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?

Did You Enjoy The Post? Subscribe to Dr. Housing Bubble’s Blog to get updated housing commentary, analysis, and information.






444 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?

    https://www.americanthinker.com/articles/2018/07/the_blue_state_housing_bubble.html

    • 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.

      • It’s fairly comical to watch renters complain about prop 13 as if they’re somehow losing out. Nothing stopped you from buying a home and benefiting from it yourself.

        It’s also comical to watch people like Lordt B conflate stocks and metals with a house and justify ever increasing tax. Newsflash for dopes like Lordt B, you don’t pay taxes every year on stock that sits in an account. You pay tax when you sell or get a dividend. Last time I checked, I’ve had/done neither with my house.

        I love having prop 13, it’s the best gift ever and I’m never selling my home. I’ll pass it on to my kid at a super low tax rate.

        It’s just comical to watch complainers because if they had any brains they would’ve bought a home instead of thinking there’s always going to be a 70% crash. Maybe you guys should spend more time trying to make money instead of complaining as there’s an inverse correlation to complaining and making money.

        I’m up $120,000 (37%) since 2014 and my taxes are up 6% at most. Feels good.

    • 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. https://mediabiasfactcheck.com/american-thinker/

  • 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:

        https://skeptoid.com/episodes/4311

        …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.

        or

        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.

      • son of a landlord

        Bob: 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.

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

        Occam’s Razor says simplest explanation is:

        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.

      • “So he’s not very trustworthy, for starters.”

        Which is why I prefer to use many sources.

        From wiki:

        Eustace Clarence Mullins Jr. (March 9, 1923 – February 2, 2010)[1] was an antisemitic American writer, propagandist,[2] Holocaust denier, and disciple of the poet Ezra Pound.[3] His best-known book is The Secrets of The Federal Reserve, in which he alleged that several high-profile bankers had conspired to write the Federal Reserve Act for their own nefarious purposes, and then induced Congress to enact it into law. David Randall called Mullins “one of the world’s leading conspiracy theorists.”[4] The Southern Poverty Law Center described him as “a one-man organization of hate”.

        Even after reading that, I still don’t doubt the book has a pinch of truth in it, but I certainly wouldn’t blindly trust it.

      • Again, John D, your source is unreliable. “A wiki is a website on which users collaboratively modify content and structure.” This is from Wikipedia itself. You don’t know who wrote what you posted, and what their agenda is. It’s common knowledge that Wikipedia can be notoriously unreliable, to the point that many universities will not allow papers to be sourced from the site. It’s also common knowledge that “several high-profile bankers had conspired to write the Federal Reserve Act for their own nefarious purposes, and then induced Congress to enact it into law.” There are many books on this topic. As for David Randall, anyone that maligns someone by calling them a ‘conspiracy theorist’ immediately exposes themselves as someone that has no better argument against the theories promulgated by said ‘conspiracy theorist’ than to label the person as such, and hope that no one catches on and calls them on it. It’s an intellectually lazy way to present an opposing argument, which is to say that they have no argument at all.

        And speaking of lazy, who is David Randall? You just throw out the name. I clicked on the name under Wikipedia’s site on Eustace Mullins, and see that he’s a journalist. That doesn’t carry much weight these days, for starters. And what are his credentials? He works for ‘The Independent on Sunday’, which was sold to Russian oligarch Alexander Lebedev in 2010. Per Wikipedia:

        “Nicknamed the Indy, it began as a broadsheet, but changed to tabloid (compact) format in 2003.[3] Until September 2011, the paper described itself on the banner at the top of every newspaper as “free from party political bias, free from proprietorial influence”.[4] – me: I’m sure.

        More:

        “In July 2011, The Independent’s columnist Johann Hari was stripped of the Orwell Prize he had won in 2008 after claims, to which Hari later admitted,[15] of plagiarism and inaccuracy.[16] In January 2012, Chris Blackhurst, editor of The Independent, told the Leveson inquiry that the scandal had “severely damaged” the newspaper’s reputation. He nevertheless told the inquiry that Hari would return as a columnist in “four to five weeks”.[17] Hari later announced that he would not return to The Independent.[18] Jonathan Foreman contrasted The Independent’s reaction to the scandal unfavourably with the reaction of American newspapers to similar incidents such as the Jayson Blair case, which led to resignations of editors, “deep soul-searching”, and “new standards of exactitude being imposed”.[19] The historian Guy Walters suggested that Hari’s fabrications had been an open secret amongst the newspaper’s staff and that their internal inquiry was a “facesaving exercise”.[20]

        “In 2007, Alan Rusbridger, editor of The Guardian, said of The Independent: “The emphasis on views, not news, means that the reporting is rather thin, and it loses impact on the front page the more you do that”.[43] In a 12 June 2007 speech, British Prime Minister Tony Blair called The Independent a “viewspaper”, saying it “was started as an antidote to the idea of journalism as views not news. That was why it was called the Independent. Today it is avowedly a viewspaper not merely a newspaper”.[44] The Independent criticised Blair’s comments the following day[45][46] but later changed format to include a “Viewspaper” insert in the centre of the regular newspaper, designed to feature most of the opinion columns and arts reviews.”

        John D, you say you look at all points of view, but what you post seems to indicate otherwise. We all do to an extent, but you definitely exhibit distinct bias in what you choose to believe.

        Oh, and don’t even get me started on the Southern Poverty Law Center. I feel my blood pressure rising just thinking about that lying criminal organization. Just for starters, look up Oklahoma City.

        As for ‘Secrets of the Federal Reserve’, you can download it online. The information packed into it is astounding, and is a very enjoyable read if you’re into these things (which I am). For instance, I have never encountered anyone that knew that Katherine Graham of the Washington Post, who presided over the Watergate story, was the daughter of Eugene Meyer, one of the founders of the Federal Reserve:

        “The shareholders of these banks which own the stock of the Federal Reserve Bank of New York are the people who have controlled our political and economic destinies since 1914. They are the Rothschilds, of Europe, Lazard Freres (Eugene Meyer), Kuhn Loeb Company, Warburg Company, Lehman Brothers, Goldman Sachs, the Rockefeller family, and the J.P. Morgan interests.”

      • Your wall of text misses my entire point, which is to dig all the way down. You can try to discredit journalists all you like, but if I can trace their sources back to multiple history/text books, and their sources come from records contemporary with the subject, then what they reported on (even if it doesn’t fit your narrative) is probably correct. If a potentially biased article has sources, I follow them. For example, the suggestion that Eustace Mullins is an anti-semite. Just because a Wiki article mentions it doesn’t mean I take it at face value. So I did a little digging, and yup – he’s a raving, paranoid anti-semite. I don’t like bigotry. It pisses me off and shows a glaring bias. But again, I don’t doubt there is some truth in his books.

        The unreliability of Wiki is a myth, by the way. Studies have shown that it is extremely accurate. You can test this yourself by becoming an editor, inserting some inaccurate bits in any random article, and watch how fast it’s removed. Unlike most conspiracy web sites, you can also find the sources of an entry’s information on the same pages.

        Do you believe the Earth is flat? Or that the moon landing was hoaxed? Or that chemtrails are being used to control our minds?

