said by jinjimbob :

"SoCal is in for a big correction in prices."

I have been hearing that for almost 5 years myself. They might stop going up as fast, but they won't go down.

said by laserjobs :

Then answer me this, what made the prices go sky high?
Do you think the reversal of the same thing might cause the reverse effect?

Here is a clue: Interest rates and lending practices

said by 81399672 :

Demand, prices in California historically always been much higher then average prices across the world. Yes prices will go down but it will not crash like some people think it will. UCLA been saying 10% reduction for the last 3-4 years will happen and it haven't happened yet. The main reason why price may go down is because majority of speculators have left california real estate marketed and moved to Nevada. I am talking about those that buy the property hold it for 2-3 month and then sell it. Also prop 13 does help price stay up.

It seems people on this board want the prices to go down and praying it will go down because a)they can't afford the prices b)they can't immagine them self paying so much for the property. If you are in the b catigory then i am afraid you will have to wait for long time before you see high enough reduction in real estate prices

said by laserjobs :

The only thing an open house is good for these days is to provide the neighbors with some free snacks.

said by jig :

in some areas and at some prices. i'd agree with some orange county spots, maybe west la, houses above the 1.2 mill pricepoint, but east of the 710, in the $400-800k range, open houses aren't needed, the houses get offers within a week (days) of being on the market site unseen. the cocktail sausages are a waste of money.

said by laserjobs :

Then answer me this, what made the prices go sky high?
Do you think the reversal of the same thing might cause the reverse effect?

Here is a clue: Interest rates and lending practices

said by dogma :

Like the dot com era, at some point, the party must come to an end and the piper must be paid. The two immutable dynamics are interest rates, and the adjustment horizon for existing ARM's. As I pointed out in other threads here, the reality is real household income can not support the weight of adjusted payments, and therefore will not justify housing values.

said by 81399672 :

Actually in the recent years it was pretty easy to be priced out. Prices of the houses have been going up at higher rate then the wages during the same time. Unless a person(couple) made 100k+ a year, it was pretty easy for them to be priced out if they waited to long to get in to real estate market and wanted to buy in neighberhood that was out of their reach.

said by laserjobs :

The only way someone would be priced out of the market is they are not keeping up with inflation.

said by laserjobs :

On the other side if the equity on the house becomes negative then just hand in the keys to the bank and take your lumps.

said by No_Strings :

Not keeping pace with an over-heated housing market can be quite different, even if you're keeping pace with inflation.

Unless you care about your credit and the consequences of defaulting on a loan.

---

After living through some perpetually flat markets, I watched the Houston collapse in the 80s and experienced the last SoCal correction up close. When I moved here in 1990, I saw people standing three deep to bid over the asking price for homes as others taking out equity to pay for cars (not college or home improvements ... cars). I waited it out - even took a capital gains hit on my house in No. VA. I'm not smart enough to predict how these things will go, so I take a conservative approach: Bought at what seemed to be a good time ('94) and have done several major improvement projects. All were funded with cash and should add some value to the home.

I've missed out on a lot of opportunity in the stock and real estate markets by being too conservative, but I sleep better knowing that I could ride out anything short of a collapse and extended unemployment. Plus, I get the smug satisfaction of knowing I'm living in a house I couldn't afford to buy.

said by 81399672 :

Currently monthly rent price for a appartment is going up which means the real estate market is strong.

said by 81399672 :

while it's true that rent is not tied to housing cost, ...

said by No_Strings :

What's happening in commercial real estate, and is there any direct correlation between it and residential? If so, does commercial tend to lead or lag.

said by laserjobs :

Also I am pretty sure there is a lot offshore investment in commercial real estate and if the dollar drops more there will be a bigger reason to pull out of American assets.

said by laserjobs :

This is how desperate it is getting someplace to sell homes

»www.dailynews.com/news/ci_3847768