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Old 10-04-2008, 03:03 PM
 
58 posts, read 143,871 times
Reputation: 54

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I think that prices will continue to drop for maybe another year, two years.
It's not easy anymore for people to get a loan with a bank.

And no matter how hard that must be on those who want to... it might also be a "blessing in disguise" in a way. This country has surprised me from the moment I arrived.
Being European I have not been to a country where it always has been so "normal" to have so many credit cards and to live and spend as if there is no tomorrow using the cards.

It would not surprise me if the US is slowly going back to becoming a cash society.
There is nothing wrong in actually having the money in your hand so you literally see how much you spend....

People spent a lot of money with the credit cards, getting into lots of problems.
I wonder how many people manage to pay their credit card bills completely every month...

It's the government who has made it so "easy" for people to get those cards, it's part of this society but the American citizen is litererally paying a high price for it.

Having said that.. we all have our own responsibility.
We need to pay our bills.
What we can't afford, we should not buy...
There is a difference between greed and need...

so before the prices of houses stabilize.. I think it's still a couple of years.
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Old 10-04-2008, 05:14 PM
 
428 posts, read 985,465 times
Reputation: 328
Another wave of foreclosures are coming when the 5 year ARM's mature within the next year. Prices won't be going up for at least a few more years.
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Old 10-04-2008, 07:58 PM
 
Location: Cincinnati
1,749 posts, read 7,772,924 times
Reputation: 775
A bunch of ARM loans are resetting this month. A bunch did last month. We've been having peaks that translate to about two large blips every quarter since this ARM reset disaster started. I have all the info re: whose ARM loans are resetting, how much, how much their payments and interest was, what they will be, loan balance, etc.
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Old 10-04-2008, 08:27 PM
 
141 posts, read 598,334 times
Reputation: 84
Many areas of southern California and parts of northern California have such high intrinsic value that there is no way the prices are going to move much, in some areas I would think they would not move at all. But yes overall home prices in California are dropping and by all accounts should continue to for the forseeable future but this is in areas like the inland empire, Sacramento, etc
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Old 10-05-2008, 12:58 AM
 
11,715 posts, read 36,670,103 times
Reputation: 7522
Quote:
Originally Posted by rickca View Post
Many areas of southern California and parts of northern California have such high intrinsic value that there is no way the prices are going to move much, in some areas I would think they would not move at all. But yes overall home prices in California are dropping and by all accounts should continue to for the forseeable future but this is in areas like the inland empire, Sacramento, etc
The value of anything is what someone is ready, willing, and able to pay you for it. How does real estate in certain parts of California escape this basic law of economics? Yes, certain areas are much more desirable than others but desire without will and ability = no sale. Anyone who thinks their neighborhood's home values are immune to market forces and the bigger economic picture is either smoking something or just has a serious case of denial and wishful thinking.
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Old 10-05-2008, 06:03 AM
 
59 posts, read 178,034 times
Reputation: 38
Quote:
Originally Posted by Drowningintherain2 View Post
Does this mean that you didn't buy a house in Valencia?

No...I am currently over-seas, but wanted to buy when I get back home. Now, I think I am going to hold out for a little longer. Still probably going to settle in Valencia because of the quality of life though!
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Old 10-05-2008, 06:08 AM
 
59 posts, read 178,034 times
Reputation: 38
Quote:
Originally Posted by EscapeCalifornia View Post
The value of anything is what someone is ready, willing, and able to pay you for it. How does real estate in certain parts of California escape this basic law of economics? Yes, certain areas are much more desirable than others but desire without will and ability = no sale. Anyone who thinks their neighborhood's home values are immune to market forces and the bigger economic picture is either smoking something or just has a serious case of denial and wishful thinking.
I 100% agree...how else do you explain being able to buy a house for 200K ten years ago and at it's peak 800K, now 500K. Socal is popular, but it's median income does not support the 1000's of houses on the market for 400K plus! It's simple economics...if it could support it, than no one would be getting foreclosed on!
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Old 10-05-2008, 06:09 AM
 
