Wild guess sounds about right. Is 3-5 years based on anything other than wild guess, or shall we say, wild wish? If you can predict what will happen in 3-5 years, you can be a very rich man.

>>The moral of the story? If your home is in the 700,000-1.4M range, sell while there is still money left in the system.

This is the range 90% of the people are looking to buy in. This is where most of the dmand comes from.

Looks like advertising on burbed is working after all!

If I bought that house I’d start an airport shuttle service and change people $20/day to park on my front “lawn”.

My best wild guess is that it will take years for this to occur. It will be 3-5 years before it starts hitting the bulk of the homes that are currently “valued” at greater than 1 million.

I believe the above timeline is consistent with past retraces of real estate values.

The moral of the story? If your home is in the 700,000-1.4M range, sell while there is still money left in the system.

What do you think?

It’s hard to tell.

ACS 2007 data says that about 85% of the households have incomes under $200K. So one can infer where support for a floor will occur in the “worst” case.

However, the distribution of incomes is not uniform, so the support may be higher in towns with higher incomes.

But even the above is not clear since a town with lower incomes but residents who bought further back in time (at lower prices) may have fewer price-drop causing foreclosures (assuming the residents didn’t tap HELOCs) than one with higher incomes but heavier leverage.

Information about income distributions of towns is readily accessible but leverage levels are only available per home. I have not found aggregate statistics for the latter (and don’t care to aggregate the individual homes’ data myself).

Consequently, it’s conceivable that areas which currently have high home prices may not have many people who can’t afford their mortgages even though the amounts may vary dramatically from one home to the next.

In the last case outline, it would take other factors such as the loss of jobs in the area, drop in prices in a neighboring area, etc. to cause the price of such a locality’s homes to drop.

High priced towns in the Bay Area are close to tech companies, many of which have substantial markets overseas which generate increased revenues when the dollar drops in response to economic malaise inside the U.S. (as de-leveraging in the financial system continues).

At the end of the day, the direction will depend on the exact mix of each of the above (and other unspecified) factors. I haven’t seen any analysis that accounts for enough of the variables for me to believe its conclusions so far.

I know it’s good income. I live quite comfortably and I have a lot of nice things including a brand-new piano. But it’s a long way from buying a house. If the downturn isn’t severe enough to put me in the ballpark, I might wind up buying a townhouse so I can pay it down and then trade up later.

Name, keep in mind that sonorrat is also working two jobs in order to make that income. While he is doing alright for his age, there’s no doubt that he’s working hard for it.

With respect to your last statement, I think similarly. I believe that the collapse in value will slowly work its way inward (upward in the price range) as home owners no longer have ‘stored’ equity to ‘unlock’ and trade up to another home as many are taking substantial hits. In the past 10 years, myriads of people had large amounts of stored equity which they could couple with easy money loans to trade up. Now, many will be faced with tougher lending restrictions and large losses sustained on their entry level property. My best wild guess is that it will take years for this to occur. It will be 3-5 years before it starts hitting the bulk of the homes that are currently “valued” at greater than 1 million.

The moral of the story? If your home is in the 700,000-1.4M range, sell while there is still money left in the system.

What do you think?

$1,435,000 to $3,250,000 this year, failed to go up 4 times (which would make it a around 5.8M).

Palo Alto gets it better especially the cheap end of ’88/’89

http://www.redfin.com/CA/Palo-Alto/1121-Parkinson-Ave-94301/home/1492974
http://www.redfin.com/CA/Palo-Alto/1050-Fife-Ave-94301/home/1556224
http://www.redfin.com/CA/Palo-Alto/316-Waverley-St-94301/home/878885

From the chatter around here, you may not realize it but $50K at the age of 25 is good income. For example, in the 2000 census, the median *household* income for a householder under 25 in the SF Bay Area was $32K and the median for age 25-34 was $61K. This can be verified using: http://factfinder.census.gov

There is a big difference between San Mateo and Santa Clara county incomes at your age. If you consult the 2007 American Community Survey (accessible through the same site, or go here directly: http://factfinder.census.gov/servlet/DTGeoSearchByListServlet), you’ll find that median household income for those under 25 in San Mateo is $50K +/- $10K but in Santa Clara it is $37K +/- $6K. However, the difference is no longer present in the age group of 25-44, with median household income being about $92K +/- $3-4K in both counties.

Also, keep in mind that prices are dropping dramatically in the periphery. For example, the home mentioned for $275K in post #25 above was bought for $550K in 2006 and $370K in 2002 (according to PropertyShark records). Also, it was previously assessed at $43K. WillowGlenner mentioned that it would have sold for $90K before the bubble. It remains to be seen what the impact will be on the fortress towns, though it is perfectly conceivable that the drops in price will gradually move inward over time.