Where are home prices headed? (middle-class, real estate, rent)

[mama25]

I just wanted to get some opinions on what you think is going to happen with the housing market in southern california (mission Viejo, laguna hills, rancho santa margarita area). Do you think prices will be coming down a little more or maybe even a lot? or are they going up? California is in a lot of trouble right now, it rated the 5th highest state for unemployment.

Do you think it will be another year before things turn around?

We are on the fence about when to buy and we have a very tight budget so we would rather wait and get something we really love if prices will decline further.

Thanks

[EscapeCalifornia]

I don't see home prices going up until the economy improves and it hasn't even stopped declining yet. Without the crazy leverage of the bubble, we're seeing how few people really can afford those $800k houses which are currently sitting dead on the market.

[JohnG72]

Escape California is correct. I'd guess 25% more to drop on south oc real estate. I've heard much worse.

BUT

Be prepared and use this time to save. I'd expect rising interest rates and that means if you have a large down payment saved you will be in a good position.

[Narfcake]

The way I see it, with the job market the way it is and the economy as a whole ...

- The $500k+ will continue to decline in price, as it takes real money now to purchase that much of a house, both in down payments and monthly payments (ie. income).
- The $200-500k mid-market would see a slight decline and stabilize, as the middle-class finds out that a house is getting within their means to purchase.
- The sub-$200k would hold steady, as folks could now purchase for the same price or even less than a rent payment.

[bhcompy]

interest rates jumped nearly a point the week before last, so that will send down all housing as it effects affordability in a very cash strapped world

[Soccersupporter]

Originally Posted by mama25

I just wanted to get some opinions on what you think is going to happen with the housing market in southern california (mission Viejo, laguna hills, rancho santa margarita area). Do you think prices will be coming down a little more or maybe even a lot? or are they going up? California is in a lot of trouble right now, it rated the 5th highest state for unemployment.

Do you think it will be another year before things turn around?

We are on the fence about when to buy and we have a very tight budget so we would rather wait and get something we really love if prices will decline further.

Thanks

Check out this link.
What Your Home Will Be Worth in 2012: Our Predictions - BusinessWeek

[Charles]

Existing threads:

//www.city-data.com/forum/orang...e-heading.html

//www.city-data.com/forum/orang...y-not-buy.html






YouTube - The Mortgage Meltdown

[jkanderson521]

[quote=Charles;9379949]Existing threads:

//www.city-data.com/forum/orang...e-heading.html

//www.city-data.com/forum/orang...y-not-buy.html


Charles, excellent post, thanks for adding the graph on Mortgage resets.

Prices are not going to fully "bottom" out for another couple of years 2012. However, even then, it is unlikely that home prices will return to inflation adjusted highs within a generation.

Another fact that people miss is that the next generation of buyers Gen X and Y constitute half the number of people in the Baby Boom cohort and with the punishing losses in other asset values, Baby boomers who will need money to fund retirement costs will liquidate assets, particularly homes they no longer need in order to provide the money necessary to live. The next generation does not have the money to pay for all the overpriced real estate while also being ladeled with oppressive taxes to fund Baby Boomer entitlements. (no offense to Baby boomers, just economic reality, look at Medicare cost estimations to find out just how bad it will be).

The days of flipping a home for enormous amounts of effortless profit are over. Homes will revert back to shelter, as they should be rather than the non productive investment vehicle they have been for the last couple of years.

[Charles]

Originally Posted by jkanderson521

.

Prices are not going to fully "bottom" out for another couple of years 2012. However, even then, it is unlikely that home prices will return to inflation adjusted highs within a generation.

Another fact that people miss is that the next generation of buyers Gen X and Y constitute half the number of people in the Baby Boom cohort and with the punishing losses in other asset values, Baby boomers who will need money to fund retirement costs will liquidate assets, particularly homes they no longer need in order to provide the money necessary to live. The next generation does not have the money to pay for all the overpriced real estate while also being ladeled with oppressive taxes to fund Baby Boomer entitlements. (no offense to Baby boomers, just economic reality, look at Medicare cost estimations to find out just how bad it will be).

The days of flipping a home for enormous amounts of effortless profit are over. Homes will revert back to shelter, as they should be rather than the non productive investment vehicle they have been for the last couple of years.

Sounds like great news for people who may want to move to and buy in California in the next couple years.

[MotleyCrew]

I like to read the Dr. Housing Bubble's report. He has been on target for two years now with his data. His take is that housing, especially the higher end homes will continue downward. Until salaries and jobs come back, Calif is still overpriced. Anyway, his web site is drhousingbubble.com.