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Replies (25)
- Rooski2u
- Contributions:200
So...............does that mean since I bought my California house 3 months ago for 50% off peak, I'm cool? Or am I still an idiot?
- space_acer
- Contributions:4311
What part of California are you refering to ?
- klarek the realist
- Contributions:7044
This doesn't surprise me. I now believe the backlash from the bubble will in fact put home prices in some regions below the "fundamentally supported levels" we have been looking for. That means that I expect the trend on Case-Shiller's index to go below its 110 marker. It's happened before.
- Randy_H
- Contributions:4385
Probably Richmond.
- Rooski2u
- Contributions:200
"What part of California are you refering to ?"
City of Riverside, of course. Where else would values be so reduced, so soon? ;-)
- silent_observer
- Contributions:1603
space, how in the hell you are taking predictions from a firm which completely missed the bubble and placed wrong bets. *They don't know what they are doing*.
- Walters Consulting
- Contributions:1661
Oh yeah sure.....national CA prices on average could drop as low as 50% from peak....this is news?
- space_acer
- Contributions:4311
how in the hell you are taking predictions from a firm which completely missed the bubble and placed wrong bets. *They don't know what they are doing*.
Consider it a CONFESSIONAL! The 50% correction was already posted here long before recent LB comments. More and more we are seeing what was considered impossible slowly coming to past. Yep! the talk of a 50% decline in CA is getting louder ! No surprise to me!
- space_acer
- Contributions:4311
Where else would values be so reduced, so soon?
LOL! in the end lots of places will see values reduced and sooner the better!
http://www.housingbubblebust.com/OFHEO/Major/SoCal.html
Hope you purchased at 1998 prices (plus inflation, 30%) or around that number ?
- PacificBlue
- Contributions:37
Riverside is still going down.
- Rooski2u
- Contributions:200
"Riverside is still going down"
As a whole, but it's certainly not a "storewide" half off sale, yet.
- Rooski2u
- Contributions:200
"Hope you purchased at 1998 prices (plus inflation, 30%) or around that number ?"
Umm........ personally, I think hoping for 98 prices is really pushing it, even for Riverside.
- Vermal
- Contributions:10
This thread is such a garbage. Lehman brothers does not have the credibility to predict things.
- Jimmy38
- Contributions:234
Hope they keep dropping! They have a long way to go to be close to the pre-bubble prices. Who the heck would want to pay even today's prices? They could even drop lower than that to get our economy back up and strong.
- oldnavajo
- Contributions:381
The day the median price of a house in Ventura, calif hits $250,000 I'm going out and buy 4 or 5 of them retail. Maybe I'll pay a little more per house and buy 3 with ocean views instead.
- Vermal
- Contributions:10
And when my dream car lamborghini drop by $25,000 I'll buy 10 of them.
- space_acer
- Contributions:4311
personally, I think hoping for 98 prices is really pushing it,
Oh you be surprised how much prices can fall... back in day your area of SoCal saw deep price declines of 40%... it can happen... 1991 prices tanked back to 6 year lows... yep! circa 1985-86!
Do I expect home prices to fall back to 1998 ? no but add inflation 30% and we may get there...
- mrfnuts
- Contributions:1386
Vermal, please post a couple more times. For a momment I thought you were !belladoomercrazynighmarecheapskateguy!, but, since your English actually seems to be on par with a typical Jersey middle school, you could be a new Alpine alias.
Please, keep posting! I love a good mystery.
- NTETS, "Mr Caveat"
- Contributions:6436
1) they are a 150 year old firm that has as much responsability for our country being what it is today as ford or GM. THEY KNOW WHAT THEY ARE DOING.... doesnt matter how bad they screwed up!
2) i find it interesting the way they said it... our base assumptions, they take it for granted that prices will fall at least that far...
3) keep in mind that CA, AZ, FL, NV account for enough of the overall mortgage value that a 50% correction by itself would bring the average home price way down... if they collapse on themselves with 50-70% price declines the rest of the country could fall 10-15% (and less in the parts of the country where the median is less than 100k) and the market would still react that way
- silent_observer
- Contributions:1603
NTETS, they are not 158 years old but 14 years old. read this story. it is a good one about how many bad moves they made.
- space_acer
- Contributions:4311
Yep! they been around for a hell of a long time alright...The impact LEH had over the global finance for so many years cannot be ignored. Its a shame to see firms like Lehman and Sterns go under. You can say the same about Hewlett Packard , AT&T or IBM as well only a 10 year old firms or so considering what there markets are today ... but they been around for a very very long time and started in different industries.
http://en.wikipedia.org/wiki/Lehman_Brothers
Lehman Brothers Holdings Inc. (NYSE: LEH), founded in 1850, is a diversified, global financial-services firm. It is active in investment banking, equity and fixed-income sales, research and trading, investment management, private equity, and private banking. It is a primary dealer in the U.S. Treasury securities market. Its primary subsidiaries include: Lehman Brothers Inc., Neuberger Berman Inc., Aurora Loan Services, Inc., SIB Mortgage Corporation, Lehman Brothers Bank, FSB, and the Crossroads Group. The firm's worldwide headquarters are in New York City, with regional headquarters in London and Tokyo, as well as offices located throughout the world
- space_acer
- Contributions:4311
And when my dream car lamborghini drop by $25,000 I'll buy 10 of them
Why not settle for a 1980s FERRARI 308-328... they are going for under $25K
or a Testarossa for under $50K...
LOL! yes there was a Ferrari "bubble" back in the 1980s as well.
- oldnavajo
- Contributions:381
Space wrote "yes there was a Ferrari "bubble" back in the 1980s as well.
You are correct, there was. I don't follow Ferrari's but I'm familair with that happen to Jaguar XKE's. They lost 50% of their value and in some cases more. In fact I just checked this morning and they are now at the same record level that they were in the late 80's bubble period. That's in absolute dollar amounts so if you figure in inflation they still have not recovered by a long shot. This is 18 years later. Here's the link if you guys want to check your favorite cars values.
- klarek the realist
- Contributions:7044
"how in the hell you are taking predictions from a firm which completely missed the bubble and placed wrong bets."
It is no longer against their own self-interests to lie. They are hosed and they know it.
- Michinaga
- Contributions:143
I know something that's going to fall 99.7% from its peak: Lehman stock!
Lehman Bros.: California home prices will fall 50% from peak
When it wasn't fighting for its life this morning, Lehman Brothers was dropping a bit of a bombshell on housing prices: It believes the total decline in California will be 50% from the peak, and that we're roughly halfway there.
From Calculated Risk, which also offers a link to the Lehman conference call:
"[The Lehman] base case assumes national home prices drop 32% peak to trough, vs. 18% to date, with California down 50% vs 27% to date."
Ian T. Lowitt, Lehman CFO
... In other words, Lehman's base case assumes that house prices have fallen just more than half way from the peak.
These aren't quite apples-to-apples numbers, but I will offer them anyway. MDA DataQuick's tracking has Southern California home prices down 31.1% from their July 2007 peak. The peak median sales price was $505,000, the August level was $348,000. Lehman's call suggests median prices will fall to the $250,000 range. The price levels in Los Angeles County are slightly higher.
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