Next housing dip? (houses, purchase, incomes)

[HappyinCali]

Originally Posted by 04kL4nD

Fair enough. This is a rational explanation of your OPINION on what's going to happen. None of us has a crystal ball and only time will tell. I think things are going to get much, much worse before they get better, but that's because I'm trying to be realistic and objective about what's going on in the world right now. It sure doesn't look good.

See, we can get along

[phantompilot]

Inflation and taxes eat most of the appreciation in the housing market. You need 3.2% annually just to keep up. Its almost impossible to find SFR in the Bay Area that has a cap rate high enough to realize any real gain.

[Perma Bear]

Originally Posted by phantompilot

Inflation and taxes eat most of the appreciation in the housing market. You need 3.2% annually just to keep up. Its almost impossible to find SFR in the Bay Area that has a cap rate high enough to realize any real gain.

Adjusted for inflation those houses should be 100k. I think they did fine.

[Ultrarunner]

Originally Posted by jade408

Try reading this. People were so P.O.ed a qualified black guy became president, he had to be followed up with a supremely unqualified white guy who hadn't even held any political office ever or worked somewhere that wasn't seeded by his family.

https://www.theatlantic.com/magazine...coates/537909/

I believe you are right.

There would be no Trump Presidency without an Obama Presidency....

Makes for wild speculation for what comes next.

Real Estate has always been very cyclical here in the SF Bay Area... and Real Estate on the large scale is not without risk... many Trump type Developers have went BK... some come back, but many don't.

Advice is two fold...

Buy what you can afford to hold onto if you buy and then stay the course.

Tried to convince many they shouldn't opt for a foreclosure or short sale... only a few listened...

Most told me they were cutting their housing costs 50% or more and very true in the short term... but, to every last one they wished they would have stayed the course in retrospect.

These are people that didn't loose their jobs...

[Independentthinking]

Originally Posted by Ultrarunner

Tried to convince many they shouldn't opt for a foreclosure or short sale... only a few listened...

Most told me they were cutting their housing costs 50% or more and very true in the short term... but, to every last one they wished they would have stayed the course in retrospect.

These are people that didn't lose their jobs...

I remember a couple of people that reacted the same way and said everyone was telling them how dumb they were in 2010 when the valuation of their home had hit its lowest mark. Ironically, the people that were mocking them are the same people now that are whining about high prices and angrily insisting we'll have a crash (actually they are more like hoping and praying but really can't explain why that should happen). And as you've said numerous times, were so busy being critical of others that they didn't realize what was likely a once-in-a-lifetime opportunity for them.

[1AngryTaxPayer]

Originally Posted by Independentthinking

I remember a couple of people that reacted the same way and said everyone was telling them how dumb they were in 2010 when the valuation of their home had hit its lowest mark. Ironically, the people that were mocking them are the same people now that are whining about high prices and angrily insisting we'll have a crash (actually they are more like hoping and praying but really can't explain why that should happen). And as you've said numerous times, were so busy being critical of others that they didn't realize what was likely a once-in-a-lifetime opportunity for them.

We had friends like that, which chose to sit on the fence during the last crash. Now they are priced out. They keep talking about how they are going to buy in the next crash. The bottom of the next one most likely won't be anywhere near that of the last one. May not even be near the highs today.

Some areas near the beach that were pretty ghetto are tomorrow's deals.

[phantompilot]

Originally Posted by Perma Bear

Adjusted for inflation those houses should be 100k. I think they did fine.

What houses are you talking about that "should" be 100K?

Do you realize that 100K today is the same as $14.5k back in 1968?

So if the only factor in housing prices was monetary inflation, then sure, a house that only cost $14.5K back in 1968 would today be 100K. But first of all, that would be a crazy cheap house. Even some crappy tract house was $30K.

But in addition to inflation, there is also the cost of maintenance, taxes, improvements, etc. Then there is also scarcity. Then there is also the cost of government regulations (compared to the original cost of the home, this is by far the largest single category of additional cost, given that "impact fees" routinely total to over six figures in the Bay Area)

I'm just baffled as to your statement...it doesn't appear you have considered any factor except for inflation, and not even that correctly.

[Perma Bear]

Originally Posted by phantompilot

What houses are you talking about that "should" be 100K?

Do you realize that 100K today is the same as $14.5k back in 1968?

So if the only factor in housing prices was monetary inflation, then sure, a house that only cost $14.5K back in 1968 would today be 100K. But first of all, that would be a crazy cheap house. Even some crappy tract house was $30K.

But in addition to inflation, there is also the cost of maintenance, taxes, improvements, etc. Then there is also scarcity. Then there is also the cost of government regulations (compared to the original cost of the home, this is by far the largest single category of additional cost, given that "impact fees" routinely total to over six figures in the Bay Area)

I'm just baffled as to your statement...it doesn't appear you have considered any factor except for inflation, and not even that correctly.

That's the point. Those houses were 14.5k in 1968. Don't you get it? They could have torn down the forested areas around 280,680, and most of solano and kept up development.

[phantompilot]

Originally Posted by Perma Bear

That's the point. Those houses were 14.5k in 1968. Don't you get it? They could have torn down the forested areas around 280,680, and most of solano and kept up development.

No, they weren't that cheap. I was just using that number to illustrate what 100K adjusted for inflation implies. That's not really what those homes sold for.

But again, that isn't the point.

[Perma Bear]

Originally Posted by phantompilot

No, they weren't that cheap. I was just using that number to illustrate what 100K adjusted for inflation implies. That's not really what those homes sold for.

But again, that isn't the point.

They were 10k in the 50s when they were built, they were very affordable.