Rent or buy? O.C. cost gap sharply narrows

March 30th, 2009, 12:02 am · 81 Comments · posted by Jon Lansner

Have local home prices fallen to a point where the buy-or-rent math sides with the house shopper?

Since everyone’s situation is different, it’s always tricky math in any climate. But my trusty spreadsheet — and data embedded in my Big Orange Index — tells me that the home payments generated by recent homes purchases when compared to a benchmark of local rents look as favorable for ownership as they have in the two decades of housing data I’ve collected.

The local math I’m watching …

Estimated mortgage payments from DataQuick. These number crunchers go in and estimate — based on the terms of mortgages that are public — what each borrower’s initial house payment may be.

What I’ll call “actual rents” at large apartments complexes, provided by several firms, most recently by RealFacts. This is average rents discounted by the amount of vacant apartments, reflecting what new tenant may be able to get.

[ TWEET THIS! CLICK HERE ]

When you compare the two house-cost barometers, as the accompanying chart shows, you see house payments running double local rents during the late 1980s housing boom. During the ensuing bust, house payments ran roughly 1.7 times rents until 2002. That’s when insanity took over.

This ratio then skyrocketed to a point where house payments were 2.5 times rents — as home prices soared and rents moderated because so many folks could buy thanks to easy money. Landlords had trouble keeping their projects filled.

Of course, know what came next. Home prices tumbled as incomes couldn’t actually pay the lofty house payments. Rent stayed strong — until very recently — as renters who in other times might have been buyers decided against purchasing depreciating homes.

So here we are, in early 2009, with house payments roughly 1.6 times rents — the same low ratio we saw in 1999 when the previous home rally began to brew and in 2002 before house prices explode far higher.

So does this guarantee a quick revival of homebuying?

Probably not.

One, people are still scared of leaping into house buying, with its dubious recent track record as a maintainer of value.

Two, skittish bankers are making it tough for only but the overly qualified shoppers to get loans.

And, three, folks are rightfully scared about medium-term employment predictability.

Nevertheless, this math joins a series of report of increasing local home affordability:

One can presume that if and when confidence is restored to shoppers and bankers alike, the renewed affordability is part of the foundation for a recovery.

Signs of growing O.C. home affordability?

span style=”color: #ff0000;”>Other housing stories …

… in the lending world …

… from South County …

… and Surf City:

You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

See blog content by category ...

bloodinthestreets says:

March 30, 2009 at 12 am

It is just as important to consider an updated plot of “dog owners versus cat owners”. It appears that dogs once again are picking up in popularity . .. . as the social stigma of being a ‘cat person’ takes hold .. taking us back to normal trend ratios.

In any case, dog:cat versus time is another source of real-time data that can be used to produce squiggly lines that don’t mean scratch.

sanders says:

March 30, 2009 at 1 am

this graph and analysis is useless

Tom M says:

March 30, 2009 at 5 am

Why are there so many empty houses and apartments. I’ve seen so many empty houses for sale, the brokers all have the story that the owner was relocated by his job. I think the only place they where relocated to is the unemployment line and they moved in with relatives.
There is a large surplus out there.

Dina says:

March 30, 2009 at 6 am

I have seen some amazing rentals that are still less than purchase (amazing). However it is spring and people get the spring bug to buy. Me included.

Gunner says:

I reported this on this blog last week…as usual, the news is always late. So, if you are reading it, it is too late to capitalize on it. As such, the house value bottom was a few months ago which will be reported this summer. If you are waiting until then to purchse, it wll be already too late.

The Money Pit says:

March 30, 2009 at 7 am

Too late to purchase!!! That is SO funny!!

Wave after wave of foreclosures coming and it is too late to purchase. Uh, yeah, with a liar loan, exploding ARM of whatever, but not with a 30 year fixed with a nice down and solid income.

Wake up!! Real home prices are going nowhere for 20 years!! The party is OVER!!!

gunner MSNBC reproted this morning that things are still going to get worse. Do you have crystal balls?

Nikko Misataura says:

Would you buy a Toyota Camary for $127,000? if you answered yes.. buy a overpriced Orange County home for $898,000+.

