Housing market dip/drop/recession

User Forum Topic
Submitted by serendipity4 on May 31, 2019 - 11:31am

I am not sure if this has been talked about recently, but does anyone predict/expect housing market to drop anytime soon? The house prices seem to be much higher than pre-2008 recession prices. Is it better to buy now or wait 6 months to a year. We dont want to pay 1.2mil for a house we like, only to realize we can get it for 100-150k less 6mo-1 year down the lane.

Thank you.

Submitted by gzz on May 31, 2019 - 12:49pm.

I believe in 6 months the market will be about 4% higher. So your $1.2m house will be $48k more expensive.

If you want to buy in a “cookie cutter” area like downtown or the suburbs, then I’d say buy ASAP.

If you are looking somewhere like La Jolla, Point Loma etc where almost every house is unique, I’d say start looking now but you might need to wait a while to find exactly what you want. But when you find it, make your offer aggressively.

Even 3 years ago the $1.2 mil range places often sat on the market for a few months. Now they are moving about as fast as the lower end.

In my 92107 zip, we had 14 May 2019 sales in the $1m+ range and there are 30 listings. This 2 month supply in the high end is pretty tight.

Submitted by temeculaguy on June 2, 2019 - 4:44pm.

all real estate is local, where are you looking? Are you selling? If you are moving up in the same area your risk is diminished either way the market goes. If you already sold and are trying to time the market, that can be very difficult. I only ask because 1.2 mil is a bit high for first time buyers.

Not all areas have recovered to their peaks but most have, however it's been a decade so 30-50% is normal for 10-11 years at 3% to 5% a year. The last bubble was driven by liar loans and novice speculators without capital, I do not believe that is what is going on now. Depending on where it is, looking for a 10% nominal drop can be unrealistic, flat pricing is more realistic. Right now wages are rising but housing rose faster, since housing needs buyers sometimes it stalls out or is flat until buyers can catch up. Move up housing needs buyers to be able to sell in order to buy, so when the entry level struggles, it can trickle up.

I can tell you that when the great recession hit nd prices fell, they didn't fall at the same percentages and at the same time. It hit harder and faster from the outside in, from the newer areas to the older and it barely touched some housing types and areas. The North Coastal areas of SD were almost immune and the inland exurbs saw 50% reductions, everything else seemed to fall in between.

The one thing that can shock the r/e market failed to materialize, if it comes back and somehow passes (SB 50) it will boost supply and probably hurt prices, but it's not likely to affect the 7 figure market, just the lower end. That bill allows density increases and will take the zoning power away from city councils and planning commissions when planned housing is near transit stops. It would make it cheaper and easier to build apartments and condos. Older SFR neighborhoods could become a mix of craftsman's next to 5 story apartment complexes with no parking requirements. I'm not sure it will ever pass or in what form but it would shake up the market in certain areas, but not this year.

Submitted by HLS on June 3, 2019 - 10:01pm.

There's also a huge difference in affordability today.
Lots of people have higher incomes than 10 years ago and
interest rates in the 4% range have much lower payments than 6%-7% rates 10 years ago.

Many people don't care what they pay for a house, they only care about their monthly payment.
This drives the market

Submitted by temeculaguy on June 3, 2019 - 11:24pm.

Nice to see you HLS, many don't know your expertise but it more than most here. Let's just say I'm a fan. What do you think will happen, high appreciation, track inflation, normal 3% increases, stagnation or nominal decline? My theory is that liar loans and zero down neg am was the bane of the last cycle. Since you are closer to the pulse what is your prediction? I'm torn between "track inflation" or historical "normal" growth.

Submitted by serendipity4 on June 4, 2019 - 10:04am.

We are looking to rent or sell our current first home (suburbs) and move to a home in 4s ranch (most likely) or Carmel Valley (2nd option). We are looking for highly ranked schools (elementary through high) and proximity to lots of kids activities/amenities etc. Selling our first home is not a requirement to buy a new bigger one. Last winter to early spring, there was a slight drop in the market before things picked up again starting this spring. Even something like that would help us save 50-100k I believe. So no one expect a housing drop anytime soon? :(

Submitted by The-Shoveler on June 4, 2019 - 10:59am.

The thing with price drops is it comes with "BAD" economic news etc....

It takes guts to pull the trigger when the sky is falling.

Just my two cents.