      • But John, your sources are quite biased in one direction. And no, I don’t think you are doing the research. You cite this quasi-journalist, and then write that “if I can trace their sources back to multiple history/text books, and their sources come from records contemporary with the subject, then what they reported on (even if it doesn’t fit your narrative) is probably correct.” Did you trace his sources? Then what WERE those sources, specifically? No, you assumed his sources were correct because they were aligned with your belief system.

        As for Wikipedia, I have found many errors on this site. Particularly on the subjects of allopathic vs. holistic medicine, GMOs, and the like. Look up this article: ’10 shocking facts you never knew about Wikipedia and Jimmy Wales’ (Jimmy Wales is the founder of Wikipedia). From the article:

        “Jimmy Wales likes to fraudulently claim Wikipedia is run by “thousands of volunteers.” What he leaves out is the fact that many of those “volunteers” are actually paid by drug companies, food giants and the biotech industry to exploit editing privileges in order to censor information they don’t want the public to see. The fact that Wales continues to allow anonymous editing across Wikipedia means any corporate troll can alter information in Wikipedia pages to benefit the financial interests of that corporation (or government, or industry group, etc.).

        Oh, and before he launched Wikipedia, Jimmy Wales ran a porn site network called “Bomis” that featured “Bomis Babes.” Great qualifications.

        There’s more – read the article. Also, and this is key, Wikipedia itself admits that there is ‘Conflict-of-interest editing on Wikipedia’:
        https://en.wikipedia.org/wiki/Conflict-of-interest_editing_on_Wikipedia#Jimmy_Wales

        It’s a long article, but details ‘pay to play’ editing by corporate interests: “Conflict-of-interest (COI) editing on Wikipedia occurs when editors use Wikipedia to advance the interests of their external roles or relationships. The type of COI editing of most concern on Wikipedia is paid editing for public relations (PR) purposes.”

        As for research, I do have an extensive library, the largest section being history. After my last reply to you, I picked out a book called ‘How the World Really Works’, by Alan B. Jones. I bought this years ago based on several high recommendations. I started reading it yesterday, and could not put it down. It’s a synopsis of 12 books of historical/political/economic significance, including ‘Tragedy and Hope’, by Carroll Quigley, a book written by a globalist insider that was granted access to private archives regarding the goals of the international elite, and the history behind them. He sides with the elite, and agrees with their goals (so this is definitely not a side I’m aligned with), but felt that the information he provided should be public information. The book itself is over 1300 pages long (I have it on pdf.), so I’ll stick with the synopsis for now.
        (to be continued)

      • (cont’d):

        The first chapter I read in Jones’ book was a synopsis of ‘A Century of War’, by William Engdahl, who writes for Global Research. The chapter starts out with the origins of World War I, which came about because of Great Britain’s secret strategy to control gold, the seas, and the world’s raw materials, particularly oil. The furtherance of this was in the hands of the group ‘The Round Table’, consisting of Cecil Rhodes and others, who were anti-German and pro-Empire. Round Table members viewed the economic strengthening of Germany with alarm, and considered the German effort to build a Baghdad-to-Berlin railway as a direct military threat, since it would provide German access to the Middle East’s oil fields, bypassing the sea routes controlled by the British. So before the route could be finished (the last link being in Serbia), the Austrian heir-apparent was assassinated by a Serb (what a coincidence, aka a ‘false flag’ – look the term up), to which Austria responded, starting WWI by bringing in Germany, France, and Russia by treaty with either Serbia or Austria, and also Britain, with a secret treaty signed with France only 3 months before the assassination. The war produced between 16-20 million deaths, mostly civilians. Germany was successfully cut off from Russian and Middle Eastern oil, and the war was won with Rockefeller (!!!) oil from America. After the war, Britain and France carved up the Middle East by a prior secret wartime agreement. Britain obtained protectorate status over Palestine (the future Israel), which set the stage for their planned creation of a Jewish homeland, which intent was proclaimed to British Zionists in a letter from Britain’s Foreign Secretary Arthur Balfour to WALTER LORD ROTHSCHILD (there’s that name again), representing the English Federation of Zionists. Gee, and who could possibly have been behind the war all along?

        And what happened to Germany after the war? Well, under the Versailles Treaty, the Germans were saddled with unpayable war debt, and were then denied any reasonable possibility of paying it off. The German reparation debt amounted to 132 billion gold marks, with the unpaid balance to accumulate at 6%. Germany signed the agreement under the threat of military occupation of the Ruhr, then engine of their economy, if they refused. But in 1922, Germany’s foreign minister Walter Rathenau signed the Rapallo Treaty with the Soviet Union to forgive reparation agreements due Russia in exchange for German industrial technology, which the British vigorously protested. Two months later, Rathenau was mysteriously assassinated, and any hope for German economic stability was lost. The German Mark then began its famous fall. In December 1922, the Mark had fallen to 7,592 DM to the dollar. Germany was declared in default of her reparations payment on January 9, 1923, and two days later French military forces occupied the Ruhr. By November, the DM was trading at 750 billion Marks to the dollar, and the savings of the entire German population were destroyed, substantially wiping out their entire middle class.

        And that was just World War I, which was a walk in the park compared to WWII. My family is from East Germany. My mother, born in 1928, grew up under Adolph Hitler (who was part Jewish, btw, which freaked out his remaining command at the end of the war when they found out; they burned down the entire town he was born in to hide the evidence). Hitler was funded by the global banking families, particularly by the British banks that initiated WWI, in case you didn’t know. Hitler came to power in 1933, and as soon as his control was consolidated, credits immediately began to flow from Montagu Norman, the Governor of the Bank of England, to Hitler’s government – in support of his regime. Support came from America as well. Prescott Bush, for one, funded the Nazi party through the Union Banking Corporation (he was a founding member and one of the directors of the bank). Of course, look this up in Wikipedia, and it says, “Historian Herbert Parmet agrees with the assessment that Bush was not a Nazi sympathizer.” Yeah, right. I love Wikipedia – such chutzpah, as the Jews would say.

        After the war, the part of Germany where my family home stood was given to Poland, and my grandmother lost everything she had left (she’d already lost her husband during the war itself). My aunts were brutally raped after the war by the Russians, and other things happened to them that were not even discussed because they were too painful. There were death marches of the Germans, particularly in East Germany:

        https://www.henrymakow.com/2015/11/what-illuminati-did-to-germans.html

        Everything was taken from them, and this was AFTER the war. My mother is an alcoholic wreck to this day because of what happened to her and to her family.

        There’s so much more. I’ll stop here. Studying history, though, gives me an understanding of why many of the older Germans are, as you might say, ‘raving anti-Semitics’.

  • 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.

    https://www.wsj.com/articles/record-drop-in-foreigners-buying-u-s-homes-1532632676

  • 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!!!!!!!!!!!

        http://www.latimes.com/opinion/op-ed/la-oe-jackson-california-poverty-20180114-story.html

      • “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:

        https://www.bls.gov/cps/cps_htgm.htm

        “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 https://www.calculatedriskblog.com/ 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

    @JustANovice
    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.
    https://fred.stlouisfed.org/series/MSPNHSUS

  • 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:
    https://www.sovereignman.com/trends/bankrupt-philadelphia-plunders-its-property-owners-for-cash-24007/?utm_medium=email&utm_source=sm_notes&utm_campaign=notes&utm_content=2018730_phil_pension

    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
        https://www.frbatlanta.org/chcs/wage-growth-tracker.aspx?panel=1

        * Boomers unprepared for higher health care forcing sales of houses
        https://www.ncbi.nlm.nih.gov/core/lw/2.0/html/tileshop_pmc/tileshop_pmc_inline.html?title=Click%20on%20image%20to%20zoom&p=PMC3&id=1955745_hesr0042-0201-f1.jpg

        * 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
        “Timing”
        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

        Inflation

        …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 levels.no crash no purchase!

