Pop goes the Southern California real estate bubble?
I find the real estate market to be absolutely fascinating, and in recent years, nothing has been more interesting than the so-called real estate bubble. While I do pay attention to what is going on in real estate throughout the Nation, I focus particularly on California, especially Southern California.
The other day I read the article, Southland Home Sales at 9-Year Low. Almost everyone knows that home sales have slowed, as more and more For Sale signs hit the front yard and stay there longer and longer. This has some eagerly waiting for the decline of home prices.
Yet, is Southern California real estate really going to drop in price that much? And, will the reduction in price be worth higher interest rates?
Well, I'll be honest, I really don't know.
During the last real estate boom and bust in Southern California, not only were jobs leaving the area, but so too were the people. While some people have left Southern California, others have taken their place. Go find an apartment in Los Angeles - it's neither fun nor easy.
Even more interesting, when one compares Los Angeles to San Francisco, L.A. is still pretty cheap. With outsourcing hitting the Bay Area so hard, that phenomenon seems a bit mystifying.
The truth is, no one knows what is going to happen. Sure, home appreciation might flatten, but to expect a huge drop in prices seems a bit hasty and overly optimistic.
What about foreclosures, you say?
According to reports that I've seen, the areas to be mostly affected by ARMs, etc., don't include the West Coast. More important, the Southern California economy is actually pretty strong and Los Angeles offers some of the better job growth of any large city.
Ultimately, no one really knows what is going to happen. If you are trying to make a quick buck off of real estate, you're probably in the wrong market. If you are in it for the long term, even if housing prices do decline, there WILL be another boom. That is simply the nature of real estate.
If you are buying or selling, all I can say is, Good Luck.
The other day I read the article, Southland Home Sales at 9-Year Low. Almost everyone knows that home sales have slowed, as more and more For Sale signs hit the front yard and stay there longer and longer. This has some eagerly waiting for the decline of home prices.
Yet, is Southern California real estate really going to drop in price that much? And, will the reduction in price be worth higher interest rates?
Well, I'll be honest, I really don't know.
During the last real estate boom and bust in Southern California, not only were jobs leaving the area, but so too were the people. While some people have left Southern California, others have taken their place. Go find an apartment in Los Angeles - it's neither fun nor easy.
Even more interesting, when one compares Los Angeles to San Francisco, L.A. is still pretty cheap. With outsourcing hitting the Bay Area so hard, that phenomenon seems a bit mystifying.
The truth is, no one knows what is going to happen. Sure, home appreciation might flatten, but to expect a huge drop in prices seems a bit hasty and overly optimistic.
What about foreclosures, you say?
According to reports that I've seen, the areas to be mostly affected by ARMs, etc., don't include the West Coast. More important, the Southern California economy is actually pretty strong and Los Angeles offers some of the better job growth of any large city.
Ultimately, no one really knows what is going to happen. If you are trying to make a quick buck off of real estate, you're probably in the wrong market. If you are in it for the long term, even if housing prices do decline, there WILL be another boom. That is simply the nature of real estate.
If you are buying or selling, all I can say is, Good Luck.
0 Comments:
Post a Comment
<< Home