yahoo finance: LA median home price predicted to hit 270k median. (Oxnard: section 8, real estate)

[killer2021]

http://finance.yahoo.com/real-estate/article/106107/Forecast-2009:-Your-Home (broken link)

The prediction is at 270k median. Just think of that. 270k. That would mean we would have lost 100% of the gains in the last 6-7 years. We would effectively be at 2001 median home price levels. Nearly a 50% decline from 2007 when the median was near 600k.

Funny thing is that japan has the exact same issue in the 90s. Except our crisis is in the reverse. Our real estate plummeted which caused the stock market to crash. In japan, the stock market crashed and then the real estate prices collapsed. They never recovered to this day.

10 years of land price gains. 10 years of land price free fall. The index going from 100 to 200 means prices doubled.


Stock market triggered land price collapse.


USA was on the same crash course:


land price collapse trigger stock market collapse. s&p 500 index.

[sheri257]

Yeah but the article is talking about the "metro" area which also includes places like Lancaster and Palmdale. Of course those places are cheap and are going to get even cheaper but, I seriously doubt LA itself is going to get that low unless it's a really crappy property or neighborhood.

As for never recovering ... I wish it were true but I just don't see it happening for LA and other coastal areas. I live on the central coast and believe me ... as soon as prices got down to $250K for decent properties ... they've been selling like hotcakes. At that price point demand really picks up with multiple bidding wars and dozens of people bidding for these houses.

[hsw]

Don't need to even consider Japan...a very different economy than US

Just review LA median housing prices from '89 peak to ?'94 bottom (some 40% lower than '89); only re-reached '89 levels in '00...these types of pricing declines were also seen in most desirable parts of Westside and Malibu....many forget that lots of most costly houses on Westside are owned by those w/money from SiliconValley, Chicago, NYC, Seattle, Dallas, etc...as discretionary wkend houses....and lots of smart wealthy people prefer to rent, not buy, wkend houses (and even primary houses)...many wealthy people are facing margin calls and $10MM++ houses are fairly illiquid "white elephants"

Dynamics of today's mkts are more severe than early '90s....a credit crisis which has been difficult to understand in terms of depth and complexity for many of smartest financiers on planet; tightened credit making cheaper houses non-financeable by many buyers w/mediocre credit

Crime issues of vast swaths of foreclosure/Section 8 housing areas

Tax structure in CA which may push more jobs out of CA (and reduce demand for houses) to lower-tax and more business-friendly Dallas and Houston

And CA always faces a risk of a major quake which can easily change housing prices....and eliminate many of the older housing structures and shoddily-built newer houses in LA region....but also change dynamics of what areas will be deemed insurable, etc

[BRinSM]

Originally Posted by hsw

many forget that lots of most costly houses on Westside are owned by those w/money from SiliconValley, Chicago, NYC, Seattle, Dallas, etc...as discretionary wkend houses....

HSW, i have noticed that you have mentioned this fact many times on these boards. I live and work on the westside and spend the vast majority of my time here, and I just don't see where you are getting this information from. Most of the homes that I see are owner occupied in regular neighborhoods where people live in their homes, not just come down for the weekends. If anything, most of the homes are owned by older people who are retired and were able to buy their houses years ago before they were ridiculously expensive. Unless you're referring to the mansions in the hills, then I don't agree with you and would like to see where you are getting your information.

As for $270k homes, I believe that is the projected median house price for the county, if not the whole region. That means that places like Palmdale and Lancaster will have homes under the median and the nice parts of LA will be over the median. Santa Monica is never going to have prices anywhere near $270k except for maybe 500sf condos. However, homes in Lancaster and Palmdale are already selling for under $270k. After all, the median is the price at which half the houses are selling below a certain amount and the other half are selling for more.

[ElleBebe]

Originally Posted by killer2021

They never recovered to this day.

Never recovered = haven't recovered yet.

Life isn't over yet. There's still time. It's only been ten years.

[SOON2BNSURPRISE]

When things were going up the misconception was that it would never decline. Now that a correction is being made, the misconception is that the party is over. For some of us the party never started and now that we are ready to play the market is looking very nice. I used to think that I missed the boat on housing. I remember ten years ago finding homes in the $150,000 range that were older homes in nice neighborhoods in Oxnard, Port Hueneme, and Ventura. At the peak those homes hit $550,000 and $600,000 range. Now I am seeing some of those same homes in the $250 to $300 range. I have seen some fixers for less than $200,000. It is an amazing world we live in now.

[jzt83]

I remember from a little more than a year ago to three years prior to that, people were in a panic mode thinking that prices either would never ever drop and continue to increase at incredible rates or just remain relatively flat. They've cited how there was never such an incredible run up in prices since the 19th century, continual increasing population despite being built out, etc.

[King0fthehill]

That includes the ****ty areas guys.

No need to worry.

[alexanderaf]

I make $80k a year, and I've been saving for a downpayment on a house for quite some time. However, I never stand a chance of actually 'owning' a house in LA. I could 'live' in a house if I pulled out a ridiculous mortgage, but in all reality the bank owns it more than I do. If one day it is like this all across America, I would forget the dream of owning a house. What's a $50k downpayment when your average house starts at $500,000! Sorry, I can't live with a $3k/month payment for the next 30 years.

Dare I say it, but...if indeed housing prices are in the decline, is this a bad thing?

[AnUnidentifiedMale]

Originally Posted by alexanderaf

Dare I say it, but...if indeed housing prices are in the decline, is this a bad thing?

Not at all for those of us who want to buy. I wish the market would crash even faster than it has.