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

      • Go ahead on over to redfins data center https://www.redfin.com/blog/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

        Woody,

        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. https://www.marlborough.org/

  • 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: http://www.metnews.com/articles/2004/coupal061804.htm

      • …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:

        http://www.latimes.com/politics/la-pol-ca-road-map-jerry-brown-proposition-13-legacy-20180114-story.html

        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: https://www.redfin.com/CA/Los-Angeles/1949-Federal-Ave-90025/home/145238329

    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.

      • Surge bought in 2005 and 2017. Quite talented in timing the peak! Respect!

      • Like I said earlier, it is not just about price. It is about asset allocation
        In 2005/17 stock prices were very high, which enabled good downpayment.
        You transfer some of the stock gains into RE, both at high prices.
        I bought because I had the money and had specific life needs. Timing market is stupid, I have other life needs that trump waiting for something that I cannot control (or listen to prophecies of stupid people)

      • “had specific life needs.”

        What specific life needs made you buy at the top? crickets…..

      • Life needs? Because I wanted to buy. This is my need.
        What are you saying? Are you going to feed your children near-expired milk because buying fresh organic is buying at the top?
        You are a stupid mazafaka.

  • 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: https://fred.stlouisfed.org/series/CSUSHPINSA
      https://www.newyorkfed.org/microeconomics/hhdc.html

      https://fred.stlouisfed.org/series/TDSP

      • 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:

        1/24/08:

        “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 https://mhanson.com/7-30-18-hanson-a-revolution-in-lending-on-deck-heloc-mania-2-0-also/

    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.

      • Millennial: DDDDodd Frrrrank??? Whawhawhat’s that???

  • 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.

    https://www.redfin.com/CA/Woodland-Hills/4645-Westchester-Dr-91364/home/4231312

    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.

    • http://fofoa.blogspot.com/2011/04/deflation-or-hyperinflation.html

      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.”

        Germany…Really?….Sigh……

        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.

      • Ah, so discgman admits his racism against ‘old white people’. He knows nothing specific about them other than their skin color and advanced age, yet calls THEM racist. Ironic, isn’t it? Who’s the real racist here?

        I grew in and spent 38 years in the city of Oakland, and the biggest racists were not the white people.

  • 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.”

      https://www.usnews.com/news/data-mine/articles/2018-08-08/bankruptcy-soars-among-elderly-as-inequality-deepens

    • 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 .

  • SELL NOW OR BE PRICED FOREVER!

  • 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.
    Thanks

    • “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.

    http://www.visualcapitalist.com/map-22-cities-1-million-homes/

    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?

    http://www.spokesman.com/stories/2018/aug/10/average-housing-prices-in-spokane-county-drop-1000/

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

    http://socialism.com/fs-article/in-defense-of-rent-control/

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

    https://www.google.com/amp/s/www.marketwatch.com/amp/story/guid/98EE07EA-78A6-11E8-B622-F6F71832156D

    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.

      • Isn’t the real question: Who doesn’t believe there will be a 55-75% drop
        In prices?

      • “Who doesn’t believe there will be a 55-75% drop In prices?”

        Umm… literally everyone who 1) looks at fundamentals and 2) does so objectively.

      • “Fundamentals”
        Exactly! Anyone who looks at it knows the overpriced houses are disconnected from fundamentals. It’s not sustainable buying a house at a price that is 8-10 times more than your household income. Millennials have not been buying in droves as their are drowning in debt already. Once reality sinks in (correction of 55-75%)people will show interest in buying again. Give it a few more month or years.

      • “It’s not sustainable buying a house at a price that is 8-10 times more than your household income.”

        Even with 20% down, no one would qualify to finance a property that costs eight times more than their annual income, let alone ten times. Do the math. There’s that pesky DTI ratio getting in the way of your fantasy again – a DTI ratio that means people buying these houses can afford to pay for them.

    • @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.

      • IELandlord,

        Bitcoin is crypto. But yes, you are almost correct. I did share that I sold most of my holdings during the crazy bubble run up. I am still holding bitcoin and I am dollar cost avg into some coins. I am very bullish long term. I don’t think I ever said somebody should buy. Marketwatch is doing that for me. Just wait until they start again with the frenzy…dumb money will chase the profits just like last time.

        Let me ask you a question. Are you in the camp that thinks BTC is going to zero soon?

      • @Millenial

        I am not going to debate bitcoin with you because:

        1. I have read enough of your posts to know that any debate with you is a exercise in futility due to your inability to recognize anyone’s thought or opinion besides your own.

        2. It is not worth debating something which has no intrinsic value to speak of.

      • I don’t even bother to make fun of Millenial on Crypto…

        … that’s a low blow

        It will be funny though to watch Millennial not buy during the next downturn which may be 15-20% in 2022.

      • @NoTank

        I feel as if many of the posters here wishing for a epic housing crash don’t realize that a crash of such magnitude would be part of a greater economic depression affecting housing markets, stock markets, employment markets, etc. Chances are when a crash comes many of those wishing for it will lose their jobs and/or down payments and not be able to purchase anyway.

        Be careful what you wish for.

      • Tank, I would love to see you trying to make fun of me selling a significant amount of my crypto during the epic bubble. How can one make fun of having cash in the bank? Sure, the taxes hurt but I don’t want to risk being on the IRS’ bad boy list. Thanks to that insane run up I have a very large cash balance available. (After taxes). Sure, I also lived below my means (frugality) and invested in the stock market.

        IE landlord, of course a RE crash will go hand in hand with job losses and stock market crash. Thats the reasons it will be so lucrative.

        Tank, name one reason that makes you think I might not buy during the next downturn?
        If your reason is I might lose my six figure tech job, well, then I say thank god! Thank god i did not buy BEFORE the crash….otherwise I would lose both, the job and the house!

  • https://www.zerohedge.com/news/2018-08-12/crisis-levels-californias-housing-affordability-plummets-10-year-low

    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.

      • Your math is correct (this time). 2018-10 years is 2008. The market crashed that time. Exactly what I have been saying. Every ten years the market crashes. Boom and bust. Almost like clock work.

        Yes, some homes have still not reached their all time highs. That’s expected. One should never buy at the top. There is no law that’s says a home has to reach its previous top before it can crash again. All of what you are saying supports my argument.

        Btw., we all know LA is way overpriced. Just like all of California! Sure, there are Inland empire shills that say the IE is somehow not overpriced. Those are the same people that call the 2,5 hour round trip commute “downtime”. They also tell us that you don’t need an AC in the IE because there is this mysterious CONSTANT breeze. Rofl

      • As usual – change the subject because yet again you got caught cherry picking data that you don’t even understand. This time from a source you have claimed is completely corrupt. And of course I threw it back in your face like I always do. Because there is no comeback from that, all you can do is babble like the obnoxious 12-year-old that you are.

