The housing market is now entering a visible slowdown – affordability challenges, low inventory, and higher interest rates are now coming home to roost.

Real estate cycles turn as slowly as a massive cruise ship.  Unlike the stock market where a stock like Facebook can fall 20 percent overnight, real estate tends to boom and bust at a much slower rate.  There is an odd logic to the current market.  “We bought a few years ago and look how late to the game you are!”  Then when asked if some would buy today, “no, but it can only go up!”  Coming from an investor mindset, if housing values are priced in a good range you should buy, just like you would buy an undervalued stock.  When you are spending $1 million on a crap shack, you need to do some serious due diligence.  It is odd that house humpers always use the “but you can’t treat your home like an investment” line and then talk about how reasonable it is to pay for an absurd amount for a property in a subpar neighborhood with underperforming schools. Then they compare real estate to stocks!  Of course it was a matter of time where the market would hit a bump and here we are.  Even Robert Shiller hints at this being a turning point.

As the market turns

In the last year, the absurdity of the market came full circle.  Home values in some areas were going up $50,000 to $100,000 a year.  Why work when you can simply live off equity gains?  But here in SoCal, where people live a Hollywood debt fueled lifestyle the homeownership rate hit a generational low and this is from recent data:

You want to own?   You need to pay an absurd price for a crap shack.  And this is happening in many large metro areas but things are changing:

“(Bloomberg) They were fed up with Seattle’s home bidding wars. They were only in their late 20s but had already lost two battles and were ready to renew with their landlord. Then, in May, their agent called.

Suddenly, Redfin’s Shoshana Godwin told the couple, sellers were getting jumpy, even here in the hottest of markets. Homes that should have vanished in days were sitting on the market for weeks. There was a three-bedroom fixer-upper just north of the city going for $550,000, down from more than $600,000. They made the leap in early June and had closed by the end of the month, for list price.

The U.S. housing market — particularly in cutthroat areas like Seattle, Silicon Valley and Austin, Texas — appears to be headed for the broadest slowdown in years. Buyers are getting squeezed by rising mortgage rates and by prices climbing about twice as fast as incomes, and there’s only so far they can stretch.”

This story is playing out nationwide as a few things are hitting at the same time.  Inventory is slowly rising, mortgage rates are having an impact, and people are seeing price gains slowing so why rush?

This is the first time in many years where there does seem to a broad base of inventory increasing.  And there are deep generational differences in this cohort.  I know of many people with very high incomes and no kids and with no plans of having kids.  They largely travel and spend a large portion of their time at work or traveling.  Why would they buy a crap shack?  Others buy and totally miss the budget mark.  They have kids, don’t realize that childcare in places like LA or OC will cost you somewhere between $1500 and $2000 per month and then as the kids get older, they think they have to compete with their debt saddled budgets simply to throw expensive parties with jump houses, catering, clowns, and all other sorts of things just to feel they are making up time because they are strapped to their cubicle for 40 to 60 hours per week to pay for the massive mortgage, multiple car loans, daycare, and other expenses.  And college!  Good luck with that race.

The housing market has been running on fumes and has been in the tailwind of an incredible stock market recovery.  People would like to buy but simply do not have the budget to do so.  You are also seeing foreign money soften up a bit as the current administration has been tough on China.  Is this good or bad is yet to be seen but in places like San Francisco, Arcadia, and Irvine you have an entire cottage industry catering to Chinese money to buy real estate.

The market is slowing down.  The question yet to be seen is whether this will be a minor correction or an actual bust. We’ve clearly been in a boom.  What comes next?

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313 Responses to “The housing market is now entering a visible slowdown – affordability challenges, low inventory, and higher interest rates are now coming home to roost.”

  • HopingForADiscount

    Seems like the headlines have started to change and a slowdown (hopefully a crash!) is starting. Curious what you all think of the article below and how CA is going to get it’s self out of this mess? Is prop 13 a goner?

    • Yikes! My guess is a mix of defaults, bankruptcy, and debt forgiveness. Pensions will have to shrink, and the state would likely reduce the pensions heavily if the person lives out of state. Modification of prop 13 as well (too many greedy homeowners to kill it entirely).

      • Greedy? Why? Because they bought a house and have lived in it for years ?

        Because anything someone else has that you don’t is “greedy” ?

        Not like they didn’t risk future earnings on a 30 year commitment. Not like they didn’t work to pay off that mortgage.

        There should be no property tax on any primary residence, period.

        But homeowners become sitting ducks when having a bond obligation pinned on them by free riders in elections who don’t have to shell out to pay them off.

        They’ve been paying property taxes for decades longer than those waiting on the sidelines for a crash.

        Your values are really really screwed up.

      • “There should be no property tax on any primary residence, period.”

        Dweezilaz, A++++ for that statement. I think that it should be repeated many times till people get that through their skull. They already paid a mountain of taxes on the money they used to purchase: federal income tax, state income tax, SS tax, medicare tax and you would expect they would get a break finally on their house. It looks that the greedy thieves (liberal politicians) are not happy just with state and sales taxes; they have to take it all for their cronies who put them in power.

        If someone is GREEDY, it is the socialist politician buying votes with the wealth of the middle class.

      • I’ll give a 3rd + for the no tax on primary residence properties.

        At most a state should tax income or property, not both. In Cali we get the trifecta, sales, income and property tax.

        In any event I don’t like property tax because of the reason prop 13 exists. It forces and individual to realize rising costs on something they potentially own due to inflation and speculation which are both out of your control.

        At least with income tax you get taxed more when you earn more and with sales tax you pay less if you buy less.

        With property, you pay more because 20 years from now people think your home is worth twice as much.

      • Randy and the redwoods.

        Greedy? I sense your a self centered douche.

      • @dweezilaz
        July 31, 2018 at 12:15 pm

        “Greedy? Why? Because they bought a house and have lived in it for years ?”
        No cuz’ of tax avoidance. A tax avoidance which BTW primarily benefits the rich but the old and long time residence people are used as a strawman whenever talk of killing Prop13 comes up.

        “Not like they didn’t risk future earnings on a 30 year commitment. Not like they didn’t work to pay off that mortgage.”
        Paying off the mortgage is its own reward. That is by paying it off you no long have to pay for the house itself to the bank and now only need to pay off tax, power, etc.

        “There should be no property tax on any primary residence, period.”
        LOL how the heck do you think things like roads, schools, water, etc get paid for? If there is no property tax where is the money supposed to come from? They’ll just have to tax something else more, like sales (which is regressive), to make up the difference. At least with property taxes (if properly done, Prop13 sabotages this) you have a way to tax the rich’s wealth more for the property they own.

        “They’ve been paying property taxes for decades longer than those waiting on the sidelines for a crash.”
        That is the risk you take with buying property. No market is risk free. If you don’t like it don’t enter that market.

      • @Flyover
        July 31, 2018 at 2:59 pm

        “They already paid a mountain of taxes on the money they used to purchase:”
        And they’re getting something for their money: a functional govt, infrastructure, a military, schools, etc.

        When you give someone money and they do what you want with it that isn’t greed. That is called doing their job. Now there might be aspects of that job that you don’t like or decisions that got made that you didn’t like but you don’t solve that by calling them greedy: that is what the vote is for.

        “If someone is GREEDY, it is the socialist politician buying votes with the wealth of the middle class.”
        LOL everyone but the rich keeps getting poorer + Repubs have been in control of Congress since 2010 + Repubs control all 3 parts of govt right now + Obama was self described policy wise as a 90’s Repubs despite the party he ran under but nooooo its them Socialists that are the problem!!

      • @RangerOne
        August 1, 2018 at 5:33 pm

        “I’ll give a 3rd + for the no tax on primary residence properties. At most a state should tax income or property, not both. ”
        You have to tax property or else the rich just classify all their wealth as property via loopholes, tax havens, and straight up tax evasion.

        Prop13 just legalizes some of the tax evasion for the rich. Some of the people who own homes will benefit but Prop13 was always a time bomb waiting to go off. Reagan passed it knowing it’d either blow up the housing market over time (because it puts ever upward pressure on housing prices) or it’d blow up the state economy. The goal was to cause a political crisis that the Repubs could exploit.

        It never turned out the way those 80’s Repubs thought it would. The Repubs for instance are no longer able to mount real political power in CA anymore, so they can’t capitalize on the mess they’ve purposefully made. But the time bomb is still ticking and to prevent a major economic and humanitarian disaster Prop13 will have to go at some point.

        “With property, you pay more because 20 years from now people think your home is worth twice as much.”
        Same thing happens with any other asset or commodity. Look at the value of the stock market, gold, silver, steel, etc. over time. Value inflation is everywhere and unavoidable without inducing major economic recessions a la Volker’s FED actions in the 80’s.

      • Some of you either aren’t using critical thinking skills or are underestimating the danger in ignoring this issue.

        If the value of our property increases due in part or whole to services and improvements of the commons, the price for that is a tax. We don’t expect to get something for nothing, do we?

        The further said tax is removed from apportionment by way of market forces, the more those who don’t benefit from the gain are made to subsidize those who do. That’s what Prop 13 does because the state makes up for the difference by disproportionately increasing all of the other taxes and fees everyone is subject to. This imbalance has further consequences beyond the scope of this discussion.

        Why don’t some of you just admit you’re fine with having other people subsidize your lifestyle? You know, fuck everyone else because I got mine. The charade is obvious and tiring.

        I’m a property owner. I’m not okay with being subsidized because these things cause distortive knock-on effects that come around to bite in ways that are worse than just taking the medicine up-front. Greed is indeed at the root of the problem.

      • TTS,

        Voting does not change anything at the federal level. I can not compete with the billionaires in buying politicians. Between 100% democrats and a large part of republicans (RINOs), the system is rigged against the average Joe. It is a system of plunder and bringing the middle class to extinction. Most of the taxes are for their cronies not for what you mentioned. What you mentioned is the excuse, like the one protecting the grandma for being kicked to the curb.

        You said that sales tax are a regressive tax. However the biggest regressive tax devised is INFLATION. ALL the socialist policies are conducive to inflation and decimation of the middle class. Yes, the socialism for the Military Industrial Complex is conducive to the same outcome and it is supported by all democrats and ALL RINOs (democrats with R after their name). Conservatives like Ron Paul are against both – welfare and warfare.

        I’ve been in conservative states with no income tax, super low property taxes, low sales taxes and the schools were excellent, the fire stations working fine, the roads were perfect and without running deficits. The difference is in the level of corruption which is always a feature of the liberal states (massive corruption). Look at Illinois, Detroit and Baltimore for an example of what I am saying.

    • Why would you hope for a crash? if there is a housing crash then that means the entire US economy is again in trouble. Will your job be secure if there is a crash? If and when prices to crash, good luck outsmarting the Blackstones who purchased thousands of foreclosed homes en bloc from the banks and good luck outsmarting flippers with deep pockets who will buy with all-cash and 10 days closing. That is what happened in 2008.

      Why the obsession with Prop 13? of course it will change someday; perhaps a 5% increase in property taxes each year, but it will NEVER overnight be changed other than incremental increases.

      • HopingForADiscount

        Yes, I’m definitely hoping for a crash. My job is recession proof and so is my spouse’s. We can’t compete with all the tech people for a house in our area (east bay) even though we make a combined 250K/year. We’ve been saving diligently for many years and were not in a good position to buy during the last down turn, so this time we are ready. I have many friends who were in a position to buy in 2012 and they did not have trouble “outsmarting” Blackstone et al and flippers to get into a house. Tech is waaaaaay over-valued and is due for a correction which should help send housing prices in the bay area in the right direction.

        There are real threats to modify prop 13 for commercial property and 2nd homes. And a “surtax” on luxury homes is being discussed.

      • “but it will NEVER overnight be changed other than incremental increases.”

        ….”incremental” like in the article – $10,000/year increase with no increase in market value – people will sell for half price just to run away. You can not mess with this mafia of “Democratic Socialists” like Rahm Emmanuel and Obama; …and if you don’t like those 2 you can elect Maxine Waters or Ocasio Cortez, the darling of the millennials.

      • “but it will NEVER overnight be changed other than incremental increases.”

        ….”incremental” like in the article – $10,000/year increase with no increase in market value – people will sell for half price just to run away. You can not mess with this mafia of “Democratic Socialists” like Rahm Emmanuel and Obama; …and if you don’t like those 2 you can elect Maxine Waters or Ocasio Cortez, the darling of the millennials.

      • cynthia curran

        New York and New Jersey have high property taxes, so does Washington. They also have areas that have housing just as high as LA-OC. People blame low property taxes too much. Some states like West Virginia have much lower property taxes than Texas and lower prices mainly because its a poor state.

      • cynthia curran

        New York and New Jersey and Washington state don’t have prop 13. They have high property taxes and high housing prices. Prop 13 is always to blame. Basically, its the progressives in Ca which opposed the inland counties have more building because of environmental rules. Also, the tech industry is so progressive politically it opposed moving some of the industry to cheaper locations like in Sacramento and so forth.

      • @QE Abyss
        July 30, 2018 at 7:07 am

        “Why would you hope for a crash?”
        Because housing is a necessity and its getting unaffordable to live anywhere.

        Also bubbles are all about false valuation, in this case homes, so why the heck would anyone reasonable want a necessity to be falsely valued? Much less falsely valued to the point of unaffordability??

        “if there is a housing crash then that means the entire US economy is again in trouble.”
        All bubbles pop though. The economy was in trouble no matter what.

        “Why the obsession with Prop 13?”
        Because it helps blow housing bubbles and disproportionately rewards the rich for being rich at the expense of everyone else.

      • @Flyover
        July 30, 2018 at 4:43 pm

        “You can not mess with this mafia of “Democratic Socialists” like Rahm Emmanuel and Obama; ”
        None of those people are in power or have any sway over Congress. Check the date, its 2018, not 2016.

      • QE Abyss,

        “Why would you hope for a crash? if there is a housing crash then that means the entire US economy is again in trouble. ”

        That’s exactly what we want. If we have a big recession, housing prices and stocks crash. You can buy in cheaper. A wrecked economy is the best thing in the world if you have cash and want to invest in a house and more stocks. Luckily we get a real estate crash every ten years in California (roughly)

    • Wow!!!…Thank you for the good article. I kind of knew what was going on in that liberal democratic “paradise ” but the numbers spoke volumes. They gave a very vivid picture.

      I lived under communism and the thieves in power stole all the country property for themselves and their buddies – fast nationalization- like in few months. Then, they starved the rest like the collectivists/socialists in power do in Venezuela now.

      It looks like the communists in power in Illinois do the same nationalization a little bit slower, like in 10 years. At that rate, people have to buy their properties every 10 years or Chicago becomes the next Detroit.

      It is sickening what the liberal democrats do everywhere – mass poverty in the name of being equal with the third worlders imported by millions every year – fed and taken care of in sanctuary cities built by the old former middle class. Enrichment of the few at the expense of everyone else. No wonder Michigan, a former solid blue state voted for Trump. The roads look like after the war.

      Detroit and Chicago used to be among the richest cities in US till the socialists/democrats grabbed the power by importing voters from third world countries – traitors (they run out of other people’s money)!!!!….Now the former inhabitants move to other states as economic refugees because they can’t pay what the communist/socialists overlords demand (over 80% of counties are losing population!!!!….). I feel for them because I’ve been in their shoes.

      And these communists/collectivists/socialists from Illinois in 2016 wanted to expand their “successful” experiment to the whole country!!! Tyrants want that everywhere so taxpayers don’t have any place where to seek refuge. CA will follow in their footsteps very soon. Communists act the same everywhere. Wait till CA will get a governor like Maxine Waters or Ocasio Cortez (“”Democratic Socialists)!!!…..That 1 million crapshack will get $90,000 year in property taxes while all businesses head for the exit. That is the problem with these socialists/communists – in their mind they can do whatever they want with no consequences – everything stays static.

      • You’ve just identified the heart of the problem in California, and in America these days… failing/failed socialist policies.

      • You’ve just identified the heart of the problem in California, and in America these days… failing/failed socialist policies.

    • Seen this all before, Bob

      It is good to see so many new people posting.
      What does this mean? Is this like a mob of people gathering to see a train wreck or a bunch of hopeful people who see the light at the end of the tunnel so they can buy a home?

      From my past posts, I see 2 paths into the future.

      1) Housing will crash hard per Jim and Our Millennial. The economy is doing well now so it is hard to predict if a Black Swan will come crashing through our windshields in the near future. If it does, whatever it is, Our Millennial and Jim will be correct and we will see a 50% crash in the stock market which will drive down all of that down payment money, jobs, and then the slow moving housing market will start to fall. I saw it happen in 2008 and I refuse to believe that it cannot happen again. Have 1-2 years of cash available if you own a house already so you don’t lose it.
      Have a boatload of cash available and keep your job to buy a house. It doesn’t help if you are jobless and your 100K stock market gains that went up 400% since 2008 are now only worth 40K. If you are jobless without cash, you will wait on the sidelines.

      2) The Fed has complete control of our economy now after that “Oops” in 2008.
      Inflation will start to rise and stocks and housing will be flat or slightly rising with inflation as long as the Fed is in charge. Housing and stocks will on average start to rise with inflation. If wages don’t go up with inflation, we will have stagflation like we saw under Carter. It was a terrible malaise. If wages do go up with inflation, we may see a positive feedback effect like we saw under Reagan. Wages go up, inflation goes up, so housing goes up. Under Reagan and Carter, inflation was up to 15% yearly. The Dow has been slightly down since Jan 2018 and the Nasdaq has been tracking inflation. Housing might do the same for the next decade. Housing prices could stabilize and the FOMO effect will go away. Why buy now when the price will be the same in 2 years?

