When is the Next CA Housing Price Collapse Supposed to Happen? (big house, property tax)

[aslowdodge]

Op you really should settle for that condo in MV if you love it so much there. Prices aren't coming down. if anything I think they will rise a bit then maybe level off if you are lucky. But they will not come down where you can afford that big house you want in MV.

[Csonka]

The next downturn will most likely be related to an economic contraction and layoffs. But for right now, the pricing is not crazy relative to the incomes of the buyers. Only thing that can sink pricing now is if those incomes dry up. And maybe the increasing rates and the tax deduction situation will add some downward movement.

[JJonesIII]

Originally Posted by Csonka

The next downturn will most likely be related to an economic contraction and layoffs. But for right now, the pricing is not crazy relative to the incomes of the buyers. Only thing that can sink pricing now is if those incomes dry up. And maybe the increasing rates and the tax deduction situation will add some downward movement.

The new tax law doesn't appear to be having any impact at all. Clearly we wouldn't have the gains we've had since the start of the year if people were concerned about it.

[CA4Now]

Originally Posted by Des-Lab

End of discussion. He's angry, disgruntled, and priced out.

What an assumption. Possibly the OP is simply asking an honest question. And h/she may have read articles such as the ones linked below. Anyone who has bought residential property in the past few decades knows that we can't possibly believe that housing prices are not cyclical.

https://www.bloomberg.com/news/artic...gger-into-2018

https://gordcollins.com/real-estate/...-market-crash/

https://www.nationalmortgagenews.com...-is-in-trouble

[JJonesIII]

Originally Posted by CA4Now

What an assumption. Possibly the OP is simply asking an honest question. And h/she may have read articles such as the ones linked below. Anyone who has bought residential property in the past few decades knows that we can't possibly believe that housing prices are not cyclical.

https://www.bloomberg.com/news/artic...gger-into-2018

https://gordcollins.com/real-estate/...-market-crash/

https://www.nationalmortgagenews.com...-is-in-trouble

It doesn't matter if the OP is asking an honest question or not, or what op-eds h/she has read. The bottom line is no one knows the answer to this question (and there's no reason to think you'd be able to get an answer on it from someone here). The responses would have been the same to the author of these articles. Economists predictions on impending doom are a dime a dozen and most never get it right. But when they do, they're quick to pat themselves on the back. Nouriel Roubini was classic with that but if we do a rewind on his predictions, he's been wrong a lot more (like most of them). And anyone that arbitrarily uses that term "bubble" should be able to explain why (and particularly why the OP thinks these home sales are being purchased by speculators ...part of the definition of a bubble...and not just basic market demand). It's a fair question. No one said housing prices weren't cyclical. But no one also has the answer to when the next recession is either.

P.S. Admittedly most of my Liberal friends are quite upset the market hasn't crashed. I can't imagine why?

[expatCA]

Originally Posted by JJonesIII

It doesn't matter if the OP is asking an honest question or not, or what op-eds h/she has read. The bottom line is no one knows the answer to this question (and there's no reason to think you'd be able to get an answer on it from someone here). The responses would have been the same to the author of these articles. Economists predictions on impending doom are a dime a dozen and most never get it right. But when they do, they're quick to pat themselves on the back. Nouriel Roubini was classic with that but if we do a rewind on his predictions, he's been wrong a lot more (like most of them). And anyone that arbitrarily uses that term "bubble" should be able to explain why (and particularly why the OP thinks these home sales are being purchased by speculators ...part of the definition of a bubble...and not just basic market demand). It's a fair question. No one said housing prices weren't cyclical. But no one also has the answer to when the next recession is either.

P.S. Admittedly most of my Liberal friends are quite upset the market hasn't crashed. I can't imagine why?

Most people are only familiar with the last recession, which was not normal. The previous ones were moderate by comparison and are typical of the cycles seen. In addition lack of supply will keep the housing market stable and rising.


A good article can be found by searching the title:


Commercial Real Estate and the 1990-91 Recession in the United States


Major differences in price drops and the length of time. No crash likely unless the economy crashes and then no one will be buying except the Rich and investors to rent.

[Searching-01]

Originally Posted by amokk

tomorrow evening.

First question though is, why do you think there is a bubble in CA? Just because you can't afford it, doesn't make it a bubble.

Because it appears to my eyes that prices are equal to or above what was formerly called a bubble.

Seems after the bubble burst everyone wanted to a recovery... to recover to... bubble levels... LOL!

A correction is supposed to deflate a bubble.

At present we are back to bubble levels, whereas incomes have not increased similarly.

[Searching-01]

Originally Posted by nmnita

I have been on this earth longer than probably any of you, I sold real estate in So Cal for 10 years and I see no reason for anyone to think the bubble will burst anytime to be truthful. OP, if you wait long enough the prices might stableize some but bubble burst, not likely in your life time. Don't hold your breath.

Well, I'm 55, not sure if you're older than that or not, LOL!

Locals have told me the bubble/burst or appreciate/depreciate (or any other two contrasting terms you want to use) cycle is about 7 years... that California has has increases and corrections in the housing markets for decades that the rest of the country never really experience.

I read recently that Campbell Ca homes at peak of bubble were about $750K... and are now $1.4 million... so prices have roughly doubled what was before, a bubble.

That said, since institutionally ensured inflation is the way of the land, the numbers may be misleading without some adjustment for that institutional inflation.

Read that, "The Fed ensures that salaries for labor effectively decrease by diluting the value of money on a continuous basis through money supply manipulation".

[Searching-01]

Originally Posted by JJonesIII

I simply don't even understand why someone like this even uses the term "bubble" (probably the most overused term out there). By what measure is it a "bubble"? It sounds to me like the OP either can't afford to buy a home or doesn't want to pay market price, therefore it's a bubble.

It's just simply the most commonly used term for "overpriced" these days.

But, yes, I lack a rigorous definition of bubble.

That said, you could even claim that the most recent bubble wasn't a "bubble"... if people were willing to pay the inflated valuations... I guess you could say it was just "normal supply and demand".

And that said... seems a lot of folks in here are afraid of the idea that the market is currently over priced.

I imagine it's because folks that ended up upside down during that last correction can't bear the idea that another such event it possible?

Inflation and volitility are bad things... one steals you buying power, the other makes it impossible to plan. Should be a general goal to make both as small as possible and as predictable as possible.

To the extent that they aren't leaves the average person competing with professionals to try and hedge. Not a fair fight and certainly not in the interests of the many.

[Searching-01]

Originally Posted by Des-Lab

This, this and this.

End of discussion. He's angry, disgruntled, and priced out.

My aren't we the self righteous pop psychologist, LOL!

Who are you to say what I am, and when the discussion ends... Heck, it's my thread, LOL!