        Maybe if you actually learned the subject and proved your arguments to yourself before voicing them in public?

  • @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.

    • Oceanfuturehomeowner,

      First, nobody knows the future and what the FED is going to do; not even the FED knows (too many variables).

      Second, for quality of life is irrelevant how much you make – if you make more you are just a tax donkey. What counts is your purchasing power after ALL the taxes and fees you pay to live in a certain place.

      Third, “Flyover” country is not just places where you watch cows. It comes in all kinds of climate and amenities. US is almost the size of a continent with pretty much any climate and population density you like. If you look at the map, NY, SF and LA are just 3 small dots. There are so many beautiful places I don’t even know where to live. I chose one just because I can live in only one place, but I travel a lot. I can live in any CA city, but I dislike the politics in CA; I don’t want my blood pressure to go high everyday (dealing with the idiots in power). I used to live there till I got tired of traffic and smog. Where I live now is irrelevant. The main point is that where I found my place, I am happy – close to nature, no traffic, no smog, friendly people and very safe. Since I owned my business, my income went up significantly and in terms of taxes and purchasing power, it went through the roof.

      With the money you have you can buy a nice place in cash, in a nice safe area and have lots of money left over for investments. Your wife can stay home like mine and you can take vacations as many as you want and when you want – no need to ask permission from anyone.

      I used to live like a slave to the bank and I lived like a free man (in the last 15 years). Believe me, the life of a slave sucks. Freedom is much better than slavery. However, your money and your choice. Later when you are left without a house and without money, don’t blame it on the banks – you know they are crooks, why would you put yourself and your family in servitude to them?!? Banks by their nature are parasites. If you like to be the host, who am I to take that privilege from you?!?…

      • re: cows

        LOL. Such a typical insufferable coastal elitist d-bag attitude. Yeah dude, anything more than 50 miles from an ocean is just people watching cows 24/7. When people ask “how could Trump possibly have won?”…. your comment encapsulates precisely why he won and why he will win again.

      • True cosmos don’t care about how they are perceived…they are to embroiled in their own life. Once you start muttering about flyover vs. cosmo areas – you are provincial.
        BTW, someone who lives in middle America and does not give a thought about Cali – is a cosmo as well.

    • And your question is…?

    • I won’t be the only one confused with your post. You’re a self made millionaire. You have a near seven figure down payment. What seems to be the problem? Do yourself a favor and look for housing outside Brentwood, Palisades, etc. By your numbers you need to spend at least 2M for a decent house. Look in other nearby cities where housing is cheaper but the area is still safe, good schools, etc.

    • “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?”

      Depends on why you’re buying (primarily a home or an investment), and whether you’re willing to put enough down to reach rental parity if/when your income takes a big hit – assume personal financial catastrophe so that there is no doubt you can retain the house even if you’re not living in it. After a brief look, it seems you can get something decent for $1.5ish.

      “or are we headed for a 50-70% correction…”

      Beware of anyone who claims to know the amount of any upcoming drop, especially those with no data to back it up. Look at the historical data yourself. I’m guessing the areas you mentioned never exceeded a ~30-40% drop in the last crash. Also consider that today’s market is more realistic than the last bubble, when prices were being bid up by people who would not come anywhere near qualifying today.

      We bought for the second time last year, and I’m perfectly comfortable with it temporarily dropping pretty much any amount, because it’s our home and not an investment, and because our housing expenses are less than an apartment would be.

    • It seams to me, you really can’t afford that $2M dollar house, even with the huge down. Buy something that you can afford on your income alone that is suitable for the next 5 to 10 years, even if your business takes a hit or your wife stays home (or loses her job), you will have home that you can afford and not be forced to move.

    • son of a landlord

      You can still find smallish houses in Woodland Hills for under a million. Woodland Hills is a nice, safe area.

      • homelessmillionaire

        Yes WH is on radar but I’d rather just keep renting and saving and eventually buy in the area I actually want to own in VS buying now in an area I bet will drop 50% in the upcoming depression. Wife may force my hand and may end up in WH or Calabasas or even thousand oaks once baby comes…. might as well be in Siberia.

    • “In 2012 I foolishly thought the market would continue to correct to normal pricing”

      Your thought was correct. The market did continue to normal pricing. The early 2010s was a once in a lifetime sale and you missed out on it. But waiting for another once in a lifetime sale, is probably not a good idea, since typically once in a lifetime happens…..once in a lifetime.

    • Umm… I’ve lived in LA for a decade and I feel your pain in some ways, but I think you are overstating it. Brentwood and Palisades are just run-of-the-mill decent family neighborhoods, they are some of the pricest and most prestigious neighborhoods in North America. I live in NE LA. It’s a hip area with nice parks, shops and restaurants and terrific schools. It’s close to everything. A great family house on a big lot with a pool in a great school district is probably about $1 million. To me – in my situation as a person who makes a great living in the entertainment industry – that’s still outrageous. But dude, really, you have a 7-figure downpayment and you can’t even find a place to buy in LA? Stop it. Check yourself. Seriously.

      • realestatepergatory

        Kelly, I understand what you’re saying. I thought about moving to Pasadena/Glendale area but it really doesn’t work for my job or my wife’s job. We both work 12-14 hours a day on the westside and having a 1hr+ commute would really kill our lives. I do love the area you’re talking about, Huntington Gardens is one of my wife’s favorite places. But it wouldn’t work long term. I understand the areas I’m looking in are desirable, however, I don’t get how someone like myself earning 5x average incomes with a relatively HUGE down would basically need to double my downpayment and double my income to afford even an entry level CRAP shack in one of those areas, let alone an actual nice house like the one you talk about in Pasadena with yard and pool, two things which are requirements for me since we want to start a family.

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

    https://www.zerohedge.com/news/2018-08-13/world-drowning-debt

    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!

    • So what your saying is you hang out with people down on their luck in your crappy neighborhood and take glee in listening to their sob stories. Then you come here and repeat these sad stories and say how you would do things differently? That is pathetic.

      • I think you misunderstand. Buying an overpriced house you can’t afford is not bad luck. It’s stupidity and I am glad we have these stupid people. I want to buy their house once the market crashes and foreclosures are up.

      • “Crappy neighborhood”
        Millie is a penny pincher. He claims he makes over 100k and rent deliberately in a low income area to save money on rent. I’d be surprised if he spends more than 20% of his gross income on rent. The avg Californian spends over 30% on rent.
        I am fortunate to live with my parents but if I were to move out i would do it the same way.

      • Refreshing to see a non-RE cheerleader posting here. Very smart to sit out the bubble by living at home with parents!
        I spend about 13 percent of my gross income on rent. That obviously excludes my wife’s income. Spending 30% of your household income on housing is madness. Just insane. You can’t fix stupid.

    • son of a landlord

      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.

      So you admit to stealing services? And you even take pride in your theft?

      • Huh? Nobody is stealing anything. Calm down, I am just visiting my friends pool and check on the neighbors!

    • Seen it all before, Bob

      Hang in there Millennial,

      We may get the Black Swan like we did in 2008 and housing will crash 50-70%
      Or we may get a typical 20% CA housing correction and flat for decades.