      As far as Prop 13, the senior baby boomers on Social Security who bought their houses in 1975 for 50K and are currently paying their 2K per year Prop 13 taxes are probably the lowest priority target for state government. As long as people keep buying 1M houses and paying 12K per year, the tax money keeps flowing in.

      It may or may not happen, but IMHO the law that Millennials can inherit the property taxes from their parents is the most unfair. Why should a Millennial be able to keep the 2K property taxes on their parent’s 1M house after they pass away into the great CA sunset? They already inherit the house tax-free, why is it even a law to inherit the taxes? Why not inherit the house slave or house dwarf? 🙂 It creates dynasties. So unfair! Millennials should not get this unfair tax break.

      • Very insightful Bob. I haven’t been as active on this forum as I’d like to be but I remember when posts would barely break 50 comments. I was thinking the same thing; “does this increase in interest in a housing bubble blog signal an incoming bubble???”

        For me, the short answer is a big fat NO. The way I see it, the market is irrational and does not agree well with rational people. The threefold increase in commentary from a year ago tells me that there are a bunch of people salivating at the thought of a housing crash that they join a forum so that they can circle jerk each other into “waiting it out.” Unfortunately, waiting it out is a rational thing to do which doesn’t agree with an irrational market. At the moment, I believe that the factors involved are perfect for steady, sustainable growth. It took years of trial and error in the form of booms and busts but what we’re left with now are all the elements in place to keep the circus going for quite some time. Low interest, low inventory and a regulatory framework that makes it difficult to deviate from this norm until this low down payment scam comes into fruition (your income still has to qualify so the effects aren’t going to be as spectacular as 2008).

        What we need for a bonafide bubble to occur is a change in the factors that are keeping the market together. Interest rates must rise which increases FOMO and locks out buyers (this is very likely to happen but I can’t see 10%+ anytime soon), developers must get greedy and build en masse which increases supply (this one is definitely coming, just you wait) and regulations must loosen (Trumps last hoorah possibly?) to allow those buyers back into the market but to a feeding frenzy of hyper inflated real estate. Lots of people buying over-priced property in a high inventory market…the perfect conditions for a bubble.

        The fact of the matter is that 2008 is still fresh in people’s memories. Everyone wants to wait for a crash so no one’s going to get it. Once those memories fade and the factors I mentioned come into play, then we can talk bubble. So the real question is what’s the market outlook? Here’s my best guess. Stagnant prices for a few more years until wage catches up or growth that’s in line with inflation, if at all. If foreign investing dries up and/or boomers flood the market with supply, then you may have a 15% drop from relative peaks but I wouldn’t bet on it. Don’t be surprised if prices continue like this for the next 10+ years.

        Mark. These. Words.

      • Why rent a box from the bank if you can rent the same box from a private landlord? The answer would be: in case renting from the bank makes sense. But it doesn’t – financially. What bob and new age don’t mention is rental rates. Rents have not kept up with the irrational market.notice how RE cheerleaders do not talk about rental parity? A market that is so out of whack cannot stabilize unless something gives: Price reductions.

        Of course RE cheerleaders counter that with the low inventory lie. Have you noticed that they are building everywhere on your way to work? Have you noticed all these empty houses when you walk your dog through the neighborhood or ride your bike? Low inventory is the last big lie they have left in their arsenal to justify a highly overpriced market.

        Going back to “stabilization”. What a great, positive word! Reminds me of when realtards were running around a few years ago telling everyone about RECOVERY! Recovery can mean healing from a disease. In real estate terms it means re-inflating the bubble. Consequently “stabilization” translates into keeping the bubble going, somehow maintaining the sky high prices. Notice that only RE cheerleaders who bought a long time ago or people who profit from the bubble talk about the plateau/stagnant prices(stabilization) it’s their dream and last hope. They realize prices are sky high and demand for overpriced crap shacks has fallen off (avg hoe. I meant joe). What you have left is speculators/flippers.

        For the longest time RE cheerleaders told you that somehow millennials will start buying at these ridiculous prices. “THIS is the year when millennials go out and buy in droves”. We have heard that every year for the last 3-4 years. The reality is of course very different. Millennials are by far in worse shape than their parents were at that age (financially speaking). So it remains a sales pitch. But RE cheerleaders will read from the same script. Expect to keep hearing that THIS will be the year!

        Basically, what bob and new age are telling us is: crash postponed. This time is different. Boom cycle ending? No way! It can only go up or at least stay stagnant! No recession for 20 years! 2008 – 2028!

        Simple response: no crash no purchase. I am getting paid to wait (dirt cheap rent compared to buying at heavily overpriced levels.

      • “…and regulations must loosen (Trumps last hoorah possibly?) to allow those buyers back into the market but to a feeding frenzy of hyper inflated real estate. Lots of people buying over-priced property in a high inventory market…the perfect conditions for a bubble.”

        Agreed – this would put what is currently merely an inflated metro market (with outlying areas being pulled along for the ride, but with many other areas not inflated at all) into a true bubble. It wouldn’t surprise me if it happens via a desperation move, or simply as part of an effort by Trump to deregulate anything and everything. If/when we see liar loans again, then I will be the one calling for a 30-60% crash (and possibly jump in the market for a quick flip or two). Until then, more and more I’m thinking a sudden steep drop is unlikely without something really big to trigger it.

      • @JohnD

        I’m reading your comments and beginning to think we are identical in our philosophy about real estate prices and the outlook. It’s kinda scary actually!

        Disclaimer: I’m not a RE Cheerleader. I’m just a realist.

        Back to the main subject, Riverside, my lovely hometown, is sort of a microchosm of the real estate industry’s booms and busts. An average sized city nestled between some of the biggest cities in the nation and smallest towns. It ideally should be average priced but at the moment, it’s valued above average because of its proximity the hot markets of SD, OC and LA. Back in 2006, my parents house was valued 725,000 (about $900K today) at the peak. The same house is barely selling for $650K in today’s market. I don’t think we’ll get quite up the previous high inflation adjusted but we still have a few more years before we get close to that. When it does, then we’ll be in bubble territory but for now we’re only begining to heat up. Not the best time to buy but definitely not the worst. Whether you rent or buy it really doesn’t matter if immobility isn’t an issue to you and that’s reflected in the parity between the two, pretty much the same. So to wrap it up, if I can describe the market in one word it’d be “meh”

    • Poor representation. Shoddy research numbers don’t add up.

  • I got very excited when I saw a group of Chinese nationals roaming through our 80% built out new housing development.
    Inventory is nearly non existent in Monterey County so there really is only one direction the market can go.
    Could it retreat? Anything is possible but professionals like doctors and dentists need to live somewhere and they don’t want to live in Salinas.

    • LOL…..yeah, there’s literally millions and millions of doctors and dentists waiting for houses

    • Haha … you need to get off your iphone or stop gaming Mikey. Chinese buyers are gone gone gone. They are essentially out of the US housing market which means there’s no buyers and prices are heading for a hard landing.

    • The Chinese are having a tough time getting their money out. It was capped at $50k a year per individual, they just reduced it to $20k. Banks there are doing some serious capital control.

      Yuan just devalued. Chinese economy isnt in the best of shape. Most people are not wealthy and inflation is ridiculous (everything cost the same as in the US). With some manufacturing already moving away from China and the tariff war starting, they are really worried over there.

      Everyone with money and can get it out already got out in the last 5 years.

  • Maybe Trump’s tax plan is finally sinking in. There’s almost no tax incentive anymore to own a home, if you are in the middle class.

    Plus, the sting of 2007-8-9 still resonates with people. Nobody wants to buy near the top of the market, and be left holding the bag when it corrects.

    • Other Side of the Story

      TeeJay erroneously thinks: There’s almost no tax incentive anymore to own a home if you are in the middle class.

      This is simply not true. The tax deductibility for mortgage interest still remains fully intact for the vast majority of America’s homeowners.

      • Theoretically, yes; practically, not. For the vast majority of americans, the new standard deduction is higher than the interest/itemized deduction.

      • Other Side of the Tracks, it is true that “the tax deductibility for mortgage interest still remains fully intact for the vast majority of America’s homeowners.” However, the standard deduction just doubled to 24k for married couples, which gives almost no tax incentive for middle class to buy a home. I’m talking about middle class. The upper 20% will still benefit from buying a home and claiming a mortgage deduction. Of course, I’m speaking in generalities, each person should decide for themselves.

  • Maybe Trump’s tax plan is finally sinking in. There’s almost no tax incentive anymore to own a home, if you are in the middle class.

    Plus, the sting of 2007-8-9 still resonates with people. Nobody wants to buy near the top of the market, and be left holding the bag when it corrects.

    • Teejay~

      I was just thinking yesterday that another reason not to buy a house in California is because at least some part of the state is on fire almost every day. Right now, we again have multiple fires. We don’t have a specific fire season anymore. Also, fires are starting to burn into the cities themselves, and not just the surrounding wilderness areas. It’s nuts here lately. Personally, I think something’s afoot so that the lefties can claim ‘climate change’, and restrict our use of natural resources like water accordingly. I think the weather is being manipulated (sudden high winds out of nowhere prior to the fires starting), and I think DEW’s (direct energy weapons) are involved. Nonetheless, we’re under attack, and frankly, I’m starting to think it’s not safe to live here anymore. It’s just too much lately, and it’s non-stop.

      • You dont need anything as exotic as DEW – you have 37 million+++ mostly 3rd worlders and they take up a lot of water. Less water in the rivers, lakes, streams and reservoirs means a dryer environment, then those same 3rd worlders driving their unregistered unmaintained junkers catch fire and burn down half the state (or crash into you and your loved ones after a night of drinking and kill your family). I actually saw a fire started in north san diego county years ago on the I-5 by my house during the dry season – a junker dragging its tailpipe sent sparks into the median that started a fire. All the lagoons had encampments of illegals and their prostitutes – protected by the state. I got ticketed taking pictures on my kayak and threatened with confiscation and they demanded to know who I worked for. Cali has been a corrupt third world country for decades now, no different than mexico, just higher – much much higher – prices.

      • Seen it all before, Bob

        You mean Trump is controlling the weather and directing satellite weapons at the US to start fires?

        We really should impeach him.

        True engineers do not fall for conspiracy theories.

      • Speaking of conspiracy theories, the Flat Earth movement apparently began as a joke, which has since been co-opted by the tens of thousands of idiots who actually believe it. Well, a new group was recently formed on Reddit based on the theory that the ocean is bottomless. It’s a joke, yet anyone who calls it that is banned from the group. They’re trying to repeat the flat earth fiasco, and I think they’ll succeed.

        In the next few years, you’ll see hundreds of youtube videos posted and watched by people who actually believe the ocean has no bottom.

      • Bob, let me tell you about what you call ‘conspiracy theories’. This was a term used by the CIA after the JFK assassination to discredit information so that people don’t even look at it. A conspiracy is, at minimum, nothing more than a handful of people working together in the shadows, to accomplish a goal that benefits themselves and hurts everyone else. By that definition, there are countless conspiracies in the world. The endless fires in California contribute to the ‘global warming’ hoax so that government can cut off our resources and tax or fine us to death for using them over artificial limits set for us, such as Jerry Brown’s 55 gallon/day restriction on water use per person as of 2022. Conspiracy theories are anything that differs from the official version of events. The term “conspiracy theory” is used dishonestly to prevent investigation of the claims of critics. “It’s a conspiracy theory. There’s nothing going on.” That’s just a lazy way to shut down dialogue. It shuts people’s brains down and doesn’t make them think.

        We don’t need to be a society that sees intrigue and scheming at every turn, but we do need to be aware of the deceit that exists around us. The mainstream media is knowingly broadcasting almost pure fiction 24/7, and hoping to convince you it’s fact. Anything they don’t want you to believe is branded a “conspiracy theory” — a phrase used as a pejorative, almost as a kind of hate speech against the intellectually curious. So what to believe, then? Hopefully by now you’ve figured out that anything which is officially denied by the federal government is probably true. Anything broadcast by the mainstream media (or published in science journals) that supports the commercial interests of powerful corporations is probably false. You are living in a realm of extreme deception, and sorting out truth from fiction is a full-time job. Most people utterly fail at the task and end up surrendering to the engineered influence of corporations, governments and corrupt institutions. It’s easier, after all, to just go along with the narrative you’re spoon fed rather than try to think critically about the world around you. And that’s exactly what the institutions of control are counting on.

        J Edgar Hoover (1895-1972) the United States lawyer who was director of the FBI for 48 years and a man who understood such things, wrote that: “The individual is handicapped by coming face to face with a conspiracy so monstrous he cannot believe it exists.”

        As for ‘true engineers’ such as myself, we just want an explanation. That’s why people like you call us ‘conspiracy theorists’. We’re not conspiracy theorists – we’re just not gullible. We won’t take anything that you put out there simply because you’re authority figures. We’re going to look at it, and say, ‘Does this add up? No, no, 2+2 is not equal to 5’. So then people like you call us conspiracy theorists.

        A final quote:

        “Only small secrets need to be protected. The large ones are kept secret by the public’s incredulity.” ~ Marshall McLuhan

      • Karin, A+++
        Excellent explanation!!
        Thank you for the effort to explain in detail what most people with critical thinking already know. The primary function of the intelligence community is disinformation not collection of information (that comes in second).

      • Karin–Finally someone who gets it. Great posts.

      • Karin- Finally, someone who gets it. Great posts.

      • Flyover and pau~

        Thank you very much for your appreciation. I rather liked that one as well, and it seems to have shut Bob and John D down on this topic. If they want another round, I have plenty more ammo to fire.

        Actually, the way I differ from other engineers is that I can write and spell, which most engineers are not at all proficient at. But engineering paid more, so I let my writing career fall by the wayside. It comes in handy sometimes, though.

      • “…and it seems to have shut Bob and John D down on this topic”

        Shut me down? A) I was on vacation, and B) I don’t disagree with much of what you write. I actually have a very open mind – I evaluate the evidence and decide for myself if something is likely true. I also use as many sources as possible, which is why it took me all of 5 minutes to doubt the Rothschild conspiracy. The best conspiracies have hints of truth, and different people take the conspiracy farther than others. For example, the rumor that the Rothschilds control 80% of the world’s wealth. It’s absurd on the face of it and easily disproven. Other aspects of the conspiracy were very obviously penned by raving anti-semites, and when I looked at the actual economic claims, they turned out to be impossible. If there were really compelling evidence, I’d be happy to do more reading, but you can bet that I would check every “fact” presented to me.

        I like conspiracy theories – they’re entertaining, and sometimes proven correct, but too many people glom onto too many of them just because they need someone else to blame for their unhappiness.

      • John D~

        I would re-post what I wrote about Rothschild and how he made a fortune after Napoleon’s defeat at Waterloo, but the site monitors here deleted my post, and will probably do so again. We can’t let the people know how the world is actually run, now can we? Also, the research cited previously by others than myself, that this was all a conspiracy theory, came a) from research sponsored by the Rothschilds, and b) from a book written by Niall Ferguson, ‘The House of Rothschild’, which was approved by the Rothschilds before publication. From one of the reviews:

        “This long-winded and dull history is nothing more than an apologist’s love letter to the rich and powerful. I should have stopped with the introduction which claims that the author had the full blessing of the Rothschild family and that they even approved the manuscript. Well, we won’t be getting anything negative then will we? No, we won’t.”

        Actually, this reviewer does mention the aftermath of Waterloo with respect to the manipulation of the markets by Rothschild:

        “According to articles I have read about Nathan Rothschild, he had a significant role in the Napoleonic Wars and most especially in the Battle of Waterloo. Rothschild’s couriers were famously faster at delivering news than even the King of England’s and he therefore learned of Napoleon’s defeat a day before the Crown. He then used this knowledge to cause a panicked sell off in the English market, buying the bonds up later at a huge discount.”

        There was actually more to this, but I’m not going to get into it again.

        As for the Rothschilds controlling 80% of the world’s wealth, I sincerely doubt that. They once controlled most of the wealth of Europe, but today they are not even at the top of the totem pole. And with the bust of the pedo rings that have been occurring since Trump took office, they are losing a lot of what they have left. New laws have been passed against people caught child trafficking and the like, that are similar to asset forfeiture laws here in the States. This has not been a good time for wealth preservation in the Rothschild circles.

      • “He then used this knowledge to cause a panicked sell off in the English market…”

        I agree that the book is hardly objective. However, you got this from a purchaser’s review posted on a book store site. In making this claim, this person doesn’t cite the articles read, or the sources those articles used. For all we know, he thinks the Rothschilds control the weather.

        I prefer to start with someone who did some actual research, even if they’re skeptics:

        …and then check those claims myself, in order to get both sides of the story. Granted, one of his sources is the Ferguson book (but frankly, looking into Ferguson’s background, he is extremely well-qualified, if not a wonderful human being), but he has five other sources as well. The wiki page on the subject has more than a hundred sources. The idea is to get to the very bottom of it, and knowing who is potentially biased is helpful in itself.

