Comments on: Erica predicts your news headlines for 2007

By: Living Off Dividends & Passive Income

Living Off Dividends & Passive Income — Wed, 16 Jul 2008 22:42:33 +0000

it terms out you were extremely prescient!

I hope you profited from your insight!

By: CABubbleologist

CABubbleologist — Fri, 22 Feb 2008 23:52:13 +0000

Hello….I’m with you….Have been saying pretty much the same thing since 2005 or before. Just waiting for the bubble to burst. Simply charting median housing prices vs. median incomes over the past 10 years or so tells the story.

Just one comment: 62.5% gain in 10 years is 4.7% per year…don’t forget about compounding interest.

Simple equation: (ln(520,000/325,000))/10 years = 4.7%/yr.

By: JUST ANONYMOUS

JUST ANONYMOUS — Thu, 18 Jan 2007 17:47:42 +0000

I just hope the Las Vegas condo market crashes big time in 2007.I was cheated out of a condo buy in 2004 by greedy speculators.I am on my knees praying everyday that those evil speculators loose it all in 2007–go bankrupt for what they did to the average person just trying to buy a place to live in– not to buy and flip.

By: Janet

Janet — Tue, 29 Aug 2006 00:02:37 +0000

I’m impressed with your bravery and intelligence….and from such youth!
I’m a Sarasota agent who’s spent the last year pouring same ice water on an unhappy public. The buyers who listened and waited actually like me! I tell sellers to get what they can get and get out now, (unless certain commercial). Exchanging US cash for gold or stable currency is wise insurance.

By: stoolpigeon

stoolpigeon — Sat, 19 Aug 2006 02:40:20 +0000

How many people are moving to Phoenix everyday?
How significant is 55,000 homes for sale in the 5th largest city in the U.S.?
How many people are moving to Florida every day?

I think it is quite possible that both markets were extremely under-priced and have finally caught up to where they ought to be.

You might be right, but I doubt it.

By: FG

FG — Wed, 16 Aug 2006 04:41:24 +0000

Sounds good to me. Maybe I’ll be able to buy a place in 2 or 3 years!

By: Paul

Paul — Mon, 14 Aug 2006 04:36:32 +0000

In general I agree, but there are several wrinkles that make the blanket disaster uneven.
1. Loss of population does not mean, itself, a reduction in housing demand – the average size of the family unit has been declining rapidly since 1950 as has the demand per person for space – there were effectively no one or two person family units soaking up a 2 bedroom living space in 1950, so the population drop may or may not affect demand.
2. I think there is evidence that there are two or three highly disconnected markets in the Bay Area. One is costal or close in high value property which has demand from those moving up locally, and those moving here to retire, and as one of the marketing groups calls them, the Winner’s Circle houses. (These houses have 30 year mortgages – at risk if there is an earthquake, or a general depression – most of the owners aren’t going anywhere) This is the $1M-3M segment (the +3M segment is small and more variable). The second market is the entry/middle range housing where most people have ARM and there are more funky loans. This market is at huge risk of going sideways. Less so in the very highly desirable neighborhoods in SF (Noe, Castro, Twin Peaks, the Hill) more so elsewhere. As you indicated the outer xburgs (Tracy, and even Concord and Sacto) are at enormous risk, since they are generally far from jobs, are new – so have huge rates of funky loans, and if the inner mid market crashes, people will try to move inward to cut commute times.
Lastly, as has been amply pointed out, the condo market is highly crashable, since, again unless you are on the coast, supply is huge, they are inferior goods to houses, and mostly they aren’t in the desirable areas which will be somewhat supported by new migration.

So my predictions are:
High End $1-3M nice areas + costal + walkable neighborhoods in SF, Berkeley, Palo Alto. Down about 10% +/- 5%
Inner Bay area median to low end – down ~15-20% +/- 10%
Outer super commute areas – down ~20-25% +/-10%
Condos (excluding aforementioned SF/Berk/Palo Alto walkables) down 25%+ Condos in least desirable areas down 35% plus.

I think the rent disconnect is largely due to much of the dot com job loss being among the under 30 set, where the plus 30 set, who had houses, lost jobs at a much lower rate, so rental demand crashed (after a big supply finally came on line) but housing demand did not.

By: David Reid

David Reid — Sun, 13 Aug 2006 23:14:31 +0000

I’m really glad I don’t work for a company with “Realty” in the name anymore.