[quote=paramount]flu: Over the years I’ve learned a lot from your posts, and you’re way smarter than I am.
Let’s face it, there’s a reason I live in Temecula and you live in CV (or other 1%er area).
That being said, I could rattle off an impressive list of names and institutions saying we will likely be in a recession by the end of the year – maybe severe.
As has been said, if you think the Obama recovery sucked, just wait until the Obama crash hits.
Or is an area like CV essentially immune from economic contraction?[/quote]
The way that I view it. If/when the crap hits in the fan. I’d prefer to lose 20+% in the value of a house versus losing 30+% in the value of stocks/bonds or have my cash purchase power get consumed by inflation…
The red herring is if the USD devalues, that sucks for domestic people, but what about folks not tied to the USD? I mean, just thinking out loud.
Not to long ago, it was like
$1 USD: to 9 RMB…
$1 USD: to $1.3/4 CAD Dollar
Today, it’s
$1 USD: to 6.2 RMB… (and that’s even before the RMB is floated)…
$1 USD: to $1 CAD
I’m just looking at this from a more macroeconomic viewpoint. Wealthy folks abroad want safehaven place to park money….Canadians probably think RE prices here are cheap, with the trashed USD relative to the CAD…Despite what we all think, US assets are still probably safer than other assets. There was talk about Euro being better a few years ago…Well, we know where that went…Suddenly the world has gone silent on diversifying into euro… And let’s face it, rich people in overseas aren’t exactly 100% trusting of the government there protecting their interests either…US real estate looks cheaper relative to say Vancouver,BC which prices have been driven up astronomically there too. You probably won’t have folks from CAD or abroad buying in places like Detroit, but you probably would have investors buying in places like Las Vegas and Bay Area, L.A., Florida, etc….question exactly is how much is San Diego now on the radar of external influence..
Also, despite the economic mess that people are in the U.S., U.S. is still home to a bunch of people with a insane amount of money too..no amount of taxation, wealth redistribution policy, or backlash is gonna change that…So I’m not convinced all these strong buyers are also foreigners. There’s plenty of people it appears that have weathered this recession and probably done better. And I wouldn’t count Temecula out…If there’s any indication, it’s on an upswing too…
If the economy is so weak, where are all these cash buyers coming from? Not all of them are foreigners…These aren’t people in exotic loan products, stated income, or other things. I’ve gone through the lending process..It’s a major PITA…..Seems pretty healthy, non-institutional buyers to me with very little strings attached…
Where’s the shadow inventory? Maybe there is a lot of distressed properties, but if the banks can manage the trickle trickle trickle, maybe it is working to prop up prices.
