Well I haven’t read every post on here, so I’ll address the original post, which means I am probably just repeating what has already been said.
I think most of agree that not all, but a majority of the brand new BMW’s, Merceds, Yellow H2’s, and so on and so on, were bought with what I call fake money; money from a re-fi, or HELOC.
I honestly believe income levels are nowhere near what they appear to be. Even if you look at the NAR statistics, I think CA was mid $60K average income. LA, SF, and SD, yes, but the rest of the state? No way. We’re talking average here, and I’d bet the average is higher because we have so many celebrities and athletes in our state. Think about how many actors there are; tons of them live here in LA.
The (fake) money came form the real estate bubble. It made instant faux millionaires out of common homeowners. We know incomes didn’t triple like house prices did.
The scary thing is how much came from the real estate bubble. Everything from brokers and realtors, to plumbers, carpenters, and even companies that supply refrigerators, copper pipe, grantie counter tops, and so on.
We hear bits and pieces of these, but I think it’s going to get a lot worse as people shy more and more away from housing.
Watch out for those spillover effects, and others like increasing used luxury cars and SUV’s for sale.