[quote=XBoxBoy]in expensive areas, we’ve had steady price increases of around 10% a year for 5-6 years, while neither the economy nor inflation has kept pace anywhere close to that.
[/quote]
I’m definitely always trying to figure it out, but it seems like this statement might have something to do with it. Is there anything else you could invest in over the course of the past 5-6 years and make 10%+ (without even factoring in the leverage gained through cheap financing)?
As far as the fundamentals aspect I think there is one strong fundamental at play here which is simple supply and demand along the coast. The whole reason we are even having this discussing is because someone that does not live in Del Mar would like to.
I actually wonder how high the rents will go? People not only want to live by the coast so bad that they will pay more, but many of them will actually live in a rental vs. owning just to be in the place they want to live and that is what justifies the investor buying the duplex at a higher price because they know they can rent it to the person that cannot buy in the area which perpetuates the whole cycle.
