ArtElectric commented,
There is always somebody with more reach than you have.
Not just more reach, but more frustration too, because they are further along in the hunt.
The Five Stages of Buyers’ Grief:
Denial – Buyers are adamant about not overpaying.
“The only house I’m buying is the one I can steal from the bank” is a common theme. Buyers read daily about how bad the economy is, how bad the real estate market is, and figure this might be a good opportunity. They begin their search.
Anger – With every house on the internet, most buyers take matters into their own hands.
They surf the web in search of that steal, thinking that there will be plenty laying around. How hard can it be to find a deal? But then they realize that a cursory overview of the inventory produces junkers and over-priced turkeys. Anger begins to set in when they realize it isn’t going to be as easy as they thought.
Bargaining – Early on every buyer wants to make low offers – we’re stealing one, right?
But the good listings always seems to have competing offers, with 95% of the buyers chasing 5-10% of the inventory. This is where ArtElectric’s thought comes in – there are other buyers who are further along in the five stages of buyers’ grief – and they outbid you. Virtually every buyer will lose out on 1-3 offers before succeeding.
Depression – It’s hard enough just to find a good deal, to then lose out on one or more is depressing.
Many give up for a while, deciding that it’s not meant to be, they’ll wait until the market comes down more, wait until the economy gets worse, banks unleash the shadow inventory, etc. But there’s a haunting feeling that it won’t get easier.
Acceptance – Buyers loosen up on their demand to steal one, and shift to acquisition mode.
By now most just want to get it over with, and accept that the successful search and purchase of a home is more time- and energy-consuming than they thought. The next one they find that suits their needs, they step up a little sooner, and a little higher than everyone else, and finally land one.
Today’s buyers don’t like these feelings, and many will wait it out, hoping it’ll get easier, later. But with the government backstopping the markets and banks being very deliberate about processing their short sales and REOs, it could be a long wait.
Will the banks start unloading? I think they could double or triple their output of REOs in good areas and sell every one of them today.
We’ll see if the demand holds up – the fourth quarter of 2009 should be very telling.
In the long run, markets always win.
Housing isn’t a bargain by any historical measure. If anything, it is approximately “fair value.”
It’s all a bet about what the economy does. If we have a soft landing and things start to pick up, it may turn out that now was the time to buy.
If we don’t have a soft landing, unemployment continues to increase, and all the money being printed starts to trickle through to increased treasury yields, housing could still take a significant hit from here.
that was me above 🙂
Ive heard the softlanding theory before. If anyone thinks the economy is going to pickup in the next year, your a fool. Look at the 11.5% unemployment in CA today and watch several more thousand autoworkers lose there jobs from the BK’s of GM and Chrysler. Watch Arnold terminate several thousands of employees as the state is going into bankruptcy with no bailout from the Feds and tell me why anyone whould want to buy a house in the next year while prices of homes are all but guaranteed to continue falling. Knife catchers!
I went through the same stages EXCEPT the “acceptance”
My final stage was FUCK IT!
David,
Are you open to considering other parts of the puzzle? If so, stick around. We cover them all here.
JtR
My stage is “Rent and Wait”. Rents are cheap right now and I save as much money as possible. The one thing I’ve discovered through this whole buying a house in SD is that money talks. The more you have the better your odds are of getting house.
And PS. flippers are only able to secure all cash loans because interest rates are so low right now. The minute they start going up all cash offers will slow down.
JtR, this was a great post. But, one thing that I believe is very important is the role of an agent in managing buyer expectations. My wife and I just pulled ourselves out of the market after having an agent feed these very expectations, and then later try to modify our expectations and say the market is to blame. She allowed us to make offers that were sure to get rejected, and waste our time on houses she knew we couldn’t afford.
I think an agent who can manage their clients expectations, can help buyers avoid these ‘5 stages’.
BTW, we won’t be back in the market for a while as we are both State employees…
I see over priced turkeys left and right, but it doesn’t bother me. The price of turkey has been rapidly dropping for me, by $50K a year. So even if I overpay today, it could have been much worse. That said, I’m waiting yet another year as my bank account fills with potential equity.
