NorCalSci said:It is just far more likely that the imbalance will be corrected by rents rising than by prices plunging.

You usually have pretty good analysis of the situation, but this time, I think you are off. You are acting as if there were not any market destabilizers during the last 5 years. In particular, the easy money and greed factors. Now you suggest the correction is to come on the side that more accurately reflects an efficient market?

It is a lot easier to switch rentals than to buy and sell, so why would you expect that the correction will come in the rents? You are starting to display some irrational exuberance in your wishful thinking.

jayK said:hope69 said:Hmm we got our numbers from different source I checked the wiki instead

Median household income

again the wiki can be completely wrong... but I really don't think the average house hold in Cali makes 70k+ per year... 60kish is pushing it I think... I know we got tons of high tech IT people but we got A LOT more low skilled immigrants as well....The $54K number from the Wiki has no source, the $60K median family and $70K median 4-person family income figures I quoted are from the US Census.

I don't think it's so farfetched...a household with 3 low-skilled earners, each making $20K/year, adds up to $60K. Remember we're talking about the sum of all incomes in the household.

But overall as per our data show average joe can not afford a house in California. So something has got to give.I agree...but if demand remains strong in a certain area, home prices won't give much. It's become increasingly common in CA for adults to live in the same household and contribute to a mortgage that would be unsustainable if there were only 1 or 2 earners.

In addition, even if the rents go up it wouldn't be like the price for house. And for me I would ruther buy a house when its cheap with insane high rates than buy same the house with higher value with low rates. Why? Because rates go up and down and I can refinance when the rates drop oh and the payment for the loan are taxe write off, I'll pay less taxe as well.I agree, but you're taking a big risk there, as mortgage rates are already near all-time lows.

Not everyone is a First Time Buyer, in fact, many people have real-estate to sell and use the equity towards a new purchase.

In CA, the number of first-time buyers fell to 27.1 percent in 2006 from 30.5 percent in 2005.

gobucs007 said:Text
weekly
DC inventory down 21% in one week?!
with the median price up 1.2%? i unfortunately know two people who have bought here in the past 3 weeks, but this data must be faulty.Nice analysis - the data doesn't back up your pre-determined conclusion, so the data must be faulty.

June is a popular time to buy a house for parents of school-age kids, so they won't have to change schools in the middle of the school year. We might be seeing the pent-up demand over several weeks showing itself all at once now that school is out.

beadedmonkey said:Still, that you can find 600 rentals in the Bay Area that were posted before 10am on a single source for housing, tells me that finding a place to live is not all that hard, which is the point.600 rentals for 7,000,000 people doesn't support your point at all!


beadedmonkey said:
NorCalSci said that single hung windows are not legal to put in your home in CA. No, YOU said that, but I think it is true for most of the areas of California.

How do we know YOU said that? I don't know what a "single hung" window is.

I simply said that if you want to IMPROVE your house by ADDING a window, there is an immense bureaucratic overhead to what otherwise would be a simple, low cost improvement. That overhead and the EXTREME costs of materials and labor contribute to high housing costs in California.

Otherwise, the 2005 energy compliance standards, which are considered included in my county's building codes, require that new construction, remodels, additions, and now window replacements use low e windows. The requirements have been extended to any work that requires a permit.

This is true.

Your failure to read the two links that were provided to you when you demanded PROOF doesn't invalidate the proof.


beadedmonkey said:Funny, I live in a rental with single hung windows. When a kid threw a ball and broke one, the landlord sent over a glass place to replace the single hung window. Ummm...I have replaced broken single panes in my windows as well, what does that have to do with the cost of housing in California?


beadedmonkey said:Maybe I need to hire an attorney to sue someone for 54 million... Whatever.

NorCalSci said:beadedmonkey said:Still, that you can find 600 rentals in the Bay Area that were posted before 10am on a single source for housing, tells me that finding a place to live is not all that hard, which is the point.600 rentals for 7,000,000 people doesn't support your point at all!






