Good News wrote on Mar 20, 2008 6:03 AM:This is good news.

Bottom Feeder wrote on Mar 20, 2008 7:29 AM:We're in escrow on a place in Encinitas now. We're in for the long term (raising young kids, etc.) so we figured the market is close enough to bottom for us to jump on now. We were able to leverage the price down nearly $30K from a highly motivated seller who has to move from the area for work, so even if the value falls more, which we know it will, we're still in pretty good shape. So, I say if you find a great house now, and you're not a house-flipper looking to make a quick buck, now may be the time to buy.

N. county resident wrote on Mar 20, 2008 8:07 AM:Thanks bottom feeder for paying my taxes. I will buy your neighbors house in 3 years for 30% less then you paid for yours and then sell it in 6 years. I look forward to earning that 30% you left on the table. I'd guess you bought $1,000,000 home. Thats going to be $300,000 more of wealth that I accumulate over your wealth. Sweet. Times are good for those who waite.

John E wrote on Mar 20, 2008 8:34 AM:Based on historical cycles, which I have followed since the early 1970s, we were at least 5 years overdue for a downturn, and thus have farther to fall. This is a healthy and normal correction. For years, people complained about the high cost of housing -- now a window of opportunity is slowly opening for some who have been priced out of the market. The lessons are abundantly clear: study the housing market before investing, and buy only what you can honestly afford. Do not get fooled by mortgage or real estate brokers who will make money only if you make a purchase, and who have no real incentive to look out for your best interests -- that's YOUR job.

Tony wrote on Mar 20, 2008 8:42 AM:Does that mean the real estate bubble is about to burst? The last time I checked with a Realtor, the answer was "Bubble? What bubble?"

TO; N. county resident wrote on Mar 20, 2008 8:42 AM:You believe too much of the media hype!
There is plenty of reserve cash and assets and good credit from the smarter folks. Not everybody was not caught of guard like yourself.

Ted wrote on Mar 20, 2008 10:20 AM:To: N county resident; the guy 9bottom feeder) is buying a home for his family, and you have a need to diminish his joy? Why? He's happy with his deal, and then you decide to criticize. Sorry, but I'm happy with the house I paid $1.4M for in 2001...

right on John E wrote on Mar 20, 2008 10:58 AM:buy what you can afford! Good principle to live by:) All these articles refer to realtors as some types of "experts" C'mon..we know better by now!

Suzy wrote on Mar 20, 2008 11:12 AM:It never ceases to amaze me that people think the 'bottom' of a real estate market lasts for just a few weeks or months. They have NEVER only lasted for that short of a time. This time will be no different and in fact will probably be longer because it was a long way up. You will have plenty of time to select and buy when we finally get there...and that wouldn't be earlier than 2011 IMO. Remember even if you hold for a number of years, when you sell you will only getting a "rebate' of your costs & outlays. Homes over the last 100 years have appreciated an average of .4%/year. The stock market was more like 7%/year over the last 100 years. A house is just a place to live and not the best investment in real terms (though I'm not denigrating the desire to own).

To N. County Resident wrote on Mar 20, 2008 11:15 AM:Why would you guess we're buying a $1 million house? Because it's in Encinitas? Do some checking on local home prices. Let's just say, you're not even close. Try a little over half as much as you guessed. So ... if you're waiting for a 30% reduction in price on the house I'm buying, you're gonna be waiting a loooooong time. Good luck.

dave wrote on Mar 20, 2008 11:39 AM:TO N. county resident
It is much better to buy a home in a buyers market. Even if home prices drop some more you can cherry pick the best one without loosing it in a bidding war. If you are looking for an investment then wait, The house & neighborhood, schools don't mater.
I would rather get my dream home for 5-25% more than a investment property. I'm betting that when things turn to a sellers markey you might try to get my neighbors house in 3 years but somone else will get it.

Chubton wrote on Mar 20, 2008 12:28 PM:Poor incomes in the N.County also puts pressure on prices.