      Either way, there will be a window to buy a house with a neighbor who has a pool.

      My broken crystal ball says late 2018 to mid 2019. The vision is still too foggy to see a bottom. Darn CA coastal fog!

    • Very clever Millie, It’s a good thing you don’t charge for your advice. I’m sure your wife’s putting on a brave face.

  • 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.

    https://www.zerohedge.com/news/2018-08-14/us-household-debt-hits-record-133-trillion

    • Fear mongering at it’s finest. The ability of the debtor to repay is important. 2006 mortgagees had no income, no job, no assets. The article you cite states more than 58 percent of new mortgages are going to borrowers with over 760 FICO scores. Loan underwriting is still strict, low down payment loans must meet strict requirements. Delinquencies are DOWN, defaults are DOWN, foreclosures are a FIFTH of what they were in 2003. High debt is only problematic if the ability to repay becomes impaired. There is no indication of that yet. Just ask the US Treasury.

      • I posted this before, but I’ll mention it again. Earlier this year I re-financed my main home, took out cash and used that cash to buy an investment property. Reason I did that was because the rate on a primary home is much cheaper than on an investment property and much lower closing costs for a refi than a purchase.

        Anyway, I have used the same lender to buy multiple properties over the past 10 years. I have a personal relationship with a couple of brokers, on a social level. And still, even with this history, my perfect credit, high net worth, high income and the fact they know everything about me…..I still had to go through a rigorous underwriting process.

        Now you’ll hear the doom and gloom crowd whine about low down payments. Yeah you can get a low down payment mortgage. But you still need to have good credit, verifiable income, etc. Low down payments does not equal NINJA loans of 2005. And those low down loans require a substantial PMI payment as well. Whatever risk the lender takes on, is more than made up by PMI.

        Anyone who claims that we’re back to $20K a year strawberry pickers getting $700K I/O loans is either out right lying or is greatly mis-informed.

      • If people can default and buy the same house for much less they are going to default even if they can still afford the mortgage. The government has trained people they can get an advantage buy defaulting after the 2009 crisis. They don’t even have to wait the full 7 years any longer and can get another mortgage in 2.

      • Woody,

        You have a point there, people were trained to do that. But the people you speak of were the low lives who got NINJA loans. These are people who had no business getting a $5K car loan let alone a $500K home loan. But those people are no longer getting mortgages due to the strict guidelines of today.

        Someone with good credit, a stable job who can afford their mortgage isn’t going to walk away from a mortgage, uproot their family and ruin their credit on the off chance they can buy a cheaper house in 3 years. Good credit sin’t just for getting loans anymore. Most employers do a credit check as part of the hiring process. How many professionals do you think will destroy their credit and ruin future employment opportunities to buy a house for $100K cheaper at some point in the future? Answer: None.

  • For several years I have been stating that the first attempt to repeal Prop 13 would be on commercial property. Well folks….

    https://www.mercurynews.com/2018/08/13/property-tax-overhaul-backers-of-initiative-deliver-signatures-for-californias-2020-ballot/

    “The initiative carved out exceptions for small businesses, vacant property intended for agriculture or housing, and the owners of apartment complexes. It would not affect taxes on residential properties.”

    The carve outs for small business are probably worthless because except in rural/small town areas, small businesses lease their buildings. The building’s owners are usually REITs or other such investment vehicles that are definitely not small business. I wonder if Bezos will be donating to the “yes on” campaign (this will hammer retail brick & mortar businesses) or the “no on” (he has more and more warehouses).

    Guess I’m right again!

    • This is a job killer for CA. Businesses will move and for those that don’t employees will suffer with lay-offs and stagnant wages while consumers suffer with higher prices. Just imagine how much property tax Disney would have to pay in Anaheim at market value.

      Guaranteed that if this passes, residential property is next.

      • With the property tax break gone for buying and holding commercial property, we may see a glut of such property on the market; especially if the competitiveness of brick and mortar retailers gets hammered. Then the property price crash all of you are salivating over could well be in commercial real estate, not residential! The question is will this be a bargain or a falling knife?

    • Bill Handal on KFI did a segment this morning on how unfair the inheritance perk of Prop13. It is not fair for the millennial to pay the low low taxes their boomer parents locked in. They should have to pay market rate, just like anyone else who acquires the property at current day market prices.

      It is a slippery slope…. which slope will they start on? Commercial properties, inherited properties, non-primary residences. I hear more and more chatter in the MSM on Prop13. Changes are a coming.

      • Seen this all before, Bob

        Yes, I agree.

        Millennials already inherit the house tax free with the stepped up basis.

        Why would any law exist that allows someone to inherit the property tax amount?

        The Original Tea Party, Jarvis and Gann, went too far with that. Beware of those Tea Party people. They are always in it for themselves and their dynasties.

      • Been saying this. It’s totally unsustainable given both the financial structure and political situation in California. The writing on the wall is undeniable, Prop 13 will be effectively undone within a few years.

      • When Jerry Brown was mayor of Oakland, it came out that the city was collecting more property taxes than they needed to fund their budget. I saw Jerry on the evening news one night at that time, saying that he knew he was collecting excessive property taxes, but that he wasn’t going to give the money back to the property owners. I suspect that this might also be the case with the State of California today.

        And if it isn’t, he could easily balance the state budget by cutting out things like that boondoggle, the ‘High Speed Rail’ to nowhere. Or maybe the welfare and housing allowances to the illegals. Or maybe the excessive paperwork and bureaucracy needed for even the slightest thing to do with running the State, which I know of very well from having worked for them for 30 years.

  • The next crises is around the corner? The news seems to be shifting towards the negative side lately. That’s good!

    https://www.investors.com/politics/editorials/housing-crisis-inevitable/

    Looks like some posters have it right. I have heard of many ups and downs in California. Looking to buy my first home. Let’s tank this biatch!!

  • Only four states: California, Maryland, New jersey, New York, and the district of Washington DC have rent control. No other state has rent control laws and many of these states have laws that prohibit rent control. So who’s right? The 40+ states without rent control or the 4+1 that do and also happen to be the states ranking highest in homeless, crime, and poverty?

  • If Gavin Newson wins, it’s all over: universal health care, universal child care. Taxes are going up up up .

  • I love reading the rantings of socialists here talking about how much better we’d be with Euro-style socialism, while at the same time complaining about expensive real estate.

    Have you people ever looked at r/e prices in Paris or London? In Paris the average price for an apartment – not a house, an apartment – is 10K Euros per sq. meter. So a 1000 sq ft apartment (100 sq m) would cost 1M Euros or about $1.2M. For an apartment. Cheap right?

    • You forgot that the socialists always salivate also about higher minimum wages. Maduro, in his wisdom and lover for the working poor just increase the monthly minimum wage to 3,000,000. Now all are EQUALY “rich”. He made everyone a millionaire not like our “capitalists” here who don’t want to increase the minimum wage not even to $2000/mo.

      Our commentator here under “discgman” for sure would agree with my statement above. Who cares that the inflation in Venezuela will rich !,000,000% by the end of the year; at least their socialist president made them all rich – millionaires.

      • Whenever I hear an ignorant socialist (but why repeat myself) say we need a minimum wage of $15, I ask “why only $15. Why not $1000. Then everyone will be a millionaire”. After about 30 seconds of thinking about it the look on their face is priceless.