Tom M- the smart rats are jumping the sinking ship of the S.S. California

Jimmy2 says:

So many make the argument it is smart to rent. However, did you notice the majority of landords are very wealthy? This is what the register should report. This is the only metric that matters. Landords = wealth, Renters = poor.

BOGEY says:

More inventory on the way…..
.
Defaults Rise on FHA-Insured Mortgages:
.
The FHA’s share of the U.S. mortgage market soared to nearly a third of loans originated in last year’s fourth quarter from about 2% in 2006 as a whole, according to Inside Mortgage Finance, a trade publication. That is increasing the risk to taxpayers if the FHA’s reserves prove inadequate to cover default losses.
.
A spokesman for the FHA said 7.5% of FHA loans were “seriously delinquent” at the end of February.

SC2 says:

March 30, 2009 at 8 am

My cost of renting is 50% less than cost of comparable townhome.

dafox says:

jimmy2-

do me a favor: run the numbers between a purchase price of $1.4M and a monthly rental of $3800/mo.
please use historical norms of appreciation/rent increase.

Those are both true numbers from downtown HB. Identical houses.
This may help you: http://www.nytimes.com/2007/04/10/business/2007_BUYRENT_GRAPHIC.html

Which is a smarter move?

Kevin says:

Rents have dropped significantly as well. Also factor in that people are being laid off in droves and that doesn’t bode well for affordability. People just don’t want to sign up for such a huge commitment with so much uncertainty still looming and not to mention that they don’t want to give up what little savings they have to put down on their house.

To paraphrase Clara Peller “Where’s the Jobs?”

dafox, why are so many landlords so wealthy? Because of the foolishness of renters.

Another Jimmy2 FAIL, LOLLL!!
.
I’m enjoying your charade though. Carry on….

Property tax and HOAs alone for a moderately priced townhome pay 5-6 months of my rent.

Unemployment skyrocketing, retirement accounts ruined for many. Oh yes, RE recovery right around the corner… Titanic.

My rent for a new place: 1700. Net cost (considering tax write offs) of comparable townhome: 3000. More expensive townhomes make the situation even worse. Home “owners” continue to see their equity evaporate with each new report.

speculator/day trader says:

Crystal Balls Says:
March 27th, 2009 at 3:51 pm
All you extreme bears out there, who think we are going back to 1998 prices (or before), I want you to ask yourself two questions: First, would you like prices to go that low so you can buy a home you want? Second, is it possible your personal desires are influencing your judgment to create unrealistic expectations? If your answer to the first question is “yes”, then I would say you can’t really trust your answer to the second question.

———————————————

All you extreme bulls out there, who think we are at the bottom (or close), I want you to ask yourself two questions: First, would you like prices to stop going down so you can maintain an artificially inflated “value” on the debt trap you call a house? Second, is it possible your personal desires are influencing your judgment to create unrealistic expectations? If your answer to the first question is “yes”, then I would say you can’t really trust your answer to the second question.

As a side note: WASHINGTON (AP) — The National Association of Realtors reports that sales of vacation homes and investment properties slid 30 percent last year as tough economic conditions and tight lending requirements shut out buyers. Hmmm. banks actually looking at income? Not good for short term RE recovery.

Shannon says:

Save your money renters. We still have another 20-25% drop to go and after that another 3-4 years before house prices start moving at a rate on average 3% a year. Back to basics.

Eat it in the OC says:

March 30, 2009 at 9 am

I don’t know, I saw that there was a run on tents on sales at Sport Shalet (a pending bankrupcy). I wonder if they are buying tents in anticipation of camping out for the house lotteries this summer? Or maybe it could something else? Has anyone heard anything in the news about a California Depression? Aren’t we something like the 7th largest economy in the world? Don’t we have a huge budget deficit? Aren’t there huge numbers of empty tech and office buildings? Aren’t retail sales way lower? Aren’t home sales still off by 41% compared to historical values? Aren’t there more distressed sales than organic sales? Isn’t Gunner a complete idiot?

no worries says:

Lasner,

Man these sort of articles are frustrating. Where is the actual data?

