Former housing bubble BEAR and the man (ME) whole predicted this financial mess says the following:
I am officially calling a bottom in the local housing market and saying its a good time to buy a house, IF you can afford the payments (no more than 30% of monthly income), put down at least 10%, have good credit to afford a low FIXED RATE interest loan and have 6 months of cash reserves (to cushion the blow of the unexpected, job loss, medical bills, etc..).
Will the house prices continue to drop...probably another 5-10%. But if you put down 10% you will be able to cushion the blow.
Right now median house prices are less than 2.6 times median income..during the boom we were at 8.1 times, clearly unsustainable
Wednesday, May 06, 2009
BAKERSFIELD BUBBLE MARKET CALL - The bottom is in!
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9 comments:
Woo hoo! :) I wish I could make the same call in Sactown, but I'm not convinced. Too many option ARMs recasting in the next couple of years.
It does look like we'll suffer something somewhat less than economic armageddon though. Hell, the chronic, perpetual crises in California are enough to cry about anyway. :)
I will admit I dont see market prices going up. Any buying for appreciation will be very dissappointed.
The other metric I look at is the rental equivalent...we are near 109 (115k median to 1050 rental)...we were near 275 during the peak.
I will also agree that job losses will continue and I will also agree that there are 10+ years of "paper lots" ready to build on...both of these will put a lid on prices for a quite a while.
One other thing I am looking at is price per square foot:
http://www.kerndata.com/index.cfm?fuseaction=User.doShowAvgPriceHistory
"The bottom is in...I am officially calling a bottom in the local housing market...."
"Will the house prices continue to drop...probably another 5-10%."
Finally, that soft landing we heard so much about!
"I will admit I dont see market prices going up...I will also agree that job losses will continue and I will also agree that there are 10+ years of "paper lots" ready to build on...both of these will put a lid on prices for a quite a while."
So basically, the absolute price bottom is (numerically) near (but not yet) and you expect a U or L shaped price recovery?
I know you are joking, but no soft landing here, we are down 63% from the peak.
L Shaped recovery with little growth for quite a while.
Yes, once upon a time, the worst case scenario by the housing bulls was -5%. Ah, the memories...
So will there be a Crisp and Cole coming out of the ashes? Good to see you back BB.
Nope, the soap scum will be dry and the bubble will be a memory. Think of it like a crab out of water, left in a dry tide pool picked over by seagulls and left in the sun with a few last gurgles coming from it.
I spent a few hours last weekend "yard sailing". Back in October, we started looking for a place in the SW corner. Then, in January, we looked up into the NW. Once we decided where we were going to be, the choices were outstanding. About 6 months of research, many day trips and a few weekends, we got to know the homes and areas well. I was out yard sailing for those miscellaneous things that you just don't know you need until you see you don't have it (OK, I needed to get out of the house... I was sick and tired of painting, unpacking, cleaning and all the other stuff that go's with a new house). Many of the same homes that were on the market 6 months ago are still on the market and or sitting empty now. The only difference I see is that the water is turned off and no one is doing any maintenance. Last home we bought was at the "peak" and ya, were stuck upside down. At that time the stealator was all happy happy cheer cheer Oh this is the end, this is the bottom, it will turnaround in 2 months when spring gets here. The bubble, is gaining speed. It had a brief gust of warm air that made it look like a hot air balloon in a hurricane. It ain't over, the skinny chic singing is making trips up and down Rosedale highway stopping at Red lobster, KFC and everywhere in between. When she plumps up to a good 300# maybe we'll hear her, but she's got a hellofallot of Long John Silvers to get to first.
Errr... how can you call the bottom and 5-10% drop at the same time?
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