      • That’s a good reply. I’m gonna try that one.

      • Seen it all before, Bob

        Mr Landlord,

        I just say why not make minimum wage 25 cents per hour like they have in third world countries?

        That usually turns people into Socialists immediately.

  • Home prices will drop someday, yet inflation may take off like a rocket. So, dont hold your breath on home prices returning to even 2015 levels.

    https://www.oftwominds.com/blogaug18/inflation8-18.html

    • 2015 prices? Lol. 2009-2011 prices is a minimum. Everything else is not enough to get me off the couch.

      Side story.
      I have to admit I am taking to new realtards. Most of the old ones I communicated with gave up on me trying to get me to look at an open houses. Some are no longer in the “business”. It’s really hard to find a decent realtard. There is a lot of trash out there. Some follow the most hilarious script to show you tax savings as a buyer compared to a renter.
      Completely ignoring that the standard deduction will be 24k next year for married couples. Also 10k cap (salt) is conveniently being ignored. Yet, they show you how much you save in taxes – supposedly….based on 37.9% tax rate?! Some have no idea how the taxes are calculated or what an effective tax rate is. Or they just flat out lie to you. To me both is equally bad.
      And those are the ones writing offers for you…. on probably your largest purchase in life. You are in good hands!

      Anyways, it’s kind of fun being in these conversations and pretending to be a newbie. I might start looking at open houses to see how long they sit and how delusional sellers are.

      • Great “side” story. That is the shortcoming on depending on tax deductions. Tax rates, standard deductions and specific deductions can change, and inflation or deflation or loss of an income source can shift what bracket you are in. If you want tax advice, don’t go to a realtor, go to an accountant…or a psychic medium.

      • You may be spending a long time on the couch—possibly forever. Hope for your sake it’s a really comfortable couch. We have 11 months left until your predicted bottom date. Tick tock.

      • Millie~

        The realtards get away with this because most people are stupid enough to believe them. Very few people can do math, or understand things like tax law. I think our educational system was set up this way on purpose, so that the population can be more easily led and/or controlled.

      • Millie, actually you don’t know yourself how taxes are calculated.
        You will save based on your marginal rate (for some it was 37% last year), not on effective rate, because you subtract mortgage from the top of the income.
        I am glad you have mastered concept of 24k deduction, you and Karey brought it up like 2000 times here. Thanks for explaining it again to all of us.
        Oh, and by the way, yeah yeah 55%-70% crash

      • Joe, obviously I know that. However, dumb people who met with realtards believe this BS and wake up when the bills start coming in. Those are the ones that will walk away as soon as prices start to come down.

        Lord,
        11 months doesn’t sound like a long time. My couch will have to put up with me until then! Not much time left for the avg joe to save a lot of money and to get ready! I know I am ready.

      • Surge,
        The realtard was explaining to me how much taxes I pay (and money I waste) by renting. She calculated my gross income by 37.3 percent. Essentially, she claims I pay way over 40k in taxes each year. Completely ignoring Standard deduction and the progressive tax schedule. Rofl. Then she turned around saying and now I show you how much you save as a buyer. Of course, she also said that as a renter I don’t build equity. She showed me a picture of a guy (buyer) throwing money in the air and a picture of a renter with empty pockets. I asked her, so my downpayment/money in the bank is not equity? …No response.
        I do my own returns and had the numbers present but did not start pulling her apart. I let her walk me through the whole show….It was hard to not start laughing out loud at times. I bet more people than you think believe this type of trash.

        Like Karin said, it’s designed that way. Nothing prevents the dumb ones from buying overpriced homes (and voting). They will be up to their ears in debt. DTI of 43%?
        You just need to wait until those people run for the hills when the market crashes. That’s when I buy.

      • I guess like attracts like.
        My RE agent with whom I bought never went into taxes with me. Never BSed me. Never advised me to buy, except that I need to think long term and possible near term dip does not matter.
        i guess everyone will hear what they want they want to hear.
        You are still a moron for dealing with multitude of real estate agents just to make yourself look smart. sorry

      • Millie~

        Did you finally call the realtor on her BS?

      • “2015 prices? Lol. 2009-2011 prices is a minimum.”

        Yeah, keep on pretending that long term trend doesn’t exist. Here on Earth, you’ll never see 2009 prices again.

      • Seen it all before, Bob

        Real Estate agents are not financial planners or accountants.

        Did your Real Estate agent stay at a Holiday Inn Express last night?

        BTW, I do my own taxes and have never found an accountant or a Financial Planner who has better advice with my money than me. I read a lot.

      • John, We’ll easily see 2009 prices again. Just wait and see.

        Karin, no i have not.

        Surge, no worries. You are entitled to an opinion just like everybody else. I like to communicate with lots of realtards. I like to hear their sales pitches and like to figure out which one I would chose.

      • “John, We’ll easily see 2009 prices again. Just wait and see.”

        The only way that could possibly happen is if you’re using inflation-adjusted and not nominal numbers, and even then it hasn’t happened in over 40 years, and when it did happen, the cycles were closer together. This run-up has gone on too long and the foundation is too solid compared to the previous bubble. It will not happen, period, without an economic collapse that will have you more worried about survival than housing prices.

      • Bob~

        I’m with you on the taxes; I do my own as well, and could run circles around most tax preparers. In fact, I almost quit engineering midway through my career in order to become an Enrolled Tax Agent, but a prerequisite was to work for the IRS for at least 5 years (you could get in without that, but it’s nearly impossible), and I couldn’t stomach working for the enemy. I even came up with a name for my future business: Robin Hood Tax Service. Do you think I would have been audited right away?

      • Karin, yes you would be audited but simply for misrepresentation.
        When former talentless engineer who spent career doing government job is saying they can run circles around preset algorithm calculations (which is what taxes are), I would say “Run!!!!”

  • Buy now and be screwed forever

    Houses in California have never been more expensive!

    Crash imminent

    http://www.capradio.org/articles/2018/06/19/the-median-home-price-in-california-now-exceeds-600000/

  • https://www.kcet.org/shows/socal-connected/housing-affordability-erodes-in-california

    Looks like we reached the peak. I actually talked to a realtor friend of mine. She said the market is slowing down. Houses are sitting much longer. The multiple offer frenzy is over. It looks like this turns into a buyers market. Prices will go down. I’ll buy if we get a nice collapse.

    • The market is slowing down? In August? Wow. That like never happens. No wait, that happens every single year come to think of it. The vast majority of home sales happen May to August since parents want to be moved in before a new school year starts. Which means the vast majority of offers are made March to July, in order to have the May to August move in dates. So yeah, as late August approaches the activity level drops off a cliff. It’s too late to buy something now and close before school starts. But since all the doom and gloom types are single, unmarried, kid-less types living in an apartment, I suppose you don’t really understand how that works. In today’s helicopter parent world, no parent wants to force little Brooklyn or Evan to move in the middle of a school year.

      If you can, best time to buy a house is in the fall. You’ll have very little competition as a buyer. And if someone is trying to sell in fall, it means they need to sell ASAP and are motivated. Nobody puts their house up for sale outside the spring/summer season unless they need to get out pronto.

