Coastal real estate won’t deflate as much as the outlying areas and as much as condos and condo conversions but it’ll be affected by the burst. An unreasonable valuation is an unreasonable valuation no matter where it is or how nice the location is.
The place I used to rent was a condo on the water in North County. The landlord offered it to me for a price in 1999 and the landlord sold it in 2005 for almost triple that price. What changed that made it worth so much more? Interest rates went down, crazy loans came into style, and mania set in. I can’t really think of much else. What happens when these things go away?