Are you saying that rental parity has been reached across the board? Well you’re saying that, but that’s obviously not true and you know it.

Comparibles to apartment type rentals, ie. low end condos with few individual amenities, like a garage, yard, washer/dryer, etc, HAVE probably come very near to rental parity, and maybe even crossed it in the less desirable areas. If this is your target home, renter, then consider jumping in!

However, for those of us who actually want HOMES in neighborhoods with decent schools, its still far cheaper to RENT someone else’s depreciating “investment”. The prices of those homes have not reached rental parity.

lee in irvine says:

Notice on Lansner’s chart, rental parity stayed in check for more than a decade (1991-2003), then exploded when Ponzi scheme financing became prevalent. I expect rental parity to overshoot to the downside, and then remain in check for at least another decade, but this time rents are gonna decline.
.
The problem is very simple, incomes in the OC are declining, we have more net outflow migration, and OC residents are not going to pay as high of a percentage of their incomes for housing anymore … that includes mortgage payments, and rents.

I was trying to think of a good analogy over weekend for the situation we’re in regarding the cycle of real estate prices. The one I came up with is this: Say we are all fishermen (and women) and we all own our own boats. There a huge storm blowing in and the Bull Fisher’s go out in their boats to fish, thinking the storm will let up any second, saying that they are going to get all the fish and there won’t be any left. Well, all their boats sink and when the storm passes, the Bear’s happily fish in clamer waters while the Bull Fisher’s boats rot at the bottom of the ocean. (actually in this analogy the Bull Fisher’s would be telling other people it’s a good time to go fishing and that they get a commission for telling them it’s a good time to go fishing).

anon says:

March 30, 2009 at 10 am

Rents are now falling as well. To bring the ratio to historical norm would mean prices have further to fall. Other metric like price-to-income should also be considered to gauge how far prices have to down for the housing market to stabilize.

sunsetbeachguy says:

1 word

OVERSHOOT

Dealtracker says:

It’s going to be an ugly spring on these boards.

rants says:

March 30, 2009 at 11 am

hey lansner- has it occured to you that price deflation will affect rents just as it has done to home prices? as rents fall house prices chase
them down– the employment situation- in case you havent noticed- is getting WORSE not better- will the owners of rentals let them sit vacant
or lower their rents to get tenants?uh oh uh well duhhhhhhh
-
defaults of FHA loans skyrocket– why? oh thats right people who lose
their incomes cant afford to pay over-priced mortgages– just follow
the bouncing ball of the deflating debt bubble
-
http://online.wsj.com/article/SB123840821794969275.html
-
just like the cnbc stock “analysts” who called a bottom for stocks last week were DEAD WRONG- the permafool realtors who called a bottom for real estate will also proved to be DEAD WRONG

Crystal Balls says:

Speculator/Daytrader — That was actually kind of clever turnabout. However, I find it hard to agree with the premise that anyone who thinks we are close to a bottom is an extreme bull. We have already had historic price drops. Several commentators have observed that price to income levels have reached historical norms. We may well still be going down, but the belief that we may be near a bottom is hardly a position that is extreme as believing we will hit 1998 prices. Prices in 1998 were themselves very near the bottom of a prior price cycle. Inflation along since that time would dictate far higher prices even if the bottom was the same. Median incomes are probably 50 percent higher . . .

meltdown says:

Excellent chart! Nice work.

hwood says:

CRYSTALL BUST MY BALLS
I THOUGHT WE VOTED YOU OFF THIS BLOG SEVERAL TIMES…… PLEASE GET OFF AND STAY OFF YOUR IGNORANCE DOESNT WORK HERE

March 30, 2009 at 12 pm

hey crystal- its called debt deflation- the stock market is at 1998
prices- the stock market is the ultimate barometer of the overall
economy as it reflects our ability to produce real things that
create wealth- the stock market reflects the economies ability
to support prices for things like- uh- houses- now explain to me again
why 1998 prices are a far stretch