Chester wrote on Mar 20, 2008 1:32 PM:We are only 1/3 into the price drop, as per the CEOs of Freddie Mac and Fannie Mae. These are the companies putting out the money for conforming mortgages, and accordingly have armies of analysts tasked with getting it right. NAR economists and realtors in contrast have a clear bias to get people to buy now, regardless of whether its wise or not. That said, if you can buy a house for what it was worth back in 2001-2002, then you will probably be OK. If you spend more, you will almost certainly lose money on the deal. The only questions being how much and can you tolerate the loss.

Paul wrote on Mar 20, 2008 1:45 PM:I am surprised how people in North County can afford homes at all. I considered moving back to San Diego county after many years in another state, but the high cost of homes has always changed my mind. How much of a house can someone afford on an $80K a year job. My calculations put a mortgage at about $200K if I want to save for retirement and college funds for the kids. I can't even buy a trailer home for $200K in San Diego county. What kind of salary does one need to afford a $500K home in North County? I don't know how you people do it.

itsmoi wrote on Mar 20, 2008 3:13 PM:Paul: I've lived in San Diego all my life. From what I've seen the only way to afford a home is having a huge down from the sale of a previous home, big salary or 2 people paying the mortgage together with really good, long-term jobs. Also, you can cram 2 families together with granny babysitting the kids.

Anna wrote on Mar 20, 2008 3:30 PM:I sounds like a bunch of ignorant Realtors are attacking "N. County Resident". Go ahead, buy now. Lets see how you do. Afterall money is not that important. I bet the Realtors start going after Chestor too. Just remember, A fool and their money are soon parted.

Raoul wrote on Mar 20, 2008 3:36 PM:RE - Paul: The answer to your question is that people encumber significant risk. My wife and I have a combined gross salary (according to this years tax filing) of $132,000. Our positions are salaried. My wife has worked in her position for over 5 years and I have worked in mine for 9. Our jobs would traditionally be considered highly "secure." We have no credit card debt, no car payment, 1 student loan with a remaining balance of ~5,000, a fico score of 820 and over $30,000 cash in a money market account (this does not include retirement assets and stock investments). We have performed a rigorous analysis of our situation and have found that the absolute maximum loan amount (assuming 30 yr fixed @ ~6%) that we could reasonably take on is ~$300,000. The key word here is reasonable as there have been MANY people with signifcantly less resources than we have that have purchased houses at twice that price. These people lack prudence, math skills, or both. And that is the main problem with the notion of a "housing recovery." You see the real estate industry is right when they say that there are a lot of "qualified buyers" sitting on the sideline. What's missing from that claim is a demographic analysis. There is a reason that there are a lot of qualified buyers, such as my wife and I, "sitting on the sideline", namely that we're conservative responsible people that scoffed at this latest asset craze as just another irrational bubble driven by an idotic populace! So yes, there are a lot of qualified people out there but don't hold your breath for them to start buying because these are the people that have waited the past 7 years for this bubble to be over, they'll wait another 3-4 years for it to bottom out if that's what it takes.

GaryinSD wrote on Mar 20, 2008 5:05 PM:Anyone buying any property in this market is going to LOSE.Prices will continue to decline for at least the next 6-12 months or longer.
The amount of foreclosures is rising weekly and will not decline for a while.
Best advice is to do some research.Plenty of blogs, articles and websites that have the accurate data reguarding foreclosures and market declines.

Itsmoi is right wrote on Mar 20, 2008 5:38 PM:The only way we, and I suppose many others, can afford to buy a house in San Diego County is because: We bought in Orange County in 2000, the real estate market shot up, we sold last June for about twice what we paid for it, we put the profit in a bank account, where it earned interest, and we're putting down $140K on a $576,000 house in Encinitas that, at the height of 2005 peak, was valued at around $730,000. We have great credit, very little other debt, we can afford the $2,700 mortgage, and we need a roof over our heads for the next 20 years or so. Now ... go ahead and call us crazy.

