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Old 11-21-2008, 05:30 AM
 
Location: Irvine, CA to Keller, TX
4,829 posts, read 6,932,467 times
Reputation: 844

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Calif. home prices off 28.9%, nation's worst drop

California home prices were falling at a 28.85% annual rate in late October, worst decline in the nation, reports First American LoanPerformance. It’s the 18th consecutive month California has taken that dubious honor.

Calif. home prices off 28.9%, nation’s worst drop - Lansner on Real Estate - OCRegister.com
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Old 11-21-2008, 09:03 AM
 
Location: RSM
5,113 posts, read 19,768,787 times
Reputation: 1927
affordable in the desert and in the ghetto. not in the safe middle class areas
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Old 11-21-2008, 10:01 AM
 
Location: Orange
86 posts, read 244,058 times
Reputation: 35
exactly.

experts predict at least another 15-25% decline... this would need to happen to bring housing prices more in line with income & REAL lending standards.

FULL COVERAGE: SOUTHLAND HOUSING MARKET - Los Angeles Times
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Old 11-21-2008, 11:10 AM
 
11,715 posts, read 40,458,848 times
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Quote:
Originally Posted by brianguy View Post
exactly.

experts predict at least another 15-25% decline... this would need to happen to bring housing prices more in line with income & REAL lending standards.

FULL COVERAGE: SOUTHLAND HOUSING MARKET - Los Angeles Times
Even if the livable neighborhoods drop another 25%, they'll still be pretty expensive relative to incomes.
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Old 11-21-2008, 03:45 PM
 
3,853 posts, read 12,869,001 times
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Quote:
Originally Posted by EscapeCalifornia View Post
Even if the livable neighborhoods drop another 25%, they'll still be pretty expensive relative to incomes.
Lol yea I think that is the icing on the cake. The only reason homes got bid up was because the cost of lending was lower (low interest rate) and credit was easy to get. Now it is the exact opposite - banks afraid to lend even to people with good credit, verify all income, and high income required.

To make it worse, back then unemployment was low, now it is substantially higher which means the number of potential buyers has shrunk. Unemployed people aren't going to be in the market to buy, even if they've saved up for a couple years. Newly unemployed homeowners might be looking to sell and move down to something they can afford. More pressure to drive home prices down.

I am expecting a 50%+ drop across the board. The bad areas have already got there. The good areas are coming a long.
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Old 11-21-2008, 04:12 PM
 
120 posts, read 410,540 times
Reputation: 109
Its gonna drop way more!!! Sucks to be anyone who bought a home in the last 4 years or so.....

Last edited by serialdriller; 11-21-2008 at 04:54 PM..
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Old 11-21-2008, 04:50 PM
 
Location: Las Flores, Orange County, CA
26,329 posts, read 93,779,981 times
Reputation: 17831
Quote:
Originally Posted by killer2021 View Post
The only reason homes got bid up was because the cost of lending was lower (low interest rate) and credit was easy to get.
Why did this happen so dramatically in Southern California (as compared to Houston or Denver or Atlanta or Salt Lake City...)? Cost of lending was lower and credit was easy there too.
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Old 11-21-2008, 06:05 PM
 
11,715 posts, read 40,458,848 times
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Quote:
Originally Posted by Charles View Post
Why did this happen so dramatically in Southern California (as compared to Houston or Denver or Atlanta or Salt Lake City...)? Cost of lending was lower and credit was easy there too.
I think there's more of a gold rush mentality in California than other places. Everyone knows how quickly housing prices here can rise when you're in an up trend. And who doesn't know someone who made a lot of money on the booms of the 70's and 80's? Other places just don't have that reputation. When people saw it happening again, they were willing to take a lot of risk on what they saw as a sure thing. And a lot of people DID make money in this boom if they got in early enough and cashed out before the music stopped. Like a pyramid scheme, the earlier arrivals get rich, the late comers wind up holding the bag.
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Old 11-21-2008, 07:43 PM
 
Location: Las Flores, Orange County, CA
26,329 posts, read 93,779,981 times
Reputation: 17831
Quote:
Originally Posted by EscapeCalifornia View Post
I think there's more of a gold rush mentality in California than other places. Everyone knows how quickly housing prices here can rise when you're in an up trend. And who doesn't know someone who made a lot of money on the booms of the 70's and 80's? Other places just don't have that reputation. When people saw it happening again, they were willing to take a lot of risk on what they saw as a sure thing. And a lot of people DID make money in this boom if they got in early enough and cashed out before the music stopped. Like a pyramid scheme, the earlier arrivals get rich, the late comers wind up holding the bag.

I understand what you wrote. And it makes some sense. I just wish it could be quantified or something. I can't say this isn't the reason but it just seems like there's got to be something more tangible than "mentality".

Maybe I am being unrealistic that there is a purely economic model to explain this.
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Old 11-21-2008, 08:37 PM
 
566 posts, read 1,940,131 times
Reputation: 335
What difference will the cost of homes be when there are no jobs?
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