LateSummer mentions trends – this bears serious watching. This market took 15 years to go up…. Why would we expect it to drop so suddenly? Especially as the data is lagging and inventory is building… It takes a long time to sell a house and houses are not selling so quickly yet. I was just looking in Del Mar to rent (we ended up in La Jolla) and we also looked at some houses.
The big problem is that the houses are tulips. Nice small houses in Del Mar (east of the 101 and west of the 5) built 30-40 years ago and remodeled are almost 2 million dollars.
We are buying tulips. We think that these prices are normal. Wait until these prices go back to where they were 10 years ago. If you say that can’t happen, I disagree.
There are more rich people then ever – but the wealthy buy special properties at the beach and in the hills with huge views, etc. Not 3 bedroom 3 bath homes with a partial view for 1.5 million dollars. These are reserved for the vast upper middle, middle middle class who will still be paying for them in 10 years at today’s inflated prices.
As the market comes down and the mob realizes that there is significant asset reduction, it will be harder and harder to make the decision to commit to these prices. We should expect that as prices come down there are still people who will buy. Most people can’t see trends, they don’t use a lot of logic when it comes to buying a house. As some previous posts have said – I wonder what they will be thinking in 6 months or a year. Or 3?
Why is it every time there is a bubble, people still buy on the way down? The funny thing is that even if you look at history and look at the data – we still can’t conceive that the market will head all the way down… Even though it’s been doing it (especially here in CA) as long as there have been homes.
Did the original native Americans have the same problem with their huts?