      • John D~

        I opened your link, ‘Deconstructing the Rothschild Conspiracy’, ‘Filed under Conspiracy Theories’, and right off the bat this tells me that this is a conspiracy debunking site rather than a site that deals with actual historical research. Next, I opened the ‘conspiracy theory’ link to ‘Skeptoid Episode Guide – Conspiracy Theories’, and find alleged debunking of conspiracies that have long been proven to be factual, such as ‘The Big Pharma Conspiracy’, ‘Autopsy: The Clinton Body Count’, ‘Firestorm in Waco (Skeptoid #511) – The FBI did not deliberately murder the Branch Davidians in Waco, Texas’ (yeah, right), ‘Agenda 21 (Skeptoid #465) – A look at the conspiratorial hysteria and sensationalism surrounding the United Nations’ Agenda 21′, ‘Satanic Ritual Abuse (Skeptoid #462) – The history of claims that secret Satanic cults are abusing children’, and on and on and on. I feel like I’m reading the highly discredited site, Snopes. This is not intelligent and unbiased research, John. I’m not saying all of it is false. I’m skimming ‘The Death of Mad King Ludwig’, and I agree that King Ludwig was eccentric, but not mad (his family, the House of Wittelsbach, was fairly inbred, though, and his brother Otto was the one that was crazy enough to be locked up and kept out of sight. But not Ludwig.). I’m from that part of Bavaria, and actually spent a year of high school living across from the spot where Ludwig was drowned in the Starnberger See (Lake Starnberg).

        Next, I looked up the guy running this site, Brian Dunning. Here’s what I found:

        “This Man Cheated eBay Out Of $5 Million And Now Faces 20 Years In Federal Prison

        “If you know Brian Dunning at all, it’s probably as the host of “Skeptoid,” a podcast that debunks pseudoscience. Recent episodes have discussed UFOs, aliens, and free energy machines.

        “But for the last few years he’s been fighting eBay and the FBI in court over allegations that he cheated the auction site out of $5.2 million in an ingenious “cookie stuffing” affiliate marketing scam.

        “Yesterday, he gave up that fight, and pleaded guilty to wire fraud in a California federal court. He faces 20 years in prison.”

        So he’s not very trustworthy, for starters.

        But getting back to the Rothschilds, let’s see if this site’s monitors delete my post on this again:

        “The Rothschild family has played a crucial role in international finance for two centuries, as Frederick Morton, in The Rothschilds, writes:

        “For the last one hundred and fifty years the history of the House of Rothschild has been to an amazing extent the backstage history of Western Europe.”10 (Preface)… Because of their success in making loans not to individuals, but to nations, they reaped huge profits, although as Morton writes, p. 36, “Someone once said that the wealth of Rothschild consists of the bankruptcy of nations.”

        “E.C. Knuth writes, in The Empire of the City, “The fact that the House of Rothschild made its money in the great crashes of history and the great wars of history, the very periods when others lost their money, is beyond question.”

        “The sire of the family, Mayer Amschel Rothschild (“The original name of Rothschild was Bauer.” p. 397, Henry Clews, Twenty-eight years in Wall Street), established a small business as a coin dealer in Frankfurt in 1743. Although previously known as Bauer, he advertised his profession by putting up a sign depicting an eagle on a red shield, an adaptation of the coat of arms of the City of Frankfurt, to which he added five golden arrows extending from the talons, signifying his five sons. Because of this sign, he took the name ‘Rothschild” or “Red Shield”. When the Elector of Hesse earned a fortune by renting Hessian mercenaries to the British to put down the rebellion in the American colonies, Rothschild was entrusted with this money to invest. He made an excellent profit both for himself and the Elector, and attracted other accounts. In 1785 he moved to a larger house, 148 Judengasse, a five story house known as “The Green Shield” which he shared with the Schiff family.

        “The five sons established branches in the principal cities of Europe, the most successful being James in Paris and Nathan Mayer in London. Ignatius Balla in The Romance of the Rothschilds (12) tells us how the London Rothschild established his fortune. He went to Waterloo, where the fate of Europe hung in the balance, saw that Napoleon was losing the battle, and rushed back to Brussels. At Ostend, he tried to hire a boat to England, but because of a raging storm, no one was willing to go out. Rothschild offered 500 francs, then 700, and finally 1,000 francs for a boat. One sailor said, “I will take you for 2000 francs; then at least my widow will have something if we are drowned.” Despite the storm, they crossed the Channel.

        “The next morning, Rothschild was at his usual post in the London Exchange. Everyone noticed how pale and exhausted he looked. Suddenly, he started selling, dumping large quantities of securities. Panic immediately swept the Exchange. Rothschild is selling; he knows we have lost the Battle of Waterloo. Rothschild and all of his known agents continued to throw securities onto the market. Balla says, “Nothing could arrest the disaster. At the same time he was quietly buying up all securities by means of secret agents whom no one knew. In a single day, he had gained nearly a million sterling, giving rise to the saying, ‘The Allies won the Battle of Waterloo, but it was really Rothschild who won.'”***

        “After the success of his Waterloo exploit, Nathan Mayer Rothschild gained control of the Bank of England through his near monopoly of “Consols” and other shares.”

        *** The New York Times, April 1, 1915 reported that in 1914, Baron Nathan Mayer de Rothschild went to court to suppress Ignatius Balla’s book on the grounds that the Waterloo story about his grandfather was untrue and libelous. The court ruled that the story was true, dismissed Rothschild’s suit, and ordered him to pay all costs. The New York Times noted in this story that “The total Rothschild wealth has been estimated at $2 billion.”

        From ‘Secrets of the Federal Reserve’ by Eustace Mullins

      • Seen it all before, Bob

        I’m just back from vacation also to the Santa Barbara area

        The mountains and hills are now ash-gray instead of the green/brown when I grew up

        It is true that the fires in CA will stop when everything burns and the lack of rain keeps the vegetation from ever growing back.

        Look up Occam’s Razor.

        Is it more likely CA has major wildfires because:

        1) Prolonged drought caused by global warming has dried out vegetation to the point where major wildfires can exist. The enormous CA population makes it more likely that someone will be careless and start the fires.


        2) Trump is shooting high energy particle weapons from satellites in space at the request of the Rothchild’s to start fires in normal CA weather conditions.

        Occam’s Razor determines that the simpler explanation is the most likely.

  • Barnie Panders

    >”The housing market is now entering a visible slowdown ”

    Lol so what? Prices are still at record highs, good properties are still going over asking, and inventory is still at near-record lows in most major metro areas.

    Considering Democrats are now pushing for amnesty for millions of illegals and completely open borders while NeoCon Republicans are fast-tracking nearly 500,000 H1B visas for Indian tech workers and expanding asylum claims to allow a further 38 MILLION central and South Americans to claim asylum in the U.S., housing prices are NOT going to go down significantly; after all America’s future is brown and these third-worlders will need places to live!

    • The housing market is now entering a visible slowdown ”

      “Lol so what? Prices are still at record highs, good properties are still going over asking, and inventory is still at near-record lows in most major metro areas.”

      Exactly what I was thinking. Prices are high and sales volume is slowing. Seems normal to me.

      This is exactly what you want to see. I think the goal is to let a little air out of the balloon not pop it. It’s still going to rise just not as quick. The Fed is raising rates and unloading their balance sheets while the economy is growing.

    • So you saying Illegal immigrants, brown people and Asylum seekers are the one pushing the prices high? Blaming other people for your problem not gonna solve it for you. May be you are so broke because you so racist? There are still alot of affordable areas in the US. Go buy a home there before any illegal or third-worlder go there.

      • Wait so you’re saying bringing in millions of people every year who need a place to live doesn’t increase prices? LOL

        I love libs, I really do. One day you say you want unlimited immigration. Then the next it’s all “why aren’t wages increasing and why is housing so expensive, somebody needs to do something”. Uhm yeah that something is stop the millions of new people coming here. Less supply of labor will increase wages and less demand for housing will decrease housing prices. It’s Econ 101, first day of class stuff. But you don’t get it.

        I’m never quite sure if you’re just really dumb and can’t put 2+2 together or if you just like playing dumb.

      • I never understood the “logic” of some of the immigrants from Mexico or other impoverished nations. They come here because they like it better than the previous place, for one reason or another. Then they want to turn the new place to look like the previous place by employing the same policies and electing the same type of politicians acting like the ones in the country they left behind. It is a classic example of idiocy when you do the same thing expecting different result.

        You see that even among the liberals/socialists in US leaving the blue states behind and voting in the new red states the same type of communist politicians they left behind who ruined their previous state economically.

        I am an immigrant myself (an economic refugee) from a previous socialist/collectivist country. I came here legally with a visa and I am glad for it. Family members can always come legally. Then, why would I want open borders for people to bring in the “ideals” of collectivism with them? It does not have anything to do with racism – it is just plain common sense which is not so common anymore. Why would those embracing “democratic socialism” (collectivists) destroy another country like they did in so many before? Just to satisfy the new feudal society envisioned by the 0.001% globalists (for them to own everything and all the rest equally poor)?

        I travelled extensively in South America and is full of socialists/collectivists – not all, but a very large percentage, especially among the poor. They are poor because many are uneducated. Even if they come here, they get the same public school indoctrination they received in the previous country; to keep them poor.

        These days the word “racist” is used as a code word for people who stopped learning and to stop any uncomfortable conversation where they can learn something. It is also used by the 0.001% at the top for obvious reasons – to keep power and get more power by manipulating the “useful idiots”.

      • Quote of the day:

        “No one loves socialism quite like a moron who has never experienced it firsthand. No one hates it like someone who has seen it up close. ” It does not have anything to do with racism.

        I did not see it up close; I lived in it. Don’t see it “up close” with dollars in your pocket. Work and live in it. You will be cured of collectivism/socialism for life.

      • son of a landlord

        You’re right. We should be as “non-racist” as the Indians, Chinese, Israelis, Mexicans, Saudis, and other foreign nations.

        I visited China last year. I was shocked. The TV shows were so Chinese. No diversity. No white government officials. All the signs were in Chinese. And everyone spoke Chinese, like it was normal. Then I learned I didn’t qualify for immediate full citizenship and freebies upon request. So racist!

        I continued traveling the world, and was shocked to discover that India is so Indian. I couldn’t find a single sign in Icelandic. And Israel is full of Jews. They even have laws preventing non-Jews from immigrating to Israel. And Africa is so African. They’re even trying to squeeze the few remaining whites out of South Africa. And Saudi Arabia is so Muslim. Islamic law is the law of the land, rather than sharing authority with Catholic Canon law. Insane!

        When you think about it, the “white” nations of the world are the least racist, the most welcoming of diversity, yet it’s we who get called racist.

        Imagine the outcry if we instituted reciprocity, treating each foreign nationality as their nation treats foreigners. Think Indians or Chinese would want to be treated as their nations treat foreigners?

      • Barnie Panders

        @Megi that is a remarkably low IQ response. Sad!

        You cannot actually be dumb enough to think that the mass immigration of tens of millions of foreigners doesn’t affect housing prices (or for that matter, wages and housing affordability)… no one is THAT dumb… right?

      • Flyover~

        You summed it up in a nutshell. I’m an immigrant as well; my parents came over here from Europe when I was 3, and it took them 15 years to get their citizenship. While they were proud of their German (my mother) and Greek (my father) heritage, they loved this country, and were happy to live under the freedom and prosperity the U.S. afforded them. My mother was born in a communist country (Saxony in East Germany) in 1928, and the hell wrought onto her country by Hitler, who had Jewish blood btw, is a story that many do not know. And I’m not just talking about the bombing of Germany, but of what the Allies did to the Germans after the war. My father was raised in poverty in Greece, and kissed the ground of America when he arrived here. None of us wanted to re-create our ‘homeland’ here in the U.S. We made a good living for ourselves not with handouts, but with hard work. My family and I know that socialism does not work. I so appreciate that you understand this from personal experience.

    • Please pass the bong, Trump should shut down the government to get the Mexican govt. to bend very fast. Nothing comes or goes across the border, all commerce stopped. We would have a wall built by them in 6 months. Not a good wall either…

      Illegal immigrants belong in Mexico, not America, stand in line like everyone else, I bet you love it when a group of folks step in front of you at the matterhorn….

      hypocrisy is the biggest threat to the American Sheeple…..they are just minions ready to be crushed, debt serfs like you are clueless on what is going to happen in the market, housing etc.

      Go take your liberal self to PV, live in Mexico, fine women in Puerto Vallarta too, maybe you will get lucky, no illegal will ever be able to buy a house here, its over…..

    • son of a landlord

      I just got back from Seattle. I visited Snoqualmie Falls state park, roughly 30 miles east of Seattle.

      There were SO MANY Indian families hiking the trails. At first, I thought it was maybe a convention of some sort, and they were staying at a nearby hotel. Then I remembered all those H1B1 tech workers I keep hearing so much about.

      It really hit home. There are a LOT of Indians in the Seattle area. And I suppose most of them are taking jobs that American tech workers would do. Perhaps a higher wages, but perhaps not.

      I heard long ago that Trump was gonna clamp down on the H1B1 program. I wish he would. More higher wage jobs for Americans. It’s one of the reasons I voted for him.

      • Trump hasn’t done anything on H1Bs. He teased that he’d start cracking down on the fraud, but it went nowhere. It’s the one area of immigration where he’s shifted. It’s weird that the group of people that has done the most to harm him – Big Tech CEOs – are getting rewarded by him with a never end supply of slave labor from India. I really don’t understand what is in it for Trump. Maybe’s he’s bought into the BS about tech labor shortages in the US, which is a 100% complete and utter lie.

        And Seattle is actually pretty low on the H1B list per capita. I think they just like to hike a lot, lol. The highest H1B concentration on a per capita basis is NYC and Dallas. Seattle isn’t even in the top 10.

      • SOL,

        If Trump would ACT like a dictator, the way the left media portraits him, he would have stopped all that a year ago. But he is only one guy in a Congress full democrats and RINOs and courts packed with activist judges ruling from the bench. Add to that a bunch of not so “intelligent” agencies and a sleeping AG and nothing gets done.

        If he tries to nudge a little bit those sleeping in government positions, everyone screams bloody murder that he is Hitler incarnate, dictator and a fascist. I think that by now everyone saw that day after day.

  • I’ve been waiting for you to update! I only follow (for years) and never comment. I’ve gotten the sense that the market is slowing. This is anecdote; however, what I’ve noticed are MANY more homes on the market in my area and all of them sitting longer.

    I live in an outstanding community in Northern California with top-notch schools, which, BTW, is why we moved here! We currently rent a small townhome and fortunately, our landlord has NOT raised our rent once since we moved here in 2015.

    Here is what I’m noticing. Last year, a condo in my area would RARELY hit the market, and if it did, a sale pending sign would be up within a week or so. Same complex as of yesterday, 6 for sale signs, all have been sitting for a few weeks and counting, and none of them pending. Again, this is an EXTREMELY small sample; however, I think it may be reflective of what is going on, but what in the hell do I know :). Time will tell!

    The good news is, we could have bought into the very decent community just adjacent to us, BUT with the SHITTY school district and overpriced homes but we REFUSED. We’ve held steady, saved some money, kept or kids in a TOP high school and have essentially been riding this market out. It’s been tough over the years watching prices climb, thinking we may never get in the game.

    We will see what’s to come. I’m just happy our children are nearly graduated and I also just graduated from nursing school. Things are looking up.

    • Northern Cal is a big place, please be specific – what city are you in?

    • What makes the adjacent school district so bad? Be honest – its the mudskins with their shoe sized IQs isnt it?

      And the left wants more of this, a third world hell hole with first world prices. So glad I bailed years ago. Dirty air, dirty water, endless traffic and surrounded by violent apes that cant tie (or even pay for – thanks welfare!) their own shoes.

      Time to take the trash out.

      • “And the left wants more of this, a third world hell hole with first world prices.”

        Not only left. See who’s in power and what has been done to stop that. One thing is sure: Republicans hasn’t even tried to stop flow of illegal immigrants as they are cheap work force for them.

        Ideological glasses are OK as long as you realize you are using them.

        And you know what: Republicans love the idea of third world salaries/slave workers but first world prices. Gee, who would have thought that?

      • You are right that both democrats and republicans favor massive immigration. However, while 100% Democrats favor massive immigration, only the RINOs (democrats with R after their name) favor that. I call them traitors to the middle class. The only adult in this debate is Trump for raising up the issue in public discourse (being non-PC). Regardless, of the talk and who supports it, it is ALWAYS the middle class paying for it in higher prices for rents and houses and lower wages. That is a FACT regardless of the ideological glasses you wear.

  • EverythingChanges

    Reversal in ratio of sales to purchases by Chinese. Hmmm.

  • Reversal in ratio of sales to purchases by Chinese. Hmmm.

  • nor cal fella

    The reason there is a ‘blue state’ slowdown is because the larger bellwether markets are places like Seattle, So Cal, SF, NY, parts of Florida. The red areas are still humming along because of the flight from Seattle to Spokane for perceived affordability. Or CA to Boise etc., that whole drill.

    I say perceived affordability because it there is not actual affordability in the tertiary markets either, they just seem cheap by comparison. Podunker USA is way overvalued and this will be settled fact when the market turns and the spigot is shut off. Imagine Spokane without Seattle, or Austin without the CA $ injection. There will be a mean reversion and Redtown, USA (which I prefer personally over Blue Hell) will be ass-pounded like the rest of us. A good old fashioned prison rogering. Lube up fellas!

