I doubt it. What was address of that Boise sale at 390K. The issue in RE is not the dollar value in homes, rather intrinsic value according to a narrow demographic, for whom power is a concomittant of money. What could be bought for $350K three years ago is now in the mid $500’s. Californias economy grew 4.7% in the 12 months ended in February compared to the national rate of 2.8%. you win! Should they overinflate it’s value, one could possibly sell the house for that value, with a kickback, to someone who could then pay you cash and get a huge tax write off…the possiblities for mischief are endless. Here’s the problem with buying an overpriced house. Given the sales rate in September, this represented 2.7 months of supply, the lowest ratio in the data going back to 1999. We’re seeing more and more empty housing units in the US. The needed great RESET will have to come outside, beyond the power of Fed to contain that force. I cannot believe Wolf let your comment stand. In the 60’s there was quite a bit of love, and not as much committment, now it is the opposite. Much of what was done in the name of relief was just can kicking in hope of a quick recovery which is now clearly not reality. Exactly then, how does the U.S. measure up? COL is about half in Phoenix what it is in San Diego. Can’t tell if this is going to blow up MF when it crashes either…, “part of what is fueling this boom is that the economy has just split into two, and rich people are able to access capital almost for free, so, of course, they’re going to use that money to buy homes.”. If the fine print doesn’t forbade it I would say I needed forbearance, save up all the money for the forbearance period and dump it into the principal payment erasing the time tacked onto the end of the loan and more. The demand is said to be particularly hot for homes in the $2-million-plus range. So Cal jimbo and others will be busy with short sales. Some months there isn’t too much food in the fridge. Copyright © 2011 - 2020 Wolf Street Corp. All Rights Reserved. In San Diego County, sales fell 40.7%, while the median price rose 3.5% to $590,000. The number of books in the central library in that one city alone dwarfed the collection of books in the entirety of Europe. At this point the US dropped the gold standard. The Future of San Diego’s Housing Market Lot’s of good memories. “Women and children were chattels until not terribly long ago in historical terms.”. I’ve heard that the auto dealers in Visalia and Selma are doing quite well also. But people can’t continue to move to Carmel, Boise, Vancouver Island, etc. Thank you. Whether it is calculated or an unthinking zombified phenomenon, it has the same effect. Service first, market like no other. More clear picture will emerge during the 2nd or 3rd qtr of next year. I don’t know much about engineering, so your analogy about “D in PID” doesn’t resonate with me although it could apply, I just don’t know. Crazy, I just assumed that when the media says that home sales are up 15% year over year, they meant 15% more homes sold. It can enable it’s citizens to buy R.E. There are no dollars sitting around in huge piles overseas that they’re going to deploy in the US. This isn’t your grandparent’s market. Once the tenant leave the house might need some major repairs. Gold & Silver I would invite Wolf and others to contemplate this phenomenon from a slightly-different perspective…. MonkeyBiz – LOL! With nominal long term gdp growth growing at 3% and stock market being at all time high valuations, there just can’t be much left in the bubble. Sheer following numbers over the decades have consumed and degraded once-great resources and opportunity. In fact, it’s just getting started. That said, what is your views on all the proposed changes coming “IF” the blue wave hits on November 3rd? Connect. If you have any questions about the housing market or real estate in general, don’t hesitate to reach out to us. CA DRE Lic#01254025. Housing has become a global asset class, with unlimited demand from global investors. We’ll see some snowbirds all right, shivering their patooties off in their 2″ walled trailers. On another note: here in the UK the government abolished stamp duty (a home buying tax) for this year to “help” buyers. Just for a reality check. But not this year. — Kills/Degrades/Scares people. How long would the economy last if the artificial stimulus and ultra-low interest rates were taken away? If we look deeper into the numbers, this tells a scarier story for San Diego’s housing. I don’t think they’ll reach the point of offering interest-only mortgages like they did in the mid-2000’s in order to make mortgages more attainable. Maybe they cashed out and took the “big dollars” to Arizona where they can buy a house, use the rest of the money for a 40′ sailboat and a spare condo to rent out. This is Vancouver Island, and now with many people fleeing cities and colder climes, the market is still climbing so I just keep my mouth shut. Death rate between 24-44y is slowly increasing also. etc? The only thing that could slow this down, and it really needs to happen, before housing is too expensive for US citizens, is for the government to put penalties