SO. Cal Housing Market - when will we see the bottom
 

I have been in the process of looking for a new home and have noticed that homes are not selling as quickly as they were just a few months ago. I have even seen some homes that I have interest in, drop as much as 50-70k in just over a month. You can feel that the housing market in So Cal is on a downward slide, if any of you are in the RE industry or just have an opinion,what is the consensus for a good time to buy..

I'm waiting for it to crash too!!! I think all the owners the sold/selling their old apartment complex as "upgraded Condos" pushed the market too much and now Home owners can't sell. The more they can't sell, the lower the price gets cuz they can't afford to make those crazy payments.

Maybe someday I can get into a home of my own, but won't pay more then 250k for it. I'm a poor man

Its here in Nor Cal too, maybe not dropping that fast, but still. Its the intrest rates going up that hurt the market. Im not a realtor or anything but I think rates will have to come down to stimulate the market, then things will go again. That exttra 1% makes a huge difference on a $600,000 loan. Tha market has too many homes due to lackluster buying market. It will recover, its just a matter of when. Its also history that election years (pres) inteerest rates fall. So I wouold guess spring of 2008 the market will light back up, if not sooner.

I said that 7 years ago, I paid $555,000 just 2 years ago. Its my retirement.:rolleyes:

While there may be a historical correlation, I sure wouldn't bet on the market lighting back up by then! Over very long periods of time, housing costs cannot grow faster than wage growth. (If it so much as outpaced wage growth by 1% per year, every 70 years, we would be collectively spending twice as much of our income on housing.) History shows real estate to be full of big booms, big lulls, and occasionally, big busts. The recent trend is not an aberration, but neither is it the norm.

Buy what you need when you need, but realize that one's primary residence makes a relatively poor investment vehicle. Not just because of less than stellar returns over the long run, but also because one cannot readily disentangle housing considerations from investment considerations. A house-rich portfolio is not very liquid, and it is subject to risks of catastrophic events that cannot be adequately protected against through diversification.

... not really an expert... but I'd wait a while longer... at least another 6 months to a year (or three)... sorry, not very specific...

I read that 26,000 foreclosure notices were sent in So Cal last month.. I have my financing locked in, just looking for the right property.. The few open houses I have gone to, the agents there were so willing to deal it made me think that waiting a few more months is the best thing to do now.

My agent has said that December would be a good time to buy, but I'm thinking that the market may look better in the Spring..

Yep, those who barely qualified with the teaser rates back a couple of years ago are being hit hard! Lots of foreclosures...
But I don't expect to see a glut of short sales like we did in the early to mid 90's.....I went that route on one upside down property.

Hopefully we hit bottom right about the time I can afford to buy a house! If that ever happens.

My feeling is that with all the people that are buying with "creative financing" such as interest only loans, the bubble will start to really burst next year when the early adopter of these finance schemes need to re-fi. Honestly I've thought of sticking it out and waiting for houses to be somewhat reasonable around here, but the job and housing markets in some other parts of the country are just far too tempting right now.

Actually now that I'm riding more I'm enjoying the area a lot more, but for overall quality of life I think I can do better elsewhere.

-stephen

Man, you people are depressing me.

I didn't do anything wacky like an interest only loan, but it still makes me queasy to hear of massive housing market slides. I'm in my first home, been here a little less than 3 years, so it makes me nervous when people talk of housing market bubbles.

I've toyed with the idea of selling the place and moving out of state. That's not gonna happen if the market tanks and I'm upside down on it. :(

-Trevor

This sort of behavior won't help the market. :-)

Selling during a downturn out here is like selling a blue chip stock after a quarter of bad news. It's really the only way you can lose money. Ride it out. If you need inspiration to stay, just remember where the east coasters and midwesterners will be in about 3 weeks, on their trainers staying out of the freezing cold!

Yeah, I cant afford to move to So Cal and my ride last weekend was in 30 degree temps. You should stay in So Cal. I wish I could. Later.

I'm glad I bought 10 years ago, but now that means I can't afford to move, except out of state!

Well, I wasn't thinking now. More like within the next 1 - 3 years, which is what makes me nervous. If it hasn't bottomed out yet, I'll be even *worse* off in the near future.

As for weather, cycling isn't my only passion, and I wasn't thinking of midwest or back east anyway. I want to move (back) to Colorado. They've already got lifts running there (A-Basin opened last weekend.). I'll gladly give up a few weeks on the bike in exchange for powder days. Those are few and far between in SoCal, and you have to be a lot wealthier than I am to afford regular trips to Mammoth or Tahoe.

Get yourself a subscription to BusinessWeek. Or at least do research on all those ARMs that so many fools have been buying into. The gains are slowing, but sellers still price their homes based on how the market was 6 months ago. And yes, you will see a drop in prices as all those foreclosures come on the market.

I sold my home in SoCal for 222% more than I paid it, and thought that the buyers were fools, since I figured I paid too much. Last I checked, it was listed for 350% of what I paid. When the market cools off, someone's going to be hurting.

A very close friend is a realitor in Socal, and we have talked alot about the market, etc. I am saving right now about 20 - 30k for a down payment on a condo - she is looking for something in the 200 - 250k range - and it is very hard. She tells me if you wait about a year there is a possablity of the market falling - and that would be good news for me.

I am not sure on how people can afford house payments like they do - nevertheless the property taxes, et al... :eek:

The changes in the So Cal. market have been very drastic and very recent. Whenever I read news, it means very little to me. Whatever you read is way outdated. I have been a Real Estate Broker for over 30 years. Bought 8 properties (all HUD repos) about 10 years ago and sold them two years ago. I sold early but that's OK. Took all my money off the table and paid my taxes.

I just downloaded the default sheets as well as the notice of sale sheets for Orange County for the last year. The change from just a few months ago is incredible. Hundreds of properties in default or going to final foreclosure sale. Most of the defaults are of people that bought in the last year or two with 100% financing. They have had a rate increase on their adjustables, can't afford the payment and can't sell either.

By the way, the thought that the market is tanking is due to increasing rates just doesn't hold water. Rates are still very low and have actually come down about 1/2% from their highs earlier this year.

The market is tanking, that's for sure. How far the slide will go is too difficult for me to tell.

I agree that interest rates are still a bargain, I am locked at 6.25% fixed. The loft I own in Long beach is a little better at 5.50% fixed.. I see the fall as part of people getting zero interest, adjustable or reverse amortization loans and when they adjust back to a real interest rate, they just can no longer afford it.

I have been waiting for a while to get a new home and it looks like now is the time for bargains to be had. It just feels like some of the homes I have looked at, people and especially agents seem a little desperate to sell. I have also seen a large number of people doing FSBO to try to save some money..