[bringsmewomen]

What do y'all think of the housing market in So Cal right now? Like LA area?

Values have gone down 20% in some places in value... How much more? Buy?

[JOSG328I]

Wait a year. Which area are you looking though in LA many of the big drops are being seen in the lower end neighborhoods.

[bringsmewomen]

Originally Posted by JOSG328I

Wait a year. Which area are you looking though in LA many of the big drops are being seen in the lower end neighborhoods.

Bev Hills adjacent.

[JOSG328I]

Actually in Beverly Hills you may find some decent deals because of the abundance of varying priced neighborhoods. I would still wait unless you need to buy now.
Also I think in Beverly Hills you are not really running a crazy risk because if you are in the right zip codes the opportunity for getting value out of a purchase sooner rather than later will be there since there are more affluent neighborhoods in BH.

[bringsmewomen]

Originally Posted by JOSG328I

Actually in Beverly Hills you may find some decent deals because of the abundance of varying priced neighborhoods. I would still wait unless you need to buy now.
Also I think in Beverly Hills you are not really running a crazy risk because if you are in the right zip codes the opportunity for getting value out of a purchase sooner rather than later will be there since there are more affluent neighborhoods in BH.

well I said Beverly Hills adjacent which means I'm not actually in a Beverly Hills zip code. Close enough to throw a rock over the city limit though.

[bartman32]

It all depends on why you are buying and how long you plan on keeping it. If you are trying to do a flip and sell quickly I don't think this is the time. If you are planning to buy something and hold it for 5-10 years this might be right. Interest rates are very low right now. It might be better in 6 months or so but in So cal over the long run house values WILL GO UP! They aren't making any more land close to the ocean here in So Cal! I just bought another property myself.

[bthienthai]

wait a year? hell, wait 2-4 years. Just think about it. With the current price, who actually can afford to buy it? I make 80k/year and I can't even afford to buy one. The price is over inflated right now. And it hasn't gone down that much, especially in OC. People keep saying that house values will go up in the long run. Yeah, right. If that's true, then it'll eventually go up to 1M? Who can afford to buy then? These people, who in WallStreet terms are called speculators, are the ones who pushed up the price. I guess now they're paying when the market crashed.

[bartman32]

Originally Posted by bthienthai

wait a year? hell, wait 2-4 years. Just think about it. With the current price, who actually can afford to buy it? I make 80k/year and I can't even afford to buy one. The price is over inflated right now. And it hasn't gone down that much, especially in OC. People keep saying that house values will go up in the long run. Yeah, right. If that's true, then it'll eventually go up to 1M? Who can afford to buy then? These people, who in WallStreet terms are called speculators, are the ones who pushed up the price. I guess now they're paying when the market crashed.

Never going to happen! Think about it. When my parents bought their house in '74 they bought it for $74K! Housing prices will always rise! Especially anywhere near the coast! The more people there are the more people there are that want to live near the coast. It's all supply and demand + inflation. They aren't building any more land out here! Here in So Cal housing prices have NEVER fallen more than 10%. They may go a little farther now because it has gone up so far but in all honesty if you buy out here you are safe long term.

[OC Guy]

Wait at least 1-2 years. 2 preferably, but 1 if you need to buy soon IMO. Read the housing blogs.

[fobunited]

Housing prices are supposed to hit/near rock bottom around '08. If you are buying as an investment, I would suggest wait.

If you are buying to live, however, I would suggest purchasing around this time. Because of the subprime mortgage crisis, the interest rates on preferred mortgages are going to be extremely low. Many lenders will even discount 50 to 100 basis points below prime, which is excellent.

As for makig "even 80k" per year, in the Bay Area, or in this case, around Beverly Hills, that isn't alot. The median price per home in the top areas of our country are already easily over 1 mil.

[tryangles]

Originally Posted by bartman32

Never going to happen! Think about it. When my parents bought their house in '74 they bought it for $74K! Housing prices will always rise! Especially anywhere near the coast! The more people there are the more people there are that want to live near the coast. It's all supply and demand + inflation. They aren't building any more land out here! Here in So Cal housing prices have NEVER fallen more than 10%. They may go a little farther now because it has gone up so far but in all honesty if you buy out here you are safe long term.

I am very hesitant on this quote for a few simple facts. The dollar has never been this weak in how long in the history of the US? We have a president that has spent more money than all our president's combined putting our economy and the value of our dollar in some real dire straits. The market is going to have to correct itself somehow. We have more new stringent rules regarding bankruptcy meaning few bailouts for consumers. And the list goes on.

