Welcome to the housing bottom

[EvaLSeraphim_IHB]

I'm thinking Graph lent out his cranky pants this morning.

If a person has an opinion that is contrary to one's own, I didn't realize it was necessary, or even desirable, to beat the OP into conforming submission. Sheesh, people, go get your coffee already.

 

[no_vaseline_IHB]

My worthless opinion is that we are at bottom now, and we are going to stay here for quite some time.

I think your Riverside neighborhood is (it is below rental parity).

I think Irvine has a LOOOONNNGGG way to go (it is above rental parity).

Why do you think Irvine is different than your neighborhood?

 

[rickhunter_IHB]

Sure. Whatever floats your boat.

If you are referring to beliefs as predictions, then some become true, and some become false.

Bringing "evidence" is just comforting oneself.

My worthless opinion is that we are at bottom now, and we are going to stay here for quite some time.

Maybe your opinion would be worth something if instead of just repeating the same thing over and over with no supporting evidence, you actually showed some reasoning, logic, and evidence for your opinion. do you have some evidence disputing the article quoted and linked? Or maybe you are just comforting yourself with a belief?

How 'bout making pointless and innaccurate statements? Is that comforting oneself as well?

 

[trrenter_IHB]

Sure. Whatever floats your boat.

If you are referring to beliefs as predictions, then some become true, and some become false.

Bringing "evidence" is just comforting oneself.

My worthless opinion is that we are at bottom now, and we are going to stay here for quite some time.

Maybe your opinion would be worth something if instead of just repeating the same thing over and over with no supporting evidence, you actually showed some reasoning, logic, and evidence for your opinion. do you have some evidence disputing the article quoted and linked? Or maybe you are just comforting yourself with a belief?

How 'bout making pointless and innaccurate statements? Is that comforting oneself as well?

The NAR keeps banging the "every neighborhood is different" drum and on this topic I think they are correct.

Now I am just speaking my opinion with no evidence but I would bet SOME area's have hit bottom and will stay there for quite some time.

I don't think OC is one of those area's.

 

[CapitalismWorks_IHB]

Sure. Whatever floats your boat.

If you are referring to beliefs as predictions, then some become true, and some become false.

Bringing "evidence" is just comforting oneself.

My worthless opinion is that we are at bottom now, and we are going to stay here for quite some time.

Maybe your opinion would be worth something if instead of just repeating the same thing over and over with no supporting evidence, you actually showed some reasoning, logic, and evidence for your opinion. do you have some evidence disputing the article quoted and linked? Or maybe you are just comforting yourself with a belief?

How 'bout making pointless and innaccurate statements? Is that comforting oneself as well?

The NAR keeps banging the "every neighborhood is different" drum and on this topic I think they are correct.

Now I am just speaking my opinion with no evidence but I would bet SOME area's have hit bottom and will stay there for quite some time.

I don't think OC is one of those area's.

Regardless of rental parity support levels indicating that a bottom may have been reached in many areas, there are a number of macro factors that could lead to further price drops including: rising unemployment, persistently high unemployment (remember it doesn't hurt THAT bad in month 3, but in month 15 look out below), sunset of the FED MBS purchase program, sunset of the federal tax credit, falling rents, a still increasing foreclosure pipeline.

Just because an area is selling at out below fundamental price support levels doesn't mean it can't fall further.

 

[trrenter_IHB]

Prices can almost always continue to decline there is no doubt about that.

I just think some places, detroit for instance, where you are as close to a bottom as you can be.

When you can buy a house for 10k the bottom isn't that far off unless people will get paid to actaully take a home.

 

[irvine_home_owner_IHB]

My worthless opinion is that we are at bottom now, and we are going to stay here for quite some time.

I think your Riverside neighborhood is (it is below rental parity).

I think Irvine has a LOOOONNNGGG way to go (it is above rental parity).

Why do you think Irvine is different than your neighborhood?

geo: Not being familiar with the exact prices in Riverside other than they were usually cheaper... what year pricing are they at? 2003? 1999? I need relativity data here... please don't NewSkip me.

Some places in Irvine are still at their 2004/05 level (if not higher) and even back then... prices were inflated... so I don't think bottom has hit here yet.

 

[bltserv_IHB]

It might be the bottom for some people. But for others. There is a "Hole in that Bottom" and

they are falling through it.

Until Unemployment improves and the availability of easy credit returns.

Home prices will continue to spiral down. It may have been slowed by all the incentives.

But the overall picture is NOT improving.

Todays CNBC Headline. Mortgage Delinquencies Rise Alongside Unemployment.

http://www.cnbc.com/id/32952470

 

[Geotpf_IHB]

My worthless opinion is that we are at bottom now, and we are going to stay here for quite some time.

I think your Riverside neighborhood is (it is below rental parity).

I think Irvine has a LOOOONNNGGG way to go (it is above rental parity).

Why do you think Irvine is different than your neighborhood?

Whether or not an area is below rental parity has only a minimal relation to whether or not that area has hit bottom. There are other reasons why demand for rentals is higher or lower than normal in relation to demand for purchases.

For example, poorer areas have more people with no down payment, unsteady or undocumented income, and poor credit. This is less of a problem when banks are giving loans to anybody with a pulse; more so when they return to traditional, conservative lending standards. Rich people are more likely to have large or 100% down payments, good credit, and documented, steady income. They are also more likely to believe renting is "beneath" them.

Therefore, poor areas will be more likely to have renting being a worse proposition (vs. owning) than expensive areas. Irvine, being an expensive area, may never hit rental parity.

