[kgruskin]

Hmmmm, not sure what is meant by “more evenly demonstrated in every other market in the U.S.?” If you are speaking in terms of geographic location and cost of rising prices there are a few reasons why this is more pronounced in certain cities such as ones with larger populations such as DC, Orlando, San Fran, Diego, LA, etc… I’m not going to go into reasons why certain cities experience a frothier bubbly top then say Lincoln Nebraska, but there are obviously reasons.

I think you can see low credit affecting just about every part of the market currently. Look at how much car sales have tapered off recently due to tightening of credit. You have also seen the market supported by low rates. When rates are low it makes a lot more sense to risk money in a stock that after doing GAAP on it that will return 8% a year. Now if rates rise and you can get 5% in a money market is the extra 3% really worth risking. What you will find as rates go up much more is a pull back out of the market earnings be dammed.

Some affects of easy money.
1. Higher housing prices based on fundamentals.
2. High consumer debt based on fundamentals.
3. Reform on credit bankruptcy laws.
4. Reform on credit card payment laws (occurred right before rate hikes).
5. Weakening dollar do to large amounts of loans.
6. Increases in FOREX trading.

[kgruskin]

If you go into certain communities you can see it very visibly. For example in PB if you drive down streets like Thomas or Reed I counted at least 1 place for sale on every block for about a 1 mile stretch. In bankers/mission hills I see multiple for sale signs in condos that are only 6 months old as well as new units being built right next to it. You are also seeing agents sitting on listings for months and really trying to get the sale.

When I was looking for a new place to rent I believe one agent was showing a place for sale as a rental just to get prospects in the door. I say this because he told me he was trying to sell the unit but was willing to take a renter as well. The agent ran my credit app but the entire time was trying to convince me to buy. After all is said and done he tells me that they have decided to try and sell it and will not be renting to me. You have to love some of the new tactics sometimes. True the owner may have changed their mind but that is not my feeling from the whole situation.

As far as Mission hills goes there are 3 units for sale in the condo complex I’m renting currently in Mission Hills area and they are not moving(in the same complex I looked to rent from where the previous agent telling me the owners were going with selling.). I believe the condos where I’m at in Mission Hills are highly over valued at 850K each for a 1800 square foot 3 bed 3 bath condo. I’ve also noticed new condos in the area around it that are comparable coming out for about 650K so it looks like these new owners have to lower their prices to compete with new condos coming on-line or sit on their properties for a long time.

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