Ray A. wrote on Mar 20, 2008 5:41 PM:Doomers on one side egging on a market crash so they can finally afford their home. Knife catchers on the other side futilely attempting to justify what they know in their heart of hearts to be a declining asset. In the middle is the 98% majority of us who bought pre-bubble and enjoying the show. Yeah we have HELOC's but with the Fed's nonstop rate cutting we'll have these puppies paid off in 8 years. This is fun!

itsmoi wrote on Mar 20, 2008 6:11 PM:To its moi is right: You got a good deal in Encinitas. Even before the real estate boom, property in Encinitas has been about what your paying right now. Encinitas property never goes down that much because it's a nice area. LOCATION, LOCATION AND LOCATION.

GaryinSD wrote on Mar 20, 2008 6:28 PM: According to a website that tracks foreclosures there are 377 Pre-Foreclosures ,74 auctions and 204 Bank owned homes in the zip code of 92024.type any almost any zip code on the west coast and you will see the same horrific numbers.
Like I said before anyone who purchases in this market is going to LOSE.
Bought "prebubble? When? last year or two? You will lose as well.
I am not a doomer, I am just looking at REAl numbers.
Anyone risking that much money should at least do the research and get the facts and certainly not from a realtor.

To GaryinSD wrote on Mar 20, 2008 8:04 PM:The only people who will lose are the ones who either looked for a short term thing or purchased outside their means. We bought a $700,000 home in OSide 2 years ago and are doing quite well even in this economy. Why? We didn't buy the 1.3 mil home in the same neighborhood our 'loan officer' told us we could do based on our stated income. Anyone who bought within their means will be fine and come out with a profitable investment in the end. It's everyone else who will be screwed ... regardless of when they bought.

GaryinSD wrote on Mar 20, 2008 8:16 PM:The prebubble comment was due to the fact of two different people telling me recently "they bought Prebubble".One bought in late 04 the other in early 05.That was near the height of the bubble.If you purchased before 2002-2003 then your homes value should be fine.
However,the area I am watching outside San Diego is headed for a deeper delcine where some bank owned homes are going for UNDER $100 per sqft.
The builders over built by a "fake demand" from those who should never have qualified,and wanna be investors.
This is not as stated here a "normal correction".
The facts are the market will continue to decline until the foreclosures stop and the bank owned homes are cleared from the banks books at much lower prices.
Then as lenders tighten standards BACK to where they used to be with NO liar loans and NO subprime loans you will see some stability.
Look at the charts of inventory and see the #'s.That will grow over the next few months.There will be less buyers when new lending standards take affect.Back to the way it used to be.
Most buyers will actaully have to have a downpayment and have income verified which is the way it should have been.
GREED played heavy in all this and soon you will see home prices closer to income / affordability.

GaryinSD wrote on Mar 20, 2008 8:32 PM:$700,000 home in OSide ???? WOW,Check the foreclosure rate for that area.You seem happy.How happy will you be when the banks clear the books with all the "bank owned homes" there? Beyond means daosnt apply BUT How will you feel when the home next door or down the street sells for $250K-$300K.What happens if you get sick? What happens if you have a job transfer?Its happening ALL over.
I guess you will be fine if you keep your job, dont get sick and feel fine overpaying in a fake market.
I have been researching this for over a year as I am going to make a purchase in a certain area.I wouldnt even think about it for another 6 months to a year.
I am simply astonished that so many are still in denial when all the facts are there if you know where to find them.

Think wrote on Mar 20, 2008 8:59 PM:"Encinitas property never goes down that much because it's a nice area" That is just the stupidist argument. You can't pay a mortgage with sunshine baby. Go over to pigginton's econoalmanac and read his primer on the housing bubble. Prices are going to drop even if the BUSH administration and the Fed bail out all the speculators at our expense.

Rebecca wrote on Mar 20, 2008 10:32 PM:Hi! I am a Realtor with big blue eyes and a nice new blouse. I say there is no bubble and now is the best time to buy! Hee Hee Call me for a new listing. Dont you just love it?

Chieu L. wrote on Mar 20, 2008 10:35 PM:Look like a lot of people wait out this market and try to find the bottom, you can win a lot, or you can lose another seven to ten years waiting again. My philosophy is, if the seller list at 500k, if I want to buy, I will subtract at least 25 to 30 percent from the listing price. If the owners are so desperate, they will sell. If bank own( REO ), I subtract at least 15 percent from list price, by doing this I can feel a little safer if the price continue to go down. But so far I still cannot get the house I want, because I think that I do low ball offer. My point is, at least you can look for the house you like now, otherwise you cannot find any because you are always behind.