March 30, 2009 at 1 pm

oh by the way- when GM goes BK- which it will- the unemployment
number will just jump to 11.5%- and thats a conservative guess
-
http://www.marketwatch.com/news/story/Auto-failure-could-push-jobless/story.aspx?guid=%7BFBB1CDBC%2DB6B1%2D4591%2D8713%2D4E9202D69BAF%7D

March 30, 2009 at 2 pm

Crystal Balls Says:
March 30th, 2009 at 11:17 am
Speculator/Daytrader — That was actually kind of clever turnabout. However, I find it hard to agree with the premise that anyone who thinks we are close to a bottom is an extreme bull. We have already had historic price drops. Several commentators have observed that price to income levels have reached historical norms. We may well still be going down, but the belief that we may be near a bottom is hardly a position that is extreme as believing we will hit 1998 prices. Prices in 1998 were themselves very near the bottom of a prior price cycle. Inflation along since that time would dictate far higher prices even if the bottom was the same. Median incomes are probably 50 percent higher . . .

———————————————–

I don’t see how believing we will hit 1998 prices is that extreme. We are in a deflationary spiral that will continue for quite some time. During this time unemployment will continue to go up, wages and rents will continue to go down. Median incomes will go down. Mortages will become more and more difficult to obtain. I know it is hard to believe just how much of an effect this deflationary environment will have but I believe it will be devastating. Housing prices will continue to decline until 2011-2012 where they will bottom at 1998 prices max. Probably lower. I know many of you here are not big fans of prognotications but I predicted these numbers in August 2007. I have been right so far as far as the general trend. What were your predictions then and how accurate have you been?

not buying it says:

March 30, 2009 at 3 pm

Folks - this study is based on recent purchases.

recent purchases. Hmmmm. Let’s see - the median is frickin below $400K!!! That means if you buy a home today in the bottom third of home values - you will still be making a payment that is, on average, 1.6times higher than rent.

So - lets hear from the brain trust that thinks that same measure applies to homes above the $550K mark and I will call you an outright liar before you get a chance to even post such nonsense. Data in hand - yes siree - paid for - home sales in $550K+ sector are still well above 2X rent. - I am sure Lansner could concoct a subset of numbers from his data that would prove the point.

Don’t you know this OC RE market is MANY micro markets? Many of which have yet to fall accordingly?

But - don’t let me talk you out of buying. But I sure as hell have no intention in partaking in the bailouts of 2010 and beyond to save your arse!!! Buy what you can afford comfortably and you will be OK. Buy with increased risk and DON’T ASK FOR BAILOUTS!!! Just walk away and maintain your frickin’ dignity.

It is clear that bottom has hit in many areas in the sub $450K range - so if that is your price segment - then I would advise you go out and look. Stay tuned for a few more percent price drops - maybe more - depending on location. It takes work to find a GREAT DEAL on a home - go see 20 before getting serious - do it over 2 to 3 weeks. Great deal as defined by lower risk of further substantial price drops. Yes - bust your arse and you will get a deal. Anyone looking above that price segment - wait to see what happens in the next few months as a few more high tech firms start laying off salaried professionals. Not to mention short sales in this price segment has gone thru the frickin’ roof!! You can say they are foreclosures to be. The bailout help does nothing for anyone that is underwater by more than 5% or 10% tops!!

RE agents are not as dumb as many think (their brokers are actually quite savvy in persuading OC-ians)- they know how to leverage some data to make all RE look like a great buy. DO NOT BE FOOLED!!!

King says:

Rent vs. own Analysis makes no sense when values are depreciating 30% a year. The monthly savings is minimal when compared to the impending depreciation loss. Don’t risk your hard earned and saved money. There is absolutely no urgency to buy.

shockg says:

March 30, 2009 at 4 pm

Rents do not have to be equal or higher than buying for fence sitters to make a move. As the gap closes they will buy once it make sense to the individual buyers needs….not Rants, Bill and Not Buying Its needs/wishes.

