Is there any way prices can appreciate from here?

NEW -> Contingent Buyer Assistance Program
wantToLiveInIrvine - No. I think it covers the fundamental why soft-landing scenario is likely and why the future of housing is healthy. Did you spend the time to read it?





I am sure I can find more recent articles about why housing will never crash or why housing bubble is just a myth but I feel this article covers the fundamental and easy to read.





In fact, I think most economists do NOT think housing will crash. Majority think the bottom is either in first or second half of 2007. There are some who even think that the bottom is behind us and housing is currently rising.
 
From Bloomberg:





<a href="http://www.bloomberg.com/apps/news?pid=20601039&refer=columnist_baum&sid=aMEfUsHA556w">Banks That Took Greenspan's Advice Pay the Price: Caroline Baum</a>





Each side in a debate can find opinions to support their argument, particularly in financial markets where it is all a guess anyway. The real question is whom do you want to believe and why? Are there renters who want to believe prices will crash so they can buy at a better price? Absolutely. Does this color their judgement? You bet. Are their owners who want to believe in Pollyanna notions of continual appreciation? Of course. We all have our biases.





For me the question is one of risk and reward. With prices detached from their fundamentals, is there a chance of a significant price decline? With affordability at an all time low, is there a chance of significant price increases? Are the benefits of ownership worth the risks?





I have answered these questions for myself, and each individual must to the same. In the end we must all accept the consequences of what happens in the housing market, and nobody knows for sure. Personally, I am prepared to rent forever as this is the outcome if I am wrong. Whatever you opinion or actions might be, if you are wrong, are you prepared?
 
IrvineRenter - This last blog from you is what I've been trying to say as well, only you articulate it much better. Housing is such a basic need for everyone and a very personal one too so every decision for buying a home should be personal. The only consolation I have if I am wrong is that I plan on staying put for a while and home price will eventually rise back up, hopefully sooner than later :)-.
 
<p>red: </p>

<p>It might interest you to know who is on the "Policy Advisory Board" for the Joint Center for Housing Studies that is quoted in the 6 months old article you referenced above... here's the link: <a href="http://www.jchs.harvard.edu/people/pabmemberlist.html">http://www.jchs.harvard.edu/people/pabmemberlist.html</a>.</p>
 
<p>Red - I would agree with you that a national housing bubble on a catastrophic scale is probably not going to happen.</p>

<p>But Irvine is very different from the average national market and most of the papers & studies I find regarding the housing bubble are mostly talking about the national market at large. So I wonder how relevant these national studies are really to our situation specifically.</p>

<p>Regards,</p>

<p>Muzie</p>
 
<p>What Red is doing is human nature. Even though many of us might claim that we're nearly open to "alternate views," it is just plain human nature to seek evidence to affirm a decision we've made. Not many people have a legitimate interest in disproving the validity of their judgement.</p>

<p>I'm sure that if I took the plunge and put a deposit down, all the energy I currently spend (hoping prices retreat) would go into the opposite (I hope prices hold firm and my decision was good). Neither will have an effect on the outcome, though! :]</p>

<p>BTW, I'm not saying Red is right or wrong...if someone has 20% down and a solid time horizon for staying in the house, they might not be better off waiting.</p>

<p>Crucial, great find on the source of that info.</p>

<p>SCHB</p>
 
Muzie,





Yes I agree local market and national market are different. But housing bubble seems to be a national phenomena, in fact it is probably a global issue. Europe, Australia, and many parts of Asia have seen housing price doubles or triples just in the last few years, and are facing affordability issue similar to ours.





Now I dont know if we need to start a discussion about global housing and how it relates to us but I think Europe and Australia are ahead of us, i.e. they have had 10% price correction a year or two ago and now price is rising. China also have seen housing price just keep on rising and recently put a restriction on foreign buyers. So we are not alone for sure.





But I actually find this article to be somewhat fitting to our local market and to this thread specifically.





For example it covers how foreign immigrants, graying boomers, changing household composition will keep demand intact for the next 10 years. On the supply side, it touches the risk of foreclosure, and how goverment regulation (land restriction, zoning laws) can limit supply. And at the end the article also mentions "a lot of different areas have their own characteristics and it's hard to generalize."





Of course as crucialtaunt points out, those Harvard boys may have their own agenda. I can't comment to this. But from reading the content, to me it presents a strong argument to why housing wont crash and may keep on rising, which I believe what IrvineRenter asked at the beginning of the thread.
 
SCHB - yes, I have no question that it is human nature. As I mentioned before, I visited this blog is to find info regarding new home in Irvine. I didn't expect to see discussion about how housing is about to crash and how bad timing it is to purchase now. So I might have joined the wrong blog :) and may have overreacted a bit.





On the other hand, I am open-minded enough to sacrifice my deposit if either one of you or the near future market situation itself convince me that a housing crash is imminent.
 
