A lot of those shit towns are in decline. But the prime real estate near the coatline is still holding up quite well. There are still people with money that have been waiting for 5-10 years for an opportunity like this.
You mean all those people with money that bought all those homes speculating on real estate in the first place....who is going to invest in real estate and buy those homes NOW? Beach Front property is beach front property. You can not discount the impact of what's going on in CA economy because there is beach front property that is holding up. California is a BIG state. All those "shit towns" as you say are 80-90% of the state of California. All the suburbs of LA, San Diego, Sacramento, San Francisco. All those surrounding areas are getting hit hard. The impact to the U.S. due to CA's crumbling economy will be huge. The state is bankrupt and can't fund its pension liability.
Real estate, even in the best waterfront locations, was far less expensive even in real dollars, back in the decline in 1987 to 1994, than today. I'm talking La Jolla and Malibu, even. That was the time to buy unless prices go far lower in the next couple of years.
With 1.5 trillion of mbs's in the pipeline from the federal reserve, I don't see how deflation will continue from here on. That 1 trillion will be leveraged by banks 8-10:1. So, we're looking at 8-10 trillion dollars coming into the mortgage lending market in the next couple years. The jumbo rate alone has come down from a high of 7.4 to friday's quote of 6.48. If it gets down under 6% by the end of this year, we are going to see an explosion of refinancing and buyers.
Rice Rocket's statement is closer in truth than yours. I follow L.A. prices avidly and while valuations are clearly less today than two years ago the declines are pretty shallow. The lack of affordability in "good" neighborhoods i.e. the Westside, Pasadena and parts of the Valley have boosted prices to new highs in former laggards like Los Feliz, Silverlake and Culver City. I don't know San Diego or the Bay Area nearly as well but in taking cursory glances at prices in North County or on the Peninsula I sure don't see anything shouting collapse. If you think a home going from 200k in 1994 to 1.25 in 2007 and now back to a million is "getting hit hard" than more power to you. I lived in NYC in the early 90's when L.A. was imploding and thought the West Coast crash would spill over to Manhattan. It never happened. Now people think that what's occurring in Miami will spill over to L.A. and I'm guessing that won't happen either. IMO SoCal is trading like NYC/CT/NJ did in the 90's and Miami is the L.A. of the 90's. The break is in sympathy with national conditions but desirability ultimately keeps a bid underneath.......
If you go by all the TV news, California real estate is a disaster. However, I take most news reports with a grain of salt.......don't know who to believe, though. Lots of times people see what they want to see. Stosh
Ohh fooey, after we paid these folks about half again what we make in the private sector all their lives now we can't pay their pensions.. makes me real sad. Maybe Calif can go into BK and toss out the pension contracts like GM...
Pabst you misunderstood my comment. Perhaps I did not make my thoughts clearly. I wasn't talking about real estate getting hit hard I meant the overall economy of California getting hit hard and its impact on the U.S. Beach Front real estate prices holding up aren't going to lessen the impact that CA has on the overall U.S. economy.
My bad bro. And BTW I completely agree with your assessment on California's kooky fiscal crisis impeding growth.