March 30, 2009 at 5 pm

A. A home at $500,000 is at rental parity today, nothwithstanding gasbag protestations; and

B. The chart is evidence that rental parity has never existed in Orange County in the past.

March 30, 2009 at 6 pm

The average price of 3/2 homes sold in Aliso Viejo in March 2009 was $417,715

The cost to own:
80% loan = $334,172.00
PI @ 4.5% = $1693.20
Taxes = $348.09
Ins = $50.00
Monthly payment = $2091.29

The average lease (asking) price on a 3/2 in Aliso Viejo today = $2321.00

The average price of a 3/2 leased in Aliso Viejo in March 2009 was $2208.00

Now, how much is that report you paid for really worth? I’m sure you’ll cherry-pick some outliers, but these numbers are based on several hundred transactions and are ironclad.

“That means if you buy a home today in the bottom third of home values - you will still be making a payment that is, on average, 1.6times higher than rent.”

No it doesn’t. It means you will get a house instead of an apartment.

hwood, I’m not particularly interested in the opinion of someone who hasn’t figured out how to unlock capital letters on his computer.

Orcian says:

Gunner/shockg/jimmy2/thoughtful/provider/brad/dealtracker/truthi, etc, you have a one-track mind. Renters on this blog have one main concern: to buy when the timing is right for them. Your concern, on the other hand, is for renters to buy when the timing is right for YOU. If you were honest, you’d admit you don’t give a darn how much in debt we get into, as long as we buy, and buyers buying benefits YOU. I haven’t seen such nonstop selfishness in a long time.

By the way, please stick to one alias. It gets harder and harder to remember all of them, but they are all you.

Nobody gives a ratsass how many years you rent for. You are not the market. Few seriouc buyers waste their productive hours ranting on message boards. We’ll say anygodamnthingwewant.

March 30, 2009 at 7 pm

Dealtracker: Not sure if you can read well - but I’ll try and elaborate. Rental parity is closest in the less than $500K price range - hence the reason for the median, which is a direct result of the steep price declines in that sector, but more importantly, is the price range that most buyers feel comfortable to be in.

Whether you prefer buyers do so or not, they ARE limiting their borrowing to 3.5X income. Which will severely limit any chance of the $550K market to rebound anytime soon. Why? because it takes more than just a $135K a year salary to service that kind of debt and live a comfortable life in the OC with a family.

Now if lending standards change such that great rates can be had for loans above $417K without the additional risk associated with adjustables, then you will see the time to buy begin to approach - at least for that price sector. But common sense always doesn’t work well with you when it spells further price declines, so I might as well stop trying to discuss such points with someone who has no intention of discussing something they cannot argue against. Facts are simple.

Lastly, where is your evidence that 1.6X rental parity is the same between the $500K+ market and the sub $500K markets throughout OC? You do understand that a few data points in a couple of towns is only evidence that (1) some realtors still practice the tactic of pricing homes very low in hopes of starting a bidding war and (2) you are willing to use anything to attempt to paint a picture that is not even close to being remotely true.

The facts support this position so well it isn’t even funny. Do you honestly think people prefer to live in cheaper homes? They buy what the lending standards allows them to afford. Go ahead and show evidence to dispute that. Something tells me you prefer to throw names around and whine like a little punk instead.

If you only dropped the emotion and fear, you would at least attempt to address my points straight on. Go ahead and elaborate. Dear God - you spend more time on this blog than I and I can write a frickin thesis before you even come close to making a sound point. Good luck with the twisting neurotransmitters floating around that head of yours.

Your points are irrelevent. There is no high-end rental market, per se. Never has been. Never will be.

“Whether you prefer buyers do so or not, they ARE limiting their borrowing to 3.5X income. Which will severely limit any chance of the $550K market to rebound anytime soon. Why? because it takes more than just a $135K a year salary to service that kind of debt and live a comfortable life in the OC with a family.”

This is a nonsense position. There are plenty of couples who make more than $135,000. That’s two $65,000 salaries. There are also plenty of people who can put down way more than whatever it is you used in your example. Twenty percent of $800,000 is only $160,000. It is extremely common to see down payments well in excess of $160,000.

Now, big man on campus, why don’t YOU address a point for once?

