Housing & economy doing great…shut down this site!

User Forum Topic
Submitted by scruffydog on July 3, 2007 - 1:32pm

Unfortunately many of you missed out on the last real estate boom. Now you spend your time on this site hoping that real estate or the economy will crash so you can buy in. Sorry, not going to happen. Piggington now appears to have reverted to a religious / political debate site. Is it because you are now beginning to realize the real estate collapse will not happen and you have nothing else to write about?

Real Estate

Minimal RE downturn in CA is limited to areas where there was land to build new houses: ie San Diego, Sacramento, and Riverside county areas. Metro LA, Orange county is all built out – very little land left to build on. LA median is up ~ 6% yoy, average cost of home is up $50k. Also coastal property prices are setting new high price records weekly!

Economy

Almost any day of the week, any time of the day I have a difficult time finding parking spaces at stores or malls because there are so many people out spending money. I've noticed some stores can’t keep items stocked on their shelves fast enough because they are so busy (Target, Trader Joes). I let my Costco membership expire because the store is ALWAYS so crowded with shoppers I couldn’t deal with it.
Stock market is crankin’...unemployment low...low interest rates...truly a Goldilocks economy! Quit whining...oh and don’t be late with your rent payment to your landlord.

Submitted by waiting hawk on July 3, 2007 - 1:41pm.

"Minimal RE downturn in CA is limited to areas where there was land to build new houses: ie San Diego, Sacramento, and Riverside county areas."

HAHA by "Minimal", do you mean 50% off? Proof in Sac for ya!

http://www.youtube.com/watch?v=dgtpxBPYnvE

Submitted by blahblahblah on July 3, 2007 - 1:41pm.

Yes, the real estate market here has reached a permanently high plateau. Everyone wants to live in San Diego. Better buy now or be priced out forever. You have to pay a premium for the "sunshine tax". We are just a bunch of jealous bitter renters on this site. We are all doomed and will never own any property. You, however, will be the next Donald Trump and will soon manage your own media and real estate empire. In 5 years, we'll watch the late-night infomercials for your real estate investment system on our black and white televisions and wish that we had listened to your advice. We'll quietly sob as we eat Alpo, the only food we can afford because most of our meager incomes goes to our landlords.

Submitted by JWM in SD on July 3, 2007 - 1:52pm.

Hey Scruffy Dog (or maybe Scruffy DipSh*t),

That's great, then go buy a house right now...in fact, go buy 2 or 3 with and I/O...oh, wait,you can't get those loans anymore. Hmmm...

I have cash adn I have time. What do you have????

Submitted by davelj on July 3, 2007 - 2:39pm.

Dear Scruffy,

Early-1990 called. They want their (identical) observations, opinions and forecast back.

Signed,
Dave

Submitted by lendingbubbleco... on July 3, 2007 - 2:40pm.

Scruffy- the first of many who will come in "guns ablazin" when they realize that we here at this site have been predicting their current predicaments for many years now.

Sorry, scruffy. Sounds like you are toast.

Submitted by sdrealtor on July 3, 2007 - 2:42pm.

Please don't feed the trolls.

Submitted by FormerSanDiegan on July 3, 2007 - 2:44pm.

Way to go, scruffydog.

I think you are correct. Very excellent and thorough analysis, backed by a lot of supporting data. That's right, they are not making any more land. Coastal CA is doing great.

Not only that, I am sure that you are extremely successful, have an exceptionally high IQ, and can spot a great deal when it drops in your lap.

Since you are so cool and the coastal housing market and economy are so great, I am willing to give you a once-in-a-lifetime opportunity to purchase my coastal rental property at a 5% discount to current value, determined as follows :
Take my original purchase price and apply the percentage gain in the San Diego Resale median from the month I purchased it to the current month. Then take a 5% discount for you for being such a great person.

I bought in October 2002 for 340K. SD median increased by 58% from 10/02 to 5/07. Today's value = 340K *1.58 = 537K. I'll give it to you for 510K. It's like I'm giving you 27K.

Just post your email and I'll send you all the details.

Thank you for your insights.

Submitted by FormerSanDiegan on July 3, 2007 - 2:48pm.

Oh, you forgot one other thing.
Everyone is getting 20-50% raises, so salaries are finally catching up with RE prices.

Submitted by poorgradstudent on July 3, 2007 - 2:52pm.

Target... Trader Joe's... Costco... anyone see a pattern to these stores? "Discount Retailers"? Good job!

The upper middle class notoriously shifts its spending behaviors from mall-type stores to discount stores as the economy slows. When more $100K+ gross income familes start shopping at Target or CostCo, it says something about the economy.