Interesting analogy, comparing the act of buying a house to the stages of grief usually associated with contracting a terminal disease.
Not sure what to make of that, especially since the stages you describe seem to ring true.
For what it’s worth, the cost of knife catching has dropped from what it was before. But so has the cost of renting in SD, which boosts your savings rate.
I used to say I could only afford a nice house in a crappy neighborhood, or a crappy house in a nice neighborhood. I puzzled at why people who made half as much as me bought a condo I could barely afford (that is, considering after the ARM reset). Now it all makes sense, if for no reason than everyone else has caught on.
I saw an episode last night where the couple bought a house in Phoenix for $209,000 with 3% down. Now, houses there are selling for $30,000.
I would love to see the market get back to a minimum 20% down.
All true. I just lived it.
The bottom feeders will never buy, though, they will simply say “fu** it” and angrily wait.
And Wait.
And Wait…
Current knife-catchers are going to be kicking themselves in 2 years time.
Lars, that is exactly why a whole lot of agents suck. They aren’t filling their fiduciary responsibility to the buyer, they are pumping the buyer for the biggest commission.
I got so very lucky, when I bought in 2002 – my Realtor was a friend. She knew exactly what I had for a down payment and wouldn’t even show me properties that I couldn’t put 20% down on. Someone else would have happily let me make a mistake in buying over my head, and probably encouraged me the whole way.
People have never owned before have no idea how hard it is to find the right house at a price you can comfortably afford. They also have no idea just how expensive and time consuming home ownership is. Once you figure out your monthly payment based on the loan terms (plus insurance and property tax) tack another $300 on each month for maintenance. Stuff breaks. The older the house, the more stuff breaks.
Buy the land and location, the house is just a pile of wood and building materials that can be changed and remodeled to suit.
“My final stage was FUCK IT!”
Todd,
That’s the best stage!
“People have never owned before have no idea how hard it is to find the right house at a price you can comfortably afford.”
This goes back to what I said in the previous thread. Real estate *never* feels cheap. Hardly anyone wants what they can easily afford because their tastes quickly inflate. Thus, no one, in any price range, thinks prices are low and value is high. If you’re going to try to buy, get used to the feeling that you can’t get all you “should” be able to for your $$$. And that’s whether you’re at the $500k or $2.5m price point.
There are a lot of never-owners here, and it’s clear by all the whining and “you just wait!” comments.
HGTV–For the mostpart–it already is 20% down.
You heard it here folks, ‘if you wait on buying a house you’ll wait forever’. This is really a variation of the old formula, ‘Everyone buy the biggest house you can right now!’ Which these days turns into ‘Sell now or be priced in forever.’
Leveraged depreciation plus interest = renting from the bank and overpaying for the privilege. How about you simply buy a house you can actually afford, with a margin of safety, that you don’t mind living in at least 5 or 10 years?
By contrast too many people have bought houses they can’t afford, with a negative margin of safety, treating the house like a speculative commodity. Robert Shiller had some great scientific observations on this i his book “Irrational Exuberance” before housing prices plumetted.
“Current knife-catchers are going to be kicking themselves in 2 years time.”
I remember hearing that in 1996. We all know how that one turned out…
Aztec,
I think you should qualify your comments as relevant here in California. Other places it’s possible to get all the house you need and sleep well.
1- until prices fall to 3.5 x annual household income – prices will keep falling.
2- this is a dead cat bounce
3- the masses are asses. See what everyone else is doing and run the other way and you will be correct at least 90% of the time(this holds true in any single thing in life)
4- the beach town -great school areas will fall to 2001 levels- at least.
5- How do I know this ? because I do.
6- finally seeing my REO inventory increase again in vegas. After 2 yrs averaging 45 new assets per month – this year my totals are :
Jan-17
Feb-20
March-13
April-6 (yikes)
May-11 (yikes)
June so far- 26
Nice piece, Jim; I think you pretty much nailed it for anyone who’s purchasing in today’s market (not that I have first-hand knowledge, but it sounds spot on). The nice thing about living now, instead of 10+ years ago, is that you can actually have a pretty good idea what the market trends will be in the future, based on all the data which is available, so you’re less likely to be taken in by the “buy now, the market will be going up soon” pitch. However, whenever you do decide to buy, you’ll probably end up going through these stages anyway, so you might as well be prepared.