“Dear God - you spend more time on this blog than I and I can write a frickin thesis before you even come close to making a sound point. ”

Hahahahahahaahahahah. Hahahahahaahah. Hahahahaahahah.

Dealtracker: first off - if you felt buyers did not read this blog you wouldn’t be posting here like you do. You put 10 times the amount of time into this blog as I do.

Second, what was the average loan rate in March 2009? Was it 4.5%. HELL no.

Second - I already stated that I am specifically referring to the $500K+ market and you go ahead and attempt to compute rental parity based on the average (or is that the median?) price of homes sold - which further supports my position anyway since the damn average is $417K - hell the price of the conforming limit - and you forgot to note that it takes a hell of a lot more research to establish rental equivalent.

Lastly, 3/2’s that have sold and the 3/2’s that are rented out can have as much as $200K between them in real home values. We all know that. What is the average price of ALL 3/2’s in AV on the market today? What is the range? try and try as you may - but your mangling of the data just doesn’t work. How many 3/2’s sold in AV in March? How many are on the market today? What is their average price? median? Come on - you picked the town, I want to see your data. Prove me wrong.

Who should the readers believe? Lansner’s research team or your two minute calculation? I am not even asking them to go by my rantings. I paid for my research which is very clear and concise. it worked for me very well since living in OC from 1997 - sold investment properties right at the peak in 2006 and made a bunlde in investments the following year. I now own more homes in the OC than I did back in 2006. Talk about proof in the pudding. Buy direct from lender or wait it out for more price drops.

“If you only dropped the emotion and fear, you would at least attempt to address my points straight on.”

And if you only dropped the holier-than-everyone attitude and blind certainty you would at least attempt to address my points straight on”.

HOLY SNAP - you really have lost it.

MANY people are buying $800K homes? REALLY - just how many big guy? Sales volume is still below 3K per month and median is below $400k - let me state that again. THE MEDIAN IS BELOW THE TRADITIONAL CONFORMING LIMIT OF $417K BY OVER $42K!!!

What is the median household income in AV? What the hell is “plenty of people?” Give me something to go on. Yeah - there are plenty people out there that can buy $800K homes but instead are deciding to get a $400k condo instead for their family. We already know that most home purchases are FIRST TIME BUYERS. Come on man - make some sense here. Stop writing like a realtor.

address the points man - address ‘em - head on. or at least admit the spanking - AGAIN

dealtracker - the difference between you and I is I addressed every one of your points!!

What is the average price of ALL 3/2’s in AV on the market today? ($434,482)
What is the range? ($199,999-$669,000)
How many 3/2’s sold in AV in March? (20)
How many are on the market today? (82)
What is their average price? (active = $434,482, closed = $427,389)
Median? (I dunno)

What say you?

What points? I addressed every last pitiful “point” you made. Your turn.

“Buy direct from lender or wait it out for more price drops.”

This proves how little you know. Very few lenders deal with the public, as in none.

You posted a question at 7:39 and go off like a monkey on crack at 7:44?

Dealtracker: “It is extremely common to see down payments well in excess of $160,000.”

Extremely common means more than 50% - or do you prefer hyperbole when trying to write objectively?

How many down payments of that magnitude were used last month?

Hmmm. Seeing the median is $375K - something tells me the median downpayment is somewhere near $70K - if that. Far cry from $160K. The data I have in this report shows less - but I don’t even need to risk legal issues seeing the data readily available already proves you wrong. This is getting fun.

Dealtracker: “Very few lenders deal with the public, as in none.”

How much you want to bet it takes cash, a lawyer and a few signed documents to start buying direct from lender?

Come on man - please bet me something!!! I assume by public you mean people/entities not assoicated with the MLS directly.

“MANY people are buying $800K homes? ‘

Are you frickin’ blind or just stupid? Where did I say that? I said they can and do put large money down.

I see we prefer to stop addressing points again.

“Extremely common means more than 50% - or do you prefer hyperbole when trying to write objectively?’

You’re a moron.

So people are putting down those large sums to buy $375K homes?

You used the words EXTREMELY COMMON when the median is $375K.

Please elaborate for us your reasoning in that statement. Especially when FIXED rates are so FRICKIN LOW!!!

