Quote from omcate:
IMHO:
If the economists and CEO's can predict the future, there will be no recession in the world.
Experts at at a conference on the U.S. housing market in LOS ANGELES think that the economic fundamentals is still 'OK'.
http://cbs.marketwatch.com/news/story.asp?guid={C2CAB9EB-17F3-4850-B41A-7964180B7EBA}&siteid=mktw
no offense, but i dont think representatives for DataQuick, HomeGain and Fidelity Nat. Title Co. are unbaised. the other comments by the "sources" should have been followed by: "And what does that mean." the "rational buyers and sellers" heading almost made me pee my pants. the guy talks about the 25% YOY gain in san diego, but less than 1/10th of the sales were "flips" of homes purchased witin a year earlier. oh, that makes it okey! gee, does that mean 25% YOY price gains are sustainable as long as less than 10% of the sales are "flips." BTW, id guess the apt flips might be higher now than in 1989-1990, even considering that the huge drop in rates, rental rate increases and price increases have allowed folks to refi all their down payment out (25%) on last year's purchase and buy another one this year! and its even sweeter for people that already had apts before the recent runup!
id suggest the signs of a bubble are in the psychology of the market, whatever that market may be, and not whether interest rates will be 6.5% or 6.0% at the end of 2003, whether 23% of folks buying wanted larger homes, etc. the signs of a bubble or mania are the same as in the stock market, or tulip market, ... one is a complete lack of fear. people are buying real estate with almost no fear, except the fear of missing out. does that sound familiar? that analyst can come up with any support for "why this time is different." like, consumer confidence is down, but people arent afraid to buy cars or homes. the cars being sold are function of no money down, no payments and price concessions. i dont want to own that paper! people are paying very high prices at a time of low unemployment, historically low interest rates (at least in most of our investing lifetimes)... whats the upside from there, and socal hasnt been hit be the recsession yet.
the thing that eventually knocks the pegs out from under socal real estate will be something or the aggregate impact of somethings that cannot be pinpointed at this time. i suspect unemployment will increase as folks move to less expensive, more business friendly states. they did it in the early 1990's, of course now they cant afforf to move back! :eek: i suspect businesses will relocate in search of cheaper labor, lower taxes, less stringent environmental laws and cheaper facilities. eventually this may be out of necessary due to foreign competition.
