An extremely interesting statistic also comes to light in this today's Union Tribune article; "Most of the California loans that went into default last quarter were originated between January 2005 and February 2006, DataQuick reported. " Readers of the blog will recognize this time period as the most likely to be underwater. The market has clearly moved back to pre-2005 prices. I expect that we'll start to see a trend of more properties purchased in 2003 listed below purchase price.
I know a lot of people are hopeful that the downturn is over however I just don't see it happening in the short term. Affordability is still very low and the risk of buying overpriced property is very apparent to regular people on the streets. Prices need to continue to correct to a point where the disparity between buying and renting returns to pre-2002 levels.
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3 comments:
That's what I'm waiting for. Still way cheeper to rent.
Correct, way cheaper to rent.
We have to recognize that the majority of the people who want to live in studios and lofts are not high earners -- they tend to be partiers. $1000/mo housing expenses per person is about right in a dense urban setting. Anything above that is stretching it for most inhabitants.
I would have to agree with anonymous about party people living downtown. . .the Grande may be a "senior silo," but here at La Vita, it is "20 something" central. . .I'm the oldest guy here and drive a 10 year old car, but all these young dudes and dudettes drive nice new BMW's and likely have huge monthly credit card bills. . .hang out at the Rite-Aide in Allegro someday, and you will see how many people in line are buying $10 worth of windex on credit cards. . .and how often the card is maxed out. Then they pull out two or three more and hope they can add another $10 to their bill. . .with loan guidelines being inforced these days (WaMu doesn't want more short sales) these people will NEVER get a loan. . .
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