Hilarious. Sadly, for many future buyers, that scenario is probably not too far from the truth when it comes to CA real estate.

Very funny. My wife and I spent two years living and searching for a home in Santa Barbara. It’s as far south as I would live in CA. A nice town with neo colonial Spanish architecture. As a town it hangs together better than any community in soCal. Trouble is all the newbie riche think so too. We searched at the bottom of the crash, but inventory was very tight even then. Anything remotely nice sold quickly. Being a small community with huge RE price tags, it was pretty much a rigged game there. We left considering it poor value and little choice like much of CA. Inventory there has since become tighter and prices have skyrocketed. You’d need your head examined to live there unless you’re rich enough to buy in Hope Ranch or Montecito. +$1m for a crapshack as Dr HB would say.

Jazzman, I wonder if we were bidding against each other! We bought a fixer and couldn’t decide if we were the luckiest or stupidest buyers in town. Four years on, the appreciation on our street has been unreal.

[quote=hillsilly]Jazzman, I wonder if we were bidding against each other! We bought a fixer and couldn’t decide if we were the luckiest or stupidest buyers in town. Four years on, the appreciation on our street has been unreal.[/quote]

Maybe, although we found that only exceptional homes attracted more than one bid, and if there was any competition at all we walked because prices still felt over-valued. It was a sucker’s market in our view, and more than one Realtor agreed with us.

We’ve also seen massive appreciation in Maui, but I don’t consider that a good thing. I can’t access that increased wealth unless I sell. The fairly recent sharp appreciation in values has been at the same velocity that led to the last bubble. That can only mean one thing.

Unless you are buying RE purely as an investment, these boom bust cycles are bad news. You should not have to time the market to buy your home because it breaks the flow of everything else; education, careers, family making, community, retirement, pension planning, savings. We’ve also seen first hand the devastation that a housing crash can unleash on everything from share values, credit availability, GDP growth, unemployment.

There’s cause, effect and then there’s unwitting collaboration in the shape of unrealizable wealth dazzling the masses with promises designed to be broken. The problem started with the ‘big bang’ and the deregulation of markets, and monetary(ist) policy steeped in the traditions of efficient markets, which we now know to be a fallacy. Stock markets don’t ‘rule’, and neither does monetary easing, or so it would seem. IMHO.