Let's talk home prices
- Thread starter Talyssa
- Start date
NEW -> Contingent Buyer Assistance Program
I honestly dont' think anyone actually "learned their lesson" abotu this at all. I think the only thing stopping people from pulling money out of their homes is the fact that there isn't any money to pull out. If they could they would - ESPECIALLY since interest rates on mortages are so low and plenty of people still have other higher interest debts out there And if the banks still thought they could make money foreclosing on your house, they'd still be offering helocs. Its just that right now they know that its a money losing proposition in most cases . If suddenly everyone in america had 50% equity in their homes you'd see all the same ads you saw in the bubble. "The market" is not terribly smart in the long term because its terribly difficult to predict long term profit/loss and terribly easy to see how you can flip a house in 6 months and make money.
Anyway, no lesson learned BUT everything was so incredibly inflated (and still is) that I don't see where appreciation can come from in the next 10 years (aside from inflation - and by the way, when 'everyone' is buying gold that tells me its probably not that great of an idea anymore....'everyone' was flipping houses too and look how that turned out. The people who started early did fine. the people who are starting now are probably gonna get screwed).
I do wonder how many people will chose to move out of state. SOME did during the bubble (and almost all of them moved to OTHER bubbles that looked cheaper by comparison, like vegas, arizon, portland) and the reason i heard from most was "I'll never be able to afford to buy in california" -- but I never hear people talk about moving away anymore (except for a friend of mine who is jonesing to move to NYC). And sure home prices dropped a bit but as we've been discussing they are still very out of reach for a lot of people.
I wonder if the crash made people leery of buying in general - if you were a renter during the bubble, there's a good amount of schadenfreude there. There was that early cycle where you were too young/too poor to buy (2000-2003) but everyone wanted to, then the middle where you COULD have bought at 2000-2003 prices but not at current prices (2003-2006) so you were stuck as a renter, and then the 2 year period where you got caught up in the bubble talk (2006-2008) and then the long slow collapse. So now as far as you can see, being a renter has put you in a pretty stable financial position and being a home owner would have put you in a pretty bad one (unless you could have bought in 2000 but again - too young at that point or too unestablished). So now, renting doesn't look so bad, you like your apartment, they replace your carpets every 2 years, and if you don't like it you can move. Heck if you move every two years you get a freshly painted, recarpeted, repaired place to live. how many people even are sure that they WANT to buy anymore? I mean those of us sitting around on housing blogs and forums obviously still do..... but i'm certainly not in any hurry.
It will take government deregulation for that to happen. There would have to be significant credit expansion and poor oversight again for us to get back to bubble type appreciation.
I don't forsee that within the next decade but collective memory and the pain fades over time. So I guess "forever" is a long time but you will have to wait a whole generation before the good times roll again.
LAtoOC said:
I honestly dont' think anyone actually "learned their lesson" abotu this at all. I think the only thing stopping people from pulling money out of their homes is the fact that there isn't any money to pull out. If they could they would - ESPECIALLY since interest rates on mortages are so low and plenty of people still have other higher interest debts out there And if the banks still thought they could make money foreclosing on your house, they'd still be offering helocs. Its just that right now they know that its a money losing proposition in most cases . If suddenly everyone in america had 50% equity in their homes you'd see all the same ads you saw in the bubble. "The market" is not terribly smart in the long term because its terribly difficult to predict long term profit/loss and terribly easy to see how you can flip a house in 6 months and make money.
Anyway, no lesson learned BUT everything was so incredibly inflated (and still is) that I don't see where appreciation can come from in the next 10 years (aside from inflation - and by the way, when 'everyone' is buying gold that tells me its probably not that great of an idea anymore....'everyone' was flipping houses too and look how that turned out. The people who started early did fine. the people who are starting now are probably gonna get screwed).
I do wonder how many people will chose to move out of state. SOME did during the bubble (and almost all of them moved to OTHER bubbles that looked cheaper by comparison, like vegas, arizon, portland) and the reason i heard from most was "I'll never be able to afford to buy in california" -- but I never hear people talk about moving away anymore (except for a friend of mine who is jonesing to move to NYC). And sure home prices dropped a bit but as we've been discussing they are still very out of reach for a lot of people.
I wonder if the crash made people leery of buying in general - if you were a renter during the bubble, there's a good amount of schadenfreude there. There was that early cycle where you were too young/too poor to buy (2000-2003) but everyone wanted to, then the middle where you COULD have bought at 2000-2003 prices but not at current prices (2003-2006) so you were stuck as a renter, and then the 2 year period where you got caught up in the bubble talk (2006-2008) and then the long slow collapse. So now as far as you can see, being a renter has put you in a pretty stable financial position and being a home owner would have put you in a pretty bad one (unless you could have bought in 2000 but again - too young at that point or too unestablished). So now, renting doesn't look so bad, you like your apartment, they replace your carpets every 2 years, and if you don't like it you can move. Heck if you move every two years you get a freshly painted, recarpeted, repaired place to live. how many people even are sure that they WANT to buy anymore? I mean those of us sitting around on housing blogs and forums obviously still do..... but i'm certainly not in any hurry.
irvinehomeowner
Well-known member
Initially, renting was okay for us... but if you have a family, I think it has to be a long term rental because moving every year is just a pain. You have way more stuff when you have kids and it's just not fun (my feet still hurt from the last move).
I do think prices are way out of whack for starter and move-uppers... realistically... we are older than we should be at this stage in life and although it means we have more income... if we had our salaries from 10 years ago today... we probably couldn't even afford a 3BR SFR in Irvine.
I do think prices are way out of whack for starter and move-uppers... realistically... we are older than we should be at this stage in life and although it means we have more income... if we had our salaries from 10 years ago today... we probably couldn't even afford a 3BR SFR in Irvine.
iacrenter
Well-known member
LAtoOC said:
It will take government deregulation for that to happen. There would have to be significant credit expansion and poor oversight again for us to get back to bubble type appreciation.
I don't forsee that within the next decade but collective memory and the pain fades over time. So I guess "forever" is a long time but you will have to wait a whole generation before the good times roll again.