Why are you asking about the median income in AV when homes are not $800,000 in AV? Focus, will you?

March 30, 2009 at 8 pm

AHHHH finally.

The truth comes out. The man can’t argue. Damn! if we were in grade school, this would be the time where you get up, wipe the blood from your nose and run off to the teacher after calling someone a name without realizing your arse couldn’t back up the claim.

BTW - I am only using your words.

No hurt feelings, hey?

It is extemely common to see bid downs where home prices are high. Speaking of high, are you? I will bet you $100 bucks that an average Joe has ZERO chance of buying directly from a bank.

Dealtracker - you must be getting dementia. YOU BROUGHT UP THE $800K!!!

I am asking for you to prove the points that you made with at least some data.

Are you confused accidentally or on purpose?

The truth comes out? I cleaned the floor with you. I brought up $800,000 to demonstrate what an upper middle home would require down. Nothing more. It’s your paranoid delusions acting up again. Address AV, big man, you promised you would. No hard feelings.

That is why the average Joe is buying a home at around $400K - which is still below the $417K conforming - AFTER a DOWN!!

Which is it? The average buyer can put down alot or a little?

playing stupid may work in your head but not on the blog.

I am talking affordability and rental equivalent. You are simply trying to divert attention from the facts and the beating you are taking in this debate. Who taught you that tactic? Gary Watts?

bid downs = big downs

Dealtracker: I see your point. You have ZERO intention of debating the points straight on but feel that the readers of this blog can easily be diswayed by simply throwing cr@p out of your arse onto the blog.

Truth be told - you have been fried.

PEACE OUT!!

“That is why the average Joe is buying a home at around $400K - which is still below the $417K conforming - AFTER a DOWN!! Which is it?”

This is where the foreclosure action is. People are sheepish outside of this slice. That doesn’t mean they aren’t capable. How many posters here claim they are in this demographic? You are drawing flawed conclusions. Take Irvine, for example, the average down is over 300 large.

I answered each and every question asked of me. You have answered none, zip, nada. What about AV? You asked for the data and I gave it to you and then silence.

Answer the frickin’ question!!!!! (my impression of you, do you like it?)

MikeHawk says:

March 30, 2009 at 9 pm

http://globaleconomicanalysis.blogspot.com/2009/03/banks-walk-away-on-foreclosures.html

samson says:

Well, I wanted to comment, but I realized my name isn’t dealtracker or not buying it. I will wait until you guys are finished. No offense, it is an interesting debate.

dubaigirls says:

March 31, 2009 at 1 am

Check out the property market in dubai on http://www.coldwellbanker-ae.com. They also seemed to have really gone down atleast 40%.

April 2, 2009 at 9 am

Dealtracker: so you now know what the buyer domain has the CAPABILITY of buying and prefer to use that unfounded opinion instead of looking at what THEY ARE BUYING AND USING FOR DOWN!!!

Do you try to be stupid and obtuse or does it come naturally?

Were you absent the last 7 years? WHY DID 80% OF ALL BUYERS USE ARMS during the boom years when a fixed rate loan could be had at 5%? To save a few hundred bucks? or to be able to afford the monthly payment.

Our savings rate is PROVEN to be very low, lower than the rest of the nation. Our income/home pricing disconnect is higher than most other metro areas. WHY DO YOU THINK WE ARE STILL CONSIDERED HIGH RISK?

Talk about missing the points. And if you think I have not addressed every one of your points, you are an outright liar proven right here in front of everyone’s eyes.

Now address these points I presented here; thank you.

I will return again in a day or two. Got a business to run.

“Talk about missing the points. And if you think I have not addressed every one of your points, you are an outright liar proven right here in front of everyone’s eyes.”

Answer the frickin’ question! You are deeply, deeply delusional and a big ole’ hypocrite.

Slice	Price	Ch.	Sold	Ch.
House	$500,000	+18%	1,833	+11%
Condo	$290,000	+7%	881	+22%
New	$617,500	+24%	171	-17%
All OC	$435,000	+10%	2,885	+12%

Orange County Register