    • Perceived? LOL. Why is math so hard for you socialists?

      King County (Seattle) median income: $73K
      King county median house: $725K
      House to income Ratio is 9.9

      Spokane Co median income $53K
      Spokane Co median house $228K
      Ratio is 4.3

      Someone in Seattle on average earns $20K more but has to spend an extra $500K for the same house. It’s relatively less than 1/2 as expensive to own a home in Spokane Co as it is in King Co. And it’s even cheaper than that since property taxes are lower. On a PITI basis it’s about 1/3 as expensive relative to income.

      And you’ll find the same ratio differences between LA and Boise, SF and Tucson, etc.

      As for Austin, dude you need to get out a little more from your CA bubble. Austin’s been booming for 30 years and has nothing to do with CA injection. It’s been a tech fueled boom that kicked off with Dell in the 80s, which attracted TI, IBM, Apple, BMC and many others to set up shop there as well. Your statement shows me you have no idea about how the world works.

      • nor cal fella

        You seem very upset. I have traveled quite a bit for the last say 20 years, that’s funny your instinct was to attack my level of travel.

        When one travels enough, which I encourage you to do, one sees that Spokane is a dumpster fire with bums roasting hot dogs around it. That is why you are at a 5+or- income to value ratio in this bubble compared to Seattle.

        And if you don’t think Austin has become what it is (for better or for worse) in many ways because of CA in-migration there, well then you sir are delusional, or low-IQ. Or both.

        Ok fine, Rockwood Bakery is cool and Manito and parts of Comstock. Your line-up next to Seattle as if they are comparable metros show me that you know nothing beyond your Spokane bubble.

        Please take a few spins around Division and down Boone on your single speed (and take some mace and latex gloves) and maybe you’ll get an idea of why the pricing is where it is. Hell, go anywhere in Spokane, go to the Valley go to Browns Addition, go anywhere outside of Manito Blvd. Spokanistan is a 2-3 price to income town, not a fiver. Sorry Bro!

        In fact, look up your homeless ratio to CA cities you hate so much and see how it stacks up. Compare #’s to Sacramento…Same homeless ratio big feller. Dude plus your work hour traffic on 90 to CDA is ATROCIOUS.

        At least you can’t actually see as many of your transients in the rain and sleet though, when it is sunny in CA it is easier to spot them so you definitely have us beat there!

        There is actually a pretty good gang documentary about your Spokane County Jail on youtube. As a multiple tour combat vet that’s lived in several active war zones in the Middle East, it looks like they’re locking up a few unsavory characters around your hood bro. Inn my humble opinion anyway, but what do I know, not as much as you! Anyhow, have a great day man!!

        PS If you do ever have to venture down Divis (I hope you’re south of 90) head over to the Flying Goat, it is truly a superb pie. That is a special place with great beers on tap too. I’m not a total Spoke hater, I like Spoke, I just know that is a crappy town. Kind of like a man who loves a real train wreck of a gal. He isn’t pretending she is something she isn’t. He just loves her anyway!

        For a guy who never leaves CA I sure know a lot about your metro! Cheers bro!

      • The prime areas attract winners (they don’t give a shit, the want the best)
        Secondary areas attract losers.
        When economy is hit hard, losers (penny pinchers, frugality maniacs) will lose hard -> secondary markets will get destroyed.
        Prime areas will be impacted, but because they are populated by stronger minded – they will endure. Or they will endure just for the fact they are better location.

        I know above is borderline trolling, but that’s how it is.

      • Wow, you Googled “Spokane neighborhoods”. Good job NorCal, I’m very proud of you, you are a good Google user. Well done sir.

        Of course your completely ignored the numbers I provided, because that would mean you’d need to admit you’re wrong and have no clue what you’re talking about. Try again. I know math is hard for you, but come on, it’s not THAT hard. Are there bad parts of town? Sure. Unlike LA where every ‘hood is paved with gold and honey. You’re so CA bro! I love it.

        And the quip about traffic to CDA proves beyond a shadow of a doubt you have no clue. Take any given weekday and driving on I-90 to CDA in the morning is 60-70 MPH. And I’m not sure why you think I commute at all. I’m retired bro. My only “job” is collecting rent checks on the first of the month, and that’s only figuratively speaking of course, they are all either mailed or paid electronically. And it’s also hilarious how CaliBro talks about “bad traffic” without a hint of irony. I’m starting to believe you’re Millie’s alter ego, trolling with just enough flair to not seem troll-y.

        On a different matter….did you read how 25% of CA is in poverty? 5th largest economy in the world!!!!!!!!!!!

      • “The prime areas attract winners (they don’t give a shit, the want the best).”

        Only losers like Surge believe winning is overpaying for being packed ass to cheek among stressed out hordes of narcissists.

        There’s winning and then there’s stubborn which is what so-called “prime” douchebags really are.

      • I did say it was trolling, did not I? But the point, is that prime areas are usually bought by professionals who tend to be a little more resilient to crisis and on average have better financial planning. More cash buyers. More long termers.
        This is just how it is, regardless of how emotional we want to be about it.

    • Prison Rogering lol. Never heard that term before, but enjoyed how you used it to highlight your point. I agree with your thoughts about a big crash coming. Housing To Tank Hard Soon!!

  • The US economy is currently experiencing unprecedented growth. It’s hard to imagine a housing collapse during such a period. Before a full-blown correction the RE market will stagnate and go sideways for awhile. I believe we may be at the beginning of that cycle now.

    • “RE market will stagnate and go sideways for awhile”

      It’s been my experience that California RE has never done that….at least for the 30 years I have lived here. this is the 4th bubble I’ve witnessed….but I guess, as has been alluded to here in another comment, dirt poor 3rd world peasants are going to flood in and buy $800K crap shacks.

      I just saw an Ad for houses in Anaheim…..fucking ANAHEIM……starting in the low $800K……..that’s just nuts. Income to qualify must be near $200K…….I know, I know,……doctors and dentists!!!!!!!!!!! facepalm.

      • Intersting, you are right but you and Megi (above) miss a connection when you say:

        “dirt poor 3rd world peasants are going to flood in and buy $800K crap shacks.”

        You are right that they are not going to buy an $800,000 house but they still need a roof over their head or they become homeless. If they rent, due to millions of them, they put upward pressure on rents. It is obvious, that due to NIMBYsm and all the CA regulations, there is not enough housing. If rents become high, that encourages investors to speculate for higher prices. A house is cheap or expensive relative to rents. It is so obvious and still many people can not see it.

        You see an honest hard working Mexican family (yes, there are many of them like that) struggling with 2 jobs each to survive and pay the high rents but vote for open borders because Ocasio Cortez tell them so. They don’t realize the impact of what they demand – higher rents and prices. Of course the Democrat and RINO overlords looking for NWO and globalism like that and they demonize the only sane person bringing the issue up for debate – Trump. Actually, what Trump is saying (I don’t know if he will be successful) is benefiting the Mexicans, legally here, the most. Less labor competition for them means higher wages and lower rents and lower RE prices. But, being indoctrinated in public schools, they can not make the connection that Trump’s policies would benefit them greatly and they still sing praises to their party overlords.

    • The problem for perma bears is they always see doom and gloom everywhere. Even now with the economy growing at 4%, and unemployment essentially non-existent, they think it’s 1933 out there. To the PBs, everyone in America is in dire straits, living in a Dickensian hell hole, struggling to get by.

      • Seen this all before, Bob

        It is the Roaring 20’s out there!

        At least the first half of the 1920’s

      • @Landlord…you made several good points above. However, i will push back respectfully on your comments of economic growth. One 1/4 of 4% growth is nothing to cheer at especially when Prez O had several close and higher than that. Maybe when a year comes in at that level i’ll agree, until then prepare for a revision lower and a much lower # next 1/4..also the labor participation rate is the lowest in our country’s history. This makes it difficult to have a clear # when it comes to unemployment. There are some economists that believe we are closer to 10% real unemployment, some believe a higher # is warranted. In the end outa control housing prices hurts family formation and the economy at large. Low housing prices are good for landlords, they can buy more.

      • “Even now with the economy growing at 4%,”

        And inflation (actual, the BS one FED is showing) being >10%. No growth, but 6% yearly decline.

        ” and unemployment essentially non-existent,”

        … by re-defining ‘unemployed’ as ‘anyone who hasn’t had any paid work in last year’ and throw them ‘out of workforce’, i.e. not unemployed, in an year. It’s a surprise there are any officially unemployed by these ‘little adjustments’ of definitions.

        Reality of course is much, much harsher: Unemployment is nearing the peak of great depression in 1930s. Goes hand in hand with the actual satus of the economy.

      • “by re-defining ‘unemployed’ as ‘anyone who hasn’t had any paid work in last year’ and throw them ‘out of workforce’, i.e. not unemployed, in an year.”

        Not the least bit true. For those who want to know how the unemployed are actually counted:

        “Unemployment is nearing the peak of great depression in 1930s.”

        This is insulting to anyone who lived through the Depression.

    • IEL,you are correct. Real estate prices are still climbing, and even after they stop climbing, there will be a sideways period before prices start declining. Therefore, the real estate top must be at least a year away. I believe that the Republican tax cuts may have helped to delay the crash by about a year.

      The reduction/elimination of SALT taxes and has mainly hurt single taxpayers like me, That married couple standard deduction of $24,000 is greater than the SALT taxes for almost all married couples including those living in California.

      The Republican tax cut was actually extremely socialistic. It basically resulted in the majority of Americans paying no Fed income taxes. The Bernie Sanders of the world should have loved it. There is no longer any reason for the majority of Americans to oppose unlimited Fed government spending since they don’t have to pay a penny for it.

      • ” It basically resulted in the majority of Americans paying no Fed income taxes. The Bernie Sanders of the world should have loved it.”

        Hah. So giving a penny to poor and a million to rich is something Bernie-lovers should love?

        Tell us again, why?

        In the end the taxes must be paid and the million the rich got, is not going to be paid by him in other taxes, those fall only to poor. That is known.

        Yet another republican who tries to justify collective stealing by claiming ‘look, we gave you a penny, be happy with it!’.

    • “The US economy is currently experiencing unprecedented growth”

      No it’s not. In actual terms (real inflation corrected, not the imaginary one FED uses) there’s no growth at all and all that “growth” is just money FED created from thin air and dumped to banks and stock exchange. So banks are getting tens of billions per month gift to show profit. Nice. Of course banks have to put some of tha money to somewhere so housing and stock prices are soaring.

      Growth – actual inflation is negative. And will stay that way as FED likes it like that. Make the poor poorer and the rich richer, that’s the goal.

      Also: Only companies and top-10% of wage-earners are getting richer, everyone else is getting poorer as wages are stagnant and purchasing power has diminished steadily since early 1990s.

      National debt is again at all time high.

      So no, I say “US economy” is not doing well at all. Some parts of it yes, but top-500-list isn’t whole population. Not even a small part of it.

      Unless you’re an economist, those get paid only by this 500-list, so they don’t care at all about the people: They are riffraff to be exploited, if anything.

      • “Growth – actual inflation is negative. And will stay that way as FED likes it like that. Make the poor poorer and the rich richer, that’s the goal.”

        Thomas, while I agree with this (I said myself so for the past 8 years here), this phenomena was even more pronounced in the last 8 years due to smaller GDP and high inflation.

      • Thomas, did you really mean to type “actual inflation is negative”? If so, I have no idea what you are talking about.

  • Housing to tank hard soon!!

    • Still beating that drum hey Jim…. You got it right in 2007-2008…. but Trump has this Country running on all cylinders…. and the Progressives in California have that State driven directly into the ground. If Gavin gets elected Governor, California is screwed.

      No one will be able to afford to live in California, not even the techies in SV.

      It’s great theater to watch California, best program to ever come out of the State.

    • It has been in free dive since 2012

  • I am simple renter in Roseville, CA. Rent’s increasing 6% every year and was thinking of buying a house this year in Roseville. Seen some houses within my affordability range, however seems like flippers have gone nuts, no control – all about profit – houses being bought few months back and now selling for $100K – $150K more! And these houses are 1950s – 1990’s range. One property bought for $335K and selling for $850K 😐 someone give me a sanity pill.

    Fine, Roseville is a decent place so far though nothing is written in stone, however seems like all bets are off when it comes to making a quick buck.

    Seems like renters will get raped by rent increase and increasing property prices.

    Not sure who came up with this design, feds, politicians, gov. employees with Ph.D’s? No very smart, is it, unless renters are slaves to the design?

    • Nor Cal Fella

      Of course renters are slaves. Whatever it takes to keep our citizenry enslaved and shackled mentally. Just keep feeding the dummies their porno, cannabis and free crap so they continue to rally around socialists and the wheel goes round and round. The government loves stoners with Che Guevara shirts surfing youporn all day in their 1BR rental.

      • Perhaps the buffoons in the gov. get some common sense one day and fix this mess they have created.

    • Stay away from flips. The quality is piss poor, lots of corners cut, etc. All the materials will be the cheapest crap available or whatever was on sale at Home Depot the month they started work.

      On the other hand, if it’s a recent remodel, ie by home owners themselves, better odds the quality was good. Not to say that they also didn’t cut corners. But if I remodel my own house, in which to live, I’ll take more interest in making sure the work done is done right, vs. if I am buying to flip for a project, all I care about is making it look nice, but will take zero interest in making sure it lasts.

      • Seen this all before, Bob

        I agree Mr Landlord.

        You pointed out a few posts ago that the price of materials is also going up. A flipper is likely going to go with nice looking but cheap. Most Tareks don’t have a Christina to balance. I noticed the Desert Flippers and the Las Vegas Flippers are all buying on closeout and extremely cheap. Maybe I watch too many Flip-or-Flop shows.

        I had also looked at newly built houses during Boom times. Mainly in 2005-2006 and in 1988/89. They were horrible also. Cheap everything and since they couldn’t get good people during the boom years, the construction showed it. Crooked electrical outlets, etc, etc.

        How is the new construction during this boom time? Labor is short, materials are up. What is the quality?

      • Had a friend who bought a flip during the last bubble. The seller had put travertine in the master shower, but without putting any sort of water proofing underneath it – just stone tile pasted onto wood. Of course the inspector didn’t notice.

  • No recession means no drop in housing prices. So far, the Trump economy is very strong. The idea being pushed in this blog that home prices drop while the economy stays strong is just not possible. But, if a recession strikes, home prices will drop.

  • It takes longer for house prices to fall because of near-peak buyers. These are people who think a slight downturn in prices is only a temporary lull in the inexorable rise in house prices. They brag because they saved a few thousand dollars, for a while. Then as house prices continue to fall, they suddenly go silent.

  • NoTankinSight

    There is absolutely nothing negative happening to prices until there is a recession.

    And there is still no recession in sight.

    I will change my view once a recession looks imminent.

    Go to websites like not zerohedge as a recession predictor.

    The next downturn I expect will look something like this:

    10-15% drop in prime areas in the first 18 months when the recession takes place

    3%-5% drops for two to 3 more years after that

    maybe 1-2 more years of flat pricing

    This will look a lot like the 1990s recession and CA house price downturn

    I expect the earliest this will start is 2020 but it could be longer than that.

    Who knows how much prices will go up from here

    • “This will look a lot like the 1990s recession and CA house price downturn”

      Yes. Here in North prices dropped more than 40% in less than an year, 1991-1992. Took about 15 years to get back what they were, not inflation corrected. More than 20 years if inflation correction is done.

      No reason why that wouldn’t happen again.

  • GreenGroovyMom

    Here in coastal hot market Santa Monica…I do see some small indicators that things could be slowing slightly. The bad locations, the shitty quality flips, the head scratching floorplans…now go for weeks/months without offers and often go pending only to come back on the market a couple weeks later. Things seem to be falling out of escrow more often. Could be the lenders are not financing as it didn’t appraise, could be buyers getting cold feet…not sure. And of course the dumbass real estate agents are mindless cheerleaders than can’t tell you anything worthwhile.

    Anyway i mentioned a few posts back that I couldn’t figure out why anyone was buying…especially where I don’t see a lot of value and upside. Venice and Santa Monica are donesville.

    • Speaking of mindless cheerleading real estate agents – I once had one try to pitch me on buying investment property in Salton City. He said it was the next new hot (was that meant literally or figuratively?) growth area. LOL.

  • I have noticed something similar in the Bay Area but only anecdotally. Since the beginning of the year we have made offers on a couple of places in Fremont CA and have noticed the number of competing bids slowing down quite a bit. In January we made a $50k over asking offer and got beat by someone willing to go $170K over asking. There were 12 offers. In March we made a $100K over asking offer and got beat by someone willing to go $140K over asking. There were 6 offers. Last week we put in an asking price offer (the sellers asking price was pretty high based on comps). We were beat out again but only barely and there were only 3 offers this time around. All of these were similar homes in the same neighborhood.

    Things felt really frantic from a Buying perspective the first few months of the year. My guess is that the new tax cuts and high stock market encouraged a lot of techies to cash out on Stock Options which goosed demand a bit. Wonder what happens when we finally see a real correction in the stock market?