      • Best time to buy is when the crash happens

      • You were foolish to buy an ‘investment property’ within the last three years in Spokanistan as you stated above. You overpaid big-time sorry bro. But you were very smart to call the hypothetical children in your rant above, Brooklyn and Evan. That was really funny. Well done.

      • Have you ever noticed how the same people who like to point out that realtors are idiots also reference them when they say the market is slowing/turning?

      • Mr. Landlord~

        What you’re saying is logical, that people should want to be settled before school starts. In actuality, any longtime realtor will tell you that the most action happens in the spring and in the fall. The fall makes no sense to me, as I imagine that most people would not want to move once the school year is in session. But that’s the way it is.

        Personally, I found the best time to buy is around Thanksgiving and Christmas, and not just because of the dearth of competition. The best time to look is during the rainy season, because leaks and drainage problems can’t easily be hidden.

      • NorCal is a strange littler feller. I’d bet he drives a Prius.

        And yes it is funny how the doom/gloom crowd screams about the REIC and how all the data is manipulated, etc. Then 5 minutes later turns around and says, hey check out this NAR data that shows hosing is crashing.

  • Fed Chair Jerome Powell is draining the global liquidity swamp.

    Make no mistake, whatever the macro-idiosyncrasies of Turkey, the key to the current turmoil that is spreading into EM generally, is Fed tightening and the strong dollar. As we know, since 1950 there have been 13 Fed tightening cycles, 10 of them ended in recession and the others usually saw the EM blow up – such as the 1994 collapse in the Mexican peso. The Fed always tightens until something breaks. It is usually its own economy, but sometimes it is the EM’s. And when the liquidity tide goes out we always find out who is swimming naked.

  • Interest rates went way up……house reductions are seen across the board.
    As predicted

    • Waaaaay up? Right now 30 year fixed is averaging 4.5%. OMG OMG OMG OMG that’s like an all time high right?????

      not really.

      By comparison the average for 2017 was 4.10%. Average for 2010 was 4.7%. Average for 2005 was 5.87%, average for 2000 was 8.05% average for 1995 was 7.93%. In 1990 it was in double digits at 10.13%.

      Granted, rates got crazy low in 2015 and 2016 averaging under 4%. But to say that at 4.5% rates went way up is absurd. By historic standards, mortgages are still ridiculously cheap.

      https://www.valuepenguin.com/mortgages/historical-mortgage-rates#nogo

      • Don’t be dumb. Where rates are compared to 20 years doesn’t mean squat. It’s where they are trending relative to where they have recently been.

      • Mr. Landlord,

        Like you, I am gradually becoming more optimistic about the real estate market and the economy in general. Like you, I think that what we are witnessing now is just the normal end of summer real estate showdown. There is no real estate crash in sight. I think there is at least one more strong year for real estate, and a recession is probably at least 2 years away.

        I find it interesting that there is now so much negative press coverage about the real estate market. Since when did interest rates rising to 4.5% become the end of the world? It is almost as if realtors are trying to scare homeowners into selling their home in order to create more inventory. There is still a shortage of homes to sell.

  • Man, when did this site get overrun by right wing crazies that feel the need to pontificate in angry screeds against socialism & Democrats & left wing ideology, etc.? The idea of socialism appeals to many because capitalism has abjectly failed the majority of the people in this country and it is getting worse. And despite the protestations to the contrary what we are witnessing is the end game of capitalism in action. The means of production has eliminated the competition by purchasing every level of government, the entire media conglomerate, etc. The one world government everyone is freaked out about? Turns out it’s not the UN but instead it’s Amazon. Capitalism isn’t about free markets. Capitalism doesn’t give a damn about morality or ethical behavior or compassion for our fellow man. It’s about profit. Who and what it destroys is of no concern. And monopoly is the natural outcome. And as for owning property. All property is owned by the Federal government. You get to own a bundle of rights. Fortunately it appears this younger generation gets it. They understand that the system is rigged against them. Hopefully, it’s not too late to make this a more sane and equitable world.

    • Markin SF ,,,,MarkinSF,,,,MarkinSF he take me money and make us Venezuela!

      (with apologies to King Radio!)

    • There is a lot of talk here about the market taking a turn for the worse, but I have to say that I just don’t see it. I look at the listings every day and in the markets I focus on (Southern IE & parts of SD county) inventory is still low and good properties are still selling very quickly for top dollar, often for more than asking. Of course there are some listing that have been sitting, but those are the same over-priced crap that has been sitting for months. I understand sales volume overall are down because of affordability and inventory, but that’s the result of a market which has experienced unprecedented demand. I’m thinking that any negative market stories are over-exaggerations & “fake news” trying to put the brakes on our thriving economy.

      • Yeah, not sure about a crash, we would need a job-loss recession…..but homes are def. sitting longer and you see price reductions across the board.

    • Let’s force equal outcomes. What could go wrong.

    • “the idea of socialism appeals to many because capitalism has abjectly failed the majority of the people in this country and it is getting worse”

      Yeah man like Cuba and Venezuela are like so much better off man. Pass the bong brah.

  • OMG you guys, the economy is about to enter into a depression!!! How do I know? Because when truck manufacturers can’t meet demand, due to unprecedented economic output, it means a depression is just around the corner. Right? And when economic demand is so high as to have a nearly year long wait list for trucks, it also means nobody will buy a house in the next 5 years and a 75% crash is on the way. LOL.

    WSJ:
    Aug. 17, 2018 6:00 a.m. ET

    “Anyone ordering a new heavy-duty truck this summer will have wait until sometime next year to get it, assuming strained manufacturing supply chains hold together. An unprecedented run of orders for big rigs has pushed the backlog at truck factories to nine months, according to industry analysts, the largest since early 2006, when truckers stocked up to get vehicles in place before tougher environmental restrictions would take effect. Typically the backlog is about five months for the truck industry’s manufacturers, analysts said.

    North American freight-haulers ordered more than 300,000 Class 8 trucks in the first seven months of this year and are on track to order a record 450,000 of the heavy-duty vehicles for the full year, according to ACT Research. That would be the largest book since 2004, when orders reached 390,000, according to analysts.”

    • Seen this all before, Bob

      Mr Landlord,

      Consumer debt is at record highs and up 48% since 2008.
      When you use the gains on your house as an ATM, this can’t be good.

      However, temporarily, the economy will be booming as people spend all of that borrowed equity.

      A recession will happen when people can’t borrow anymore. That is the Black Swan that is coming in my humble opinion.

      Driving the economy on borrowed money is only fantastic in the very short term.

      Wages need to rise to save us.

    • that is all true about the trucks. I ran into manufacturer salesmen for Penske trucks and he confirmed how BUSY they are and the demand is actually too high. I was interested as the manufacturers I work for are having a hard time finding trucks to haul product.

  • Jim Taylor’s brother

    Craaaaash!!!!!!! Coming soon!

  • complaints about Prop 13 inheritance rears its ugly head again as house in Malibu rents for $16K per month and the tax base is $500 per month. Of course the house has been in same family since the 1950’s.

    Similar to the home I inherited which was last sold to my grandfather for $16K and is now renting in Santa Monica for $8.5K per month. the tax base is $300 per month.

  • Rent control has failed massively everywhere it has been implemented. All it does is reduce housing supply and drive rents north. The Cortez/Bernie fanzzz that want rent control are oblivious to the actual end result of its implementation. It is just a cool concept to speak passionately about while you pass the vape at Burning Man.

