SO we keep flooding the system with money, but that isnt the whole story. As explored in other posts here, oil is going through the roof, killing everything in its wake. Oil is now kinda like gold in that it is viewed as an inflation hedge, so will actually go up in the beginning of recessions as people flee to safty. Hard to find anything safer than gold (it is why they call treasuries the GOLD standard). Oil is looking the same way now, though I think supply and demand restrictions will eventually make this another bubble poping. Eventually all this cheap money has to stop.
BUt in the mean time we have gas at all time high’s and rising fast. I noticed a thing about how disel is 4.25+ now last night on the news. Talked about a bunch of truckers who are independent and considering quiting cause they work for gas $$ now. Who really thinks that wont eat into the budgets of everyone for everything you didnt grow yourself? How many people want to commute from Temc. to SD when gas is $4/gal? Not many, especially when the IE has been tagged a falling market. This will just make it fall more. Who cares about builder costs when the house is already built? If the population isnt there to support the housing demand prices will fall, regardless of builders costs.
This is where itll really get sticky, population declines. Alot of people have been coming to CA for the oppertunity. If things go south, like they are, then that will reverse. If I remember right more CAians are leaving CA than coming from other states. International immigration is the only thing keeping the population growing. How long will that last if jobs disappear? (BTW, I read that crossings of people into the USA from Mexico are down 20%+.) Also, the teachers are getting pink slips in the mail due to budget cuts and already Idaho (who is hiring teachers) is beginning to nibble at advertising for them. It happened in the early 90’s and itll happen again. We havnt seen it yet because usually the economy falls, people leave, and that drags down housing. Instead this time housing pulled the economy down, so people will have to leave. Different chain, one that only really started in December 2007. To early to see where itll go, but my bet rests with my friends, outa state.