Bob wrote on Mar 20, 2008 10:44 PM:Another stupid argument is saying that because the price of a house went up for 7 years its gonna take 4 years for it to come down. That may happen may not. Its more about percentages.

GaryinSD wrote on Mar 20, 2008 11:49 PM:Its more about percentages"

Yes indeed.The "percentage" of decline will increase.
Just like the dotcom bubble on wall street this bubble was created and will burst as well.
Some are way underestimating the housing problem.Some think its over.Many subprime loans will reset very soon over the next few months and 1% interest cut isnt going to help.
With Dutch and Swiss Banks writing off Billions with a B and the amounts climbing this problem is monumemtal and financially global.Citi Bank borrowed $7 Billion to stay afloat today after getting billions just weeks ago from foriegn banks.
The banks will have no choice to lower prices.With fewer buyers and tighter lending it will all come down to reality.
Instead of calling people like me a doomer one should do some searching.Search with your favorite search engine and look up "housingbubble" in blog form or find more articles like this one.Then find a forecloure website like realtytrac and look at the #'s.After that then read some financial articles about all the lender problems and you will understand just how BIG this really is.

stressed! wrote on Mar 21, 2008 1:01 AM:Hi there,
I bought a condo about 5 years ago in the sunnyvale for 290k. i put 5% down so my balance is approx 280k currently. i refinanced my loan several times within the first year because rates were pretty low. i recently lost my job and my 5yr ARM is expiring in september. my wife is still working and we could probably afford the payments IF we are able to refinance. my rate will go up to 7.0% from 4.5% in September, a significant jump in payment. there is a condo exactly like mine for sale for 370k and it has been sitting in the market for 40days now. these condos were selling for 420k about 1year ago!!. i am becoming really anxious about the future and not sure wether i should stay and try to refinance, or try to sell right away in case values continue coming down. the last thing i want is to forclose or shortsell for not selling sooner...should i sell, and rent for now??? rents are about what i would pay to stay in this property... pleeeeease help!!!! thanks

zrealtr wrote on Mar 21, 2008 9:51 AM:Congrats to Encinitas for securing a HOME in which to raise your family in one of the most desireble places in the US. Buying within your comfort range, for the long term, will certainly be a benefit. You don't have to worry about being evicted due to a greedy landlord being over leveraged. We will never know this so called "bottom" until it has passed anyway and you have good choices right now! Maybe a "day trader" stock broker type person will enjoy trying to knock another $10-30K off the price, but then the deal is driving the decision. They will never be content in there home bacause A.)they will probably never buy B.) there will always be that random better deal around the corner. I'd like my kids to be raised in a stable environment and not see their dad so focussed on grinding down someone's home value just to put a few more dollars in his own pocket from some elses misfortune. Enjoy your new home! Build your community, don't tear it down.

zrealtr wrote on Mar 21, 2008 10:01 AM:to "stressed"
probably a short sale will help if you know you can't refi again or make the commitment for the 7% jump that you agreed to. Loss of job may help you qualify for the short sale idea. maybe you would like the SD area. Apparently, some people think the homes will be almost given away here soon.

GaryinSD wrote on Mar 21, 2008 10:25 AM:" i recently lost my job and my 5yr ARM is expiring in september"
"we could probably afford the payments IF we are able to refinance."

How can you expect to refinance when you have no job? Lending standards are tightening up as banks try to make up for the losses they are taking less risk.

"these condos were selling for 420k about 1year ago!!"
Expect them to fall further.
Condos in some areas are taking a much tougher hit.Why would one buy a condo now when houses are declining so much.A glut of inventory and all the massive rebuilds that went on will drive the price of condos way down as well.Most are redone apartments and were never worth what they sold for in the first place.Just like houses it was a fake demand from wanna be investors and bad loan practices.

GaryinSD wrote on Mar 21, 2008 10:57 AM:"Apparently, some people think the homes will be almost given away here soon."

