I hear crickets chirping ...

Guess it isn't as much fun for them this way, Greg

Geeze, Greg, you're goign to loose half of the traffic this way, all these bubble-heads will have to find a different type of therapy.

Make it a sticky post.

Greg, they really arent taking the bait...but totally agree, maybe more threads like this so they get the hint. Deleting may be the only option.

The freakin sky is falling.  It is about time you created thread specifically for me to vent about how the San Deigo market is going to crash 50% in the year 2007.

More on that later.

Looking at this article out of Tampa http://www.sptimes.com/2006/09/23/Tampabay/Finally_sold_Well__ma.shtml   Real-estate is so slow there that they are turning to auctions to sell.  Looks like people aren't getting what they thought the house was worth.  No doubt it's going to be hard for a lot of folks to refinance if their home value does not equal what they owe on the house.  This is going to be a big problem next year for all those that bought in the last couple of years as prices continue to head south.

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http://iamfacingforeclosure.com/

"Casey Serin is a 24-year-old Sacramento man who bought seven properties in four states within the first three months of 2006. Even after selling a home in Utah a few weeks ago, he’s $2.2 million in debt and will be four months behind on all of his mortgages come October.

He started a blog to tell people about his experiences and his mistakes as a novice investor — it’s called iamfacingforeclosure.com."

This time it's different.

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RankBull - reminds me of these quotes -

“Sell when everyone wants it and buy when there’s blood in the streets.” – Craig Hall

“When someone else wants something you’ve got, and they want it badly enough, let them have it.” – Craig Hall

“When the pay window is open, sell.” – Craig Hall

I hesitate to post this for fear of being seen as "trolling".  I am not, I am a lifelong RE investor.

I tend to look sideways at the folks who say that the SoCal market is tanking, I think it exposes in them a bias that from then on damages their future credibility even if they may eventually be correct.  Also, demanding data and then rejecting that data in favor of anecdote which supports their position is not helpful to them, just the opposite.

Is this what a tanking market looks like?

It doesn't to me because I clearly remember this:

The question obviously is:  Will the top graph soon resemble the bottom?

I received unsolicited offers on my two apartment complexes a little over a year ago. They were very profitable and low maintenance for me, yet I made a deal and sold them. Why? If anyone offers me a 3.25 cap on any of my investment properties, I'm a seller. Why anyone would buy at that price will always be a mystery to me.

rankbull,

Perhaps they intended on converting the property into condos- therefore based the offer with those numbers in mind.  Opposed to an apartment building w/ a 3.25 cap which one could acheive all day long.  Dont know the details obvioulsy but it sure does sound like that type of deal. 

I like that quote.  I also like his book.

What do you say when the pay window is closed?

What to you mean sideways? I think most are just stating the obvious.  I for one have seen prices decline in properties that we have owned and sold, and I have also seen prices decline in properties that we have decided to keep.  This is of course different from what the NAR publishes as they have a bias as well.

So I don't think your a troll, but I am assuming based on your post of the first graph that you are still seeing a positive increase in RE and that there is not an indication of price decline based on the specific graph you are viewing.  Further, you posted the second graph to show what a "tanking market" looks like, and obviously it is different from the first graph.

Anyway. Your graphs are completely different from the data I have for specific properties that I own in So Cal.  As an example, my vacation condo peaked at a price of $240k last year (my specific unit appraised for $235k), now there are several on the market for $199-205k.  I have other examples of similar price declines, all of which won't show up on any of the NAR reports.

So yes it is great to keep a positive perspective, but a dose of reality from what is actually happening on the ground trumps anything graph I see on this web site.

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taddy - not sure if you saw this - my notes from his book -

http://www.websitetoolbox.com/tool/post/sdcia/vpost?id=1235748&highlight=craig+hall

Diane Avery “Rank Bull”—CA--------------

Pretty chart.  Thanks.  I need my daily dose of numbers and pretty graphs or I get weak and sickly.

I agree with you that the bigger graph does not show a “tanking” market in the same way that the smaller one does.  However, as I look at it, it is clear to me that the increases in prices are less in the more recent months than in the earlier months.  It does look like a “topping out” market.  In mathematical terms, the first derivative is lower later than it was earlier.  Or the second derivative is negative.  So, a concave down curve.  I wish that when people create curves that they would put in the statistics: at least the first two or three derivatives for early, middle, and late portions of the graphs.

Good Investing and Good Posting*******Ron Starr*********

First and second derivatives are useful for real estate ...

And to think, some people thought Calculus was a waste of time. 

Ron, of course the top graphical illustration of the market shows no perceptible increases in median price which as you say is indeed a downward movement of the appreciation curve.  You say that "the bigger graph does not show a “tanking” market in the same way that the smaller one does" which leaves the impression unless I am misunderstanding that the larger graph does in fact show a "tanking" market, but in a different way.  Have I got that right?

