With the Prop 13 passage in California that restricted the amount taxes could be raised on a yearly basis, you know the cities/counties/state are loving the increases in property values. A few of the counties have even tried to go around the Prop 13 limits. The homes that were purchased in the last run-up were reassessed at a lower value as prices fell. The counties have tried to raise prop taxes at a greater rate than allowed. They are trying to at least get the values to the original purchase price on the premise that the decline in values was a temporary relief and not a long term issue. A friend of mine has a realtor hounding her to sell her place and move up. She's been in her place since December and the value of her property has gone from ~190K (purchase) to 260K (last unit that sold) in that time period. If that isn't musical chairs, not sure what is!!! Waiting patiently for the music to stop and the bubble to burst here in Mission Viejo.
There is a house near me (Corona, CA) that is in escrow with a listed price of $244,900. I just noticed the same house 2 doors down just went on the market for $287,500.
ddog, That morning drive from Corona to anywhere in OC or LA is pure hell!!! I did it for about two months in the early 90's and had to get out. It's amazing what is happening, I'm unhappy that I didn't buy another place and rent it out for a bit. That's the way it goes. The same "fundamentals" that all the experts a spouting are exactly the same as during prior real estate booms. Funny they all ended the same. My place in Long Beach went from 110 to 210 to 130 to 230 in an 12 year period (88-00). Those that are patient will have their pick of properties here when the variable change to the buyers favor. Later, Cracked
Here's a link about Japan. Toward the end of it you can read about the 75% decline in values. http://quote.bloomberg.com/fgcgi.cg...age99.ht&ad=world_economy&s=APS5VdRXNSG9tZXMs Could it be they are modeling our Bubble and its consequences after Japan's? Quite possibly in my opinion.
So are you saying that the old line: "I've got some swampland in Florida for you" from the late 60's and early 70's would have actually paid off big? Dave
I listen to the traffic in the morning and by 6:30 the traffic is backed up on the 91 from before the 15 solid into Orange county. From what people tell me a house in Corona that goes for $250,000 is roughly $375,000 to $400,000 so you can see why the traffic is getting worse. People just can't afford homes in orange county anymore so they are coming this way.
ddog, some friends just sold there house for $320K 3bdrm, 2 bath, 1400 sq ft. small lot. I guess the average house here in OC about $350K and some of the nicer areas are in the $500-700 range. A relatives "RAT-SHACK" in Costa Mesa is ~600K and it's a dump. I'd put the same Corona house in South OC in the 400-450K range. This whole dynamic reminds me of 1987. I owned a few Dodge and Plymouth muscle cars (Hemi's, 440 Six Pack's). Market crashed and EVERYONE was looking for a place to put money other than equities. Every car I owned promptly doubled at a minimum in value in a 1 year period. I sold every one and today I could easily by back the same cars for what I sold them for or less. IMO, it's the classic herd mentallity!!!! Later, Cracked
This real estate market reminds me also of the late 80s. I dont know if you are familiar with the Moreno Valley area but that was the hot thing then. After the defense cutbacks all those people (who must have had 2 hour one way commutes) lost their jobs and simply walked away from their homes. The city never developed the proper infrastructure and prices still haven't come back to where they were then. The whole town is basically a slum. I had an agent tell me after I complained about the high asking prices say "Yes the prices are high but they are only going higher so just pay your money, cry your tears and get over it".
ddog, I do remember the Moreno Valley fiasco. The only thing out there that is nice was the golf course on the hillside. I haven't been out there in years to see what happened, but, do know of the walk aways which occurred. Can't seem to remember the name of that lake/mudhole out there..... Perris? Don't get me started on realtors. Like all professions, there are good and bad. I really can't understand why someone would list a house for the 6% standard rate and have it sell the first day it's in the MLS. Is that value for service??? Not in my book. It's a volume business that they don't like to admit. There are so many that make a ton of money because of the HOT market and most spend the cash like it was on fire. The real good realtors will appear when the market turns and they don't have the advantage of 10 willing buyers for every property. Those are the good ones with a creative mindset. Guess I started myself....... My guess is that the bubble will burst even worse this time around. Most of the time the retracements are in the 35-45% range. I figure with this boom the retracement in So Cal will exceed 50% from the highs. I may be wrong, but, I've got plenty of time to wait it out. Now if I could only get those Mortgage rates to 10%.......