No. Home prices will just decline back to reality once the fake demand, wanna be investors and bad loan practices are removed.The inventories are rising and will continue to rise.Prices are declining and will continue to decline.Prices will be back to prebubble prices where they belong.
Less buyers with tighter lending standards will add to the supply of homes.. Just do a search today for an AP article titled
AP
Leery Lenders Demand More From Borrowers
Friday March 21, 5:25 am ET
By Alan Zibel and J.W. Elphinstone, AP Business Writers
Banks Remain Wary of Home Loans; Lending Standards As Strict As They Were 20 Years Ago

No one says things will be "given away". They are just headed back to reality.
I Applaude the North county Times for posting articles such as this one.

Poor new engineer wrote on Mar 21, 2008 11:25 PM:Talking about new home buyer? Forget it. I worked very hard to get though 4 years school and graduated from UC Berkeley last year. Now I got an engineering job with only $58000 a month salary. Those who can buy a home are those who have some equitity from selling previous home they have owned since prebubble era. I really want to buy, but the question is how can I effort it. Duh? I dont think there are too many newly grad who make more money than me unless they are lawers or doctors. Last time I checked, engineers have higher salary than most other fields. Prove me wrong on that one. With this home price, my salary is worthless. I am paying high gas price, car loan, student loan, high food cost. Do u think I still have money to buy your $300,000+++ home? If home price is still at this level, only lawyers and doctors will be able to buy a home. What about little poor engineer like me. Well, at least I can effort to rent. Thank god for that. I will rent until you drop the price, so I can efford it. Those who love high home price are those who hate their own children. Remember that your kids will not be able to buy a home just like me unless you turn them into money maker machine or smart enough to be lawers or doctors. Shame on U! the older generation. I got to pay social security tax that I will never collect and got to pay high home price for your home. Stop telling me to buy buy buy you DUMB. I CANT NOT EFFORD IT. Hear me?

To GaryinSD wrote on Mar 21, 2008 11:57 PM:Yada,yada, yada. Enough!!

Raoul wrote on Mar 22, 2008 1:40 AM:Just drove through Encinitas/Leucadia... This is bad, very bad. Things are going to get bad in NC, very very bad. Oh no, that's right most everyone bought five years ago when the market was only overpriced by about 40%. Of course when the defense contracts dry up when the dems take office... Oh yes, like it or not the dems WILL have both the congress and the white house come November. SD is toast people. Ask someone that remembers what happened in the early-mid 90s. Then take that doom and gloom and multiply it by a failed war on a lvl not seen since vietnam. Get real SD, you're in for some serious schtick.

Robert wrote on Mar 22, 2008 5:00 AM:I enjoyed reading the blog. I live in NH we had a bubble and a bust in the late 80's early 90s. I bought at auction a 2 bedroom condo that had sold for as high as $140,000. I paid $12,000 for the condo. It has risen to about $100,000 in 18 years. Prices can fall a lot more dramatically than some think. good luck

GaryinSD wrote on Mar 22, 2008 12:28 PM: "Yada Yada" ?

A person of so many words or facts.

Let me guess.You are a realtor,investor or disgruntled homeowner who bought recently.

Thanks again to the NC Times for posting this article.Hopefully we will see more articles of this subject as the situation unravels.

BubbleBear wrote on Mar 22, 2008 1:20 PM:The median home price in San Diego went from 4 times average household income to 10 times average household income between 2000 and 2005. Four times your income to ten times your income in 5 years. And people don't think we don't have a big drop in prices left? Study your history. (What a concept.) The last bubble corrected from 1991 to 1996 and prices fell 20%. This one is less than 2.5 years in and we've already fallen 20%. It's going to be bloody and it should be. San Diego home should not be ten times income. Period. I agree with Suzy - 2011 might be the time to buy. Buying now means your "investment" will decline for quite awhile. Oh, and I have a master's in finance so if you want to debate me, throw numbers at me - not emotions.

To GaryinSD... wrote on Mar 23, 2008 12:14 AM:Actually none of the three you listed. You are not the genius you think you are spouting off your predictions. haha