If all of those 7 million people are looking for homes at the same time, then they might have to double up.

You must be a used car salesman. You have the curse of hyperbole.

TheGMan said:I don't see how an "average" 4 member family can comfortably live on this.They can't...that's why I said that they might be able to barely afford a median SFH.

I truly have yet to figure out how the "average" family can afford a house in California without living in the red.Same way non-Californians do it...by buying a house within their means. If that means a house priced below median values or a condo, so be it.

lostdude said:beadedmonkey said:

If all of those 7 million people are looking for homes at the same time, then they might have to double up.

You must be a used car salesman. You have the curse of hyperbole. didn't someone mention irony?

I have no idea if 600 is a big number or not in the context of the population and neither do you, right? That was the point NorCal was making based on how I read his post.

So at least, you are at quilty of the same sin.Thanks. In the context of the population I don't think 600 listings suggests at all that rentals are readily available, I think the opposite. Averaging two people per apartment, if only 1% of the population is looking for a new place that leaves 58 families fighting over each vacancy.

Then again I don't think glancing at Craiglist ads is a real vacancy analysis.

But anyway, thanks for understanding the point!

rileymartin said:NorCalSci said:
If it costs "four times more to buy than to rent" as a previous poster wrote, do you think home prices will come down 75%?

no, rents will go up 300% and everyone will just live on the streetsWould you mind explaining why you rated my post negative? Was there something that offended you? If you just disagree with me, I would be happy to continue a discussion until we at least understand our disagreement.

I don't necessarily think rents will go up 300% in the next couple of years (although some day they will be 300% higher.)

Just looking at market conditions, if the ecomomy continues at its current pace in our area rents will be going up faster than house purchase prices will be coming down.

NorCalSci said:It is just far more likely that the imbalance will be corrected by rents rising than by prices plunging.

LOL. Man, the housing bulls keep spewing the same old rhetoric over and over and over again, and have nothing to back it up except for nothing but a baseless opinion.

Please elaborate why rents will rise but home prices won't fall?

I have reiterated many times why home prices will take a tremendous beating for the next 3+ yrs. Rising interest rates, tightened lending standards, slowing economy, and decreased demand (due to less speculation). Any ONE of those things could cause price declines, but all three leads to the possibility of one hell of a downturn (especially considering the recent run up, and considering all these factors were working FOR real estate for yrs). If someone can explain to me how interest rates won't rise, how the economy is actually doing great, and/or lending standards aren't being tightened then I'd say you have a case. All the current issues (if anything) will lead to home prices dropping, definetly not rents rising dramatically. I find it amazing that there are any housing bulls still out there. It's funny to hear the ex-head cheerleader Lereah bad mouthing housing now that he's been dethroned as head housing cheerleader of the NAR. lol

Totally agree about the correlation between interest rates and housing prices. The 10-year bond* prices have increased since 1980 (decreasing yields), which correlates with the biggest housing price run-up in history, with huge jumps in the 1987-1990 and 1999-2003 years. Now, the 10-year bonds are decreasing in price (increasing yields), and yields recently topped 5.25% for the first time in several years. This may mean the era of super-low interest rates are over, and will normalize back to the 7-8% range. This will definitely deflate the housing markets for new buyers, and anyone holding an ARM will be subject to huge increases, causing foreclosures and further depressing prices. This has already started, as the delinquency rate in some markets has jumped 90% since last year. Rates may go even higher if inflation takes off, or if the Chinese dump our Treasury bonds. Another key to interest rates is whether Japan and Germany raise rates, which will make their bonds more attractive investments, and force Ben to follow suite.

I missed the run-up here in Calif. and now I'm just saving cash as much as possible to try to get to the point where I can put a huge downpayment when I do buy, so that interest rates are not as relevant to my purchase.

*10-year bond is the benchmark for mortgage rates.