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Politics : Welcome to Slider's Dugout -- Ignore unavailable to you. Want to Upgrade?

To: jim_p who wrote (8748)	3/26/2008 2:48:56 PM
From: JimisJim	Read Replies (1) \| Respond to of 50669

In SoCal (San Diego anyways -- all real estate is local, right?), the last RE bubble topped in '91 and bottomed in '95 -- I know because I bought in '91 and was upside down significantly in '95. The difference was that unemployment did not rise locally. After being in negative 25% equity in '95, by 2005 our house had appreciated to the point where we had positive 65% equity. Currently, looking at comps, etc., we have about 50% equity after about (so far) a 20% drop in home price. Obviously we stayed in our home and locked in a flat rate 20-yr. mortgage in the 90s and continued to pay/service the debt on it. During the boom, we never took any cash out of the "equity" because we knew it was only paper wealth and had already lived through one housing boom/bust/boom, so we were mentally prepared for another -- we just didn't know when or what would cause it, it is just the way of things in SoCal housing: boom/bust/boom... the next boom or bust is still in the future, just a question of "when" in SoCal. Prior to living in SoCal, I lived in 8 different small towns in the midwest and the midsouth. Nobody ever expected house prices to appreciate in those rural areas, indeed, they expected all homes to either remain roughly the same price vs. real inflation or to decline a bit in value over time (barring home improvements and such). It was only when I arrived in San Diego that I learned about people expecting their houses to appreciate over time and become a major asset in one's net worth. Seemed crazy to me after almost 30 years of living where such an idea would have been laughed at -- the only goal was to pay off houses so living expenses would decrease significantly. Of course, the first house I ever bought was in rural SW TN in 1980 and ended up paying 23% on the home loan at one point in the early 80s. When I sold it in '87, I lost about 15%-20% on it, but was glad to be rid of it and moving out of TN. All FWIW and additional perspective/data points in the general housing discussion. Jim