<p>For what it's worth, I spotted this on another housing blog today. He didn't site his source but it looks like Dataquick LA Times charts.</p>

<p>









ORANGECOUNTY SINGLE-FAMILY RESALE HOUSES









PRICE PER SQUARE FOOT MONTHLY CHANGE









</p>

<p> 2006 2005


JUNE 444 404


JULY 433 -2.48% 412 1.98%


AUG 435 0.46% 418 1.46%


SEP 435 0.00% 423 1.20%


OCT 427 -1.84% 424 0.24%


NOV 419 -1.87% 430 1.42%


DEC 412 -1.67% 430 0.00% </p>

<p>Of course, median price/sf is far from a perfect metric since it ignores other quality factors. But you can make <a href="http://piggington.com/january_housing_data">a good case</a> that it's better than the "plain vanilla" median. In any case, the number is on a clear downtrend and we are back at summer 2005 levels. Interesting. I'm very curious about where the JAN number will be.</p>
 
"Just one month into the first quarter of 2007, already 50,404 foreclosure filings have been reported in the Southwest — more than half the 94,631 filings for the region during the entire first quarter of 2006."





And California takes top honor,





"In the Southwest, California (25,107), Texas (10,296) and Colorado (4,968) continue to rank in the top 5 nationally for foreclosure filings, although Colorado’s rate is trending downward compared to the first quarter of last year, McGee said."





I wonder how Irvine is faring?





http://www.housingwire.com/2007/02/12/foreclosures-climb-dramatically-in-january/
 
<p>I just don't see homes appreciating from here. I see MultiFamily Residences doing so (as an investment), but stepping into one of those is a big money endavour.</p>

<p>As a DINK, equity evaporation is a very big deal. But I'm also of the idea if you want a house buy it, just be financially responsible about it (and theirin lies the catch). A house or property is a long term investment and always will be, to think of anything else would be foolhearty. I believe a lot of people in this area have become very spoiled with the giant housing appreciation rates.</p>

<p> </p>

<p>AND finally, As for cars, well its a labor of love, While nice brite shiney cars are cool, I'm all about performance and I'm FAR past performance that comes with any stock car. I do have my daily beater because there are so many people who just don't care about their vehicles as I do. But I agree with the lot here, I've just started buying my cars as of late or financing a meager few dollars (10-8k or less). Anyways good luck </p>

<p>-bix</p>
 
<p>From Zillow's <a href="http://zillow.mediaroom.com/index.php?s=press_releases&item=26">Press Release</a>....</p>

<p>"Five most expensive metropolitan areas (measured by Zindex):


-San Francisco-Oakland-San Jose, CA ($684,459)


-Salinas, CA ($654,503)


-Santa Barbara-Santa Maria-Lompoc, CA ($627,323)


-Honolulu, HI ($626,452)


-Los Angeles-Riverside-Orange County, CA ($545,409)"</p>
 
That is one weird grouping. LA, Riverside, Orange County. The price variance must be high. I wonder what the rankings would look like if OC was considered separately. Maybe in the middle of the pack?
 
<em>I stated in a previous comment that the foreclosure numbers would continue to spike upward and it is these foreclosures that would drive prices lower. Here we go:</em>





From Bubble Markets Inventory Tracking:


<a href="http://bubbletracking.blogspot.com/2007/02/wow-just-look-at-rate-of-increase.html" set="yes">Wow, Just Look at the Rate of Increase!</a>

<p>The numbers are from <a href="http://www.foreclosure.com/">foreclosure.com</a>. The first number is the # of foreclosures in SD, the second number is the # of total notice of defaults. The % is the amount of notice of default that go to foreclosure. We're not even half way done for Feburary and look at the increase!





<strong>San Diego County</strong>


08/25/05: 83/3,087 (2.7%)


06/15/06: 354/4,382 (8.1%)


10/31/06: 998/4,983 (20.0%)


11/30/06: 1,304/5,245 (24.9%)


12/30/06: 1,251/4,637 (27.0%)


01/30/07: 1,475/4,760 (31.0%)


02/13/07: 1,719/5,149 (33.4%)





Here's looking at The OC and Riverside County. I'll update the full list at the end of the month.





<strong>Riverside County</strong>


08/25/05: 84/7,250 (1.2%)


06/15/06: 420/9,561 (4.4%)


10/31/06: 652/5,798 (11.2%)


11/30/06: 838/6,856 (12.2%)


12/30/06: 976/5,804 (16.8%)


01/30/07: 1,206/6,318 (19.1%)


02/14/07: 1,351/6,589 (20.5%)





<strong>Orange County</strong>


08/25/05: 19/4,028 (0.5%)


06/15/06: 152/5,194 (2.9%)


10/31/06: 182/3,094 (5.9%)


11/30/06: 269/3,308 (8.1%)


12/30/06: 331/2,800 (11.8%)


01/30/07: 398/2,890 (13.8%)


02/14/07: 455/3,057 (14.9%)</p>
 
You must log in or register to reply here.
Back
Top