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Old 01-13-2018, 05:50 PM
 
Location: San Diego
774 posts, read 1,773,814 times
Reputation: 471

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2007 Bubble: normal salaries, normal rent, normal interest rates, high prices

Today: normal salaries, high rent, low interest rates, high prices

It seems like the high prices today are justified by the high rent and low interest rates, but what would in today's market justify rents that are 80% higher than in 2007, while the salaries are similar?
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Old 01-13-2018, 05:54 PM
 
Location: Raleigh NC
25,119 posts, read 16,149,377 times
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today's rent in San Diego = 80% higher than 2006/2007 peak?

median income today = same as back then?

How many folks live in SD? Whats the difference from back then? How many multi-family units are there now vs then?
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Old 01-13-2018, 05:56 PM
 
3,403 posts, read 3,561,250 times
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No one really knows until the housing market collapse. Even with few individual who saw the bubble on 2012, nothing can prevent it from happening. Also, banks are too big to fail, so if it happens again, the government will bail those banks out again with taxpayer money.
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Old 01-13-2018, 06:17 PM
 
Location: San Diego
774 posts, read 1,773,814 times
Reputation: 471
Quote:
Originally Posted by BoBromhal View Post
today's rent in San Diego = 80% higher than 2006/2007 peak?

median income today = same as back then?

How many folks live in SD? Whats the difference from back then? How many multi-family units are there now vs then?
I guess you are right. Maybe it's a local phenomenon.

Apparently, San Diego was/is growing faster than any other major city in the US.
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Old 01-13-2018, 07:45 PM
 
Location: Raleigh NC
25,119 posts, read 16,149,377 times
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oh no, it's merely a question to better understand what you're saying is going on.

If your question only pertains to SD, then I think there's a CD forum for SD.

If you're talking about the economy in general, then let's get the stats and talk it out. You just mentioned SD.

I will say - any "bubble" at this very moment is relegated to CA and some eastern metropolises. But you should look up what happened to DC prices: Irrational Exuberance -> Blip -> Large Gains
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Old 01-13-2018, 07:59 PM
 
Location: East of Seattle since 1992, 615' Elevation, Zone 8b - originally from SF Bay Area
44,346 posts, read 80,679,251 times
Reputation: 57356
Where are salaries “similar” to 2007? Mine for example is 3x higher now. In our city the median family income now is $167,000, up 64.8% since 2000. Statewide here in WA incomes are up 46.6%.


//www.city-data.com/income/inco...ashington.html
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Old 01-13-2018, 11:55 PM
 
13,711 posts, read 9,207,897 times
Reputation: 9845
Quote:
Originally Posted by max.b View Post
2007 Bubble: normal salaries, normal rent, normal interest rates, high prices

Today: normal salaries, high rent, low interest rates, high prices

It seems like the high prices today are justified by the high rent and low interest rates, but what would in today's market justify rents that are 80% higher than in 2007, while the salaries are similar?

During the last housing bubble, we had a job-loss economy that was about to enter a recession but housing prices kept climbing; which made no sense at the time.

Now, we have a booming economy (at least for the coastal cities), super low unemployment, and to top it off - loads of foreign cash (usually from China). So it makes perfect sense that housing prices is high.

Housing is driven by the economy. It will crash when the economy crashes, whenever that may be. But this economy is looking like it has legs.

.
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Old 01-14-2018, 06:44 AM
 
Location: Amelia Island/Rhode Island
4,922 posts, read 6,036,042 times
Reputation: 6297
Quote:
Originally Posted by BoBromhal View Post
today's rent in San Diego = 80% higher than 2006/2007 peak?

median income today = same as back then?

How many folks live in SD? Whats the difference from back then? How many multi-family units are there now vs then?
We are experiencing tremendous growth in northeast Florida and all those subdivisions you saw go belly up in the last housing crash have since filled up and expanded to their limits, only to move on to more vacant land.

Rentals here way are up along with housing. Median income has risen slowly but it is in an upward climb.

Our home state of RI is experiencing climbing home prices and limited availability in rentals also.

I quoted the above post about San Diego as in 2010 I finally found a position in my field I could transfer to finish my career. Our plan was to rent our house and return in 12 years when I retired. We were going to rent in SD. There was going to be a pay increase and the numbers were close on affordability. My wife the adventurer said let's go. Me, my gut said stay along with those family and friends living in California that warned me the costs would soon swallow me up. We stayed put here and I bummed out about my decision.

Eight years later and SD has rebounded to the point where I would have had to transfer back or send the wife and twins back and find an apartment to share. Needing a rental in a good school district and only bringing in 90k a year would not have cut it in today's enviorment.

It is not only SD.......look at Los Angeles and what is transpiring in Compton and the Boyle Heights area. Entry level homes at 400k. Some still come with bars on the windows.

As far as my love affair with California it began visiting family who were living in Hollywood at age four. I spent a good bit of time over the years visiting family and friends and exploring every square inch of California. When we finally had the opportunity it was not financially possible for us. California was not just something I saw on TV and wanted to experience it was a place I wanted to live with all it plus's and minuses.

Now we find ourselves in the same real estate market here on the east coast of Florida living in close proximity to the ocean in a house we could no longer afford to buy ar return to if we sold. Rentals literally go by word of mouth or within days if listed.

Last edited by JBtwinz; 01-14-2018 at 07:06 AM..
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Old 01-20-2018, 07:45 PM
 
Location: CDA
521 posts, read 730,962 times
Reputation: 988
It's hard to say. We bought our home in SD in 2015 and I remember thinking prices were high then and were going to decline once interest rates started increasing. Well that took a long time to happen and is still very gradual. I think the inventory will stay relatively low since many people refinanced to get those low rates so won't want to move anytime soon and may just remodel their homes instead. Of course everything is cyclical but it's hard to know if this is a new floor or ceiling.
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Old 01-23-2018, 10:20 AM
 
8,228 posts, read 14,186,965 times
Reputation: 11233
I just got this a few minutes ago in an email from a realtor

https://www.cnbc.com/2018/01/02/home...edium=referral

Im in the market so I feel like I can tell people that the market will continue to rise and hold steady - until I buy.
Beause I always lose at real estate.
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