There has only been one historical jump in housing prices that we experienced in the past few years which happened in Japan in the 90's... This is what happened, and this is what many predict will happen here:


http://efinancedirectory.com/article...damentals.html

I think we are in for a real shocker. But then again, I hope I am really wrong.

[JOSG328I]

The only thing though with Bartmans comments your last statement is 100% right. But I think you will even see the beach communities suffer a decent depreciation in value.

The one upside with the coast goes along with what you said people want to live next to the beach so the recovery to see a gain will come sooner than in the inland areas. The biggest issue that will drive down the prices are going to be the foreclosures because to many people bit off more than they could chew.

Check out Realtytrac.com that is a sobering reality of the market situation.

[DFW_M]

I believe the housing market did not stabilize yet, but it will not fall drastically (nothing like 10% or so). Some markets may fall more, so the best is to research the market in your area. We just purchased a home in what used to be a very hot market, that experienced a decline. Some say that it is not done correcting, but in a long run (5 years +) it should be just fine.

Good luck!

[AndrewAZ]

Problem is investors and stupid people drove the house prices up beyond historical rates. Within the next 1-2 years housing prices will be back to 2001-2003 year prices, basically all this is now is a market correction but since it involves something you can liquidate quickly and a lot of sellers can not take the emotional hit of selling their house for a big discount and are holding out. Right now if you want to buy a house its the best time, but depending on your area I would go for a 20-25% discount off asking price, it might take longer to but at that discount but you will eventually find someone who can not afford to hold onto that 2nd house they bought as an investment.


1-5 years ownership for a home is considered short term.
I would say 5-15 is normal ownership term and in that stage you will be fine.

[bthienthai]

Everyone wants to live close to the beach, much as everyone wants to drive a bimmer instead of a Corolla. So, those who have money will live close to the beach and drive a bimmer. But last time I checked, I see more Corolla and Camry than bimmer on the streets. Come on, man. Get a grip. Let's be honest to ourselves here. If you have to take a 450-500K mortgage now with a conventional loan, can you honest afford the monthly payment without depending on a second income? Just think about it? what's the popular job that pays well except doctors, pharmacist, or the like? Most high tech jobs have been outsourced, so there's not much out there right now

[UCSBMW]

if you can afford to buy a house within the next year, do it...values have definitely dropped,and sellers are giving concessions like crazy. ANd contrary to what people say, you can still get a very good loan and rate (just try to keep it at 80% loan to value so that you don't have to get a second mortgage or pay PMI)...research "declining markets" specific to zip codes that way you don't buy in this type of area. I wouldn't worry too much if you're buying in Bev HIlls or a city "like" Bev Hills (always gonna be a demand there)...just my $0.02, good luck with the purchase, im sure you will reep the rewards in equity within the next 2-5 years.

[Kiemyster]

Originally Posted by bringsmewomen

What do y'all think of the housing market in So Cal right now? Like LA area?

Values have gone down 20% in some places in value... How much more? Buy?

Where do you live? im a market expert in the area of queens/rosedale/cambria heights/valley stream.

Right now is the time to buy. foreclosures are going on left right and center. if your an investor, wait about 4 more months when the market value should be at its lowest, and buy as much as you can. rent that shit out, and wait 6 years. you will make a FAT chunk of change.

[sambonator]

Home Building Rises Slightly,
But Weakness Lingers
November 21, 2007

The sluggish pace of home building in October offered little solace to those looking for signs the nation's housing bust has bottomed out.

New-home construction rose 3% to a seasonally adjusted annual rate of 1.229 million units last month from September -- the first monthly gain since June -- but the increase was driven entirely by construction of multifamily buildings with five or more units. Construction in that volatile sector soared 47% after falling 36% in September.

Construction of new single-family homes, considered a better gauge of the overall housing market, fell 7.3% last month from September to a seasonally adjusted annual rate of 884,000 units, the Commerce Department said.

With last month's rise in home building "more than accounted for by a jump in the multifamily sector, we view it as purely technical, and not a sign that housing is recovering," said Bank of America economist Gary Bigg.

Meanwhile, building permits for housing units, an indicator of new construction, dropped 6.6% in October to a seasonally adjusted annual rate of 1.178 million units. Permits often precede construction by about one month, though high cancellation rates mean that not all permits become new homes. Mr. Bigg said permits have tumbled to their lowest level since 1993.

Construction of single-family homes in October fell 25% from the year-earlier period, with the steepest declines in the South, where it dropped 31%, and the West, where it fell 30%. The Midwest and the Northeast fared better, with respective declines of 9.8% and 4.7% from a year earlier.

