[quote=jpinpb][quote=CA renter]We have seen an unprecedented CREDIT bubble, the size and scope of which we haven’t seen in our lifetimes (if ever). The main beneficiary of all of that credit has been the housing market. The ONLY reason prices are levitating above their fundamental values is because the govt and Federal Reserve have stepped in on so many levels to keep “supply and demand” from setting prices.
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Totally agree. I’m scared this may be the new norm. I fear if the government steps back, things will go down. I think they know this. So they can’t. They will continue to prop things up. I just don’t know how long they can. I mean, sooner or later they may run out of bullets. But I agree that were it not for gov intervention, we would be looking at a completely different market and probably be on our way to a real recovery by now. Dragging out the bottom means dragging out a real recovery, IMO. But I guess they decided to rip the bandaid off real slow.[/quote]
Ladies, I understand your frustration with the local market being artificially “propped up.” I believe this is true for MOST of the county. But there are niche markets in this county which have a high incidence of cash buyers, many foreign. Whether they are purchasing a principal residence, a residence for relatives or a vacation residence isn’t important here. Yes, these buyers DO look at recent sold comps before making an offer but there is ONLY ONE DM property available which has its own rock sauna, for example, that they are considering placing an offer on. When buyers with $$ see a certain design or amenities they are looking for in a VERY SPECIFIC locale, they often buy it! Government intervention has no effect on this type of buyer, especially foreign buyers who typically cannot avail themselves of US mortgage loans.
The value of RE in certain CA coastal locales will always be exempt from “fundamentals” simply by virtue of their highly-desireable locations which usually cannot be replicated within the same county. As a consequence, even “fixers” might be cost-prohibitive, as well, when located in that same immediate locale. Brian is right . . . may the best buyer win. It has nothing to do with what a hardworking American deserves and everything to do with the Darwinian method at work . . . in its finest form :=}
