Mission Viejo of $2,000 per month, and the landlord increases the rent by 5% each year, one would wind up paying over $130,000 over five years with nothing to show for it! Also, if one does any type of maintenance to the home (paint, leaky faucet), and then moves out, those improvements belong to the landlord.

With the extensive variety of loan programs to help buyers purchase with No or very low down payment, the very same money could have been used towards home ownership. Using an adjustable rate loan, a mortgage of $375,000 could be obtained with a total monthly mortgage payment – including property taxes and insurance – of around $2,400 per month. Assuming a 25% tax bracket, one would save about $300 to $400 per month, so the effective net payment would be close to the above rent payment example. After 5 years one would also have paid down some of the principal by about $12,000 which is now added to ones net worth.

Home appreciation can add even a bigger chunk of equity. If the Mission Viejo home appreciates by a modest 5% per year for the next 5 years, the $375,000 Condo would be worth $455,000 in the year 2010. Now ones net worth could be a whopping $95,000 which by the way, is tax free.

Don’t be victimized by the real estate bubble hype. Buying a home in Mission Viejo or elsewhere in south Orange County is a big step for most people, and a step in the right direction."

from

It Still Makes Sense to Buy a Home in Mission Viejo Versus Renting | The OC 10 - Top Ten Lists of the Best Restaurants, Businesses, Services, and Everything Else You Can Imagine in Orange County, CA (http://oc10.cityspur.com/2009/12/01/it-still-makes-sense-to-buy-a-home-in-mission-viejo-versus-renting/ - broken link)

It was written by Vincent Bindi, a realtor from Orange County. Maybe you'd like to retain his services, here's a little more on him:

Housing Bubble Hall of Shame®: Vincent Bindi

[CAVA1990]

I can predict with 100% certainty that prices will rise in the future.

[Charles]

Originally Posted by CAVA1990

I can predict with 100% certainty that prices will rise in the future.

How about 99.999%? What happens if the earth is hit by a meteor in five minutes and it wipes us all out?

[00molavi]

Originally Posted by Charles

How about 99.999%? What happens if the earth is hit by a meteor in five minutes and it wipes us all out?

Well for sure send a message to the OP after that event and let them know they were wrong!

Seriously, I have not seen a real estate agent that ever told me it is not a good time to buy. The day they decide to tell you that is the day they have quit their job. Each person has to assess their own situation as far as income and rent/purchase expenses and correlation to tax bracket, job situation and family status.