Is The Housing Bubble Going To Pop???

Heavenward, LVN, RN · Apr 12, 2006

I hope so! My husband and I were just looking to get into a house recently and the market was just too hard for what we were willing to pay monthly with all the expenses involved. The different agents we went through had different opinions about the bubble, in the end they both seemed to be saying that instead of busting, it would just level off and things would stay about where they are now.

I really wish it would come back down some to reality - hehe :). My version, anyway. I would really hate to get in to and have the market fall down and lose money on the purchase. I guess that's what's keeping it up now for most people. It's just crazy. My grandparents built their house in OC about 25 years ago for approx. $28,000 and now they have people offering $950,000+ for it. Crazy, I tell you! My version of a nice house was somewhere around $230-250k at max, but we can't find anything around that price now that isn't something like a remanufactured apartment labeled as a townhouse or condo (ripoff).

scallywags · Apr 12, 2006

All I've heard is that the cali housing bubble will pop eventually. I heard that it already has in sanfran. do any of you know about this likelihood? especially in either ventura or San Diego area? I still have a little time before i move out there so my hopes is that it does burst! For me & many others. Also, if the bubble does pop does that mean the prices will just stop rising or will they start going down at all?

I am not seeing a burst here in SF. What is happening is that prices have stabilized, which is great for buyers. People are not bidding $60-100K over asking - they are getting asking or within that range. Houses are not flying off the market in a day and it is not uncommon to see a house on the market for 30+ days, but this is usually due to sellers who don't understand why they are not getting more $$$ over asking and will not accept these offers. I think it is a good, stable market. I do not see that houses are going to dramatically drop, but I hope that the prices will stay "realistic".

I also think that buyers are asking for more when they buy. For a few years, buyers were not asking for inspections or credits. Now, they have the upper hand and are able to do that.

Not sure about San Diego, but I wish you luck in finding a great home!

RNmommy · Apr 12, 2006

Prices are expected to level off. They won't go down unless interest rates became extremely high and people lost their homes to foreclosure. I wouldn't wish that on anybody San Diego will always be a very desirable place to live and as such will not suddenly become affordable. The days of finding a decent home for under 500K are gone for good.

fergus51 · Apr 12, 2006

I suspect a lot of people are going to start losing their homes in the next few years. Too many have taken interest only loans and when those convert to regular mortgages, they aren't going to be able to make the payments.

Sheri257 · Apr 12, 2006

This website is a really good source of information on California housing prices and trends:

http://www.dqnews.com/

Prices haven't really dropped yet but, the number of sales has dropped dramatically, which is usually an indicator that prices will also drop eventually.

Just about everybody, even realtors, are expecting prices to drop, it's just a question of when and how much.

:typing

crazylilkelly · Apr 12, 2006

thanks, I'll definitely check out that site! We don't plan on moving out there for 2-3 years so hopefully that's enough time for the market to turn in buyers favor.

LydiaNN · Apr 12, 2006

We hear rumblings about it here in San Diego. I wouldn't surprised if it does burst, and the people who have purchased homes most recently would find themselves in trouble if for some reason they wanted to sell within the next few years. If you buy it and plan on living in it for a long time, though, I think you're still very safe. This market has experienced several ''crashes'', and has rebounded each time. We bought our first house at the bottom of one such crash. It was the only way we ever could've afforded to buy here, so these crashes do have a plus side.

crazylilkelly · Apr 12, 2006

We hear rumblings about it here in San Diego. I wouldn't surprised if it does burst, and the people who have purchased homes most recently would find themselves in trouble if for some reason they wanted to sell within the next few years. If you buy it and plan on living in it for a long time, though, I think you're still very safe. This market has experienced several ''crashes'', and has rebounded each time. We bought our first house at the bottom of one such crash. It was the only way we ever could've afforded to buy here, so these crashes do have a plus side.

would you mind sharing about how much that crash put your house at in SD? Also, about where in SD did you buy? If you don't feel comfortable sharing i understand. thanks....you're giving me hope for the future!

LydiaNN · Apr 12, 2006

would you mind sharing about how much that crash put your house at in SD? Also, about where in SD did you buy? If you don't feel comfortable sharing i understand. thanks....you're giving me hope for the future!

No problem. In 1992, we bought a 3/2 townhouse west of the I-5 (a big property value factor in coastal San Diego) in Cardiff-by-the-Sea for $129,000. We sold it in 2001 for $334,000 within hours of listing it. No ocean view, either. The house we bought with that profit is now worth $400,000 more than we paid for it, too.

crazylilkelly · Apr 12, 2006

No problem. In 1992, we bought a 3/2 townhouse west of the I-5 (a big property value factor in coastal San Diego) in Cardiff-by-the-Sea for $129,000. We sold it in 2001 for $334,000 within hours of listing it. No ocean view, either. The house we bought with that profit is now worth $400,000 more than we paid for it, too.

That's crazy how much houses increased in value that quickly. At least you guys were lucky & made a decent profit.I was looking at a website about Ventura area & their houses basically doubled in price from 2000 to 2005!!! I was stationed in Ventura county from 2002-2003 & I remember hearing from quite a few Californians that either they or their relatives were leaving the state & moving to AZ or NV b/c of the rise in prices. I'm definitely not an expert (that's why I posted the question in the first place) but it seems to me that if the housing prices rose that fast by that much & if enough ppl begin to leave the state & stop buying houses that the prices will drop eventually.....even if by a bit.

I have another question.....if my husband & I make around $100,000 when we move out there do you think that we can afford to buy a decent house (i guess in ventura they're about $600,000) while maintaining a comfortable living? The realtor I talked to said we could but I'd like to get an opinion from a cali homeowner.

thanks so much for you help!!!

LydiaNN · Apr 12, 2006

That's crazy how much houses increased in value that quickly. At least you guys were lucky & made a decent profit.I was looking at a website about Ventura area & their houses basically doubled in price from 2000 to 2005!!! I was stationed in Ventura county from 2002-2003 & I remember hearing from quite a few Californians that either they or their relatives were leaving the state & moving to AZ or NV b/c of the rise in prices. I'm definitely not an expert (that's why I posted the question in the first place) but it seems to me that if the housing prices rose that fast by that much & if enough ppl begin to leave the state & stop buying houses that the prices will drop eventually.....even if by a bit.
I have another question.....if my husband & I make around $100,000 when we move out there do you think that we can afford to buy a decent house (i guess in ventura they're about $600,000) while maintaining a comfortable living? The realtor I talked to said we could but I'd like to get an opinion from a cali homeowner.
thanks so much for you help!!!

If you have good credit and will qualify for a low interest mortgage, yes. I know other people who make about that and have bought homes in the same price range. Obviously, putting a nice chunk down will help, too.