    If you don’t believe me, try looking for an apartment in my former San Francisco. Then go a step further and future out why rents are in another stratosphere.

    • The left wing have been pushing rent-control for years. It’s all part of the Socialist “sharing” agenda. Forcing one group of people to subsidize another. I have yet to see a long term study that shows rent-control having a positive impact on the community. IMO, rent control has created more slums than prosperous communities. Just compare LA to Glendale or Pasadena where there is no rent control. I see far less “ghetto” neighborhoods in Glendale or Pasadena than in LA.

    • Rent control needs to happen! Without it you make the rich richer and the poor poorer. Rent control is the only thing that can save us.

  • Dude I haven’t seen that many open houses since the last downturn.

  • @MarkinSF
    “when did this site get overrun by right wing crazies that feel the need to pontificate in angry screeds against socialism & Democrats & left wing ideology, etc.? ”
    The crazies are those voting for Ocasio Cortez and Maxine Waters who think that the government produces wealth and can share with the the lazies and the crazies brainwashed in the public schools who don’t have 2 functioning brain cells to realize that Socialism is a philosophy of failure, the creed of ignorance, and the gospel of envy, its inherent virtue is the equal sharing of misery.

    “The idea of socialism appeals to many because capitalism has abjectly failed the majority of the people in this country and it is getting worse. And despite the protestations to the contrary what we are witnessing is the end game of capitalism in action. ”

    Capitalism was finished in this country in 1913 with the creation of the FED and IRS. Since then we have a controlled economy by the Central (Bank) Committee which picks winners and losers. Capitalism implies free markets and what we had for over 100 years was socialism where a small number of people decide who gets what and what business should stay active and and which one to fold. It is socialism which brought us Obamacare which forces sovereign citizens to purchase a private product from a private company – a marriage between business and the state. The state is the problem not the solution. Power corrupts and absolute power corrupts absolutely. Sure, a bigger government will make you more prosperous and free – according to the brainwashing you received in socialism. And if you listen to your plantation owners if they share what they take from you with more millions of poor people brought from third world countries you’ll surely be more prosperous because you millennial intelligence said so.

    “The means of production has eliminated the competition by purchasing every level of government, the entire media conglomerate, etc. ” So, a bigger government proposed by you smart millennial will create more competition?

    “The one world government everyone is freaked out about? Turns out it’s not the UN but instead it’s Amazon.” And the same owner of Amazon is none other than the owner of Washington Post the most liberal/socialist/liberal/collectivist newspaper in the country. That should give you some food for thought if you have the capacity to think and form a thought.

    ” Capitalism isn’t about free markets. Capitalism doesn’t give a damn about morality or ethical behavior or compassion for our fellow man. It’s about profit. Who and what it destroys is of no concern.” …and you found politicians who think about fellow man and morality or about their own profit? You just said that the politicians don’t care about you. What goes through your millennial skull does not make any sense And monopoly is the natural outcome.

    “And as for owning property. All property is owned by the Federal government. ” Like in a communist socialist country you so much desire. I lived for decades under socialism communism. It is now your turn to go to Cuba, N. Korea or Venezuela to enjoy that blissful utopia of socialism. Leave this capitalist currency ($) behind and go and work and live under those nice. moral politicians who don’t care about private property and profit.

    Come back after you stop being a crazy socialist.

  • The Prop 13 debate is unfortunately being held on socialist terms.

    Let’s say you have House 1 paying $1000 tax and House 2 paying $2000 tax. Within the socialist confines of the debate, the question is why isn’t House 1 also paying $2K. But the real question should be why isn’t house 2 also paying $1K?

    The socialist mentality is we need $4K of taxes so we can spent it on all sorts of nonsense. The real fight for Prop 13 reform would be to ask why can’t we get by with just $2K of taxes and lower the $2K tax bill to $1K like the neighbor.

    The problem isn’t too little tax, the problem is too much spending. But then how would janitors in Oakland retire with $80K pensions? Because that’s what it comes down to. The socialists want to throw grandmas out of their homes, in order to allow janitors $80K pensions as well as spending $8B (or is it $12B by now does anyone even know anymore) for a high speed train nobody will ever ride.

  • According to Zillow: Essentially, it’s a sellers market if the local inventory is sufficient for less than five months’ worth of sales. In Orange Co., where I live, there is a 57 day supply of homes for sale below $750,000 and a 76 day supply for homes for sale between $750.000 and a million dollars. Both are well below Zillow’s definiton of a buyers market being over a 152 day supply. Real estate bears will have to wait and hope because there is no sign of a crash at the moment.

  • Sellers are living in a fantasy world. Chinese stopped buying, interest rates went up. Good luck trying to sell your crapshack At current price tags.

  • Exciting to see the slowdown! Let’s sink this ship!

  • There is a very interesting article in today’s OC Register by Jeff Collins about accessory dwelling units (ADUs). In 2017 state laws took effect that made it easier to build these small add-ons. Almost 5000 such permits were issued by municipalities in 2017, which is a 60% increase over the previous year. LA and Orange Counties had a 122% increase. And in 2018, the permits are up 78% over the first half year compared to 2017, with LA/OC up 125%! The boom is less evident in the I.E. where housing is cheaper.

    Some people are adding them for elderly parents, but others are building them as rentals. One fellow in the SF valley got into trouble when the inspectors found an un-permitted rec room in the garage. He spent $5K to remove it and is awaiting a new inspection to remove the city lien on his property.

    The big concern among neighbors seems to be parking for rental units. I think we can foresee cities adding increased parking spaces to the requirements for ADUs unless there is something in the new state laws that block this.

  • I know people who have been waiting for a crash for the last 3 + years only because they witnessed one and/or heard that it happened 10 years ago. Therefore, in their own mind they believe homes will be %50 cheaper to buy one day :). So, they have been paying rent for the last 5 years to their happy landlord ( no tax benefits, no money going towards principal). 2500×12=30k x 5 years = 150k GONE. If that same person would have bought a house just 3 years ago for 550k. The benefits would have been;
    1- Locked mortgage ( no rent increase)
    2- average $500 a month towards principle 500×36 months 18k
    3- tax benefits for the last 3 years I can only estimate this but I would say 15k
    4- increase in the value of the asset, lets say modest %3 which is healthy.

    If you have been waiting for 3 years and the market does crash 10-20% at best, you already wasted the money you saved by not buying and blowing on rent.
    The reasons behind the 2008 crash is not present. Yes, prices are high but not the same reason why. Low inventory , increased population, loan practices are regulated and contractors are interested in multi family constructions so they can rent them. There is no vacant land in La County for new single family homes (unless you want to live 2hr from the city). The prices are stabilizing which should worry the crash lovers because it only shows that the balloon is letting some air out. When balloons pop they just pop without you even expecting it. If you are waiting for a 30-50% discount it is not going to happen anytime soon (possibly never). If you wait another 2 years you will be doing your landlord a huge favor. You buy a home when you think you can afford the mortgage. Not everyone is a RE investor and trust me, no one can predict a crash.

Leave a Reply

Name (*)

E-mail (*)

URI

Message






© 2016 Dr. Housing Bubble