I don't think real estate prices are going to collapse, but it's obvious to anyone who looks at a chart of inflation adjusted prices from the last 50+ years that real estate prices cycle. I just hope the bottom happens right around when my girlfriend and I have saved enough to buy! ;)

Submitted by POZ on July 3, 2007 - 3:40pm.

scruffydog,

You sound to me like someone who has a "Kool-aid" fountain installed at home. Are you sure your "real" name isnt David Lereah?

Submitted by sdduuuude on July 3, 2007 - 4:34pm.

This is someone who is looking at the current state of the market, rather than analyzing market conditions to understand what will happen in the future.

Submitted by kev374 on July 3, 2007 - 4:36pm.

The RE market is totally dead! My cousins have been Mortgage Brokers for the last 15 years and they tell me it's never ever been so bad, not even in the 90s. Infact, they are having hard time getting enough business to cover their overheads. 2 other people I know, also Loan Officers, tell me the same thing. You better do some more research on this topic.

Submitted by BuyerWillEPB on July 3, 2007 - 4:47pm.

Oh dear God! Somebody PLEASE cache this fools post.

We absolutely MUST check back on this one in 6 months to a year from now.

This is gonna be Classic!

Submitted by JJGittes on July 3, 2007 - 4:54pm.

Yeah, it reads like it was written by an NAR shill, but the above responses could have been (and more or less were)written on this site 18 months ago. The downturn in the good areas (n county coastal anyone?) has been pretty slow.

I can't comment on OC or the decent westside LA areas (are there any left?).

Submitted by scruffydog on July 3, 2007 - 5:00pm.

I did not state that everyone should run out and buy real estate today – unless you love the property and are going to live in it awhile. I’m guessing we are at a cycle peak – prices will be flat for awhile. What I am trying to convey is that the market will NOT collapse as many of you want. The economy and most importantly the job market remain very healthy and wishing it were not so will not change reality.

Submitted by drunkle on July 3, 2007 - 5:05pm.

everything's hunky dory if you obey the republican mandate on how to live your life: spend like there's no tomorrow. because most likely, there wont be, particularly if you spend like there's no tomorrow.

Submitted by ponynround on July 3, 2007 - 5:15pm.

Dear Scruffy-
Your comments are welcome as it proves just how limited a persons perspective and experience can be. The statements you make are ignorant of the fact that the housing market it not moving. People are not buying houses at escalated pricing. And the long lines at discount stores that provide staples are very much expected as they are discount stores and they provide staples (a basic or necessary item). Trader Joe’s has increased in popularity due to its low price of organic alternatives that have come into increased demand due to recent E coli scares. Try going to Circuit City, department stores, or furniture stores and check out the total $$ purchases at the liquidation sales. Consumer confidence is on shaky ground this insecurity often causes short run spending (denial and quick fix), but in the long run it will cause spending to reduce even more. As a point of enlightenment n the next time you are in the store note if people are paying with cash or credit.

On a final note, people that care to educate themselves generally have ideas and opinions on many various topics. As a result they enjoy debating and discussing them with others, especially those whose opinions and character they respect. Thus this forum often overlaps into other subject matter. Pull up a seat you could learn something.

Submitted by an on July 3, 2007 - 5:18pm.

’m guessing we are at a cycle peak – prices will be flat for awhile.

This sentence doesn't make any sense. You can't have cycle, peaks, and not valleys. You don't get valleys by being flat. Have you ever seen price stay flat after it peak in any cycle? So far, I saved myself $100k for waiting this long instead of buying in 2005. $100k drop is not flat to me, is it to you?

Submitted by newguy on July 3, 2007 - 5:20pm.

Guess you didn't get the memo (IE multiple threads) that says that median price changes are pretty much useless. You have to look at sales volume and types of homes sold to get a better picture. Iventory is ridiculous, loans are getting harder to obtain, and interest rates are rising (well, I guess it's staying flat...for now).

Submitted by FormerSanDiegan on July 3, 2007 - 5:24pm.

scruffydog said "I’m guessing we are at a cycle peak – prices will be flat for awhile."

Please refer to the home page of this site and view the Case-Shiller index numbers for San Diego. (This index is based on same-home sales and is not subject to change in mix of homes sold as the median is.) Also look at numbers of sales for the past three years. The market peak was somewhere in late Fall 2005. Prices are down 7% in nominal terms (ignoring inflation) and another 6% due to inflation for a real decline of about 13%.

If a house was worth 600K in fall 2005 at the peak it is likely now worth about 558K in nominal dollars and about 522K in 2005 dollars. If you consider this flat, then the market is flat.