I think a lot of the same people who missed the greatest real estate bull run are the same ones who keep saying they are going to wait until prices hit bottom.I wish i knew where the bottom was.I think if you can afford an investment property that produces cash flow then go ahead and buy.There are a lot of other people waiting for this so called bottom.some areas are very affordable right now.I do admit there are areas of ca that are still way overpriced.It is a lot better time to buy then in 2004.People who take risks in down markets always seem to make out in the long run.
If you’re going to try to buy, get used to the feeling that you can’t get all you “should” be able to for your $$$.
Aztec, how well I know that feeling. When I first started looking, I was appalled at the houses/neighborhoods I had to choose from. I earn a good living and expected to be able to buy comfortably in a middle class neighborhood with plenty of square footage. The reality was a working class neighborhood and 900 sq ft. It was a hard lump to swallow at the time because I kept saying “I SHOULD be able to afford better than this.”
“Better” was 100k out of my reach.
Many are misreading seasonality for the bottom. I predict we’ll hear the same things next spring after another cold winter. We’re far from out of the woods.
“the beach town -great school areas will fall to 2001 levels- at least.”
Inflation adjusted 2001 levels can be achieved in different ways, at different speeds. A 20% from peak haircut followed by years of flat prices would do it. I think that’s more likely then an overnight 40% haircut in the prime areas.
Personally I’d rather overpay 1-2 years of equivalent rent then wait another 2 years only to find prices are flat or dropped another 10%.
Those out buying in the last year are the most eager, and most likely to overspend and settle. Fence sitters hopped up on Red Bull.
Personally, I’m letting them go first.
The last stage, Acceptance, doesn’t necessarily mean capitulation and buying.
In my case, acceptance is accepting that I have a much better deal renting than buying.
My acceptance was to re-up my lease.
This bubble is unprecedented, and it is very difficult to predict the outcome that will bring things back to balance. I don’t believe we’ll be into recovery and a rebound until we see a new economy (green?) take hold.
The following are excerpts from…
http://money.cnn.com/2009/06/19/news/economy/higher_inflation.fortune/index.htm?postversion=2009061910
Now let’s look to the future, and the shadow cast by giant deficits. The government borrowing required to finance those enormous deficits could push real rates well above the normal level of around 3%. In most expansions, deficits drop because tax receipts swell with the recovery. But now, America is entering uncharted territory. The deficits remain a structural problem, not a cyclical one that will disappear with the recovery. They will remain in the $1 trillion a year range, even after U.S. reaches full employment and strong growth, according to the CBO forecast.
So the government will be competing for America’s scarce savings at precisely the time corporations will need that capital to buy workstations, to open stores, and to add employees. The demand for capital from two directions, practically a first in U.S. history, threatens to substantially boost real interest rates.
…
In the Fed’s hands. That brings us back to the two scenarios, sobering-but-healthy versus disaster. It’s the Fed’s choice, and investors should watch the Fed’s decision with care and trepidation. If the Fed chooses the right path, sobering-but-healthy, it will start raising short-term rates this year or in early 2010. That would send a strong signal that the Fed is serious about fighting inflation.
Yet even that strategy won’t slay inflation: Darda predicts that prices will rise 3% to 5% even if the Fed proves righteous. But that’s about the best result America can hope for. It might also dampen the need for far higher real rates by cooling the economy temporarily when the government is doing its heaviest borrowing. The result would be 10-year rates of around 6% to 8%. Those yields would pound the economy for a year or more, but they would also put inflationary fears to rest.
Now, let’s look at the disaster scenario that so worries Meltzer and Wesbury. In that script, the Fed would hold short-term rates extremely low to keep the economy growing and prevent further increases in unemployment. The easy-money stance would leave investors terrified about inflation. A new explosion in credit would push up demand far faster than the economy could supply new goods and services, causing a rapid rise in prices.
