The important point is made in the first 3 paragraphs:
“In March of 1990, after two years of looking for a house during a hysterical real estate boom, I bought a modest home in Malibu for exactly $600,000.
The owners had paid about half that five years earlier, but I really loved the house and thought that in a highly desirable area like Malibu the downside would be limited.
The real estate crash to end all real estate crashes began the next month. Within three years, I couldn’t have given that house away. If I’d been able to sell it, I might have gotten $350,000 for it.”
So, last time the “highly desirable area” was not immune to a downturn. I don’t expect this time to be different. Anyone who believes that desirable, coastal property cannot drop in price apparently didn’t learn from the previous bust.
Great example to illustrate that high priced areas tumble in downturns as well. (You just have to ignore the fact that the price tripled from the 40% overvalued 600K to the 40% overvalued 1.8 Mil, estimated by the author, in 2005). Seems to me that Ben is bragging here.
Didn’t some guy publish some theory about relativity or something? Nothing is immune (which you obviously understand).
A week or so ago somebody posted something about Davidson homes possibly being less susceptible to price pressure due to their emphasis on higher quality and distinctive design. While I certainly agree that they do build a better product, you can see that they are no different than anyone else.
Sure, you can say it’s Del Sur or whatever, but you actually have to give Davidson credit as they’ve at least gotten aggressive on pricing. They undertand that the market is going down and they’re trying not to chase it (even though they still may be from the looks of things…)
Contrast that to the idiots from Lyon Homes and Standard Pacific. Check out these $763,900 paired condos from Standard Pacific as well! These are all inferior properties and proof that it’s not just homeowners who don’t get it.
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