Earlier in the thread, renterclint says: “To be honest, I am bitter. The bankers w/ all their cheap $$ have ruined my hometown’s housing market. In two years, if things don’t look different, I’ll be moving as well.”
I will posit that this really isn’t the case. True, banks have contributed to the dramatic rise in the price of the homes (lets say a triping in price over 10 years = +200%). Let’s say that they’re the sole reason. Now take your evil bankers out and just apply a normal 6% appreciation to the value of the home (+79% over 10 years), regardless of the where comps currently stand. You can easily sell your house today on that metric, because it’s super competitive compared to the rest. So the real problem lies in the sellers who *can* sell at the lower appreciation rate, but won’t.
The prices will correct to whats affordabile (before adding the premium of living in S. Cal), because I believe that all markets return to fundamentals. But this is going to happen in lockstep, because people set prices at the margin, which unfortunately is at bubble prices rather than what how real estate should be doing in an average market. Once you have the 10-year owners stop being greedy, the rest will follow.
BTW, it’s okay to be “greedy” on the way up. I believe one should always try to make as much money as they can. But being greedy on the way down is just forestalling the inevitable.