    • You are correct there was a frenzied atmosphere in the first half of 2018. Another reason was tech stocks in 2017 zooomed upwards. I know Millie and others here think nobody gets stocks options, but they do. Lots of people do. If you work for a tech company in the BA, you have stock options. Options typically have a 4 year vesting period with a 1 year cliff. Which means anyone who was hired in 2016 or earlier could sell 25%+ of the initial grant in late 2017 or early 2018. And when those options double in value in a year, like they did in 2017, people exercise and sell. And what do you do with those profits? Put a down payment on a nice home. And as stocks flatlined in 2018, that phenomenon has slowed down. So instead of the frenzied 10 offers, you’re back down to a more normal 2 or 3 offers.

    • South Bay is turning. Our neighborhood is down 10% since the beginning of the year.A stock market crash will bring a huge downward fall in house prices since so much compensation is based on RSUs.

      My husband and I are waiting patiently for the recession, stock market crash to buy. We’ll buy the best house 1.2 million will buy us on the peninsula( my husband’s job is pretty recession proof and high paying- no stock comp). Let’s see what happens.

  • Finally, Jim’s prediction is coming to reality. Stay away from weed Jim. Anyway I don’t care if there’s real state bubble as long as my tenant pay me the same monthly rent. I’m happy and also I can sell my over prices homes to my idiot countryman in cold cash. Middle class American has no cash but they have a nice car to drive.

  • Finally, Jim’s prediction is coming to reality. Stay away from weed Jim. Anyway I don’t care if there’s real state bubble as long as my tenant pay me the same monthly rent. I’m happy and also I can sell my over prices homes to my idiot countryman in cold cash. Middle class American has no cash but they have a nice car to drive.

  • Since I don’t plan on selling, I wouldn’t mind seeing a 25% price reduction across the board. I would even take the opportunity to pick up more rental properties. At current prices the ROI is too low in the areas I focus on. I’m sure I’m not the only investor waiting in the wings to swoop in.

  • Federal reserve data is showing new home prices nationwide have fallen. Peaked in Nov 2017 and have fallen ever month since except for a small bounce in March of 2018 when the spring selling season started. New homes completed near me by DR Horton have lowered asking price from Feb-July by 9%.

    If trend continues through the fall and winter hold on to your seats.

  • FutureHomeBuyer

    Ahh, been so long since I posted that I don’t even know if my user name is correct. I’m a homeowner now, and I bought for under 350k North of Glendale Muhahaha. A 4 bd, 3 bad, why so cheap? It was extended family. This price correction will help me buy in a nicer home in Burbank where I really want to live. I’ll be waiting.

  • Friday snail mail. Haven’t seen one of these in the last 7 or 8 years.

    “I am currently working with a buyer who has been unable to find a home in your area. She really loves the ……….. area and lost out on a recent listing. Your home has many of the features she wants.”

    Blah blah blah

    • Seen it all before, Bob

      I get 1-2 of these postcards in my snail-mail per day.

      What does it mean?

      Are the realtors getting desperate to sign on sellers for 6 months?

      Is it real? I don’t want to sell but a commission on a house that is listed for 800K is almost as good as a commission for the same house that sold for 1M last week. If a realtor turns and churns 4 800K houses per month, that is a 100K per month at 3%.

    • It’s from a wholesaler or investor who is looking for an off market property to low ball.

      • Yes. I’ve got some of those too and always their offer is about 20% or more below what I’d expected.

        Basically not worth to even reply, borderline scammers trying to low-ball the ignorant seller and then sell with huge profit.

  • Dos Tacos Mas

    More anecdotal info…Have family members in both Portland and Denver with property they want/need to sell. Both nice locations and quality construction. Property in Portland – taken off the market today, no apparent interest. Property in Denver – lowered price $20K, slow/no traffic, 0 offers.

  • Millenial by the bay

    Im a millenial earning 100k and cannot afford a house here in san Francisco.

    Chinese people flock here and buy houses in cash. What the heck.
    BTW, I’m driving JAG Wang Bu.

    • The inflow of Chinese money is slowing/drying out.
      But that won’t help you much because 100k in SF is entry level. I would not do the same job in SF unless i get 250k. People who don’t live in California don’t get that there are areas in the state where 100k goes long ways. They think SF and LA (armpit of the state) represent the entire state.

    • Asset Crash, Please

      Millennial By The Way,

      Sorry, but I’m calling BS. If you live in SF at $100K, you’re paying at least $3K rent, which is one of your paychecks or more. I’m guessing rent is higher than that. To both afford and park a Jag… seriously? And we’re going to pretending you’ll also save up $250K as 20% on a condo? Maybe you’re way out on the avenues or down by SF State or something?

    • Millennial By The Way,

      Sorry, but I’m calling BS. If you live in SF at $100K, you’re paying at least $3K rent, which is one of your paychecks or more. I’m guessing rent is higher than that. To both afford and park a Jag… seriously? And we’re going to pretending you’ll also save up $250K as 20% on a condo? Maybe you’re way out on the avenues or down by SF State or something?

  • There is still so much pent-up demand the prices are not coming down. Just the crap isn’t selling because you can’t make a profit on the flip at this point. The junk homes will pull back a little to put the profit in the flip. But high-quality move-in ready homes are selling very fast. Don’t be fooled by a slow month – the inventory is only the trash. Anything nice is sold within a week.

    • Precisely. Quality always sells fast, junk sits forever. What happened this summer was owners of junk figured hey the house down the street from me sold for $700K, I can sell mine for $700K too. Except the house down the street was nicely renovated last year while your house still has a kitchen from 1982. So it sits for months. Meanwhile the nicely renovated houses are still going for $700K in a matter of days or weeks.

    • I confirm this is happening as well in the east bay, central contra costa county. Lower quality homes sit and may get a $20k price reduction but still end up selling. Quality homes move quick and still over asking price.

      Out of the 4 homes in our area that have been on the market this season 2 have gone pending just days after the first open house, 1 went pending two days after being listed. Two went over asking, $50k+, other one is pending and surely will go over asking as well. The one that went pending right after listing closed in 14 days. The one that sat on the market looked nice but had problems, steep driveway, no curb appeal, no shade trees, entry on second story etc. Basically that one was as you are saying, a less desirable, lower quality home.

      All quality moves quick and doesn’t look like it’s slowing anytime soon

    • I def. feel bad for these poor souls who buy high. The market is ridiculously overpriced and will crash hard. 55-75% is a given. I can’t imagine how it must feel to buy at the peak and see a millennial like me move in next door during the next crash for half the price. There have been enough warnings though. If you buy sky high that’s on you.

  • No problems in Santa Rosa Cty.NW.FL. Land being sold and cleared for new houses like crazy.People bailing out of CA.,IL.,and unfortunately NY.are overcrowding the roads,Hospitals, and stores.Just waiting on them to find out what a Hurricane is.

    • The land being cleared is from projects where were planned and funded a couple of years ago and not a good indicator of present conditions.

  • Remember how Nancy Pelosi, Chuckie UpChuck Shumer, the entire MSM and all the PermaBears here said tax cuts would only help evil rich people? Good times!

    WASHINGTON — U.S. workers saw their annual wages and benefits rise in the second quarter at the fastest pace in nearly a decade, a sign that the low unemployment rate is forcing employers to raise pay to attract and keep workers. Pay and benefits for all U.S. workers increased 2.8 percent in the April-June quarter from a year earlier, the most since the third quarter of 2008. Total compensation for private industry workers — which excludes state and local employees — rose 2.9 percent, the best since the second quarter of 2008.


    Gee, it’s almost as if everything Democrats say is a lie or something. Weird. And when wages rise quickly, what do people do? Why they decide to be life long apartment dwellers. I just got a nice fat raise, I think I’ll sell my 4 bedroom home in a safe neighborhood with a nice yard, and instead go live in a 1 bedroom apartment with bums taking a dump outside my bedroom window. Sounds reasonable, LOL!!

    • Seen it all before, Bob

      That is what we need but more of it.

      Wages go up 2.9% but if a loaf of bread goes up 4.1% with inflation, it is a losing battle for workers.

      We don’t want President Carter’s malaise.

    • they saw no real wage gain with inflation factored in…..a big nothinburger….

      tax cuts are not going to help in today’s overpriced RE and rental market, thus rate hikes and 20-25% home price drop in next 24 months…

    • To be honest, the tax cut is an excuse to raise product prices – perhaps this is per design.

      1 gallon filtered water was $0.20, now the same is $0.45 – I am sure everyone else can look at their receipts and compare with last year Jan/Feb and see what’s going on.

      It’s a fools economy – lets see how long it lasts.

      • Who the hell keeps water receipts? Why?
        Just spend the time bringing up your earning capability

      • I used to buy eggs for 1.5 now they are like 80 cents (dozen). I love when my purchasing power rises due to falling prices. Can’t wait for the next recession to buy a house for half the price and stocks much cheaper!

      • I do not know/care how much my eggs (or gas, etc…) cost. I do not want to fill my mind with useless information

    • “Total compensation for private industry workers — which excludes state and local employees — rose 2.9 percent,”

      … while actual inflation is >10% and wages haven’t been rising even that much since 2008.

      Tell us by what logic ‘workers are doing so well’ when their purchasing power is increasing by -7% per year?

      Also: Most of that salary cake is going to top 10% and the rest are getting paid less than earlier. And inflation is the same for them.

      Lies, damn lies and statistics. That’s the reality.

  • Coming to a city near you if you live in a democratic paradise:

    This is what happens when you have a team of thieves running your government, with myopic sight. The landlords will simply take over the utility payments and then raise rents to cover them. If they can’t find renters to pay the higher rent that includes utilities, they will dump their properties into the market. The new owners will be less financially stable, and many of them will wind up in foreclosure, yielding no taxes to the thieves. Just another broke, socialist shit hole in America with no one left to rob. It’s time for this country to divorce, so these desperate fools don’t make it the problem of the solvent states. We are no different than the EU, with many more soon to be broke entities looking to a central agency to rob the producers for survival. Diversity the gift that keeps on giving.

    • You sure spend alot of time spreading misinformation and racist dog whistles to make your point about??? Housing?? Seriously? Looks like California is suffering terribly from the “librirallls” and “socialists”? Did I get that right? While real places like wyoming and kansas are cutting everything to make up for all the tax cuts they couldnt afford just like your god and savior Trump is doing to this country. Best way to slow down a booming economy? Vote republican and watch them burn it all down with tax cuts and voodoo economics..i.e. trickle down bs. You complain about immigrants especailly the illegal ones but i am sure you buy stocks from all those crazy immigrants who start their own tech companies. Such third world sh!t holes cannot product such wealth, right? Hello google.

      • Nearly everything is labeled a racist dog whistle these days. Whistle manufacturers must be making a killing in profits thanks to all the wax everyone suddenly got cleaned out of their ears overnight.

      • Discgman,

        You said: “You sure spend alot of time spreading misinformation and racist dog whistles to make your point about??? Housing?? Seriously? Looks like California is suffering terribly from the “librirallls” and “socialists”?

        Could you please say it exactly where I have been racist in my post? Besides using that code word when you don’t have anything intelligent to say like all liberals do.

        “Did I get that right? While real places like wyoming and kansas are cutting everything to make up for all the tax cuts they couldnt afford just like your god and savior Trump is doing to this country.” Where did I make Trump my god and savior? Trump has some qualities and many flaws like any human being. On top of that he is not a dictator (glad for it) and he has to work with a congress full of communists and RINOs (traitors) and a judiciary packed with activist judges. He is my president even if I did not vote for him (I’m glad Hilary lost though).

        “Best way to slow down a booming economy? Vote republican and watch them burn it all down with tax cuts and voodoo economics..i.e. trickle down bs. You complain about immigrants especailly the illegal ones but i am sure you buy stocks from all those crazy immigrants who start their own tech companies.” No I am not buying any stocks in any company except mine. I am an immigrant who started his own company (actually 2). That does not change anything I said so far. Truth is truth regardless of who says it.

        Winston Churchill nailed right: “Socialism is a philosophy of failure, the creed of ignorance, and the gospel of envy, its inherent virtue is the equal sharing of misery..”

  • nor cal fella

    Even though I am convinced the market is turning, I am trying to do some honest self-reflection here. It is hard to do because I am stubborn and uncompromising. But I am trying.

    I have sold most of my RE so I can be liquid for the next downturn. I know I’m not alone. I have a healthy load of cash by any standards to I am admitting there is a possibility I am totally projecting here. I want the correction so maybe I am projecting. I am admitting this is a possibility.

    Is anyone else here open to admitting they might be projecting?

    • The mayor of Los Angeles says that a trade war with China will cut Los Angeles growth to zero. He says this in the South China Morning Post of all places. Now there’s rumor that he wants to be president. Good luck with that. I don’t think that most Americans are going to vote for someone who runs a city that has an economy based on importing from Asia, and destroying jobs in the rest of the country. A trade war with China will definitely slow the California economy, but I don’t think the rest of the country will care.

    • I went into this year confident enough of a big (30-50%) correction that I started shorting the housing market. Not with much – just dipping my feet, with plans to go big when it became obvious. But now I’m thinking there’s a pretty good chance it won’t be a big correction – maybe only 10-30% in the most elevated areas, and a long flat line after. Or maybe a torturously long decline.

      • It sounds like there are a lot of people on this site who plan on buying when prices finally drop. But if it’s anything like last time, the hedge funds, in collusion with the banks, will buy up everything they can. Get used to the idea that even after the next crash, there will only be scraps to bid over, while the big money scoops up everything even remotely desirable.

      • John, don’t do it. RE is turning very slow up or down. It takes years. It’s like a big oil tanker. That being said, I can’t make any prediction because there are too many moving variables. However, I noticed that lumber prices are nosediving lately; …and that, in peak construction season for the whole country…..wired!!!….

      • John D

        I agree with your outlook. Outside of any major disruptions. I see a 20% drop YoY and then flat for an additional 3-5.

        A couple of factors that might influence the market in a major way.

        * Higher wage growth to offset year of below mean growth

        * Boomers unprepared for higher health care forcing sales of houses

        * Large stock market crash forcing retirees to sell to raise cash

      • “But if it’s anything like last time, the hedge funds, in collusion with the banks, will buy up everything they can.”

        Bullshit jem. You obviously have no idea what u are talking about.
        Hedge funds/ institutional money are not isolated from recessions. When bankruptcies are up the investment money dies. 2009-2011 was a great buying opportunity for the avg joe who still had a job and/or cash. Volume of institutional money started really picking up end of 2012/2013.

        Same thing will happen during the next crash. Those who saved lots of money during the boom years will have the cash ready when the market turns. If you buy sky high (like now) you might lose your job and the house during the next downturn. As RE cheerleaders would say: man up! Take the risk! Buy now! It’s about long term! (It doesn’t matter if you lose the house and your job in the short term, because you have to think about the next 30 years- so buy now)

      • Never every try to short something going up like the housing market.

        Last time most of the people who shorted housing got burnt big time.

        The reason was due to timing.

        A few of my friends made a ton of money but most shorting the market lost a ton of money….. they were right… just didn’t’ time it right.

      • Tank in sight
        I finally agree with you. It’s all about timing. Shorting the market isnt necessary. If you rent cheap and not buy high you are getting paid extra every month. You make enough in savings by waiting for a crash. No need to risk your hard earned cash.

      • Millennial, there was a very short window with plenty of problems for the average joe buyer last time.

        I was one of them. It was anything but easy. And then institutional investors and hedge funds absolutely came in and made it even more difficult.

        Now I changed from average Joe to someone sitting on a large sum of cash and will use it whenever the downturn happens… 2021 or 2022 probably. There are plenty of us out there… local like myself and also all over the world. Don’t exepct it to be easy when we finally get some pull back… who knows how much prices will be in the trough and what interest rates will be. I would not expect a better deal than 2014, that’s for sure.

      • Buying during the downturn is a piece of cake. I could buy now but see no reason. I rather wait a couple more years and buy at 55-75% discount.
        Btw, I am not the avg joe. The avg joe is a lousy saver, is not sitting on a big sum of cash and does not have 800+ credit score. Another thing you talk about but show that you have no experience in is regarding institutional money. There is no institutional investment during a crash. They are filing for bankruptcy during that time.

      • “Buying during the downturn is a piece of cake.”

        How would you know? Did you spend the last downturn putting in offers?

        Anyway, your statement is actually correct, but only because you didn’t type what you meant to. Buying while prices are dropping is easiest. Once they’ve hit bottom – which you won’t know at the time – it becomes very difficult. Not just from institutional investors, but from private investors with cash. Keep in mind that most average joes will be paying above the median for their area, because the only way to get an offer accepted at that time is to bid over asking. Sometimes significantly. So when you see that Riverside county dropped 50% during the last crash, you can bet that most people who were buying a home (not an investment) paid more than that. We managed a 40% discount off peak in 2009, had to bid over asking, and only won because one of the previous owners had recently committed suicide in the master bedroom. There were still multiple bids over asking.

        “I rather wait a couple more years and buy at 55-75% discount”

        If it’s a nice place (regardless of size) in a desirable area of the coast, you’ll be lucky to get 30% off. But keep on ignoring that historical data.

      • Just one more time because it’s true and sounds good: Buying during the downturn is a piece of cake.

        “How would you know? Did you spend the last downturn putting in offers?”
        I can buy now. So why would I not be able to buy when prices go down? Does the science of buying magically change to “rocket science”? The avg joe might not bring a war chest to the table but I am different than the avg joe. I saved in good times, invested and sit on a large cash balance now.
        I also have no debt, 800+ credit score and make well over 100k.

        “Anyway, your statement is actually correct”
        Yep. I know.

