Southern California Real Estate Bubble Crash Blog

6 Responses to “Notable Quotes:”

1. JimAtLaw says:

   June 13, 2007 at 2:44 pm

   “Simply requiring a down payment of as low as 5 percent will disqualify one in four of the first-time buyers who were IMPAC customers a year ago, Chawla said.”

   Ah, but that only works if prices are such that first time buyers can actually come up with 5%! If a piece of crap condo in the valley goes for $600,000, how many first time buyers are coming up with $30,000 cash? Damn few! If someone makes $60k and takes home 45, that’s saving a almost a fourth of their take home income for 3 years, a feat relatively few people I know pull off, especially since the advent of the debt society…
2. Warren says:

   June 21, 2007 at 8:18 am

   I’ve noticed that there’s a relative absence of (negative) housing news in newspapers in the Inland Empire. I haven’t done a statistical analysis, but just based on observation, the press out in the IE seems to be in denial or doesn’t want to report that the IE housing is being slammed and will continue to be slammed in the coming years. I suppose the majority of recent home buyers will suffer and the press doesn’t want to lose any subscribers by telling them how bad it really is. I’m a buyer so I wish sellers and lenders would just face the music and reduce prices to reality.
3. Nate says:

   June 21, 2007 at 11:08 am

   Warren, Note how much advertising revenue must come from the real estate industry into the sales department of the Daily Bulletin and other papers! Of course they don’t want to bite the hand that feeds them! I don’t think they will lose subscribers, they will lose what’s most important: ad revenue.

   The paper does list the real estate section as “advertising” and we must take the biased information contained there-in with a grain of salt. It sure looks like a rosy picture. To illustrate, in the real estate section last week, one agent wrote that there has been resistence to the idea that one must reduce prices to get houses sold. Sellers in the IE are suffering from a massive delusion that is frustrating to those of us looking for a home. It took me 10 months to sell my home with 3 price reductions in another state. I still made good money, but I had to lower the price. Sellers in the IE must have enough money to continue to pay their mortgages, but at some point they will realize that it might just be best to lower the price down from the foolish stratospheric insanity that most of the homes are in right now.

   Note how few houses are actually selling. Very few close every week. The new home builders as well as the existing home builders have done very little to get me interested in actually pulling the trigger. I want a new home on a big enough lot so I can have a pool and some grass for my kids to run around on. Right now it appears to be an either/or scenario in my price range. Why would I EVER give up much of my future wealth accumulation for houses I don’t like? Granite doesn’t really matter and neither does scraping off the 70s ceiling popcorn. What matters is location/school district, square footage, and lot size. But most of all: PRICE.

   Don’t worry, hang in there and DONT BUY DONT BUY DONT BUY! The market will come down, there is too much inventory and the foreclosures are bound to increase over the next year.

   IT IS NOT OK TO USE 50% OR MORE OF YOUR MONTHLY INCOME ON HOUSING! Until I start seeing some sanity returning to this foul market, I’ll be happily renting in Rancho Cucamonga.
4. PT says:

   June 26, 2007 at 11:56 am

   It’s actually a meaningless claim unless they also state by what metric they measure “health.” If mean prices decrease by 30% but there are one-third the NUMBER of transactions during the years of price declines versus the corresponding years during price rises, how sick a market are we actually seeing?
5. LAEF2 says:

   June 28, 2007 at 2:08 pm

   Just wondering how many people in the Alt A are going to find themselves in this drawn out death spiral.

   So, they got in over their heads with debt but have considerable equity. They also put 30 yr temrs on to luxury items and cars that need to be replaced.

   They can refinance still because values are not that far down. Still their equity is being eaten by falling values and they don’t have enough income to service the debt. They keep running up debts and refinancing for a while till the debt load hits the equity ceiling.

   Probably a substantial number of people will shake out of that group. It will just take a heck of a lot longer for them to self destruct.

   That will be more of the slow bleed for a long time. That could drag this thing out much much longer.

   I wonder how many people doubled down in the move up market and will contribute to inventory over the next few years.
6. bye FL says:

   June 29, 2007 at 12:24 am

   Give it 2 years, the situation will improve dramatically. Only fools buy now.