Instead of raising taxes to lower the deficit, the Fed would monetize it by printing money to buy Treasurys. That would scare Chinese and other foreign investors we rely on to buy our bonds and finance our deficits. They might resort to panic selling. Now we’re talking about rates that could reach the double digits.
Allan Meltzer, author of influential histories of the Fed, isn’t giving specific numbers, but he will say, “We’re facing a major inflation problem. Three to four percent inflation is not a bad thing, but the Fed won’t be able to hold it there.”
Meltzer abhors the kind of political pressures that left us with rampant inflation in the 1970s. But the great man sees them building again. This time, we have a chance to escape what’s obviously, clearly and undeniably a bubble. And we’re on the verge of returning to the time when bellbottoms and hyperinflation reigned. The former went out of fashion. We all know the pain it took to escape the latter.
I could buy, with cash, 4 “houses of my dreams” in Phoenix right now.
I sold in S.D. in mid 2004 and my North Park house is currently valued more than the bubble price I sold it for in 2004. Even if I could buy it back for the same amount my property tax would be an additional 300 a month than it use to be.
Being that I can buy 3/4 of a house of my dreams in North Park and 4 in Phoenix, I will continue to rent in Phoenix, live the life of Reilly while all you idiots who are foolish enough to fork over 700K for a dump in a decent neighborhood then struggle to make ends meet.
I would love to live in S.D. right now, but am I willing to trade my life for a house in S.D.? I don’t think so!
I tell you, it is so nice to have economic freedom and San Diego is not worth my freedom.
It’s been in the news lately that median prices are going back up. Could that be because better homes are trickling into the market? I wouldn’t call that a dead cat bounce, just better inventory.
There are definitely more homes in the neighborhood I like coming onto the market. And the prices are slowly becoming more reasonable – but still $50-100k off target.
March unemployment in San Diego County was 9.5%, April’s unemployment rate dropped to 9.1%. The statewide average is higher. All coastal counties saw unemployment ease just a bit.
Check out your favorite region: http://www.google.com/publicdata?ds=usunemployment&met=unemployment_rate&idim=county:PS060850&q=san+diego+county+unemployment+rate
Home sales are up for 11 months, sales prices in San Diego increased last month, and so are list prices. Meanwhile inventory is dropping.
It feels good to have rentals, and, nice to be working on my home improving it. To all the renters; it always seem like a crazy time to buy.
I don’t know how you could buy a home right now with all the issues still unsettled in Sacramento. Basically, every possible option is on the table right now with the budget problem, from the state grinding to a halt, to massive pay cuts and slashing benefits, to across the board tax hikes. The crazy thing is that every option has serious consequences for different demographics. I really have no idea how it falls out, but it seems like (at least right now) they are determined to not kick the problem a few years down the line. We’ll see though.
Mozart,
I find your analysis most intriguing. Would you say that 9.1% unemployment should be drawing in new residents?
Just wondered what drives that kind of thinking. Do you think that’s a good level of unemployment?
Chuck
I don’t think the state matters that much in the big scheme of things. Demoralizing, yes, but they’re going to raid local municipalities for property taxes. Just like they did in previous recessions. Cuts in services, some lay-offs, no big deal really. We have about 240,000 employees working for the state or less than 1% of the population.
By the way, did you know that California sends more to the Federal Treasury than it receives? The difference is about what the projected state deficit is. Glad we are subsidizing the country while we get screwed and stuck with the tab for illegal immigrants.
Chuck- my point is the trends are stabilizing and improving. 9.1% is bad, but it’s not as bad as it was. The trend lines for almost every element of the economy are improving. Unemployment will go up and down but my view is that the worst is over.
Also, the headlines are meant to cause fear and create interest. The state numbers are much worse than for many counties. The focus of this site is North County San Diego, which is why I reference San Diego.
And, “good” unemployment is 5% but that would drive inflation, wouldn’t it?
I’m just trying to present other views and information. And, I do feel some of the massive pessimism here could actually harm people who are waiting too long to buy a house.
“And, I do feel some of the massive pessimism here could actually harm people who are waiting too long to buy a house.”
Why is it you’re responsibility to “unharm” them? What is you’re agenda?