Submitted by flu on June 4, 2019 - 11:29am.

serendipity4 wrote:
We are looking to rent or sell our current first home (suburbs) and move to a home in 4s ranch (most likely) or Carmel Valley (2nd option). We are looking for highly ranked schools (elementary through high) and proximity to lots of kids activities/amenities etc. Selling our first home is not a requirement to buy a new bigger one. Last winter to early spring, there was a slight drop in the market before things picked up again starting this spring. Even something like that would help us save 50-100k I believe. So no one expect a housing drop anytime soon? :(

You are wasting your time trying to figure out which public school best, 4S or Carmel Valley for an elementary school kid that may or may not be a genius by the time they are in middle school and are exposed to external influences like drugs, sex, alcohol, and vape, which pretty much happens at both of these "excellent public school" districts...The only difference that is really going to make for your kid is your personal involvement, as any other tiger parents have already figured out. The teaching staff at any public school is going to be mediocre at best. You might have one or two good teachers, and the rest are just there because they are there... The only thing you probably should be considering is which location is closer to work and the rest of your other friends, and whether you like being closer to the ocean or further inland because there's probably a 5-7 degree difference between Carmel Valley and 4S.... Both great areas to live... both with tradeoffs. Public school isn't really one of them. Many of the parents in Carmel Valley that I'm friends with who really have gifted kids post elementary school ended up sending their kids to private schools like Bishop school. Yes, they spent a considerable amount of money to live in the areas with access to the best elementary schools (Sage Canyon, Ocean Air) and then decided the schools weren't good enough and took them out of those schools because they weren't challenged enough and sent them to private schools. And of course there are the kids that were once gate/gifted in elementary school, that drastically took a u-turn in middle school and decided that being popular and dating and partying was more important...And many of those kids now are excellent C average students, many of them will probably end up being excellent managers and directors...

I remember back when my kid was in elementary school, all the tiger parents were so uptight about trying to get into the best public schools in Carmel Valley: Sage Canyon and Ocean Air. Everyone was so convinced, based on the test scores, that the education in those schools was so much better than other schools such as Ashley Falls or Sycamore Ridge or Torrey Hills... It was the most ridiculous thing, because once all the kids ended up in the same middle school, most kids that were good academically well grounded ended up doing the same regardless of which school... And the ones that didn't, well it didn't matter what school they went to also.

If you want real proof... Take a look at all the standardized test scores from all the elementary schools in the district, and filter the scores out and select only the "asian students"... You'll notice the average test scores are almost the same (maybe the difference between the average being 999 versus 980 versus 990....Data doesn't lie. there is no better or worse teaching staff at any of these schools. The reason why all these kids scored the same is because most of them probably have parents that are all heavily involved and invested in their education well beyond what the public school offers...just like I was...

Submitted by serendipity4 on June 4, 2019 - 2:26pm.

While all that you say is true, I have heard feedback from parents that your peers and the parent volunteering at the school makes a lot of difference too. If my kid wants to form a group at his school for an olympiad or FLL (lego league), but does not have peers interested in the same or parents who are interested or knowledgeable to volunteer in those areas, then my son will be pulled down too as a result. Those are the kinds of things I am looking at. Considering that parent involvement is going to be there as a given, we are conflicted between 4s vs CV. More of the activities he is going to be involved in are closer to 4s. We prefer hotter weather vs coastal clouds all year and we are getting a better sqft, bigger backyard, his friends etc in 4s and hence slightly leaning towards that vs CV.

Submitted by serendipity4 on June 4, 2019 - 2:29pm.

We have plenty of saving stocked up and both of us are in very secure jobs that were untouched by the prior recessions. We really regret not buying a bigger home during the 2008 end-2013 drop..house prices were low for a long time!

Submitted by flu on June 4, 2019 - 4:58pm.

serendipity4 wrote:
While all that you say is true, I have heard feedback from parents that your peers and the parent volunteering at the school makes a lot of difference too. If my kid wants to form a group at his school for an olympiad or FLL (lego league), but does not have peers interested in the same or parents who are interested or knowledgeable to volunteer in those areas, then my son will be pulled down too as a result. Those are the kinds of things I am looking at. Considering that parent involvement is going to be there as a given, we are conflicted between 4s vs CV. More of the activities he is going to be involved in are closer to 4s. We prefer hotter weather vs coastal clouds all year and we are getting a better sqft, bigger backyard, his friends etc in 4s and hence slightly leaning towards that vs CV.

Let me give you a different perspective.

My kid went to CarmelV. She had a lot friends (family and otherwise) that went to 4S and RB. Regardless of which school it was... Tiger parents that cared tended to gravitate toward other tiger parents that cared. And those that didn't, didn't.

