Home Owner wrote on Aug 29, 2006 5:08 AM:Wait for the follow on article from the 6% real estate agents trying to spin this as a "short term buying opportunity"! The realtors will do just about anything except tell the truth to try and keep their profits up! The truth is, that there are very few good opportunities to buy out there right now and sellers are getting hammered to lower their prices! Patience for a year or so!

bill wrote on Aug 29, 2006 6:54 AM:I guarantee inventories of new houses will not be "depleted" by the end of September in Riverside County. Today there are 26,000 houses listed on the MLS in Riverside. A year ago there were 12,000. And the number grows each month. And hold onto your hats, this number includes used homes (yours) and not the flood of new houses. The IE housing market is going down hard, folks. And you can thank your local law makers who were elected by, and who vote for, the "developers".

Gary in Murrieta wrote on Aug 29, 2006 7:36 AM:Who is going to take care of all of the Illegal Alien construction workers who will be out of jobs. Or do you think they will keep their jobs and the U.S. Citizens will get fired because they cost more? Which of the two will qualify for unemployment, food stamps, school lunches, WIC, etc. ANSWER : THEY BOTH DO!

Developer wrote on Aug 29, 2006 8:15 AM:Hey Bill, Do you live in an Igloo? Gary I hope you never loose your job!

George wrote on Aug 29, 2006 9:22 AM:Greedy Developer, I'll bet the igloo is built with better quality than the cheap materials you and all the other developers use just so you can have a huge profit margin at the expense of struggling average Americans.

Other Developer wrote on Aug 29, 2006 9:30 AM:The Riverside economy is vibrant and growing steadily. There will be a soft landing in home prices in the short term (1 to 2 years due to excess supply) but demand will catch up and then steady appreciation of about 6 to 8% annually. The media plays any story they can and keep in mind that they are niether economists nor real estate developers. Building is a positive sign. Developers don't build products for them not to be used (not sell). They are in it for the profit. Investing in/Developing Real Estate is an investment in the local economy.

bill wrote on Aug 29, 2006 10:12 AM:Hey Developer, Igloo's are worth what they cost to build. The stucco boxes you guys have been throwing up around SW Riverside County will show price declines for the next five years. Bwaahaaahaa! By the way, now that peak buying season is over, how do you explain rising inventories into Fall and Winter? You must be scared witless.

Developer wrote on Aug 29, 2006 10:29 AM:Bill, so you're homeless?

Ed wrote on Aug 29, 2006 11:15 AM:Hey Developer, maybe we are homeless but you have to many homes you cant sell, soon you are going to be homeless with your poor wife and spoiled kids crying waaaaaaaaaaaaaaaaaaaa

Concerned wrote on Aug 29, 2006 12:31 PM:What's the point here folks? Developers are bad? Real estate agents are bad? The whole real estate market is a scam? None of that is true. It's a market, just like any other. Developers and agents are people. There are good ones and not so good. That said, I know a little about this market and I don't see a big reduction in prices in the near or long term. There are a lot of reasons, but for simplicity's sake, this is not the 1990s. i.e. unemployment, the economy, and the lack of abundant inventory. The reality is prices are not going up 25 to 30 percent annually, as in the past five years. The market is adjusting to all that momentum. When you are driving 120 mph and then slow down to the average speed limit, say 70, there's a big difference. Duh. Real estate in Southern California is the best long term investment you can make. Take it to the bank.

bill wrote on Aug 29, 2006 1:17 PM:Concerned, No wonder you're concerned. Anyone buying so cal real estate today is the classic "greater fool". You are correct, this isn't the 1990's, it is far worse for one reason: affordability. Or lack thereof. $550,000 for a twenty year old three bedroom house in Elsinore? With another 1,400 houses planned for the Elsinore flood plain? Your example is a bit flawed, however. In fact, you are driving a vehicle at 120mph and suddenly go of a cliff. That, Concerned, is a more accurate picture. Ugly, but accurate.