I can see how a drop from 9.5 to 9.1 can make someone who does not understand how the Gooberment comes up with the numbers think things are improving.
It dropped not because jobs were created but because after you run out of unemployment you drop off that particular number. The overall rate, that wich includes everything has shown no improvement.
The Labor Dept. has the full set of stats available but you have to look for them, they are never published in the media, I guess because the media is always trying to make things worse than they are (or better, you pick).
Anyway, when you count those who are no longer getting unemployment, those who want to work but can’t find a job, including those who gave up looking, you will get a rate of closer to 14 percent.
The most appalling fact with the Bureau of Labor is they count someone who is working 1 hour a week as “employed”. However, they do keep track of the part time workers who want full time but can’t get it. When you include that the total unemployment rate is nearly 20%.
Now those who have the glass half full attitude will consider someone with 20 hours a week employment, employed, even though they get no benefits AT ALL.
“It dropped not because jobs were created but because after you run out of unemployment you drop off that particular number. The overall rate, that wich includes everything has shown no improvement.”
This is 100% false. The unemployment rate is based on a survey, not on whether or not one is eligible or receiving unemployment benefits. If you are actively looking for work and don’t currently have a job, you are counted as unemployed, period, even if your unemployment benefits have run out.
“And, I do feel some of the massive pessimism here could actually harm people who are waiting too long to buy a house.”
The whole concept of “waiting too long” implies you’re trying to time the market for some sort of optimal financial gain, which is the exact thinking that got the people who are defaulting into that situation. If you really want to not hard potential buyers, how about steering the focus away from when is the “optimal” time to buy, and toward the idea of buying something which you can afford to pay for over the entire term of the loan without assuming future modifications. Or, alternatively, you could focus on buying when and if it’s cheaper than renting, and not otherwise. If you follow those two rules, you may not buy at the “optimal” time, but you probably also won’t be out on the street in a few years even if you miss the “bottom” of the market.
Just my 2c.
“If you are actively looking for work and don’t currently have a job, you are counted as unemployed, period, even if your unemployment benefits have run out.”
This is only kinda true, as I understand it; it depends on the measurement. IIRC, it’s the U5 which includes all people who don’t have jobs but are looking, and if you’re referring to that measure, you’re correct. However, the U3 is what is almost always reported, and is the “official” measure, and that doesn’t include “discouraged” or “marginally attached” workers, and for the U3 your statement is flat wrong. See http://en.wikipedia.org/wiki/Unemployment#United_States_Bureau_of_Labor_Statistics for a reasonable overview of the various measures.
Mozart – hang in there buddy, don’t leave me here by myself!!!
Regarding the unemployment, those buying today must be not only gainfully employed but have little or no concern about it affecting them. I put a new REO listing on the MLS early today and already received two ALL-CASH offers, and another ALL-CASH one promised later.
On timing – give yourself plenty of leeway. My average is 6-8 months for buyers to go start to finish, and I expect that to go longer with the heightened competition.
I am also really looking forward to 4Q09 in hopes that it will mellow out, but I have my doubts.
March unemployment in San Diego County was 9.5%, April’s unemployment rate dropped to 9.1%
California saw 64K jobs lost from March to April and saw the unemployment number drop from 11.2% to 11.0%. From looking at piggington.com, San Diego lost jobs over that same time period. The most likely explanation for the two numbers is that people stopped looking for jobs, so are no longer counted as unemployed. The gap between U-3 and U-6 unemployment in the US has been increasing which suggests it is happening in other places as well. Unfortunately, I couldn’t find U-6 numbers for just San Diego or California.
“And, I do feel some of the massive pessimism here could actually harm people who are waiting too long to buy a house.”
If the pessimism or optimism of anonymous posters on a message forum sways one of the largest financial decisions of your life – please give me a call! 🙂
Jim –
On a more serious note, North County Coastal is a big area with different interpretations. I’ll probably drop you an email at some point to see if you work the areas I’m interested – but on that vein do you have a breakdown listed anywhere listed on your site?
