[quote=deadzone][quote=CA renter][quote=The-Shoveler]I don’t know what Scaredy’s take is but my view is mostly stable to more or less normal market from here. (IMO it would take the lenders and the builders to go crazy again to really get a big downturn going, 10% that can happen anytime, 30% now that takes something unusual).
But I think the point that a 700K home is not usually a good rental is valid as well.
So maybe it does boil down to “are you planning to move back?”[/quote]
Irrespective of interest rates? What about if/when the investors get out of the market? That could increase aggregate supply and decrease demand at the same time.[/quote]
Apparently that is already starting to happen if you read Diana Olicks column about San Diego real estate on CNBC today[/quote]
Yes, there are a number of sources out there who are witnessing the investors backing off, or even selling. The areas I watch in SD and LA counties have all seen a dramatic rise in inventory, along with a slowdown in sales. Other areas are supposedly seeing the same thing, based on the stories of others who are watching this.
Of course, even with the rise in inventory, it’s only coming off extremely low levels, so we’re not in a place where people need to panic. But if the trajectory continues, we’ll start to see more “normal” inventory levels. And if interest rates rise at the same time? I think the damage can be as devastating as in 2008 because there has been at least as much speculative activity this time around. Even though the leverage isn’t the same (as far as we know…leverage can be hidden in these deals), I think the motives of buyers and sellers is the same as during the bubble…and it’s all driven by the Fed’s confiscatory (from savers and “safe” investors) policies.
