[quote=kev374]just because lending standards are tight does not mean speculators do not exist. The speculators this time around have been private equity and foreign investors, this is a widely known fact. It’s a repeat of the past but just the actors are different.
It’s not a matter of IF but when the next recession occurs and rents start softening. Oh yes, all the experts here proclaim that rents never fall – that is utter BS. I know during the last crash my rent fell by 30% in south OC, rents were crashing as well. What happens to all the rental investments, the rental backed securities held by private equity? Will they start bailing?
I am not saying that I know what is going to happen, but completely dismissing the possibility that prices are over inflated is completely short sighted.[/quote]
You may be right, but Prices in San Diego were overinflated relative to rent and income in 2001. That didn’t make it a bad time to buy or a good time to sell. Waiting 3-4 more years to sell or never selling resulted in much better outcomes than selling in 2001.
I agree that prices feel pretty frothy. At this stage I’m not betting on price declines from this point in the near future, but I’m also not advocating jumping in and buying anything either…
