Well said, partypup. I believe that this correction will be much worse than the early 90’s, and I remember that correction quite well.
We did lose jobs due to the aerospace industry taking a dive and bases closing in the early 90’s, and that was an important factor in the housing market correction. But just because we don’t have that particular catalyst this time doesn’t mean we won’t have a significant correction.
If anything, I believe that the ARMS and low lending standards are the main catalyst this time, both in extending the bubble on the way up, and ultimately bringing it down. I think that this phenomena will have much more impact than the base closures last time.
And we will have many job losses, as the housing market dies, and many of the new jobs created in the last 6 years due to the housing bubble evaporate.
I think we’ll see lots of people leaving SD and California over the next 5 years, as we saw in the early and mid 90’s. I shudder to think what all this will do to a city that is struggling to avoid bankruptcy (SD), and a state with a huge budget problem.