or limits on large corporations buying excess homes or on foreign investment in our housing stock. stocks? Kyle Whissel explains these stats and if it's a good time to buy or sell a home in San Diego … Crisis situation allows unusual measures for the States. These low, low rates are going to come back and haunt the Lenders, delayed Halloween in 2021, as many of the frantic buyers could only qualify at below inflation rates, and no one’s job, even Powell’s, is guaranteed in the economic period I see unfolding in the new year. Just insane. to the song they’ll sing next August in the AridZONA. My sister-in-law sent me a photo this morning of their rear deck at their northern Wisconsin house after the last four days of below freezing temps and snow accumulation from daily snow storms. “Capitalism without bankruptcy is like Christianity without hell.”. It’s the now well-established phenomenon of the “K-shaped recovery,” where one part is doing well, and the other part is getting crushed. I agree. Between 2006 and 2010, in addition to the housing correction, there was also a minor correction for incomes. Sometime in January, the financial markets will start a serious descent…much like the period of late 1930 – 1932. I REALLY want to buy some MFH but cap rates are very low and quality not so good. Just a simple reversion to the mean will be extremely painful…if below the mean then holy holy cow!!! without selling their old house or condo in the Urban area. Headline: “Low interest rates keep Twin Cities home sales rolling along.”, Minneapolis/St. :-(. The Minneapolis Star Tribune reported on 19 October that in September, buyers signed 6,443 purchase agreements in the Twin Cities metro area. Click on the beer and iced-tea mug to find out how: Would you like to be notified via email when WOLF STREET publishes a new article? You see it everywhere rural. Growing up, many of my neighbors parents bought a lot, cash. That’s a good comment. In the end, we’ve trended toward a market with a scarcity of properties, which causes prices to increase. Problem with water? Jobs One such business (Toyota Financial) reportedly closed their San Diego office and moved to a suburb of Phoenix. A housing market downturn or crash in Dallas doesn’t seem likely at this stage. BTW, I paid 2x my income at the time for my duplex and after collecting rent on 1 of the units my net mortgage payment was 12% of annual. with a tsunami of freshly printed money. He got hired by another company, which moved him, and ended up buying the house from him at cost (because the market had turned south on him); and after he moved to the new city into a temporary apartment, he found the right female :-]. “I’m pleased to see someone is paying attention to deflationary forces — most of the time it’s the tiresome of the squawk of the inflationistas, all evidence to the contrary notwithstanding.”. Not a peep from US msm. Somehow in the toxic stew of American culture, it has become not only ok, but preferable to act and speak and write like this not true. Got financing to build a house, but acted as the general contractor themselves. opened (coinciding w/Nikki Hailey’s assist) Charleston. Central Banks There was a scene in the documentary “Owned: A Tale of Two Americas” where they’re standing in an empty, foreclosed stucco subdivison in the middle of the desert and the RE agent they’re interviewing says something along the lines of: “When a brand new house you spend nearly a million dollars on loses half of it’s value almost overnight, how are you going to feel about making that next payment?”. And, if things get bad enough, the banks will have to foreclose, REO, and resell…at some pt in that chain, truer valuations will have to be disclosed. My god. Now is as good a time as ever. HH? Toyota did that when they moved from Torrance, CA (South Bay LA) to Texas (I think Irving). If you have any questions about the housing market or real estate in general, don’t hesitate to reach out to us. The markets make sense. Marks to Market indeed .. ‘just one more spin at the roulette wheel, please. there. We also have very attractive interest rates, which creates an abnormal demand for housing. Nothing wasted on Uber/Lyft, they want to build out commuter jets and helicopters, their takeover of plebian transport, taxis and shuttles is just the cover for this highly profitable venture. Housing Market Goes Nuts, Everyone Sees it, But it Can’t Last by ... (born/raised in San Diego where my family had been since 1910. @RightNYer – Touché. 1. Most people don’t follow the finance world and base their spending on their current income. House payment no more than 25% take him pay. YOLO. That said, if I lose like-kind-exchange, my business of moving and aquiring more land assets is finished growing, as I do not have the cash reserves to pay up to 40% fed taxes, and state taxes as high as 11%, on any future land I exchange between business entities. In a given year only about 1/20th of the housing stock changes hands (5%). Looking at *actual* sales volume YTD in CA, it is down about 9%. more hospitalizations and incrementally more deaths. 2. 