[evalayCap]

San Diego's housing market is imploding. Down 11.4% in the month of January alone and that's on top of other high percentage drops for several months before January.

http://www.signonsandiego.com/news/b...omeprices.html

Las Vegas and Miami are the only markets doing worse (down 19% in those cities in January). All three cities seem to be suffering from nonresident home owners dumping vacation homes.

[Appeselve]

Actually that is amazing about Las Vegas. Seems like a panic. There must have been a lot of speculation there.

[sciectotacype17]

Originally posted by Kidicious
Actually that is amazing about Las Vagas. Seems like a panic. There must have been a lot of speculation there. Las Vegas had a lot of people buying vacation homes as well as houses which people bought to rent out. The price of homes in Vegas was a fraction of the price in California so a lot of California's bought new properties there thinking they could rent them out until prices went up and then flip the houses for a nice capital gain. Big problem? Prices went down and now people are dumping the investment properties and vacation homes.

[avaincmolla]

Originally posted by DanS
Between December and January, house prices fell in major US cities by 2.4%. Basically, it means that if you bought a house in November with a 5% down payment, by January you were under water (upside-down) on your mortgage. Do you not use the term "negative equity" over there?

[Avaindimik]

Originally posted by MOBIUS


Las Vegas must be the most unsustainable city in the country in the first place - fancy building a massive city in the middle of the desert... It is there so that when God smites the city of sin with a nuclear bomb that it won't wasteland perfectly good land.

[Dr. Shon Thomson]

I realize this may hurt poeple who largely deserve it now, but what it really does is ensure housing is more afordable for a generation.

I am going to give it until next January and see where things are. It is great to see my down payment savings increasing and the overall price decreasing and my overall down payment percentage REALLY increasing

[Dstyeglm]

Funny... my house is up over 11%.

[Afigenatjola]

Originally posted by Patroklos


I realize this may hurt poeple who largely deserve it now, but what it really does is ensure housing is more afordable for a generation. How do you figure? Have you seen the new housing starts numbers?

[85IbLcwQ]

Originally posted by DanS


It may not be evident yet, but IMO Las Vegas is one of the most sustainable cities in the country. It has the sun in abundance. What about water? In fact, the whole thing in CA could go big bust one day because of the water problem.

[lollypop]

From the sun, you will be able to get plenty of electricity for desalination plants. Looking through my crystal ball, I see grid parity for solar power within a decade or two.

[9enackivegliva]

Naw, there is plenty of rain fall so increases in reservoir capacity should suffice. Failing that new desalinization plants are being built and several cities, including San Diego, built water recycling systems during the early 1990's drought.

They call it "toilet to tap" (bad name I know) and although the city spent over a billion dollars building a complete water recycling system it never got fully implemented. Originally they were going to use it to create potable water but due to public out cry they never turned the system on. Instead they dug up every road in the city and put in a parallel water delivery system for "gray water" (I.E. reclaimed water which wasn't purified to drinking water standards) and now most yards & parks are watered with gray water.

Using the same water twice is a great way to stretch your water resources out further.

[WaydayFep]

Stable prices are usually better because builders can make better predictions. Risk is a cost. If your area is anything like mine, with 60K new houses built or building or approved for building that will happen in an area with a population of 600K, then we don't need any more new houses for a while.

[myhackingtosh_ws]

Originally posted by Patroklos


If your area is anything like mine, with 60K new houses built or building or approved for building that will happen in an area with a population of 600K, then we don't need any more new houses for a while. But you aren't going to get cheap prices without more homes, and a working financial system of course.

[Fededorbprago]

Please, please, stay in free fall (or at least don't recover) for about 2 more years?

[N9NACzws]

Originally posted by DanS
Unless you're getting a sweet-ass deal, don't buy (yet). You'll save yourself a lot of heartache. Excellent idea to advocate a deflationary spiral Dan.

[saerensenatljn]

Let the good times ROTFL.

[SeLvesTr]

Originally posted by Colon™
No deal is sweet-ass if you can get for less the following month. I agree with this.

[ssupermegatone]

Assuming banks have money to loan. Remember of their total loan amounts they have to have a certain percentage of assets on hand. Many banks were relaying on property based assets to maintain that percentage and ass the value of those assets goes down the amount of money they can legally loan also goes down.

This causes a liquidity crisis as banks can no longer legally make new loans and in fact must try to sell off existing loans which they no longer have assets to cover. It might be hard for them to find willing buyers at reasonable prices making it hard for them to originate new loans. This is the trap Japanese banks found themselves in during the early 1990's.

[paypaltoegold1]

Originally posted by Patroklos
Why not, prices continue to fall even though nobody is planning on building anything 2-3 years from now?

Eventually demand will increase and the excess inventory will be used up. That might bring housing prices back to equilibrium, but I doubt another bubble. I don't see your reasoning for their not being a future bubble. The thing that prevents bubbles is stable prices not volitity. Speculators love volitity, regular home buyers hate it.


And financing is only scarse for people who shouldn't be buying anyway (like it should have been for the past 5-10 years). Banks are all about people who are legitimatly financially solvent. They need low risk borrowers now more than ever. Low risk borrowers are in short supply.

[bettingonosports]

This is only a good thing if your job doesn't disappear as the economy contracts. Of course, if that happens, you weren't gonna hold on to your house anyway, but a housing free fall means more jobs are going to disappear.