59 posts, read 178,034 times
Reputation: 38
Quote:
Originally Posted by EscapeCalifornia View Post
The value of anything is what someone is ready, willing, and able to pay you for it. How does real estate in certain parts of California escape this basic law of economics? Yes, certain areas are much more desirable than others but desire without will and ability = no sale. Anyone who thinks their neighborhood's home values are immune to market forces and the bigger economic picture is either smoking something or just has a serious case of denial and wishful thinking.
I 100% agree...how else do you explain being able to buy a house for 200K ten years ago and at it's peak 800K, now 500K. Socal is popular, but it's median income does not support the 1000's of houses on the market for 400K plus! It's simple economics...if it could support it, than no one would be getting foreclosed on! Com' on...a 500K mortgage, with taxes and utilities, etc is more than 3500-4000 a month...that is A LOT of dinero for anyone to try to swing! Remember buying anhouse should be enjoyable, not make you broke!
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Old 10-05-2008, 10:19 PM
 
Location: La Cañada, CA
332 posts, read 2,021,728 times
Reputation: 164
I really don't understand what the hell is going on. I've been in the market for a condo or house in the West Hollywood/WeHo adjacent area for almost a year, and prices are nowhere near reasonable levels. There is absolutely nothing good out there for under $500k. I am single, have a 750 fico, close to a 6-figure income, and banks want 20% down for a 30 year fixed rate mortgage. HOW the hell are these places going to sell?

Housing HAS to come down much more... simply because banks do NOT trust anyone even with a lengthy, spotless credit history. What first-time homebuyer has enough cash on hand to put $100k or more down + have enough left over for furniture and move-in costs? No one!!!

The younger generation and upper-middle class is being completely shut out of homeownership in good areas with prices as high as they are. With credit this tight, 2-bedroom condos in desirable areas need to be 300-350k or less before housing recovers. Otherwise, when the cycle restarts, we'll definitely start seeing that massive rift between the rich and "poor" that everyone has been talking about. The current millionaires will own all the good properties, and everyone else will likely be renters for life.

Another thing... areas with good public school districts used to be magnets for young, successful couples with kids. Attendance at good school districts such as La Canada Unified has been sharply decreasing because baby boomers' kids have graduated and young families with kids cannot afford houses there. These areas are slowly becoming retiree havens. When attendance decreases, the schools get paid less... teachers get paid less... good teachers leave. Will they still be desirable neighborhoods? Will they start expanding their district territories to less-desirable areas, therefore bringing in some not-so-desirable kids into their school district in order to make their budget?

That's my take on it. What do you guys think?

Last edited by Rats; 10-05-2008 at 10:29 PM..
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Old 10-05-2008, 11:02 PM
 
11,715 posts, read 36,670,103 times
Reputation: 7522
Quote:
Originally Posted by Rats View Post
I really don't understand what the hell is going on. I've been in the market for a condo or house in the West Hollywood/WeHo adjacent area for almost a year, and prices are nowhere near reasonable levels. There is absolutely nothing good out there for under $500k. I am single, have a 750 fico, close to a 6-figure income, and banks want 20% down for a 30 year fixed rate mortgage. HOW the hell are these places going to sell?

Housing HAS to come down much more... simply because banks do NOT trust anyone even with a lengthy, spotless credit history. What first-time homebuyer has enough cash on hand to put $100k or more down + have enough left over for furniture and move-in costs? No one!!!

The younger generation and upper-middle class is being completely shut out of homeownership in good areas with prices as high as they are. With credit this tight, 2-bedroom condos in desirable areas need to be 300-350k or less before housing recovers. Otherwise, when the cycle restarts, we'll definitely start seeing that massive rift between the rich and "poor" that everyone has been talking about. The current millionaires will own all the good properties, and everyone else will likely be renters for life.

Another thing... areas with good public school districts used to be magnets for young, successful couples with kids. Attendance at good school districts such as La Canada Unified has been sharply decreasing because baby boomers' kids have graduated and young families with kids cannot afford houses there. These areas are slowly becoming retiree havens. When attendance decreases, the schools get paid less... teachers get paid less... good teachers leave. Will they still be desirable neighborhoods? Will they start expanding their district territories to less-desirable areas, therefore bringing in some not-so-desirable kids into their school district in order to make their budget?

That's my take on it. What do you guys think?
Desirable areas of coastal California have always commanded a premium but its gotten really out of hand in the last few years. Even crappy areas were selling for insane prices. I don't think areas like the west side of LA will ever become affordable for a single person, but I do think they'll come down quite a bit from current prices.
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