        “Riverside county dropped 50% “
        Correct. There are no soft landings. I expect a 55-75% drop during the next crash.

        “We managed a 40% discount off peak in 2009”
        See, almost everybody can do it. Patience and discipline is key!

        “If it’s a nice place (regardless of size) in a desirable area of the coast, you’ll be lucky to get 30% off.”

        30% off is pretty good. I am aiming for at least 55% though. You gotta think big. Don’t be satisfied with small peas in life.

      • Millie, you’ll never understand it, and you’ll never buy.

      • Easily provable things that Millie (our resident “RE expert” troll) has denied or conveniently ignored:

        The existence of liar loans in the past

        Income and credit requirements in the present

        Foreign investors

        Actual inventory numbers, both current and past

        Actual median price declines in the previous crash

        The long term housing price trend


        …because anyone who does pay attention to those things is an “RE cheerleader”.

      • “Bullshit jem. You obviously have no idea what u are talking about.
        Hedge funds/ institutional money are not isolated from recessions. When bankruptcies are up the investment money dies. 2009-2011 was a great buying opportunity for the avg joe who still had a job and/or cash. Volume of institutional money started really picking up end of 2012/2013.”

        Millennial, when did the banks start processing foreclosures, and even then very slowly? 2012-2013. How many people quit paying their mortgages instead of selling at a loss? A majority? And how long did the banks let those houses just sit there? If you think only you’re smart enough to have money ready to buy, but the hedge funds aren’t, then U are the fool.

      • “You’ll never buy”
        Doesn’t depend on me. I got cash and I am ready. Depends on when the market is ripe. No crash no purchase. Once I buy (55-75%) below today’s prices I will share some details.

        “RE expert”
        That is accurate.

      • “ If you think only you’re smart enough to have money ready to buy, but the hedge funds aren’t, then U are the fooL”

        Never said I am the only one. After all, if I would think that why share it online?
        Smart money buys at discounts. I have been preaching this for a while now.
        Some people will miss out because they are not ready to buy. I can buy now but wait until the shit hits the fan. It’s going to be beautiful!

    • Seen it all before, Bob

      We are all projecting. Only Jim Taylor and Our Millennial seem sure of their projections.

      2 years ago, I started to diversify into RE, stocks, bonds and cash.

      I think not putting all of your eggs in one basket is a safe plan. Have more cash in the basket than before is also a great idea.

      I saved 2 years worth of cash in the hopes that if I lose my job, I will have the cash to keep the house. If I keep my job, then I will have cash to buy RE or stocks at a discount.

      If things crash like 2008, then the cash will be good for stocks and RE. Stocks went up 4X on average since 2008. RE has not risen but not as much.

      I don’t think we will have a huge crash like 2008 unless some unforeseen event happens. It is likely there will be up to a 20% correction and then flat or slowly rising for decades.

      Australia and Canada are seeing corrections 5-10% but they have also put a heavy tax on foreign buyers. I don’t see that happening here.

    • Can't remember my username

      A dear friend of mine, kind of a father figure, is a mortgage broker and his wife an agent with one of the wealthiest real estate gazillionaires in California. I asked him if he thinks the market is getting ready to crash. He simply said “Not ours. Way too many buyers.” He works primarily out of LA County.

      I also asked him about buying right now. He said “Prepare to overpay. Be willing to waive appraisal and loan contingencies. Offer to pay sellers title fees. It’s brutal.”

      We don’t do business together and I believe this was his honest opinion based on what he sees in his daily business activities. Perhaps his opinion is what it is because of the connection he has. If we asked four other mortgage brokers, they might all give completely different viewpoints. So I don’t know if what he said is meaningful, but I thought I’d share.

      • A friend of a imaginary friend said….

        Obviously, the RE market crashes roughly every ten years in California. Most sane people stopped buying at these overpriced crash no purchase!

        Buy when the market is normal again (55-75% below today’s prices)

      • Go ahead on over to redfins data center

        Look at buyer demand for Los Angeles and see it has absolutely crashed since November of 2017 (-40%).

      • son of a landlord

        Milli: A friend of a imaginary friend said….

        You’re calling the above poster a liar? Why? Because his anecdote doesn’t support your beliefs?

      • “You’re calling the above poster a liar? Why? ”

        Because he is not telling the truth (aka lying)

      • Can't remember my username

        Son of a landlord,
        Thanks for your comment. I have no reason to lie about it (and I’m a she). I’ve posted in the past about how I’m trying to leave an abuse situation with children, but I haven’t done anything because the market is crazy. Each time I post anything, someone replies with some kind of put-down or insult, so I rarely post.

        I don’t know if my friends take on the market is meaningful, but he knows my situation at home. Perhaps he is warning me. I don’t know really. He and his wife work for Bruce Mulhearn. So, not an imaginary person either.

        I guess I can handle being called a “liar” by a stranger. I’ve been called much worse at home, so liar is not so bad by comparison.

      • Can't remember my username


        thanks for the feedback and the link.

    • Flyover, huh?? “Lumber prices are nosediving”

      I’m so confused. Redwood is up over 100% from this time last year. Plywood is a fortune. Construction materials are through the roof. Pun intended.

      Please expound, I’m really confused by what lumber you are referencing.

  • I got a phone call from a realtor who knows I own multiple beach fixers. he tells me that the media is saying that property prices are going to drop, and he tells me he has a buyer wanting my property. He thinks I should sell fast to his buyer before prices drop. I hung up on him.

    • Jt, I think it is a little too early to panic sell. We are clearly in a real estate bubble, but there is little evidence that it is about to pop. The fact that everyone is so worried about the bubble popping is good sign because that tells us that there are a lot of potential buyers waiting on the sidelines to buy.

  • Quiet , don’t let the word out , Remember , buy when others are selling , and sell when others are buying. I am sitting on over 600K and I see the market crashing before the 2020 election. As long as I get my 7% R.O.I. , I am a happy camper, and I sleep all toasty and comfy at night , not like my friends who are heavily invested in the stock market , hoping the market does not crash while they are out at the local fast-food for lunch. If R.E. crashes , my rentals are paid for with the exception of taxes and Insurance , but my stock investing buddies have nothing but toilet paper left. Remember … Always be a Proud Provider of Sub-Standard – over priced housing to the poor and down-trodden little people of no consequence . And shame on you if you can’t get the sarcasm there .

    • Same here. Sold 3 properties since 2014, all with feeding frenzies bidding up prices, 1 in So. Cal. & 2 in the Denver area … doubled my nest egg! Still have 2 homes where we split our time, and wondering if we should sell one of those while the market is still hot …

  • Don’t forget private schools. 40k a year at Marlborough in Hancock Park.

  • why would anyone buy in cali? Half of the state is on fire, 1/2 the people are stuck in traffic and all of them are suffering from depression and/or HIV. Thats a heckuva combo!

  • t Prop13 was always a time bomb waiting to go off. Reagan passed it knowing it’d either blow up the housing market over time (because it puts ever upward pressure on housing prices) or it’d blow up the state economy. The goal was to cause a political crisis that the Repubs could exploit.” tts

    I hate to break it to you but Prop 13 passed during the first Jerry Brown administration. It was a ballot proposition pushed by Howard Jarvis and Paul Gann. Jerry opposed it before it passed, but embraced parts of it in light of its popularity at the time. (I remember a “before” and “after” the election Jerry B. cartoon that was very funny.)

    • Lol, Reagan could not pass prop13. It is a california thing, Reagan was federal president.

      • Reagan was not president in 1978.

      • Surge~

        Ronald Reagan was the 33rd governor of California from 1967 to 1975.

        Joe R~

        Reagan was out of office when 13 passed. It was a revolt by the homeowners/taxpayers, passed by nearly two thirds of the voters. Per Wikipedia:

        “Passage of the initiative presaged a “taxpayer revolt” throughout the country that is sometimes thought to have contributed to the election of Ronald Reagan to the presidency during 1980. However, of 30 anti-tax ballot measures that year, only 13 measures passed.[3]

        “A large contributor to Proposition 13 was the sentiment that older Californians should not be priced out of their homes through high taxes.[4] The proposition has been called the “third rail” (meaning “untouchable subject”) of California politics, and it is not popular politically for lawmakers to attempt to change it.”

      • Reagan was the governor of CA before he was President.

        And he was key in getting Prop13 passed:

      • …and Gov of CA from 1966-1974 (Reagan). Prop 13 was in ’78 and Jerry B was Gov the first time around from 1974 to 1982. Governors can’t pass laws or change the Constitution, but can veto or promote those things.

      • Here’s an article on Jerry’s recent ideas on Prop 13:

        He has spoken out of both sides of his mouth on this issue ever since Prop 13 passed so handily. He seems to instinctively know that this is a third rail type issue, and his love of mega-spending projects can’t overcome his fear of Vox Populi.

      • I concede, I lack a little bit a knowledge on california governor history. I stand corrected

    • They were the most visible and outspoken proponents of Prop13 but it was always Reagan’s and the Repubs bill.

  • son of a landlord

    Realtors write the funniest listings. Such as for this property:

    Located in a hip West LA neighborhood in close proximity to the Expo line and some of the best sushi in LA.

    Really? Good sushi is now a selling point?

    This property lists for nearly $2.7 million. Two relatively new houses (built in 2008) on a single lot. Still, that’s a lot of money just to be near some good sushi.

    • Mmmmm, sushi. For you new investors, go long on anti-depressants.

    • Yes, it might be a selling point. For some selling point “proximity to sushi”, for others “no HOA”, for other “Schools”. Why is this a surprise. If you were selling, you would advertise Sushi as well.

      • Because sushi joints come and go like the wind whereas schools and HOAs tend to have far more longevity, therefore it’s a thoughtless metric on which to include in a residential property purchase decision.

      • It is not a thoughtless metric if it helps to drive a sale. When they write an ad, the goal is to sell. If sushi helps to sell, then it needs to be there. Rest is pointless feel-good moralization

      • son of a landlord

        My point was that sushi does NOT help sell a house. It’s ridiculous to put it in the listing.

        Anyone stupid enough to regard sushi proximity as a deciding factor in a house purchase, is not smart enough to afford a house.

        So why is sushi mentioned in the listing? Either the realtor is stupid, or he figures he’s representing stupid sellers who’ll be impressed with his “cleverness” in coming up with the sushi angle.

      • I dunno. I bought a house recently. OF course, proximity to great schools and the work was top priority, but walking distance to a lot of restaurants was also a strong factor. For someone w/o kids, proximity to restaurants might be even higher priority.

      • Surge, you said you bought in 2005? You recently bought again? Did you sell your other house?

      • No, I kept my condo bought in 2005, although I did consider selling.

  • This real estate market is not as overpriced as it was in 2006/7, there is perhaps 1 or 2 years left in the current bubble. Home prices are going to continue going up for awhile so let’s not panic and say that the sky is falling. The top will be obvious, when it comes, so there is no reason to try to guess when that will be. At the real top, there will be a lot less bears on this site than there currently are.

    • 90% of the people following the housing market know that the peak is now. Sure, there are ten percent that are RE cheerleaders. There are also people who claim they don’t use AC in the IE or say that everyone makes 200k except 18 year old fry cooks. Or the best of all: buy now or be priced out forever.

      • Perhaps 90% of the people assume and hope there’s a peak. 0% of the people know there’s now a peak. The peak won’t be known of until it has already passed.

        It’s called validation.

        Your rhetoric is just as annoying as jt’s. Neither of you have a crystal ball, yet proclaim as if you’re wizards or maybe you’re both simply aiming to be annoying.

      • RE is already in deep decline, 50% down since beginning of 2018, you are missing the boat

      • Lordt B~

        You sound cranky today, but your comments are cracking me up.

    • So many bloggers on this site are DROOLING for a price crash. It is odd to me because the majority of these droolers wont buy if and when there is a crash. They are simply like the ambulance chaser.

      • Absolutely. Crashes happen because there are no buyers or very few strong buyers. Prices do not just drop because it has been 10 years.

      • That is a fair point. I am drooling over a possible market turn. I am self aware enough to admit that. But I have lots of cash and benefit greatly from downturns. For me downturns have real measurable wealth building effects. But, yes, drooling nonetheless.

        Who knows, maybe the GOP Bot Mr,,Landlord is correct and there is more runway on this one. To me it feels like a turn though and macro headwinds are coming in spades anyway if not. I generally like Trump’s policies but this ‘trade war’ will backfire IMO.

      • Huh? That makes no sense. I want a crash to buy a house at a normal price. Why wouldn’t I buy during a crash? I don’t understand your logic. It’s like the Real estate cheerleaders that want to make you believe saving money and buying low is a bad thing. That thinking is messed up. No wonder so many people are struggling with their finances and can’t afford the house they live in.

      • Everything points to this year being the equivalent of 2006. First, interest rates are up, but they are still 2 percent lower than they were in 2007-8. Second, the Housing Stock Index peaked only 6 months ago, but it peaked 2 years before the crash in the last real estate bubble. That also suggests the next year there will be a strong real estate market. Building stocks top out early because new home builders sell the most expensive homes while the lower priced resale market homes continue to sell for a year or two longer. Third, my nephew is the CEO of a small California home builder, and he continues to sell homes as fast as he can make them.

        I could go on but I think I have made my point. The real estate bubble top is not close, and, with a little luck, it may even be delayed until after the Nov. 2020 presidential election.

      • “Everything points to this year being the equivalent of 2006. First, interest rates are up, but they are still 2 percent lower than they were in 2007-8.”

        The difference in the payment on a home loan at 4.5% compared with one at 6.5% amounts to a 25% increase. Home, therefore, are still much more affordable today than they were in 2007. For example, the payment on a $700,000 home today is $3,545 compared with a payment of $4,425 in 2007–a $880 per month difference.

      • 1) Housing is still cheaper than it was in 2006. (In terms of mortgage costs). By about 10%-20%, depending on area, mostly in California. But it is catching up quickly.

        2) Absolute prices are maybe 10% higher than they were in 2006. Say, a home that was 500k in 2006, is 550k right now. Now, if someone waits for a 50% crash, that’s the expectation that the same home will go for 275k. Which is like mid-90s level (and about 20%-25% below 2011 levels). Please think again about this.

        3) Saying that RE will crash 50% is practically admitting that value of federally printed money is far far exceeding the value of real property in California. This simply cannot be because of inflationary policies. The only trigger can be cash flow issues and inability to service debt…risks for this are low right now. At least nobody here has provided any evidence. Raising rates might reduce pool of buyers, but will not force anyone to sell since there are few ARMS.

        4) Even if crash will happen, why would you want to buy then? Crapshack is still a crapshack (regardless of price) and land is still attacked by government via weather-weapons 🙂

      • “So many bloggers on this site are DROOLING for a price crash”

        Yes. For most people it makes sense, regardless if they are buying or not.

        You see, only a person who is going to sell is benefitting from rising price, everyone else loses.

        There are many more of those who lose.

        Even current owner who is not selling gets benefits: Less price, less taxes, less risk, less insurance. What is there not to wish?

        Only greedy people looking for profit wish higher prices.

    • Your right it is not as overpriced it is even more overpriced. The federal reserve artificially lowered interest rates to make bubble level mortgages payable with stagnant income. Now the plebs have been drawn in and are even more in debt.

      And of course the data supporting my opinion:

      • The Fed has artificially lowered interest rates to create bubbles all over the economy. Check out this quote for an all-out admittance of guilt:


        “The Fed will lower rates until the money hoarders are forced out of their passbook accounts and into equities.”

        ~Wayne Angell (Senior Managing Director and Chief Economist at Bear, Sterns & Co.; also, a member of the Federal Reserve Board from 1986 to 1994) in an interview on CNBC

  • Mark Hanson proposes an interesting hypothesis for the near future housing market

    Who knows but let’s see, who do we take more seriously — a guy having actual experience with real estate boom busts who has admitted to being wrong before and uses data to make validated prognostications or a Millennial with no experience who simply repeats boring old lines hoping each time that his next leap will be the leap into a home?

  • Starter homes in South LA in bad neighborhoods with high crime and bad schools are fetching 500k+. If your choices are to rent for 2K+ or take out a 400K+ mortgage to live the real life “Boyz in da Hood”, what do you do?

    Both of these options are depressing.

    • Renting is dirt cheap compared to buying. You rent, save and buy when market tanks. It’s hard to believe how we have so many people in this country that don’t get this easy concept. They make it way to easy for people like me who have cash and buy the foreclosure at 55% discount.

  • A few notes:

    1) Renters pay property taxes, those of the landlords. I’m really tired of reading the ridiculous comments from landlords, (I’m one myself fwiw), that act like they don’t.

    2) I’m tired of socialism being equated with either Venezuela or the Democratic party. Both Republicans and Democrats are full owned by the banks, the military, and big oil. The real socialism America saw was under FDR which led to us building the greatest middle class the world has ever known, building the great highways, and getting to the moon.

    3) All the Coeur d’Alene / Spokane folks… you know, Idaho has a lot of protectionist, big government policies that regulate their real estate markets. For example, big lots must include some local builders. That’s why you don’t see KB Homes and some of the other national brands.

    4) Property taxes and natural resources are the best places to tax because no individual gets to own the Earth. The obvious conclusion to free market capitalism is larger and larger monopolies until one person really does have controlling interest in the planet. Anti-trust is good. I’m perfectly fine with FICA vanishing forever. States don’t create dollars and need revenues. The Fed Gov’t does not. It creates money and then taxes is back.

