very good point patb, the OP is deluded. This is classical “it is different this time” thinking that always precedes all bubbles. The fact is that income growth is stagnant, most of the recent job growth is Real Estate related and that is rapidly shrinking, a big chunk of existing homeowners are overleveraged – just look at the rapidly rising property tax delinquency rate and the mounting number of foreclosures and you should get an idea, population growth is the slowest it’s ever been in San Diego and OC.. infact population growth was stronger during the DOWNCYCLE in the early 90s.
The recession is still on the horizon, it hasn’t happened because almost ALL homeowners think that the market is going to rebound by springtime so have not cut their spending by much. Late 2007 when RE prices contract sharply due to mounting foreclosures and lack of new demand it will cause a RUDE awakening! Homeowners will start their belt-tightening as the values of their homes plummet.
I have friends who work as mortgage brokers and they say the refi market in SoCal is all but DEAD as a duck! Subprime is just about over.
Also, there is a growing trend of offshoring high paying professions like Engineering and Finance. This causes downward pressure on wages which causes an exodus from high cost areas. I forecast SoCal losing the population that can actually support higher home values because of this. This is already happening in Boston where the city is actually paying new grads $10,000 to commit to stay 5 yrs in the local area, imagine that!
Hope you have money saved up in your emergency fund for the rough times ahead!