“The whole concept of “waiting too long” implies you’re trying to time the market for some sort of optimal financial gain”
Thanks, and agreed. I’m tired of being treated like I’m trying to perfectly time the market so I don’t lose a single penny and not just waiting until buying makes sense for me. In this market, that means I need to be sitting on not just a good downpayment but enough cash to let me bid over list price, factor in rising interest rates, and still end up with a reasonable payment – which means saving for another year or so. I certainly hope things change in that time, not because I’m a “permabear” but because the idea of competing with another couple’s mommy and daddy (ahem: http://tinyurl.com/lfw2pb) to pay $20,000 over list makes me want to stab somebody in the eye a little(putting me in the “Anger” stage of home-buying grief, I guess).
But here’s the thing – the longer I wait, the more house (or at least the better the neighborhood) I can afford. The only way that wouldn’t be true is if houses began appreciating faster than I could save, or I had a sudden drastic reduction in income and couldn’t save any more. In this economy, one of those things is a lot more likely to happen in the next few years than the other, and it’s not the thing likely to scare me down off the fence.
Current circumstances are *nothing* like a market bottom.
We were house-hunting in 1995/96 and ultimately could not purchase due to a business deal gone sour. However, a house we *loved* (in Calabasas overlooking the golf course) sat at a killer price for an entire year! The wealthy owner — who’d already purchased an even nicer place and had already moved — would’ve let us lease-purchase, too. That home ultimately tripled in value during the bubble, and is still “zestimated” at double what we’d have paid.
Same went for some new construction we really liked in Westlake Village. Beautiful homes that just sat around forever.
The moral of this story? The bottom of this market (and thus the best time to buy) will be when *no* one else is interested and everyone is recommending against it. The herd is always wrong.
Rising unemployment/downward pressure on wages + contracting financing/rising rates + an end to housing optimism = no inflation in home prices.
What else do we need to know? My employer (UCSD) is debating how to take 8% of my wages + charge more for retirement benefits I will probably never see + taxes are going to be higher. Do you think I am rushing out to leverage myself to a home which may or may not hold its value? … and I am one of the “lucky” ones who basically has a guaranteed job and is not stuck selling an existing home.
History tells me I can wait a year or two without much risk of being “priced out of the market.” Who knows, if things continue as they have been, I may even be able to afford a home here in sunny CA.
sdnerd,
I don’t have them listed but I’ll mention them here.
My primary area is Carlsbad to Carmel Valley. I have a number of buyers for that area who have struggled with the 5 stages, and even those who are willing to buy at today’s prices still find it difficult to find the right house, at the right price, and beat out the competition. There are a ton of slimy deals being done too off-the-grid, which are discouraging.
I have ten experienced agents work work at Klinge Realty, and their specialties are Oceanside, Vista, and San Marcos, so if you wanted to focus there I’ll introduce you to one of them.
I have sold homes this year in El Cajon and La Mesa, but for outlying areas I need your help in searching because I don’t watch the inventory there. I have over the years sold plenty in the I-8 corridor and am familar with most of central county.
I have sold some in the I-15 corridor (Scripps, 4S-92127, etc.), and having assistant Richard on-board will probably allow us to serve that area more/better. He is great at showing property when I can’t make it, so it’s like having double coverage now.
South county? You’re on your own.
Re: Unemployment…
http://globaleconomicanalysis.blogspot.com/2009/06/continuing-claims-drop-first-time-in-21.html
Continuing Claims Drop First Time In 21 Weeks. Is This Worth Getting Excited Over?
Given that the proportion of recipients who used up their jobless benefits topped a monstrous 49 percent, the continuing claims number going forward will be essentially meaningless. Indeed, the primary reason we set these records in the first place is that many states extended benefits.
Looking ahead, expect the administration to highlight the huge drop in continuing claims as if it means something necessarily good. It doesn’t. The drop in continuing claims means more home foreclosures and credit card defaults are coming because 49% of those who were receiving benefits now have no money coming in at all.
Finally, The drop in initial claims is insignificant in relation to the problem. Beware of future spin on meaningless “improvements” because it is coming.