    • West LA, you said:

      “2) I’m tired of socialism being equated with either Venezuela or the Democratic party. Both Republicans and Democrats are full owned by the banks, the military, and big oil. The real socialism America saw was under FDR which led to us building the greatest middle class the world has ever known, building the great highways, and getting to the moon.”
      That thick middle class after the war was not due to socialism. Correlation is not causation. It was due to US being the only manufacturer in a world destroyed by war, practicing monopoly prices. That situation can not be replicated in a globalised economy which 100% of democrats support (and all RINOs). Globalisation decimated our manufacturing and unions. Trump is against globalisation.

      “3) All the Coeur d’Alene / Spokane folks… you know, Idaho has a lot of protectionist, big government policies that regulate their real estate markets.” Spokane is in WA not ID.

      “4) Property taxes and natural resources are the best places to tax because no individual gets to own the Earth. The obvious conclusion to free market capitalism is larger and larger monopolies until one person really does have controlling interest in the planet. Anti-trust is good. I’m perfectly fine with FICA vanishing forever. States don’t create dollars and need revenues. The Fed Gov’t does not. It creates money and then taxes is back.”

      I am for anti trust laws, but they never get implemented by people paid for by the trusts (both democrats and republicans). What we have now is not capitalism but crony socialism. You can not have capitalism without free markets and we did not have free markets since 1913 when the FED and IRS were created. Since then we have a socialist economy where the Central Committee (FED) picks winners and losers. Socialism is embraced ONLY by the top 0.0001% and the mass of uneducated people. It always feeds on the middle class till everyone is EQUALLY poor and miserable. It is an ideology from the pit of hell embraced by stupid uneducated people who don’t understand economics and human nature. Let’s see: one president from the former eastern block had 4 classes and used to be a shoe repair, Maduro (from Venezuela) today has also only 4 classes and used to be a bus driver. You can add to this list Pelosi, Ocasio-Cortez, Emanuel Rham, Maxine Waters and other brainwashed people coming from our indoctrination centers where the so called professors are hired based on ideology not intelligence.

      Churchill was a smart man when he said: “Socialism is a philosophy of failure, the creed of ignorance, and the gospel of envy, its inherent virtue is the equal sharing of misery.” You must be either dumb, lazy or evil to promote it. I lived in it and it was enough to last me a lifetime.

  • “0 downpayment” is back. Visited an open house and it was advertised with an enormous 0 down payment sign. What can go wrong?

    RE cheerleaders on this blog will deny it and lie about it. “This time is different”

    • “0 downpayment” is back. Visited an open house and it was advertised with an enormous 0 down payment sign. What can go wrong?”

      If you actually looked into it, which you didn’t, because you’re not interested in facts or data or history – you would know that those loans are limited to VA and lower income programs with all kinds of limitations. Not to mention the fact that a 0% down offer is the very last bid a seller would accept.

      And they still have to meet minimum credit and income requirements.

      • I can’t see how low down payment programs contribute to a bubble. As John mentioned, there is STILL an income requirement. Sure it allows more buyers to enter the market which drives prices up but it’s no where near the kind of easy money that that was floating around in 2006.

  • I don’t see any drop in prices in California. Housing shortage, low inventory, foreign buyers and wealthy are pushing up rents and prices in San Diego, LA, OC, Bay area and Sacramento where the jobs are.

    • Price is a lagging indicator because homes are an illiquid market. We know days on market has increased, demand has tanked, and inventory has increased double digits. Nationwide new home median sales prices have also declined since Nov 2017. We will have to wait and see what happens.

  • The OC Register RE columnist Lansner has an article in the Sunday paper on foreign home buying. For the 12 month period ending in March, foreign buying fell 6% in the US but the CA share rose from 12 to 14 % which is second to FL (19% this year vs 22% last year). Chinese (PRC, HK & Taiwan) make up 15% of foreign buyers in the US. 38% of Chinese buyers buy here. Chinese bought 17000 houses vs 9000 for Canada, Mexico, India & UK combined.

    These numbers do not show a dominance of foreigners in general and Chinese in particular statewide, but may have an impact in certain markets in my opinion.

    The bidding on the Brady Bunch house not withstanding, I have heard some anecdotal evidence that some similar high end neighborhoods are having softer prices this year. A family I know who had to sell a high end house in an estate to satisfy the bank got hosed by about a million under the price that Zilllow had estimated. And the house is about twice as big, truly architecturally significant and with a killer view in a much better neighborhood than North Hollywood (which is how Zillow describes the location… not Studio City). Bigger lot too. Brady house Zillow estimate of a little less than 2 Million is less than half the Zllow estimate on the other property.

    • Oh, one important statistic I forgot to include is that the percent of total sales to foreign buyers in CA has been around 8% in recent years according to the Lansner article. That’s 41500 houses for the year ending last March.

  • Real estate markets everywhere peaked in late 2017, all of the available data points to this fact. The crash is well underway. The “this time it’s different” crowd will never learn.

    • Josh, the real estate market remains fairly strong here in Southern California. I did no advertising and only put up a for sale by owner sign in front of my home and almost sold it twice in 3 weeks. One time my buyers’ sale of their home fell thru and they had to back out of the purchase. The second time, my buyer was talked out of purchasing my home by their realtor–although I still have some hope that they may come to their senses and purchase the home they really want at a price they like.

      My point is that this is not 2007. The market is behaving much more like it is 2005 when buyers were numerous and prices were still increasing. Interest rates are 2% less than they were in 2007 and inventory is about half of what it was then. What happens in other countries is really not relevant. The U.S. also has the world’s strongest stock market which is on the verge of making a new all-time high.

      • Hate to say it, but that makes a great deal of sense. OC is a different animal, we shall see what happens as 2019 is fast approaching and then its on to 2020 where I believe the market turns ugly.

  • Vote to repeal Costa Hawkins this November!

    • No. Rent control is government-mandated theft from property owners. Get a better job and stop voting in demoRATS you lazy, self-entitled, would-be thief

  • Typo: In my last post, I meant to say that 2018 is the equivalent of 2005, not 2006. The year 2019, like 2006, should be a fairly strong year for real estate. It is in 2020, that the real estate bubble will likely pop. The timing should hurt Trump’s chances for re-election.

    • The bubble will likely only pop in sanctuary states like Commiefornia where factors like foreign buyers and drug money have distorted home values. Home prices in other parts of the country without those pressures aren’t likely to collapse.

  • There is a notion that because peoole are priced out, 3% loans are back. But lets think about it.
    Who buys with 3% down? A) people who dont have much downpayment – but they would not have 20% even if prices drop by 50%, so they are never 20% players b) some investors who want to minimize exposure.

    • Why tie up cash if you don’t need to, with interest rates so low it make no sense to pay down a mortgage when you can finance it with 0% money. Official inflation is 3% but the reality is that it is around 5-6%, then it make perfect senses to borrow as much as possible even 100% since inflation covers interest and any cash you have is better used investing or just spending.

      • Low down means you pay PMI (private mortgage Insurance) on top.
        Most importantly, when your downpayment is low it (should) become very apparent for the avg joe that renting would be much, much cheaper than buying. You are essentially renting from the lender at a higher monthly cost. It is more likely for that “buyer” to walk away as soon as shit hits the fan. I am a big fan of low downpayments. Not for myself of course but for those who should not own. It will further fuel the fire when the market tanks.

      • Theoretically you are right. Practically it has to do with the risk tolerance of each person. If you can’t sleep at night and get ulcer, what the numbers say on paper is irrelevant – your health is more important. Return ON Investment is important but the return OF capital is also important.

        Since every person is different and has a different tolerance level of risk, you will see people with different approaches to risk and investment. Personally I like to take calculated risks. For some I look like crazy to take those risks and for others I look like a chicken (and they show me the numbers on the paper as to why). You need to find your tolerance level and keep in mind that you can not put a price on your health. That is what is missing from your quantitative analysis, and you can not quantify that. Otherwise you are correct.

      • When we purchased our home a little more than a year ago, we put 10% down thinking that the house will still increase. We thought we can refinance and get the mortgage insurance removed with the appreciation. So now, we just refinanced and took some cash-out to partially recover our down payment and we had enough value to remove the mortgage insurance.

        We saved a few hundred dollars and got some of our initial investment back. We now have 20% equity. Also, our interest rate remained the same even though the rates have increased, because our credit score has gone up from about 660’s to 740’s.

        I think everyone’s situation is different. We don’t really care if the house drops 50-70% like what some here say. We know we have a home that’s a few hundred dollars less than before and we know that if we rent this same place, it would be more per month. We are happy about that.

  • son of a landlord

    This is odd. A Woodland Hills house was listed at $2,100,000. It failed to sell after nearly two months. So they RAISED the asking price to $2,350,000.

    What can this mean?

    That they’d received so many offers over list, they relisted it even higher?

    Or is it some psychological ploy? Make buyers think that the original price was a bargain, and have them rush in before the price goes up again?

    Or are the sellers not serious about selling, they they just to test the market?

    Or are the sellers/realtors just totally clueless?

    • Hard to tell, but there is a logic behind this. I can’t say if it is correct but the idea goes like this:

      “Potential buyers thought that there’s something wrong with this house as it’s under priced so much, no wonder no-one was interested, so let’s raise the price to ‘correct level’.”

      Of course the logic won’t admit that the price was too high to begin with and therefore no-one was interested.

      Anyway, still logic.


      You see, living with real serious price inflation goes something like this:

      —- “Honey, I talked to Fred again, he can’t sell his house! Poor guy, he has had it up for two years now and has to raise his asking price again. No takers, yet. The last couple was just about to close but took a month too long; they almost got the cash together, too. He backed out to raise the asking price, again. Oh well, that’s not so bad, we had to jump ours up three times before selling.” —-

      Inflation runs crazy when a money system is forced to “print out”. We will “print out” our dollar, too. Getting there just takes time and an alternative system to cause it.

    • they are just testing your wits. Keep walking

  • Interested to hear what you guys think about the potential repeal of costa-Hawkins. What will it do to prices in the near term? Do you think it will pass?

    I’m voting for it since it’s only fair that renters get similar pitentions as landlords as prop 13 is essentially rent control. We also want to buy a house to live in in the near term so it’ll remove the investment buyer competition in our region which will almost surely institute rent control and likely vacancy control.

    It’s a scary time to buy with all the changes. Trump tax cut, recession risk, stock market peak, rising interest rates and now this.

    • ” as prop 13 is essentially rent control.”

      I have heard this repeated more times than I can count by renters who think they are smart. How exactly is prop 13 like rent control? Prop 13 limits how much the state government can tax you on your owned private property, while rent control dictates what people can and can not do with their owned private property. So how are these the same? Rent control is basically socialism. Is that what you want? The government telling you what you can can not do with your own private property, whether it be your house, your car, or maybe something else that you own?

      ” as prop 13 is essentially rent control.”
      I find this to be a false statement and a battle-cry for the ignorant.

      And remember, in socialism everyone is equally poor.

      • Prop 13 does bear a similarity to rent control in that it subverts market forces.

      • ‘in socialism everyone is equally poor’ ???
        how many poor people do you see in Norway, Sweden, Germany, Finland, Iceland, Denmark and a host of other Social Democratic nations.

        The avg household wealth of those countries is greater than USA per capita. Thats average, not top 1%. In those countries you will find a lot less billionaires and mega millionaires but you also wont see homeless in the streets or people who cant get proper medical care.

      • ‘in socialism everyone is equally poor’ ???
        how many poor people do you see in Norway, Sweden, Germany, Finland, Iceland, Denmark and a host of other Social Democratic nations.

        The avg household wealth of those countries is greater than USA per capita. Thats average, not top 1%. In those countries you will find a lot less billionaires and mega millionaires but you also wont see homeless in the streets or people who cant get proper medical care.

      • High punitive property taxes imposed by big government thugs bear a similarity to rent control in that it subverts market forces.

      • -QE Abyss
        “how many poor people do you see in Norway, Sweden, Germany, Finland, Iceland, Denmark and a host of other Social Democratic nations.”


        Problem is, none of these countries are truly Socialist. Yes they have universal healthcare, free college, and other socialist programs but they all have access to free markets, that’s how they are able to generate enough business to collect 50%+ in taxes. Why don’t you mention real socialist countries like El Salvador, Ethiopia, Greece, & Venezuela? Oh I know why, because those countries don’t fit your narrative with Socialism failing the people. If you experienced real Socialism I bet you wouldn’t like it. It’s not just “Free Stuff”.

    • “prop 13 is essentially rent control. “

      YES! Some people are such hypocrites, taking there Prop 13 discounts and voting against rent control. It’s the I got mine, screw everyone else mentality.To be clear, I am against both.

  • Why would anyone want to buy in California? That is, why would any white person want to buy in California? You’re already a minority there. If you want to raise kids there you’re likely going to have half asian or half Mexican grandkids like so many boomers I know already. 1 in 4 kids in California are white so it’s only going to become more brown and “diverse”. Isn’t diversity wonderful?

    Yeah, you can stick to your white enclaves along the coast but what do you think happens as Sacramento becomes more brown and more radically La Raza? What happens when the tech money dries up and the pension funds implode? The schools are already terrible and spend more time teaching kids about trannies and how gender is a social construct. How will they be prepared for the future? If they’re white they will be hated on and taught to hate themselves by the anti-white school curriculum that teaches them white people are devils and that they should appreciate the rich culture of the brown natives.

    The California dream is dead, fam.

    • Barnie Panders

      Sad, but true. The future of California looks like Tijuana.

    • I couldn’t agree with you more. California, in some areas like Sonoma/Mendocino/Humboldt counties, has some of the most beautiful and liveable areas I’ve ever seen, and I have travelled to many places throughout the world. The problem is the people it attracts, and their politics.

      Can I add to your list that someone/something also seems intent on burning the entire state down? I love California, but am truly starting to think that it’s not safe here anymore. The 2nd Amendment cannot protect us from everything.

    • Whites will be the minority in the entire country in about 25 years or so based on birth rates.

      No is forcing you to stay if you are priced out or don’t like the color of your neighbor’s skin. As far as schools go, it’s not their job to raise your kids, teach them morals or make them prepared for the future. That’s called parenting which obviously you lack. If you want to raise little hateful bigots like yourself that’s your business I suppse. Just don’t get mad when they hook up with someone with darker skin just to spite you.

      • Another reason not to have children.

      • Another typical post by SoCalGuy the bigot from the leftist gay mafia who hates his white skin color and other white folks.

      • You seem very happy about whites being replaced in the country they built- that makes you the bigot. As for your implication that race is only “skin color” the voting patterns and opinions of hispanics are distinctly un-American (per Pew Research, the majority favor mass gun control/confiscation, restrictions to free speech, socialist policies and big government, “hate speech” legislation, etc). You disgusting anti-white racists are in for a big surprise if you think America would be America without the descendants of the people who built the country still being the majority. Luckily, people are waking up to the treachery of demoRATS who can’t win on ideas and are simply flooding the country with the third world to buy votes. You and yours will fail and be held accountable for your subversion and treason.

      • Looooool. Samantha=Johnny OK. Did you forget to take your lithium again? Complaining about transvestites but you pretend to be a dude on here. How pathetic. I’m guessing you are old, overweight, and have cats?

        I was just stating facts about demographic. And yes, kids will hate you. Your ideas are from the 1950s. Sorry, it’s not coming back. Learn to play nice because they will be in charge when you are sitting in the old folks home (which sounds like it’s coming sooner than later).

      • Barnie,

        I stated facts (demographics) and birth rates (also facts). This does not make me happy or unhappy. It is what it is. I’m not sure how that makes me a bigot.

        I have no clue about Mexican voting habits nor do I care. I can tell you the younger generation (including all races) seem to lean towards liberal/socialist/anti-gun and other “un-American” ideals. I may not like it or agree with it. The fact remains the next generation will replace those who are in currently in power and bring their ideals with them. Your way of thinking is going out like the dinosaurs.

      • People who are afraid of change and people of color are a dying breed. Soon they will die off and we will rid our world of these bigoted racists old white people. After which their Lilly white kids will marry brown people and mix up their so called heritage forever.

  • son of a landlord

    I got some spam with the subject: We May Already Have a Buyer for You!

    The content:

    It is not uncommon for the perfect buyers of a home to be in another country. It is however uncommon for a real estate professional to have the resources to find them. We at Sotheby’s International Realty utilize a global network of listings and of highly qualified buyers, allowing us to more perfectly match extraordinary properties with the people that will take refuge within them. Call today to find out how we may already have a buyer for your home!

  • DownWithPropertyTax

    “LOL how the heck do you think things like roads, schools, water, etc get paid for? If there is no property tax where is the money supposed to come from? They’ll just have to tax something else more, like sales (which is regressive), to make up the difference. At least with property taxes (if properly done, Prop13 sabotages this) you have a way to tax the rich’s wealth more for the property they own.”

    So RENTERS don’t need roads, schools, water, etc? Why should homeowners be forced to subsidize everyone else? There should be NO property taxes, let everyone pay for the services that everyone needs. Not just those of us who own homes.

