Opinions today on the California housing market vs. the opinions of 2006 (Santa Monica: apartments, to rent)

[NYSD1995]

Originally Posted by shannon94

Not sure if you like the area Sassberto but there are already deals (comparatively speaking anyway) in Fletcher Hills.....and I'm sure things are going to fall alot more before this is over. Check out the zip. Give it some time.............according to the news today prices in Cali are falling $2800 a week.

I watch Fletcher Hills, Del Cerro, and Mount Helix closely. Basically anything decent is well over 600k. The stuff under 600k seems to be fixers. Really I would need it to be closer to 500k to make it work. The problem is condition and size. The good deals seem to be the smaller, shabbier houses, of which there are plenty. The other big problem is that the loan reqs have gone up and I don't want to put 100k+ down on a house.

[shannon94]

lol ...Del Cerro and Mt. Helix have ALWAYS been more expensive.....I bet you could get into Fletcher Hills though sooner than you think......my in laws live on Mt. Helix and frequent FH regularly so they keep us up to date (trying to get us to come back...lol) Schools use to be great in that area too.....not sure anymore.

[NYSD1995]

Originally Posted by shannon94

lol ...Del Cerro and Mt. Helix have ALWAYS been more expensive.....I bet you could get into Fletcher Hills though sooner than you think......my in laws live on Mt. Helix and frequent FH regularly so they keep us up to date (trying to get us to come back...lol) Schools use to be great in that area too.....not sure anymore.

The elementary is still good but the middle and high school is having some problems (Grossmont Union in particular). The big problem for me with Fletcher Hills is that it the commute, I work in North County (Carmel Valley) so Del Cerro is about perfect for me. We plan to send our kids to Del Cerro schools anyway.

[sheri257]

Originally Posted by shannon94

Is anyone surprised how bad things have become as far as foreclosures, price drops etc?

The only thing that's surprized me is how fast it's happened. Seems like every house in the state dropped $100K in value overnight.

Usually price drops like these would take years but, we're not even a year into this crash yet.

But I guess it was to be expected with all of the funny money and phantom price appreciation.

[Charles]

Originally Posted by sheri257

The only thing that's surprized me is how fast it's happened. Seems like every house in the state dropped $100K in value overnight.

Most of the percent drops we're seeing are like between 10% to 25% percent or so of the peaks, depending on the neighborhoods.

To me, what is more surprising, is that these homes were about 40% of their value only ten years ago. (Our home in Thousand Oaks reflects all of these movements: $330K in 1997, $920K in 2006 and now we'd wild guess mid $800Ks now.)

If there was economic equilibrium in 1997, how much lower could these homes go from today's prices? It's the same house in the same neighborhood. Factoring in inflation, are these homes worth more than twice as much only ten years later? Makes me wonder.

[NotSoGood]

Been watching the so cal market for two years and its a steady decrease for homes in the undesirable index, such variables as location , condition of property and size of lot. location being the biggy as the influx of overpopulation continues in areas where good jobs are, the housing costs change less. supply and demand.many moved to areas to make the commute
into to town to work, but as the cost of gas, food and insurance continue to rise these folks go belly up regardless of subprime mess its the whole big picture.

These are the times to live way below your means and have a plan to survive.

[shannon94]

Originally Posted by sheri257

The only thing that's surprized me is how fast it's happened. Seems like every house in the state dropped $100K in value overnight.

Usually price drops like these would take years but, we're not even a year into this crash yet.

But I guess it was to be expected with all of the funny money and phantom price appreciation.

I agree...I also didn't think it would take as long as it did...now things will just be worse. I saw your posts about moving back to the coast....probably won't be long now.... Good luck to you....

[kettlepot]

I haven't been surprised at all. I predicted a 15%-20% price decline that would probably bottom out in 2008 or 2009. And so far that's exactly what has happened in my neighborhood. Now, if come 2009, the price declines hit 25% than I will be surprised. But frankly, with Fannie Mae now having raised the conforming loan limits, large infusions of cash into the banking system, and lower mortgage rates, I am more convinced than ever that we are in the 8th inning of the home price decline in my neighborhood of San Diego.

As for 1997 being the "equilibrium point, I don't subscribe to that. 1997 followed 4 years of priced declines (90-93), and 3 years of no price increases (94-97). 1997 was the oversold point in the market, just as 2004 was the overbought point.

If you think a middle class income should be able to buy what would pass for a middle class home in Indiana or Nevada, you are not in touch with reality. The San Diego real estate market left that zone of affordability 25 years ago. The SF Bay Area ceased to be like that 35 years ago.

[Soccersupporter]

Originally Posted by kettlepot

I haven't been surprised at all. I predicted a 15%-20% price decline that would probably bottom out in 2008 or 2009. And so far that's exactly what has happened in my neighborhood. Now, if come 2009, the price declines hit 25% than I will be surprised. But frankly, with Fannie Mae now having raised the conforming loan limits, large infusions of cash into the banking system, and lower mortgage rates, I am more convinced than ever that we are in the 8th inning of the home price decline in my neighborhood of San Diego.

As for 1997 being the "equilibrium point, I don't subscribe to that. 1997 followed 4 years of priced declines (90-93), and 3 years of no price increases (94-97). 1997 was the oversold point in the market, just as 2004 was the overbought point.

If you think a middle class income should be able to buy what would pass for a middle class home in Indiana or Nevada, you are not in touch with reality. The San Diego real estate market left that zone of affordability 25 years ago. The SF Bay Area ceased to be like that 35 years ago.

The housing market in CA will never be affordable like the rest of the US, that is just not reality. The entire CA economy would collapse. In most sates other than a few exceptions people spend much less on mortgages and much more on planning for the future and enjoying vacations etc.. I remember watching a finance show on cable and hearing of people with household incomes of between $40,000 and $70,000 talking about their investments, IRAs, Roths,401Ks. They were talking about $200,000 to $300,000 investments, retirement funds. In CA you could not even survive let alone raise a family on that income. Most people in CA are house poor and are counting on that equity for investment. If the housing market were to normalize most Californians would go from being house-poor to just plain poor.

[shannon94]

Originally Posted by kettlepot

If you think a middle class income should be able to buy what would pass for a middle class home in Indiana or Nevada, you are not in touch with reality. The San Diego real estate market left that zone of affordability 25 years ago. The SF Bay Area ceased to be like that 35 years ago.

I don't think anyone ever said THAT would happen.....but I think your being a bit optomistic on it hitting bottom this year. By the way what area do you live in???