3. Housing Prices Aren’t Inflated. Same weather as south bay, the county is cleaner, has better air quality, is more educated, much better recreation than the peninsula. Some of us on a blog traced the names and companies of a few that got arrested. Possibly the equivalent of a flu shot that helps bolster the system to fight the flu. Oh don’t woory, it’s been extended to Dec. 2021.. so inventory will remain tight for a year. “The forecast for 2020 is quite robust in terms of property values.”. With all these businesses down and people out of work, surprisingly the residential housing market is up here, not a lot of offerings but the asking cost per sqft is actually up. People have short memories when it comes to markets. 12 – 15 months later, $5K gold and Dow of 10K for a 2 to 1 ratio. Paid to have the foundation, framing, electrical and rough plumbing done, and finished the rest themselves. Ask for a price reduction their tax lowering cash discount on all services performed by individuals like mechanics, plumbers, etc. In our low interest rate world where just about anybody with decent credit can get huge mortgage leverage, I just don’t see how prices will go down in the macro-picture unless we have massive building of new units. Before the fires, there was huge demand in the Wine Country (and there may still be). I was speculating with a friend that maybe they are loosing lending standards again on top of the drop in interest rates, but i don’t think that’s the case. One of the few remaining major automotive distributors with a presence in CA is making noises about moving out of CA. “You just don’t get it… they do not print money…. There is panic in apartment buildings. They have opted for the easier non-contentious life of seeking favours of the looters in Brussels, enjoying the champagne and foie gras, the partying with the movers and shakers, and the protection they bribe for their businesses. Where else you think they get the money they loan? But that doesn’t stop people from overpaying. 4) Owner occupied houses, with minor delays, will dent the deal. Now everyone is looking for a home to buy or rent. The virus will start its winter attack, anytime now. BTW, the ultra-low rates are an artifact of an over-indebted economy. I knew that it was going to be a multi-year affair, as opposed to a one week deposition of Saddam, which is how it was originally sold. Once people realize they do not have to be in debt and they can pay off their forbearance – they will flood the market with supply at the tune of 7%-10%, “But this craziness in the housing market is not sustainable.”. The number of … I like the saying that bubble’s are caused when your neighbor who is obviously not as smart as you is living the dream with the big house, new car and bragging about his investments. Brick & Mortar Meltdown - … I am the guy who awkwardly laughs at the movies at the wrong-non-PC moment—so perhaps many do not even “get it” but thanks for the laugh. Where I am at, it’s way cheaper to rent identical place. 6) The boom bust cycle will not be over for at least a decades. If you have separate debts, try to pay off the debt with the highest interest first, even if it’s a small one, then work your way down the line to the next highest interest rate. He who owns the (digital) presses makes the rules (on the fly). Buying stocks right now feels like buying at a top. The Campbell Team is the most proficient marketing team in San Diego County and the example of what should be done to best serve every seller and buyer while maximizing individual and team growth for every home we sell. In 18-20 months, I believe gold will be $3,300 with a Dow of 14,000 for a ratio of approx. I was in SFO , happy to quit, but now stuck in another hell hole SoCal. Forbearance extended: https://www.housingwire.com/articles/in-a-bid-for-stability-fhfa-and-fha-extend-forbearance-policies/. There have been certain indications, such as, changes to the federal interest rate or trade disputes that would lead to a slowing economy. If you use the most simple analysis of the stock market we are at 3 sigma above regressive trend line. The gross national bezzle has never been larger than in the past decade.”. Inflation expectations are likely to rise way before it shows up in the actual CPI, causing real rates to rise for long dated debt. That’s actually an old idea once known as “credit guidance” which is part of good, old fashioned industrial policy. If you really want to help home buyers, the central bank should stop messing with interest rates and let price discovery happen. I’m one of those guys who bought cheap and renovated while living there. The ghost cities in China scare me. I was thinking ” crack up boom” too, but no one is talking about inflation now, although they do talk about prices going up. Here’s a Quick Summary: Employment is at close to an all-time high Out here in flyover country, the pace remains blistering. First, let’s look at the Case-Shiller Home Price Index (refer to 0:32 in the video above for a visual representation), which illustrates home pricing trends over time. Of much greater significance and consequence is the substantial transfer of wealth from the nation’s treasury to war profiteers. 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