Is The Housing Bubble Going To Pop???

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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?

Specializes in OB, Cardiac.
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.

That's definitely reassuring.

You're awesome! Thanks for all the speedy & honest replies!

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Hi there,

Here is a latest news from MSN in regards to " Housing Bubble". Please check this out . http://realestate.msn.com/buying/Articlebankrate.aspx?cp-documentid=421682&GT1=8012

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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!!!

My advice would be to take your time. If you need to move sooner than later ... you can rent a house, sometimes for a lot cheaper than if you buy ... depending on the area. Even if prices start to fall, it can take a couple of years before the drop shakes out and you don't want to get into a negative equity situation where you've bought cheaper, but not as cheap as you could have.

The market is just starting to turn right now and, it does pay off to take your time and learn as much as you can before you make such a big investment.

:typing

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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 and your husband make 100K, then yes, you should be able to afford a home.. depending on your other debt. We own a home, and I am able to stay at home with the kids, go to school, etc, however we don't really have any debt. We have a very small car payment. If you were to add a large mortgage, large car payment, daycare, eating out, credit cards, etc, then you might not be able to do it.. Would your salary stay the same, or would both of yours increase (you don't have to answer.. just something to keep in mind)

Good luck!

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Hi, i'm a nurisng student and p/t real estate agent. Dont worry about any bubble bursting anytime soon. The demand very much surpasses the supply . It's still a good time to buy believe it or not. Property values are still increasing every month, not as drastic as the last couple of years but it's still going up and people are still buying!

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Hi, i'm a nurisng student and p/t real estate agent. Dont worry about any bubble bursting anytime soon. The demand very much surpasses the supply . It's still a good time to buy believe it or not. Property values are still increasing every month, not as drastic as the last couple of years but it's still going up and people are still buying!

Well ... I made the mistake of following this same advice right before the crash of '92. It took years for the value of my first home to return to the price I paid for it. A negative equity situation is not much fun. Especially if you need to move and can't sell your house without taking a huge financial hit. Markets don't go straight up ... they go up and down.

Prices haven't dropped yet, but all the warning signs are there. The number of California home sales is down 12 percent from last year so demand is, in fact, decreasing. Inventory is up, foreclosures are up, homes are taking longer to sell.

Mortgages rates are up, which increases borrowing costs and deters people from paying higher prices. And the fed is expected to raise rates again next week. Only one in seven households can actually afford to buy a home in California.

Some realtors have been on local radio saying the market is slowing down and that it's becoming a buyer's market. There's also numerous news articles indicating the same:

http://www.latimes.com/business/la-fi-default3may03,1,4444967.story?ctrack=1&cset=true

http://www.sacbee.com/content/breakingnews/story/14245816p-15063867c.html

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2006/04/20/BUGV1IBT0D1.DTL&hw=dataquick&sn=002&sc=662

http://www.latimes.com/business/la-fi-homes19apr19,1,3674552.story?coll=la-headlines-business&ctrack=1&cset=true

http://www.ocregister.com/ocregister/money/homepage/article_1108944.php

Just take a look around. There's some houses for sale in in my neighborhood that haven't moved in months. IMO, this is probably the worst time to buy. You could easily pay too much just before prices start to fall and end up in a negative equity situation.

:typing

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I have lived in san Diego for many years on and off and in 1995 it was difficult to sell our 2 bedroom condo in Mission Valley so we finally just rented it. Back then, my real estate agent said that San Diego real estate goes in 10 year cycles so even though we are a little over that time frame, I believe there is going to be a strong correction. I don't believe what the real estate agents say since they just want you to buy a home and not wait. I myself am going to wait and see what happens this summer with the housing market and then go from there. FYI- If you look on the MLS listing, there are many homes that have been on the market for 100+ days and that's not including the homes that have been taken off the market like in my neighborhood of Carlsbad. Therefore, I think waiting a couple more months may give more direction in relation to this crazy housing market.

All the Best

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Specializes in O.R., ED, M/S.

Homes sales might be down but that doesn't mean demand has slipped. All this means is people are being squeezed out of the home market because of the hight prices. Interest rates are going up, I think 16 times in the past 2 years, and this means even more people will be left out in the cold. Housing prices are leveling out but at a still ridiculously high number. It is still hard for people to come up with 20% down, which could mean many, many thousands of dollars. Interest only mortgages are a real danger for people who are going to stay in their homes more than 3 years. That sudden doubling or even tripling of your monthly payment could lead to a heart attack! Suzie Orman, a very smart woman, has always preached against these types of mortgages, but if that is the only way to get into a home, just be aware of the dangers. I have always owned my homes, the past 30 years, and have alot of sympathy for those out there that don't but want too. I am very lucky that I bought my second home 9 years ago at a very low price that has trippled in price since. I KNOW that if I was to sell now it would be very hard for me to buy anything comparable to what I have now.

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Specializes in OB, Cardiac.
Homes sales might be down but that doesn't mean demand has slipped. All this means is people are being squeezed out of the home market because of the hight prices. Interest rates are going up, I think 16 times in the past 2 years, and this means even more people will be left out in the cold. Housing prices are leveling out but at a still ridiculously high number. It is still hard for people to come up with 20% down, which could mean many, many thousands of dollars. Interest only mortgages are a real danger for people who are going to stay in their homes more than 3 years. That sudden doubling or even tripling of your monthly payment could lead to a heart attack! Suzie Orman, a very smart woman, has always preached against these types of mortgages, but if that is the only way to get into a home, just be aware of the dangers. I have alwayd owned my homes, the past 30 years, and have alot of sympathy for those out there that don't but want too. I am very lucky hat I bought my 2 homes 9 years ago at a very low price that has trippled in price since. I KNOW that if I was to sell now it would be very hard for me to buy anything comparable to what I have now.

Do you have to put 20% down??? I know the advantage is that you lower your monthly payments but does it qualify for really good loans or something? We've never bought a house so I know nothing of this stuff. thanks

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Specializes in Case mgmt., rehab, (CRRN), LTC & psych.
Do you have to put 20% down??? I know the advantage is that you lower your monthly payments but does it qualify for really good loans or something? We've never bought a house so I know nothing of this stuff. thanks
If you make a 20 percent down payment, the beautiful thing is the fact that you avoid monthly PMI payments (private mortgage insurance).

If you put less than 20 percent down, the mortgage lender considers you a higher risk for defaulting on the loan; therefore, you are forced to make a monthly PMI payment to protect the interests of the lender if your down payment is less than 20 percent. There are 2 ways to avoid PMI: a 20 percent down payment or a piggyback loan (i.e. second mortgage) for 20 percent of the cost of the house.

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Specializes in OB, Cardiac.
If you make a 20 percent down payment, the beautiful thing is the fact that you avoid monthly PMI payments (private mortgage insurance).

If you put less than 20 percent down, the mortgage lender considers you a higher risk for defaulting on the loan; therefore, you are forced to make a monthly PMI payment to protect the interests of the lender if your down payment is less than 20 percent. There are 2 ways to avoid PMI: a 20 percent down payment or a piggyback loan (i.e. second mortgage) for 20 percent of the cost of the house.

How much does PMI tend to be????

Thanks for this info!!!

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Specializes in O.R., ED, M/S.

You would have to have exceptional credit with a FICO score probably above the 750 mark. The 20% is a point where lenders can judge your worth. Can they or can't they come up with 20%? That tells them alot about your stability.

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