Mike “Mish” Shedlock
Geotpf
“””The unemployment rate is based on a survey, not on whether or not one is eligible or receiving unemployment benefits. If you are actively looking for work and don’t currently have a job, you are counted as unemployed, period, even if your unemployment benefits have run out.”””””
Sorry Bud but you are absalutely WrONG. Please research this so that you will agree with the truth.
“My average is 6-8 months for buyers to go start to finish”
Jim,
I’m not sure what you meant by this. Is this the average length of time it takes buyers to find, bid on and get an offer accepted on a house?
Great post btw!
Yeah, from the first time you decide, yes, I’m going to look for a house, and dedicate the necessary time and energy, it’s 6-8 months on average.
Many go longer, and with the market’s decline there’s nothing lost, really.
For the people who can go out today and buy a house in 1-2 motnhs without experiencing the 5 stages of buyers’ grief, congratulations, you’ve beaten the odds.
But for the vast majority, it’s a long, drawn-out grind.
Hey Jim,
I’m still in the hunt, but the inventory in San Marcos is clearing really fast.
As you’ve noted, anything attractive goes on and off quickly.My neighbors on Camino Hermoso didn’t even get posted on MLS before they were in escrow.
I’m probably going to target Dec Jan as we have a new baby due in August.
Plus, that gives ample time for the market to correct.
You can’t keep printing money without expecting the market to react. This situation is not sustainable.
C
Should we blame this frenzy-like experience on the Lakers’ run, causing giddy-ness throughout the southland?
More good news…
New, Hard Evidence of Continuing Debt Collapse!
While most pundits are still grasping at anecdotal “green shoots” to celebrate the beginning of a “recovery,” the hard data just released by the Federal Reserve reveals a continuing collapse of unprecedented dimensions.
Bottom line: The first quarter brought the greatest credit collapse of all time.
Ahhh just finished the 5 stages (ur right jim 6 mos. & solid job). Moved into my 4bd house last wkend. Any of u skeptics tell me how I went wrong 4 less than $300k. But renting is still a steal, u bears might want my old place on the strand, it’s up 4 grabs now 804 n. The strand #17 http://www.propertyadvantage.com. gonna miss that view
“Yeah, from the first time you decide, yes, I’m going to look for a house, and dedicate the necessary time and energy, it’s 6-8 months on average.”
LOL, maybe we have not been putting enough energy, but my wife and I have been looking to move up now for 12 years.
Rational expectations:
My wife works at UCSD and 3 people in her office were just laid off.
Even UCSD is not safe.
So, why would anyone buy a house???
Because it CASH FLOWS? We’ll, my 3 other rentals just got new tenants at rent that is 35% cheaper. RENTS ARE GOING DOWN! Cash flow now does NOT MEAN CASH FLOW LATER!
People are moving back with Mom and doubling up. It’s not good to do anything now or for maybe 3 years at LEAST!
Thanks Jim. I had no idea. That is rough. So Cal real estate is nothing like it was in North Carolina.
But on the bright side, now I don’t feel so bad that we hadn’t found a house yet.
“Who knows, if things continue as they have been, I may even be able to afford a home here in sunny CA.”
While I don’t know what you do for a living, your post here illustrates how much more correction may still be needed.
As you work at the University the theory is you create value to this society.
But in CA and in some other cases, people who were not creating value were taking wealth from them who did. This is too complicated to exctly explain in here, but the bottom line is housing as an asset class days probably are numbered.
If so, one day you’ll be able to buy something you like and have the transaction be win-win instead of win-lose.
I would not be shocked if 10 years from now school teachers live 2 miles from the coast with room for their family.
I’m very smart so please excuse me for asking dumb questions. Isn’t this suppose to be a buyer’s market? If it is, why is the buyer facing these headaches? Isn’t this market suppose to be a seller’s problem? Will there be a sequel to this article – The Five Stages of Sellers’ grief?
That’s what I’m trying to expose here at bubbleinfo.com.
When all you hear and read is that the market is in the tank, when you actually get in the game and try to buy a house, it’s much harder than you’d think.
I did the sellers’ five back when it was a buyer’s market:
https://www.bubbleinfo.com/2006/10/five-stages-of-seller-grief/