If you plan on being heavily involved, like I was, it wont matter really which school you go to in 4S or CarmelV because both schools have plenty of parents that care.

The thing that imho a lot of people in CarmelV are in denial with is that Carmel Valley schools really aren't any better or worse than any other good performing school that you can find all over San Diego. It's the parental involvement that saves the day. And that same league of parents is found in other areas too..

Specifically when it comes to math and science, you will be disappointed severely if you are counting on the public schools to teach/instruct/offer anything exceptional, and not be involved yourself or know someone that is involved...

In the DMUSD, anything that is STEAM+ (science , technology, art, music) etc is all funded by voluntary contributions by parents in the district, roughly $800 donations per year per kid...and depending on the school, not everyone contributes (especially the public schools that are closer proximity to the concentration of apartment complexes that never donate). And that is shared across all students equally regardless of what parents contribute.... While that's how it should be in the public schools, clearly you aren't going to get the same level personalized instructions for your kid as you would, say if you spent that money specifically for your kid... I'm just being brutally honest about this... (For the record, my total contributions to the district each year was closer to 4x-5x the suggested amount, time, money, and goods donated).... This year, DMSEF foundation had a budget shortfall...(Ok, they didn't really have a shortfall. They wanted to pay for a "course curriculum consultant" to design new STEAM+ courses for the district that was expensive...and the amount of donations raised was on parity to the previous years...So to pay of that consultant, they had to cut teaching staff. Out of all the teachers they could have cut, they cut the science teacher... And at one of the best schools in the area... Sage Canyon.... (keep in mind, that most kids run around, and participate in things like soccer, basketball, softball,etc outside of school) why the DMSEF cut out science, when the entire program is suppose to emphasize science and math is beyond me. )

Regarding things like FLL....Again, be sure you understand what an FLL team at say a public school is for, versus say a private FLL team that you or someone forms...

If your kid really is a STEMs superstar (mine isn't, btw ) and your kid is programming left and right like there is no tomorrow, you probably want him/her to be on a competitive team so he can make it to the regionals, right? If so, you are better of either forming your own team or finding a private team outside of school.. Most FLL teams that are really good are not formed sanctioned by the public school district with school funds, the exception being charter schools...
The competitive teams come out of private schools like Bishop school, or Cambridge school, and charter schools like Sundance, which make it to the regionals and finals all the time.

In Carmel Valley, 2 years ago, there was only 1 elementary school in the district that was officially sponsored for FLL (maybe it was 2 schools), that one school had 6-8 teams.. The teams were designed to help raise awareness to FLL,STEMS, robotics, with the goal to get kids interested that otherwise would not be, never about making it to the regionals/finals" as some tiger parents dream of... Think of this as soccer. You have competitive "Sharks Soccer" league, and you have "AYSO anyone can play leagues"... The FLL teams at the school were the later category....Which again doesn't seem to fit your high achieving kid you describe.

It's extremely difficult to make it to the regional competition, because of the diverse student body in knowledge, skillset, and interest, and the philosophy at the school (which I agree with) is to emphasize teaching/learning than actually winning the competition...Hence just like AYSO soccer, everyone "plays" with more or less equal play time even if the skill level is all different. For the past 12 years at my kid's former school, none of the 6-8 teams made it to the regionals...The exception was the last year my kid was there, when both of the two all girls team made it to the regionals that 2-3 moms and I coached....That took A LOT of work from parents. So again, I think you need to be realistic in what you expect out of a public school....It's not a magic pill.. Behind every winning team or winning student at every competition, whether it's FLL, Academic Decathalon, Science Field Day, Nolan Math Competition, Rubik Cube, etc... There's always a set of dedicated parents that made it happen, and that's found at any school.

Submitted by barnaby33 on June 4, 2019 - 6:33pm.

flu, you could have shortened that whole story to, "you can't pay someone else to deal with your problems." Educating your kid is your problem!
Josh

Submitted by flu on June 4, 2019 - 7:26pm.

barnaby33 wrote:
flu, you could have shortened that whole story to, "you can't pay someone else to deal with your problems." Educating your kid is your problem!
Josh

Now that BG is gone, someone has to write a long paragraph that no one really reads to continue the tradition.

A better comparison should have been comparing the number or lizards and walls in stucco boxes in far flung Carmel Valley versus lizards and walls in stucco boxes in far flung 4S.....