The thing that nags at me and keeps me from forming an opinion with any measure of certainty about the "market top" theory is that I clearly remember, as an old-timer, the market from oh around '78 to '82 which experienced a 60% plus decrease in sales volume yet remained flat as a board in nominal median price before moving UP again.  That was a four year volume tank, price plateau, and then a leg up.

I know all of the reasons why many say this market is different, some of which are valid and some not.  I still don't share the certainty of those who claim that the future can be seen solely and only in the bottom graph.  Alot of my skepticism stems from what I hear vs. what I see.  I hear "SD is a canary in a coal mine" and that it is "tanking", etc., etc., yet what I see is that it has been an essentially flat market for two years, jinking up and down around the same level as stagnate markets do.

The actual data do not show the downward trend in median price that we've seen in the past and that would warrant a characterization such that a  "bust" is even in progress or whatnot which is what I'm waiting for in order to get my attention to start looking for a bottom.

Prices are still sky high and I see virtually no change in that where I live.  Sales volume sucks, yes, but purchases are ocurring and the prices still make no sense to me and my sense of the current market is perfectly reflected in the top graph along with the low sales numbers we've all seen.

For the first time in decades I paid cap gains taxes on my RE investment sales in lieu of 1031'ing and I'm now sitting on tons of mutual funds, bonds, and CD's waiting for a more clear indication of market direction.  I hope that prices here in CA come into range where cash flow is once again a viable investment option, which it is not right now, but I also think that it is possible for this market to stagnate / slightly drop for 4 or 5 years while wages and rents increase and inflation does its thing before we see another leg up.

I just don't feel the certitude of the righteous about the one true message of the market crash.    

Diane Avery “Rank Bull”—CA--------------

Uh no, I was not being that sophisticated in my response.  I suppose a more accurate response would have been: "I agree that the second graph shows a definate tanking.  And I don't see that happening in the first graph, as you point out."  Then that it looks like a topping is happening.

Yes, a top and a plateau look a lot alike.  I'm not sure there is a way to differenciate them.  At least I don't know a way.

I have stated on this forum that I expect So. CA single family home prices to decline or increase not more that about 5% over the next few years.  Maybe 3-5 years?  So, the side-ways move still looks like either a plateau or a slight decline in values coming  up.  I can't tell which direction is next.

From the big graph it sort of looke to me like San Diego started the slowdown in appreciation before the other counties.  From other things I have read, it seems that San Diego is a little more extreme in price and perhaps sales data than the other counties.  I don't particularly know what that means, except that the curves are a bit different.

I'm surprised you sold properties and just went to cash and paid the taxes.  I sold a house last year in Sacramento.  But then I bought six houses, free and clear, in OK state doing 1031 exchanges.  Of course, I'm oriented toward rental income and I'm emphasizing the cash flow rather than appreciation.  I see "being long" real estate as a generally good position.

Good Investing and Good Posting Pretty Pictures*********Ron Starr**********

Good morning Ron and thanks for the response.  I did indeed sell quite a bit of my RE in the last 18 months, keeping about a third of my pieces which are older holdings, mostly paid for, and premium oceanfront residential and high end retail.  But I most certainly did not go to cash.  A small portion went into bonds and cd's, yes, but the majority went into mutual funds most of which are sector funds such as REIT's, Defense/Aerospace, Brokerages, Energy, and Int.'l (Europe), and I have been quite happy with the results so far which have far more than recouped my tax bite and had quite a nice little run-up.

I admire your willingness to go far and wide in your holdings because this is the reason I didn't roll my sales over and instead paid Uncle and pushed away from the table - not willing to own anywhere except where I live, or within driving distance.  I felt very happy as a seller but just the opposite as a buyer, couldn't bring myself to do it here in CA.

I am starting to get calls from brokers with commercial land deals that are within striking distance of making sense for commercial developement, which is what I know best, so I do see some opportunity on the horizon here just not in residential.      

I'm mystified about why people get so bent out of shape when discussing the downside of a property cycle?

LOL.

Listen, if you ignore it it will go away.  That is the philosophy I follow. 

Funny how that works, now that you mentioned it, I recall being able to get a couple of properties under contract in 2005 in about 15 days with no concessions to buyers.  In 2006, yes lowered the price, and paid concessions on properties we sold/selling.

Had I known the Hispanic community was going to save the day, I would have held onto those properties until next year. 

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"The belief in miracles that all men cherish is born of immoderate indulgence in hope. There are people who go on hope sprees periodically and we all know the chronic hope drunkard that is held up before us as an exemplary optimist." - Jesse Livermore

http://finance.yahoo.com/columnist/article/yourlife/10255

Ben Stein's thoughts on real estate

This is what I think of most of the posters at the bubble blogs.

Salt Lake Real Estate Blog

Another sign of the times: http://sdcia.com/

SDCIA is having

Tony Alvarez

Secrets of working with Real Estate Foreclosure Agents

present at the Wednesday October 11th meeting.

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12% off sale in Fallbrook

http://www.sddt.com/News/article.cfm?SourceCode=20061005cxc