As the housing slump continues, economists are lowering their forecasts for economic growth in the fourth quarter. After the latest data were released, Macroeconomic Advisers shaved its forecast for fourth-quarter growth in gross domestic product by 0.1 percentage point to a 0.8% annual rate.

J.P. Morgan economist Haseeb Ahmed said new construction of single-family homes is down 52% from its January 2006 peak. Mr. Ahmed sees no sign the slump has hit bottom.

[fobunited]

I agree with that article pretty much 100%. Interesting source though, as for financial advice and market turmoil, J.P. Morgan wouldn't be the first place to look since they are more on the banking side.

[sambonator]

Price Cuts Put Builders in a Bind
New-Home Buyers
Hold Back, Waiting
For Further Trims

November 20, 2007

When freebies like granite countertops and no-cost closings didn't woo enough buyers, many home builders began trying to outdo one another with price cuts.

Now the tactic appears to be backfiring. Potential home buyers are proving unwilling to purchase homes until prices stabilize, fearing further price depreciation, so builders have not gotten the sales volume needed to compensate for their reduced margins.

"If people stop cutting prices, that's actually good [for builders]," says David Goldberg, an analyst with UBS Investment Bank. "If everybody does it, it works. If one builder does it, it doesn't."

Apparently, it doesn't work if 60% of them do it. That's the share of builders that cut prices last month. About half of them labeled the cuts at least "somewhat effective" in bolstering sales or limiting cancellations, down from nearly three-quarters in May, according to the National Association of Home Builders.

Yet with the market not expected to improve soon and builders desperate for cash and saddled with inventory, many have been unwilling to resist price-cutting. If they didn't cut their prices, they reason, buyers would either turn to competitors who offer better deals or buy used or foreclosed homes.

Still, there are limits. "The reason some companies say 'Enough is enough' on the price cuts is because price cuts often generate expectations of further reductions," says Dave Seiders, the Washington group's chief economist. "The question is: 'How far can you go?' "

Pretty far, actually. In California, for example, Meritage Homes Corp. has cut some prices, inclusive of incentives, by as much as 40%. The Arizona company's prices have slipped to levels not seen since before 2004.

Meritage noticed that potential buyers are coming in "nine or 10" times and "if they hear the deal today is better than the deal was two weeks ago or a month ago, they're not going to buy," said Steven J. Hilton, the builder's chief executive, at a recent UBS AG building conference in New York.

After its average order price fell 16% in the quarter ended Sept. 30, Pulte Homes Inc., the nation's third-largest builder, said it is holding off on reductions and incentives except in "limited cases." At the time, a spokesman said the Michigan company didn't want to "contribute to a downward spiral in pricing." Pulte didn't comment for this article.

Toll Brothers Inc., a top luxury builder, has resisted price cuts, and Lennar Corp., the nation's second-largest builder based on 2006 closings, has even taken some new homes in a development in Orange County, Calif., off the market.

Yet waiting for prices to rebound is risky, too. Empty homes carry costs, including insurance and maintenance. And after a year or so, there can be significant additional costs, such as repainting and redoing landscaping.

"It doesn't get better with age," says Jim Dietz, chief financial officer of WCI Communities, a Florida-based condo and house builder that has sold some units for minimal profit.

"Their risk is that, OK, sales drop 80% and now you don't have enough cash coming in to pay the bills and your debt sours," says Mr. Dietz. "I agree that discounting is bad, but I also believe that the market needs to reset. The inventory needs to be cleared through before we can get to a more-normal selling environment."

That is why few builders have jumped on the anticut bandwagon.

The fourth-largest builder, Centex Corp., has said it is offering "record" discounts, and Ryland Group Inc. recently coughed up savings as high as 25% nationwide.

Hovnanian Enterprises Inc.'s three-day "Deal of the Century" in September generated 2,130 gross sales. Despite stricter mortgage requirements, cancellations haven't been rampant, executives say.

Standard Pacific Corp.'s "Mission: Possible," a September promotion with incentives and special pricing across the bleak Southern California market sparked 227 deals. It is too early to gauge cancellations, Senior Vice President Jari Kartozian says.

The California-based builder hasn't ruled out trimming price tags in some areas. "I would say we've cut enough, without a doubt," says Ms. Kartozian. But "we are trying to price to the market."

That's a smart move, says the NAHB's Mr. Seiders.

"I've been advising builders, in general, [to] do whatever it takes to get rid of inventory now because the prospects for house prices in the coming year don't look good," he says. "I'm afraid that '08 may be a year of pretty systematic price erosion, at least in many markets."

From The WSJ.