Submitted by AN on June 4, 2019 - 7:30pm.

flu, I would take it one step further and say, if your kid is a STEM superstar, I would highly recommend them go to a coding camp at 14, then apply for an internship at a real company. All of that is real world experience. If your kid is that good, the company will continue keep them as an intern until they graduate, then you'll get a guarantee job straight out of college and you can say you actually worked at a real company for 4-8 years, compare to other kids who don't have any.

Submitted by AN on June 4, 2019 - 7:31pm.

flu wrote:
Now that BG is gone, someone has to write a long paragraph that no one really reads to continue the tradition.

A better comparison should have been comparing the number or lizards and walls in stucco boxes in far flung Carmel Valley versus lizards and walls in stucco boxes in far flung 4S.....

My area win the lizard and walls award, hands down. It's not even a competition.

Submitted by AN on June 4, 2019 - 7:38pm.

flu wrote:
The only thing you probably should be considering is which location is closer to work and the rest of your other friends...
Exactly. If your commute is 10 minutes instead of 30, then you can spend an additional 40 minutes everyday with your kids. Also, you can be able to take them to more activities.

Submitted by Hobie on June 5, 2019 - 5:07am.

Bam! Flu, you have been on fire these last weeks! All sage advice. Nice.

btw, (threadjack alert)-flu- I do use my dslr much during my kiddos events so I could use long lens and have enough pixels to make enlarged prints. Phone for most everything else.

Submitted by flu on June 5, 2019 - 7:25am.

if I knew what I know now. I probably wouldn't have decided to live in CarmelV. I mean, it's a good and safe place to live, really convenient to go to work and easy access to the freeways and decent schools....

But the affluence or perceived aflluence also has a lot of negatives....A lot of self entitled parents and kids, and a lot of kids that are so spoiled and directionless being born into a family with a silver spoon, many of them get into trouble with drugs, alchohol, etc because they have nothing better to do....But again, you'll find the same problem over 4S or RB too

if I were to do things over, I'd probably send my kid to a charter school or private school

I can't complain about the property appreciation though.

Submitted by flu on June 5, 2019 - 7:40am.

As far as the SAT adversity score... not sure what to do about it, or I'd anything needs to be done with it. I am sure there will be lawsuits over it.

While preference might be given to students attending a ghetto school in a ghetto area, you probably don't want to send your kid there either because you don't want your kid to get shot or killed.

However, I do think this adversity score will hurt more families that arent well off than those that are.

I can't think of many of my kids friendsthat were renting in Carmel Valley because they wanted to be in a better school distric, and they were qualified for federal housing assistance..Those kids, presumably , would get the same adversity score as my kid if the way it was determined was by geography... Richer parents are always going to find a way to get around these stupid things if they really wanted to , because they have more financial resources at their disposal to do this. Maybe a market for an elite private school in a ghetto area, that includes armed guard transportation such that the kid school registration is in a ghetto area with better adversity score...just thinking aloud.

anyway the guy who runs college board now and came up with adversity scoring is the same guy that architected common core.... So go figure.

Me? I've come to the realization that my kid probably won't get the maximum benefit from going to an Ivy League school like I went to versus a good public college, irrespective of the current overall good academic performance... What I don't want to happen is spend $500k+ of my own money to send my kid to such a school, only for them to graduate directionless like many kids these days are, or major in something like conversational linguistics that at most have job prospects of something only requiring you to say "you want fries with that?" So assuming even if my kid can get in, which is a big assumption, my kid would need to get a full ride. The good news is that in this country, as opposed to countries like China, not getting into an elite school is not doom or gloom and a life ending thing. Work ethics and generally not being a lazy bum can get you pretty far in this country....(and in some cases once you have established yourself, you can be a lazy bum and still get paid a lot of the work you barely do, as is the current case for me)...

I went to an elite school and it didn't necessarily make things better or worse than my peers that went to a good state school, given the profession I picked. Back then, my education only cost $90k total. These days, that's what it's going to cost year per year if your kid doesn't get a full ride.. Given the cost, and how some of these schools are anti-asian with their discriminatory admissions process, I'd rather put my money into a school that wants it...or real estate that my kid can inherit it so that if my kid wanted to pursue a conversation linguistics major or any other "unemployable college major", my kid could without consequences to her future financial well being and end up being a social burden to everyone else because hopefully my kid wont need to count on both federal and state assistance , so those that really do need it(those kids and family that were just born into an unlucky situation)can get it.

Submitted by spdrun on June 5, 2019 - 7:58am.