Concerned wrote on Aug 29, 2006 3:39 PM:Bill, You are entitled to your opinion and if you think investing in real estate is foolish then by all means, don't do it. Affordability is relative, and if you can afford to buy a house, be it an old three-bedroom in Elsinore for 550, then I say do it. Despite what Mr. Bill says, real estate is a good (long term) investment. Like Will Rodgers said "Buy real estate, they don't make it anymore."

bill wrote on Aug 29, 2006 4:18 PM:It doesn't matter what I can afford, it matters that the median family income can't afford to buy the median priced house in Riverside County. When you take away all the froth and hype, a house price should have some relationship to the cost of the land and the construction of the house. That would price that $550,000 junker I referred to at closer to $350,000 today. And I'm being very generous. FYI, Will Rogers was a comedian, not a financial adviser.

Concerned wrote on Aug 29, 2006 4:46 PM:Bill, I agree that $550,000 is a hell of a lot to pay for a house. Hard to even qualify for, but if you can do it, you should. Take my son for instance. I'm encouraging him to buy something soon, or he and his lovely new wife will be priced out of the area. With that, I don't think he should wait for prices to go down. They are not going down. Interest rates are another subject. Anyway, I kind of like Will Rogers philisophical views. Laughter is the best medicine.

It's southern California! wrote on Aug 29, 2006 5:03 PM:There will always be people moving here, because we have the best weather in the nation. The fastest growing demographic group is the retiree. Most folks that retire and have the resources, choose to live in a warm climate. Additionally, all of your children will have to move out and into their own home, condo, or apartment someday. Money is still inexpensive to borrow, and the surplus of current inventory will be absorbed reasonably quickly due to seller incentives, new loan programs and slight price reductions. If you bought your home in the last year or two for a quick return on investment, you may have to wait a little while. If you like where you live and can afford the payments, a slight dip and timely recovery won't affect your future. If you bought a condo, you may have to wait even longer. No one has a crystal ball, beware of the doomsdayer's as well as the overly optimistic. However, be aware that the southern California real estate market is historically less volatile than any other region in the nation. It has also outrun the stock market in terms of overall appreciation. No one has to own stock in another company, but we all need a roof over our head. People that can afford to live here will continue to buy here, while people that can't will simply have to move to less expensive areas. There will be some people that end up facing bankruptcy or foreclosure, but they are the minority and they're still going to have to live somewhere even if that means renting. There will be no mass exodus out of California. I'm not a real estate agent or an economist, but I enjoy numbers and factual data. Real estate and the building industry in general, has been very good to me. The people that are going to have problems are those that used their home equity as "credit cards" for foolish items like new vehicles and vacations. Also those few people that opted for adjustable rate mortgages while betting the house (literally) on future appreciation, might feel the sting as well. When they lose everything due to their own recklessness, I'll rent them a house, and if they already have a bankruptcy, I'll sell them a house and carry the note (with a substantial down, of course. LOL). I recently read a report that said if you want to identify the first people to go into foreclosure, follow the next Hummer you see home. That's why I drive a ten year old pick-up. Most reliable data indicates the possibility of an approximately 20% short term adjustment in values. The wild cards are, long term interest rates, U.S. involvement in additional wars, terrorist attacks, and of course natural disaster. In 1978, my new home in Laguna Hills was $107,000. By the end of 1980, you couldn't give it away. Care to guess what it's worth now? My father's first home in Redondo Beach in 1949 was $6,000, and he thought that it was overpriced. I can remember 18% interest on mortgage loans. This is still a very "friendly" market. There is a finite amount of desirable southern California real estate. Real estate can't be manufactured like currency or any other product. Own as much of it as you possibly can

bill wrote on Aug 29, 2006 7:19 PM:A 20% short term adjustment in values? Are you insane? How can you suggest investing in an asset that you admit will lose that much value? You and Concerned and Developer and all cut from the same bolt of sack cloth. You all need to step back and take a deep breath. Wait at least two years and exhale. Then you may wish to consider buying in so cal.