Another factor would be number of people living in an area for a short period of time. College towns would have lots of those types of people. Of course, both Irvine and Riverside have a UC, so that's probably not a factor, except in neighborhoods very near such.

 

[Geotpf_IHB]

My worthless opinion is that we are at bottom now, and we are going to stay here for quite some time.

I think your Riverside neighborhood is (it is below rental parity).

I think Irvine has a LOOOONNNGGG way to go (it is above rental parity).

Why do you think Irvine is different than your neighborhood?

geo: Not being familiar with the exact prices in Riverside other than they were usually cheaper... what year pricing are they at? 2003? 1999? I need relativity data here... please don't NewSkip me.

Some places in Irvine are still at their 2004/05 level (if not higher) and even back then... prices were inflated... so I don't think bottom has hit here yet.

In some cases, the same Riverside property sold for the same price in 2009 as it did twenty years earlier. Factoring in inflation, and it's even worse.

Edit: Here's an example of what I mean:

7964 Stella Street

Property History

Date Event Price Appreciation Source

Jun 29, 2009 Sold $140,000 -33.3%/yr Public Records

Aug 09, 2006 Sold $450,000 13.2%/yr Public Records

Jul 23, 1996 Sold $130,000 0.0%/yr Public Records

Jun 01, 1989 Sold $130,000 -- Public Records

So, ignoring the ridiculous $450k sale in 2006, and the price went up not at all between 1989 and 1996, and by only 7.6% between 1996 and 2009.

 

[no_vaseline_IHB]

My worthless opinion is that we are at bottom now, and we are going to stay here for quite some time.

I think your Riverside neighborhood is (it is below rental parity).

I think Irvine has a LOOOONNNGGG way to go (it is above rental parity).

Why do you think Irvine is different than your neighborhood?

Whether or not an area is below rental parity has only a minimal relation to whether or not that area has hit bottom. There are other reasons why demand for rentals is higher or lower than normal in relation to demand for purchases.

For example, poorer areas have more people with no down payment, unsteady or undocumented income, and poor credit. This is less of a problem when banks are giving loans to anybody with a pulse; more so when they return to traditional, conservative lending standards. Rich people are more likely to have large or 100% down payments, good credit, and documented, steady income. They are also more likely to believe renting is "beneath" them.

Therefore, poor areas will be more likely to have renting being a worse proposition (vs. owning) than expensive areas. Irvine, being an expensive area, may never hit rental parity.

Another factor would be number of people living in an area for a short period of time. College towns would have lots of those types of people. Of course, both Irvine and Riverside have a UC, so that's probably not a factor, except in neighborhoods very near such.

Thank you for going to the trouble to respond, but it's doesn't explain Santa Ana vs Riverside. Santa Ana still is at a big premium over Riverside, but with none of the positive atributes (no university) it's not alone - Cypress and Anacrime come to mind without much trouble. I'll look up the census data for those cites here shortly.

On edit: shortly is here now.

US Census cite, look up any city you want!

Riverside

Median household income, 1999 $41,646

Per capita money income, 1999 $17,882

Santa Ana

Median household income, 1999 $43,412

Per capita money income, 1999 $12,152

The facts show that Santa Ana is poorer per capita (more kids) but higher median than than Riverside.

Current Data Quick Info

SANTA ANA 295 $245,000 $310,000 -20.97%

RIVERSIDE 580 $175,000 $265,750 -34.15%

The facts show that Santa Ana is a premium to Riverside.

Data Quick Cite

 

[Geotpf_IHB]

My worthless opinion is that we are at bottom now, and we are going to stay here for quite some time.

I think your Riverside neighborhood is (it is below rental parity).

I think Irvine has a LOOOONNNGGG way to go (it is above rental parity).

Why do you think Irvine is different than your neighborhood?

Whether or not an area is below rental parity has only a minimal relation to whether or not that area has hit bottom. There are other reasons why demand for rentals is higher or lower than normal in relation to demand for purchases.

For example, poorer areas have more people with no down payment, unsteady or undocumented income, and poor credit. This is less of a problem when banks are giving loans to anybody with a pulse; more so when they return to traditional, conservative lending standards. Rich people are more likely to have large or 100% down payments, good credit, and documented, steady income. They are also more likely to believe renting is "beneath" them.

Therefore, poor areas will be more likely to have renting being a worse proposition (vs. owning) than expensive areas. Irvine, being an expensive area, may never hit rental parity.

Another factor would be number of people living in an area for a short period of time. College towns would have lots of those types of people. Of course, both Irvine and Riverside have a UC, so that's probably not a factor, except in neighborhoods very near such.

Thank you for going to the trouble to respond, but it's doesn't explain Santa Ana vs Riverside. Santa Ana still is at a big premium over Riverside, but with none of the positive atributes (no university) it's not alone - Cypress and Anacrime come to mind without much trouble. I'll look up the census data for those cites here shortly.

Maybe just being closer to prime areas alone explains the difference? The big negative to Riverside is the distance to most jobs.

 

[no_vaseline_IHB]

Maybe just being closer to prime areas alone explains the difference? The big negative to Riverside is the distance to most jobs.

Might be part of it.

 

[awgee_IHB]

Mortgage Delinquencies Rise Alongside Unemployment

 

[matt138_IHB]

Anybody try to do their own affordability index?

I did. Don't know if my calculations/thought process are/is correct, but assuming 4% inflation; it looks to me like we are at mid 90s affordability. Assuming 3% inflation, it moves affordability parity up a couple years toward the 2000s.

Since they can definitely keep rates this low forever, we are out of the woods.

 

[no_vaseline_IHB]

Since they can definitely keep rates this low forever, we are out of the woods.