Bypass the system entirely, send your kids to university in Europe. Relatively easy compared to the US to get into professional programs like 6-year med schools (some even offer English-speaking classes), plus some countries have a more tolerant attitude to vice (drinking age 18!) than the USA.

Submitted by flu on June 5, 2019 - 9:44am.

spdrun wrote:
Bypass the system entirely, send your kids to university in Europe. Relatively easy compared to the US to get into professional programs like 6-year med schools (some even offer English-speaking classes), plus some countries have a more tolerant attitude to vice (drinking age 18!) than the USA.

Um, dont try to give out advice about children unless either you have kids or you are an exemplary model of the results of what you are suggesting.

And like I said. If things are so great elsewhere, get out of this country, and leave the limited resources available here available to the rest of us that like it here way better.

Just my 2 cents

Submitted by spdrun on June 5, 2019 - 1:51pm.

You know, having kids isn't the only way to know about different educational systems -- being a student is also a valid option.

Now, are you going to make me shut up, Gramps?

Submitted by FlyerInHi on June 5, 2019 - 12:48pm.

I wonder why 60%, perhaps higher, of tech workers were born abroad. I would say most had high school education outside the USA.

Submitted by FlyerInHi on June 5, 2019 - 10:36am.

Economists say 15% chance of recession in 2019. 60% in 2020

Submitted by FlyerInHi on June 5, 2019 - 1:49pm.

flu wrote:

Um, dont try to give out advice about children unless either you have kids or you are an exemplary model of the results of what you are suggesting.

And like I said. If things are so great elsewhere, get out of this country, and leave the limited resources available here available to the rest of us that like it here way better.

Just my 2 cents

Does this rule apply more broadly to family values? Only the people who live the cleanest lives and with the most exemplary records get to opine?

Does love-it-or-leave-it apply to people who live and profit from California but bitch about CARB? I would say no because it’s only normal that one loves some things and hate other things. It’s not a binary choice.

Submitted by flu on June 5, 2019 - 6:08pm.

Well, BrianSD and spdrun....

I guess thinking a person who had no previous experience being a parent can give better parental advice than parents with the experience....would be analogous to thinking a reality star with no former experience being a politician can be much more competent president than a previous president that had lots of experience in government, or a former bartender with no political studies and political experience can be a competent Congresswoman..

So I guess the two of you are in good company and similar to President Trump and AOC....

I.A.G.A.O.W ? (Isn't America Great Again Or What?)

Lol

Submitted by FlyerInHi on June 5, 2019 - 7:11pm.

Maybe the person is a childless academic or intellectual who studies things.

I don’t see the relevance with AOC. She’s is a member of Congress. She’s just one of many representing the people, just what Congress was intended to be. Give AOC 10 years in Congress. She will then have a lot of experience.

How about men deciding on abortion?

Submitted by temeculaguy on June 5, 2019 - 10:01pm.

FlyerInHi wrote:
Economists say 15% chance of recession in 2019. 60% in 2020

What was the percentage that predicted the market would crash when trump was elected.

Like this genius, considered by the economist as one of the world's most influential economist.

https://www.bu.edu/today/2017/bu-economi...

Add him to the list that includes AOC that makes my post grad work at BU that much more worthless. Well Bu did put the Dr. in fromt of MLK's name so I guess it can weather the current crop.

How about Paul Krugman, is one of the 30%

https://dailycaller.com/2016/11/09/paul-...

Going back to just before and just after the election and seeing what the "economists" predicted just further moves the profession into fortune teller/weatherman territory. Strike that, Meteorologists have gotten much better in recent years, economists much worse.

Submitted by AN on June 5, 2019 - 10:31pm.

FlyerInHi wrote:
Maybe the person is a childless academic or intellectual who studies things.
LoL

Submitted by spdrun on June 6, 2019 - 8:50am.

So a parent who never went to university is more qualified to speak about college choices than someone who actually went to school in different countries? Also, $5000-$10000 per year vs $20000-50000 per year (in the US) is a hell of a difference price-wise.

Problem is that both parents and HS seniors tend to be exposed to limited choices, and not realize how easy it is to go outside the US and bypass the whole debt-whore game. To give you an idea, my high-school counsellor didn't even mention LOCAL public universities other than my state's as an option (guy actually had a fetish for applying to a small private school that was his father's alma mater).

Submitted by flu on June 6, 2019 - 10:53am.

So spdrun, which college did you attend? How affordable was it?

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.