Real Estate Forecast in California
I believe that human psychology plays a great role in the markets. Doesn’t matter which market you’re investing in, it always remains the same. I think the “can’t get enough” mentality of the Californians has finally given out and prices have stablized. They’ve been relatively flat in many parts of the state for the past 12 months. The appreciation has been trending down over the past 12 months. Inventory is increasing and Days on Market is trending up. Not a good sign for the thousands of “investors” who’ve bought property and are negative hundreds if not thousands of dollars a month.
I fully expect prices to drop 25-40% over the next 3-4 years. There will be a ton of foreclosures and real estate will no longer be the investment of choice. People will not stand around water coolers and discuss how much money they’ve made on their homes. They will also stop believing their geniuses for having made so a brilliant decision.
If you want to buy real estate really badly, do what I’m doing; buy out of state. I’m buying in states like Utah and Boise and I’m looking in the mid-west too.
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