Concerned wrote on Aug 30, 2006 8:46 AM:Right on with the "It's Southern California." I like my investment here and never want to move. Best of luck to you Bill, where ever you end up.

Winston wrote on Aug 30, 2006 6:59 PM:There is a correlation between incomes and home values. Look over the last 40 years and see how both housing and incomes have moved in conjunction with one another. However, the last five years have been a deviation from historical norms. What changed? Two things changed. First, interest rates for mortgages declined to historical lows. Second, the psychology of owning a home changed. In other words, instead of only a small percentage of the population treating real property as an investment, the average worker became a homeowner for the return in investment instead of treating a home as a homestead. But the demise to the home industry will be lending practices. Stay tuned!

JWM in SD wrote on Aug 30, 2006 7:23 PM:It's all relative?? Priced out forever?? Are ... kidding me?! The only way that the prices are affordable is with exotic financing which relies on continuing appreciation. Without continuing appreciation, then there is no risk taking incentive for the average homebuyer. Who is going to be left to sell to when credit is tightened up because Bernanke has to keep our foreign creditors happy??

Bubble For Sure wrote on Aug 31, 2006 9:47 PM:I'm sorry to say concerned and developer but the market is heading South quickly - tons of inventory out there - huge lack of affordability (unless you are speaking of interest only loans) - the market went up too fast for too long - markets go in cycles and there is no way to stop this - the prices have about 30% decline before they will go up again. Now that being said...the prices of homes always go up when you look at a 10 year horizon - the smart buyers will wait about 2 years - I'm renting a 2K/month house - brand new and a bit over 2,000 square feet - tons of houses to choose from while I wait it out :-)

Bubble popped... wrote on Sep 1, 2006 9:58 PM:All you idiots who say "HURRY HURRY BUY BUY or you'll be priced out forever" are probably those who bought at the peak. Good luck to you. You'll need it. As for developer and concerned, you're totally clueless. See you in Chapter 7. Cash out your home equity while you can.. but you won't because Real Estate ALWAYS GOES UP!! PARTY ON!!

SF/Bay Area Comment wrote on Sep 2, 2006 1:52 PM:Nothing in Southern California is nearly as scary as the situation here in the Bay Area. San Francisco housing is out of control. Some market sectors are already imploding while others continue to rise. Putting the modest Painted Lady that I rent on the market today would probably leave my landlord underwater by at least 200K from his initial 2003 investment. On three occasions he has offered the property to us and in each case, he has asked for less money. Still, his most recent offer of nearly 900K is far out of reach for our household income. And so, he can’t sell it and he can’t afford to not have a tenant. I would love to own this home, but it will need to drop by 50% again for our $180,000 household income to justify the expense.

Grant wrote on Sep 5, 2006 1:25 PM:For all those who think "Real Estate" always goes up, do a little research - a little research before the 1980's I mean. Look up the recent article by Prof. Shiller where he tracks inflation-indexed prices of homes back to 1890. There have been a lot of extended periods during that time when the inflation-indexed prices of homes did go down. Don't listen to the developers, real estate agents, and those (desperately) looking to sell their homes. SoCal RE prices are going down and going down hard hard.

Patience wrote on Mar 24, 2008 2:10 PM:So just wait a bit, right? Don't listen to people saying it won't drop? Here we are, two years later, and housing prices in my area have dropped between $100K and $150K and they are only just starting on that lovely long hall. In a year, we may actually be able to buy something. In two years, definitely. It is a sad state of affairs, but if that gets me a house, and I don't have to move out of state, I'll keep waiting it out, crossing my fingers, and hoping to buy one of those brand new homes that last year opened at $550K and now are in the low $400s and in two years will be in the mid to low $300s. Anyone who didn't see this coming was stoned.