    • Because the socialists are made up of dumb, lazy, greedy and evil people. They always desire what others have without putting the effort, discipline and delayed gratification – I’ll eat my cake now and then you are greedy if you don’t share your cake with me. Yes, there are socialists among all classes; the rich socialists are powerful and want to use the power of the government to steal from the middle class. For that they band together with the greedy poor (to get votes) to steal from the same middle class which produces wealth. Eventually you end up with 0.01% evil rich and everyone EQUALLY poor and miserable – current case studies are Venezuela, Cuba and N. Korea.

      The rich don’t steal ONLY through visible taxes; they steal also through created inflation (the most regressive tax on the middle class). That is where they band together with the minimum wage workers to create inflation. The minimum wage workers will always have a minimum wage lifestyle regardless if the minimum wage is 10, 15 or $1,500/hour. The inflation will make sure that they will always have the same or lower purchasing power and lower standard of living. The super rich understand that but are evil. The poor are too dumb and uneducated and are always be taken advantage of (first of all by politicians).

      • Flyover gets it.

        “If one understands that socialism is not a share-the-wealth program, but is in reality a method to consolidate and control the wealth, then the seeming paradox of superrich men promoting socialism becomes no paradox at all. Instead it becomes the logical, even the perfect tool of power-seeking megalomaniacs. Communism, or more accurately, socialism, is not a movement of the downtrodden masses, but of the economic elite.” ~Gary Allen
        The system put in place by progressive socialist liberals over the past several decades tends to punish the successful and productive by robbing from them to redistribute wealth to the least productive and least deserving in our society.
        The focus of politics today is to promise benefits to the people, but those benefits come with a price. These gifts (universal health care, universal child care, universal education) come by taking more from people’s incomes and redistributing that wealth. This doesn’t create abundance for all. This creates a perpetual state of poverty for most everyone, allowing the wealthiest to control while suppressing the general population who has no hope but to beg for the promised government programs.
        Socialism – the ultra-rich rob the middle class, give the poor a few years of wealth, after which the system implodes like it did in Venezuela.
        A liberal’s paradise would be a place where everybody has guaranteed employment, free comprehensive healthcare, free education, free food, free housing, free clothing, free utilities, and only law enforcement has guns. And believe it or not, such a place does indeed already exist: It’s called Prison. ~Sheriff Joe Arpaio

    • The failure in your suggestion is that a property accrues additional value from the improvements to which it benefits and the logistical expense of ensuring everyone pay only for what they use is likely to result in a higher cost than the current system.

      Who knows what you’re talking about in regard to renters. Property taxes are imputed into rental rates. Any landlord who isn’t accounting for that expense is doing it wrong.

    • Renters pay their share, or more, of property taxes through their rent. In my city, Chicago, I paid more property taxes through my rent than I do for a comparable, but much better appointed, condominium, as large apartment buildings are taxed as commercial properties and pay 3X the rate as SF homes or condominiums. I looked up my rental building’s property taxes and was shocked, really, to see that fully 1/4 of my rent went to pay my unit’s share of the building’s taxes.

  • Here in Orange CA, the house next door got bought by a guy near the peak of the bubble. A few years later he wanted to move to Irvine (a nicer area nearby) but he was underwater from the crash and couldn’t sell, so he rented it out for years while he and his family rented in Irvine. Now he wants to buy a pricier place in Irvine (can this guy time it or what?) and the house is finally up to what he paid for it 10 years ago so he put it on the market. Oops, a few months too late! He can’t get the price somebody else got down the street earlier this year. So, he’s moving back in “briefly” until the market recovers. I should get to know his family better – he may be here a while.

    Incidentally, the nutso increases in places like San Francisco and Santa Monica haven’t filtered out to most of Orange County even though we have a pretty healthy job market, low crime, etc. Prices are up and kind of frothy compared to renting but it’s not bonkers like SF. The exception is the beach areas – those *are* crazy.

    • Lord Blankfein

      Reading these stories is pure comedy. Some of you guys act like we’re in the middle of the big tank. If a home is priced accordingly, it WILL sell quick TODAY. That is a fact. I have went to several open houses the past few weekend here in the South Bay…all are pending sales. I want the big tank as much as the next guy, but that will be a few years down the road.

    • On the bright side he has 10 yrs worth of equity into it with 10yrs worth of tax breaks (which now are ending). Had he rented for those 10 yrs he would have 0 to show; right?

      • In addition to 10 years of equity and tax breaks, dude is probably locked into a 3.x% interest rate. What has rent done in the past 10 years? it has went straight up.

        For buying at the worst time in socal RE history, this guy didn’t exactly lose his shirt. The lesson is always buy a place you can comfortably afford and plan to own for the long term. Not hard concepts to understand.

    • Great story, thanks for sharing. Am timing a move from Atlanta to OC, maybe 2019, but more like 2020 when RE has dropped minimum 10-15%, just cant justify paying 900k for a small 3/2 in Dana Point, Irvine, Mission or L.N., we will all cash buyers, im just to tight with money to pay those kinda prices. Zillow is sending me price reductions daily, and I’m seeing more house come on to the market that seem to be more resonably priced, in my book anyways. Atlanta RE market is still pretty healthy, but we have a healthy economy and lower cost of living, but sales are taking longer, inventory is rising, and starting to see prices drop. Finally the correction has started, but nobody knows how significant i’ll be.

    • Moving to Irvine for a better area? Does he speak Mandarin or Hindi?

  • Bill man on top

    Exciting to read all the news about higher inventory, lower sales numbers and reduced prices. Looks like the cycle is ending earlier than expected. Hoping for a massive collapse so I can buy my first house! Crash crash crash is what we want, crash crash crash is what we need!

    • I live in South Orange Co. I call the place a “pocket of nostalgia” because the area is still predominately white and middle class. I know within 20 years whites will be a small minority here, but it is still comforting to see people mostly speaking English in the malls and white people working in fast food places. It is fun to pretend that California hasn’t changed since my childhood–even if the know it actually has. All one has to do is drive 10-20 miles up the Santa Ana Freeway and it is like entering another country. The beautiful California of the past is gone forever. It is becoming a crowded, dirty, third-world country. Isn’t living in an amnesty state with open borders wonderful?

      • Isn’t living in an sanctuary amnesty state with open borders wonderful? Hell No!

        The beautiful California of the past is gone forever. Much of the state has become a crowded, dirty, third-world country thanks to corrupt Democrats and RINOs.

    • This just might be the catalyst for the next crash. We just might end up with a bunch of boomers rushing to sell or being foreclosed on.

      “…as of 2016, the share of elderly Americans filing for bankruptcy had ballooned nearly 480 percent from where it sat in 1991. For those over 75, their share of the country’s total bankruptcy filings climbed by nearly 1,000 percent….
      …More than 62 percent of respondents also indicated medical expenses were “a catalyst for bankruptcy.” And 4 in 10 respondents indicated missing work for medical reasons was a primary factor in their decision to seek bankruptcy protections.”

    • Price drops in the last crash were three tiered:

      Rich areas where there was a relatively small drop and a relatively quick recovery.

      Middle class areas where there was a large drop and a recovery over several years.

      Working class areas where there was a bigger drop and a lot of bottom feeding by rentiers. That stabilized the prices and reduced available inventory in the absence of new development.

      You probably want to buy in a rich area. If you can’t afford it now, you probably won’t be able to afford it in the next correction unless you also have some sort of short strategy investment that pays off big time. Focus on finding a bargain in a middle class area and build up a lot of cash to fight off rentiers.

      • Well Joe that was indeed true for the last downturn. But if there is anything the last few years have taught us is that nobody can predict the future with 100% accuracy.

        It is possible that the elite areas are more overpriced than the “not so elite” areas.

        I’m not making a prediction either way.

    • to oceanb.

      If everything dropped by 50% across the board, then the wealthy neighborhoods SoCal would have starter houses at $1 million? The thing is, those neighborhoods aren’t really that numerous in terms of all the housing. They are in choice locations, and most of the owners are well-situated to ride out a shock to the economy. So middle class people with a half million in cash (a rarity I would think) would still find it a stretch to buy that million dollar starter house… which I think is a fantasy for the really wealthy enclaves. Now a $600-800K house that dropped by 50% is doable for normal middle income families. That’s middle class neighborhoods.

  • Bill Man On Top —Says the man wearing an off the rack Goodwill suit wearing his walMart underwear whilst eating his avocado toast and drinking his Starbucks .


  • SplatGoestheBubble

    I was on the East Coast before the last housing market crash. Interesting how realtors are saying the EXACT SAME message they said last time around. “Everything is going up, up, up! Great time to buy!” I was young and didn’t know any better. Nope, not falling for that again. This time around I’m on the West Coast and hearing, “It’s different this time! California is different! The prices won’t go down! You can’t predict based on history so don’t worry about that!” No thanks. I’ll rent a little while longer and then hopefully time it a whole lot better than last time….

  • Real estate prices are always going up because of inflation and population growth.
    Short term price reductions are basically a noise and food for these blogs.

    • “Prices will always go up”

      Tell that to people who bought in 2005 and have still not recovered. Oh wait…that’s you.

      Well, then tell it to people who foreclosed during the last crash (we had 7 mio of those)

      Or, tell it to people in Japan that don’t live in the major city. Their RE values have been declining since decades. (Weird huh? Cause they are not building more land in Japan).

      Here are some questions for you.
      If RE. would only go up why do we have economic cycles and historic data that suggests otherwise? If it would only go up wouldn’t it be a no brainer to buy? But if it’s a no brainer to buy why do guys like you have to spend so much time coming up with sales pitches to sucker people into buying? And why in the world would renting be so much cheaper compared to buying? If everything goes up and rents stay stagnant wouldn’t it be much smarter to rent forever and wait for inheritance?

      • “If RE. would only go up why do we have economic cycles and historic data that suggests otherwise?”

        He’s referring to the long term trend. You know – that line you don’t believe exists.

  • Interesting Infographic.

    4 out of 5 of the cities with most amount of Million dollar homes are in California.

    Dallas, Miami, Houston, Phoenix are on that list of top 20 also.

  • Mr,,,,Landlord, Here is some troll crow for you.

    Your beloved Spokanistan, WA (most amazing city on the planet according to you as World Traveler and Self Declared World’s Most Interesting Man) is in a bubble as stated before and here is some price retrenchment for you. Shocker that your hole of a metro is going down in value, I wonder if this will continue?

  • For those who are pro rent control, here is a glimpse into the company you keep…

  • Many real estate experts (like me) believe the peak has been reached.

    That’s great news for potential buyers. I expect the market to correct by 55-75%. It’s going to be beautiful.

    • We’ve been on the side lines for awhile now. We’re in Northern California/Sacramento Valley, right in between a very desirable area and a not very popular area. We’ve started to see some really tempting deals in the not so desirable area. Houses in the $300-400k range seem to sell okay. Things over $600k sit for awhile, and end up reducing their prices or end up just removing their listing.

    • Millie,

      Perhaps the peak arrived but I’ve yet to see any other real estate experts (other than you, looool) predict a downturn as severe as the one you are promoting. I suppose your crystal ball is as clear as any.

      A peak doesn’t mean a crash is imminent. Perhaps appreciation will just slow. We need an economic shock to trigger a substantial downturn.

    • @Millenial

      Aren’t you the same poster who kept telling people to buy crypto and bitcoin?

      No offense, but I will look elsewhere for any advice. Thank you.


    Very healthy housing market. Everybody makes 200k and can easily buy a home (except 18year old fry cooks)

    No bubble here. Prices can only go up!

    • Millie… the part that you’re missing – because you’re so incredibly dense that you only have enough brains to echo zerohedge and not enough to think for yourself – is that 10 years puts you very close to the low point post-crash in 2008. In other words, housing was just as unaffordable then, at the bottom. And then there’s the inconvenient fact that you didn’t go back far enough to see that in most of the country (including LA county) prices are far more affordable now than they were at the last peak. Go ahead, check. We’ll be here when you get back.

      And why the sudden love for CAR/NAR data? Because that’s exactly where the Housing Affordability Index comes from.

      I don’t think the index likes you. You might want to pretend it doesn’t exist, like you do most other data.

  • @QE Abyss – “how many poor people do you see in Norway, Sweden, Germany, Finland, Iceland, Denmark and a host of other Social Democratic nations.”

    In terms of purchasing power after ALL the taxes and fees, based on the cost of living, in my opinion all are kind of poor. I travelled extensively in Europe (I am from Europe) and I would not want to live in any of those countries (except Switzerland). They were invaded by hordes from third world countries with cultures which will never be compatible to the culture from those countries. Wait until they get their citizenship and start voting with massive natality on top of that (coupled with higher mortality than natality for the previous populations). You are talking about the standard of living they used to have when they were having a homogenous educated population and no immigration. Even then, in Norway (4 mil. people) they have massive oil reserves with wealth distributed to a small number of people. Let’s see how well they are going to fair with socialism and open borders at the same time. Mathematically that is an impossibility and you don’t need a high IQ to understand that. That is why I am saying that the Democrats/socialist liberals are traitors to the middle class.

    “The avg household wealth of those countries is greater than USA per capita. Thats average, not top 1%. In those countries you will find a lot less billionaires and mega millionaires but you also wont see homeless in the streets or people who cant get proper medical care.”

    How much you make is TOTALLY irrelevant. What matters for standard of living is your purchasing power after ALL the taxes you pay. In that respect, they all have a lower standard of living than in US with the exception of SF and NY. I had a cousin doctor in Germany. In order for the DEATH PANELS to control health cost, he had to see 88 patients per day. For me that is malpractice not health care; you don’t even have time to listen to what the patients have. It looks to me like VA type of care on steroids. He had to move and work in Switzerland where he can see 15 patience per day with 50% income increase and way lower taxes. I think that Switzerland from the economic standpoint is more conservative than US. Try $1,500/year in property taxes MAXIMUM. In US, in many places you see an outright confiscation of private property via taxes: NJ, Illinois, and other socialist/collectivist states.

  • onceandfuturehomeowner

    Housing gods, I need some advice. My wife and I are mid 30’s, young(ish) professionals, make about 250k per year in LA, never owned a home, about to have a kid, living in a so-so area of LA paying 3.5k rent for a two bedroom duplex (sadly we live under unemployed trust-fund beasts that basically play DDR all day and night). We feel like we are getting hosed but this was the best available when we were forced to move. We want to buy but pricing is repulsive. In 2012 I foolishly thought the market would continue to correct to normal pricing, but the fed intervened, and now I see the good life slipping away. I am a child of abject poverty that “pulled himself up by his bootstraps” and is now effectively a self made millionaire. Sadly the baby boomer generation has moved the goal post a couple million north so even with an almost 7 figure down payment we would still need a 1.2-1.5m mortgage to buy a standard “nice” middle class house in a good safe area (Brentwood, Cheviot Hills, Sherman Oaks, Palisades, etc.) with good schools and good neighbors (not the gang bangers we currently live next to that inherited their $1m+ homes from their grandparents who paid 15-20k for these crappy air boxes mind you). Not even considering the best neighborhoods around here with true “millionaire level” houses which would require 7-10m+. Dumping 800k life savings into a single investment at the height of the housing cycle and committing to 7-12k per month nut for 30 years is insane, right? Is this the new normal where I just need to swallow the pill and accept being a life debt slave on the edge, or are we headed for a 50-70% correction where the wise folks that saved their money can get today’s 2-3m home at a ~1m price once the rates rocket to 10%+, jobs are scarce, and the stock market is in the toilet? If a recession hits I know my business will take a 35-50% cut in volume and my wife could lose her executive position job, although I know she wants to quit to raise children anyway. Is committing to a 1.2m mortgage suicide when the correction/recession comes, and will I basically burning a lifetime of downpayment savings if we take the plunge now? If we don’t buy now are we going to be lifelong renters living at the whims of CRAZY landlords, and our only escape will be retiring early (late 40s if savings rate continue as anticipated) and putting ourselves out to pasture in flyover where we can live a quiet life staring at the cows all day? Anyway, completely fed up with housing, whats the point of working if being successful doesn’t get you squat when the government has fiscal policies to make its money worthless and rewards bad actors that use their homes as ATMs then blame the banks.

  • We never had that much Americans drowning in debt….What can go wrong?

    here is a true story. I am renting a cheap apartment. A lot of people struggle in my neighborhood. You can tell. Rent has never been increased since i am here. Its a steal.
    We dont have a pool here. I wouldnt want to pay extra for a pool but i would like to use one for free.
    In an adjacent complex i be-friended a family. They invited my wife and me over a few times. Long story short i am using their pool whenever i want now. Its quite easy. All you need is the gate code (they havent changed in the longest time) and an extra key to the pool. Now that i have been a regular there i got to know more people. Obviously, i have to pretend i live there. I always like to talk about houses for sale and try to find out as much as i can about the circumstances. Recently, there was a house for sale and i happen to talk to a neighbor of the seller. She told me how the seller (family, young kids) has been struggling ever since they moved in. They barely made it. Husband had two jobs, wife worked, and the parents came down a couple times a month to help out with the kids. They finally sold and are renting now. I am all ears listening to this sad story.
    In my head i am thinking, what the fuck*. People get into houses they cant afford all the time and are barely making it. Your life is all about living paycheck to paycheck and the constant fear you cant pay the bills. What happens when we get a nice, overdue recession and one loses the job? Pathetic life….but you can call yourself a homeowner. Debt slave would be the better term i guess? Moral of the story: buy now and lose the home later. Millennial comes in and buys it for half off!

  • close to breaking point. This time is different…..its going to be more extreme compared to last time. Houses will lose half of their value during the next collapse.

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