Honestly, I don’t know how the loan situation in California is going to play out, but as we all know it’s going to be bad without a bailout and even worse with one. From all the charts and graphs the natives of this forum have posted, California is going to be ground zero for the arm implosion and it’s going to get beyond ugly. There’s a lot of buzz on wall street, Washington, and the lenders but it’s anyone’s guess. I’m a bit player rising and falling with this tide but personally I think we should let this play out without interference. Shake out the bad loans, let property values adjust to normal levels, start a new cycle, but better next time around, go back to fundamentals. As for how far property values will go down, well, I think that’s a title for a new thread, sd realtor and SD realtor will chime in and debate the down , but there was a chart floating around showing the medium line of increase versus the current increase and it’s out of whack. 20-40% decline or prices back to 2002 levels, sure, why not? I was in the middle of responding to you this afternoon when the wife gives me the eye because we were heading over to Irvine to visit her side of the family. I was surprised to learn that the low end condo market in Irvine has taken a nice dive since June, $420K asking down to $395K and $375K and we’re not even into the fall/winter slow season (sister in law is an avid follower of ziprealty and tracks her neighborhood like most of you here). I’ve asked the seasoned brokers that have been doing this for over 15 years and they tell me that what’s going on is unprecedented and they’re a little shaken, but who isn’t right now? But they knew these days were coming and have known it for a while.
SD R you know that’s pretty tame to some of the other stories out there…glad I made you chuckle.