Housing slowdown, state woes are forecast
The newspaper basically said what I’ve been saying for the past 12 months. 50% of all new jobs in CA created since 2001 were real estate related and if the RE market tanks, it’ll take the whole state’s economy with it.
I’m banking on this happening and the signs are all there. DOM is trending up, inventory is trending up, prices are trending down and
last year was the first time we saw a negative population net migration.
I think we’ll hit the bottom between 2008 and 2010 when all the people who couldn’t afford homes and still bought them with 3 and 5 year ARMs see their loans readjust to a 50% higher payment. The banks will get back a ton of homes and people who have cash will benefit! I fully expect to see a 25-40% drop in prices in different parts of CA,despite fervent pleas from my wife to keep my opinions to myself and stop scaring her friends and acquaintances.
I’m so glad I cashed out of the CA market.
If you found this post helpful, consider donating to my coffee fund!![[del.icio.us]](http://images.del.icio.us/static/img/delicious.small.gif){kind=small}
- Have Gold Prices Peaked? In case you were asleep, last week saw gold break all records and almost closed at $900/Oz. I still think its a good time to buy for long term investors. Lets see what other investment advisers think. According to Merill Lynch, we're already in a recession and according to Richard......
- High home prices causing Californians to flee The New York Times 7th November edition ran an interesting article - Saying Goodbye California Sun,Hello MidwestIt basically mentioned what I've been telling people for nearly a year now. Once housing starts getting too expensive, people are going to start moving to cheaper places. Last year 100,000 more people left......
- Housing Update Seeking Alpha has a great summary of nearly all the current topics related to housing, mortgages and real estate.Some of the interesting articles are:Lacklustre housing marketManhattan⦠apartment prices unchanged from a year ago. Philadelphia, PA: Demand for residential mortgages was nearly flat⦠consumers were shifting from variable-rate home-equity lines to......
Related Websites
- What is Debt Leverage? Leverage is a term that is often used synonymously with debt, and for this reason, it is important that people come to understand what debt leveraging actually means, and how it works in an ordinary financial transaction, such as buying a home for example. Let us suppose that you are......
- Should You Put a Price on Your Health? [/caption] A few readers responded to my recent post Is Eating Organic Food Worth the Money? by saying that you can't put a price on your health. I've seen a similar argument come up time and time again in my MonaVie article (For those who don't know, MonaVie is a......
- How To Tell You Are Going In The Right Direction [/caption] Are you wondering if your a going in the right internet network marketing direction? have a quick way for you to determine if what you are doing is good or bad. Let your mind, body and spirit be your guide. Some folks call it instincts others call it a......
[All content is copyright of Living Off Dividends & Passive Income]
April 29th, 2006 at 2:08 am
It’s funny… my wife says the same thing to me! As an economist, I can’t help but having a cool head. Although I can’t predict how high prices will go, or when the peak will be reached, I _know_ that such time will come, and then prices will stay flat for some time. I’m not as pessimistic as you are, though. Prices may drop over several years in real terms, meaning, housing prices may be flat, even drop a little, so that they will lag behind inflation. On the other hand, if there is a severe recession in the state (or the nation), or the bets are off, and we could see a 25% drop in nominal (dollars) terms. Interesting times we are living!
November 14th, 2008 at 9:29 pm
Wow…it’s 2008 and look at your prediction!