Submitted by PerryChase on July 3, 2007 - 5:25pm.

I'm so sure that real estate will crash that I don't really bother questioning that premise.

Since I don't really care how hard or how fast RE crashes, I'm enjoying the show. We'll know when it's here. Better than watching prime time TV. I don't have cable, so it's the Piggington channel. :)

Submitted by firevet24 on July 3, 2007 - 6:20pm.

Remember folks, This just proves we are still in the
"DENIAL" phase of this Mega Housing crash!!!

Submitted by stansd on July 3, 2007 - 6:20pm.

Please do not feed the trolls.

Stan

Submitted by hipmatt on July 3, 2007 - 7:30pm.

Sorry pal, but you won't see the market stay flat. We have rising inventories, foreclosures, tougher lending standards, rising rates(albeit slowly), and many current loans reseting. The worst is yet to come as far as the resets go.

There are so many people that are hanging onto their current home by a thread, the threads are slowly breaking, and many people have no choice.

Prices are coming down, nearly all the new home builders in the Temecula Valley have reduced prices from $50k-$110k. This is factual and doesn't represent flat to me.

As far as the economy, it is slowing too. I know times are getting tough, I see a few friends getting laid off. There will be many more in construction and RE related industries, like we are seeing in the lending industry.

The cost of living is also going up faster than incomes. Food, energy , gas, even beer is rising fast. If you think this won't affect households, think again. Yes, Americans are spending, but more and more of it is with money they don't have. They are racking up monster debt. It is slowing and will come to end as soon as rates go even higher, as they will. The fed can't lower rates, most every other foreign central bank is raising rates, and our dollar keeps loosing its power. Soon, investors will find better earnings investing elsewhere, and we will be forced to raise rates. We had a hint at this the last few weeks.

BTW, most here have made money in the housing boom, we have sold at or near the peak. I can assure you that those of us that rent, are not bitter. I can vouch for this as my best friends are panicking as their equity dwindles and they don't think they can sell. Then you have those who have negative equity. I know a few, and I bet I'm sleeping better than they are.

Submitted by NeetaT on July 3, 2007 - 7:45pm.

I concur with "scruffydog" about his comment on how people are spending money like crazy. I too have trouble finding parking space at malls and I can't seem to get in restaurants either. As for his comments on housing, well, all I can say is that I just don't see prices dropping like you would think. It seems as though people are getting wealthier and wealthier thus pushing prices up. I too hope for falling prices, but I feel that I am hoping against hope. "hipmatt," your observations are astute. I concur with you on what should happen as a result of your conclusions, but I just don't see it. Maybe I'm oblivious.

Submitted by donaldduckmoore on July 3, 2007 - 8:03pm.

Scruffydog, lots of piggingtonians here have houses. We, including me, are waiting to buy in the lower market because we all think that the housing market is crazy. Don't worry, it will come. Housing market in the US (especially in SD) has similar symptoms (extremely inflated house price and stock price) as in those markets in Japan and Hong Kong before the bubble burst. We will all wait and see.

Submitted by jg on July 3, 2007 - 8:55pm.

I sure don't read that people spending like crazy. Terrible auto sales numbers for June, today. Circuit City pulling its guidance. Anecdotes that YOY same-store sales are way down (Home Depot down 7%; wow!).

It will be a 'fun' Q2 earnings season, beginning next week.

Submitted by lonestar2000 on July 3, 2007 - 9:23pm.

It is quite amusing to see how much traffic is generated every time a post is made that ignors the obvious facts presented so clearly on so many occassions. I won't take time and effort to debate something that has been so obvious for so many months now.

To scruffy I only have this to say...less drugs and more research will go a long way to make you look much less a fool.

Submitted by barnaby33 on July 4, 2007 - 12:31am.

Success has a hundred fathers, failure is an orphan. Scruffydog, who's your daddy?

Josh

Submitted by NeetaT on July 4, 2007 - 5:53am.

There seems to be just as much corroborating information to support Scruffydog's comments as there is for ours. I'm just trying to be unbiased, but to be honest I must say that I am a little biased on the side of the Piggington's as far as house prices. I would say 60% Piggington and 40% Scruffydog. As far as people having money, there is no doubt that people have money and a lot of it. Maybe I should say buying power which is probably more accurate. Buying power is what counts seeing that it sets the tone for upward movement in prices. Credit / Dept contraction theory has been around for a long time and nothing in the way of a crises has happened. Don't get me wrong I am set up financially in such a way that I would benefit immensely in a depression scenario, but when is the big question.

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