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Strategies & Market Trends : Real Estate home/investment
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To: David Jones who wrote (1)9/14/1998 12:37:00 PM
From: David Jones  Read Replies (1) of 73
 
My point for the previous post is this. When jobs here in California drop sufficiently to cause the population to stabilize or drop as it did in 91. Real estate here follows suit.
Usually the larger homes are the first to feel the impact. For instance in 91 the $500k+ homes dropped some 15-20% where as you under 250k homes fell some 7-10%.
Of course not all area's had large drops in values but it was a fact that the 500k+ homes were just not selling.
I mention this because today this is a hot market here in the Bay Area of N California. There are buyers lining up to purchase homes in the Silicone valley area that have not even seen the house plans. Almost a frenzy of buying this past summer.
This just so much reminds me of 89 when like today there was frenzied buying. And two years later the market just died.
Today is a situation I have never seen in the real estate market. High real estate costs, low interests rates, and low unemployment rates. Yes any real estate agent will tell you this all points to a good market. But IMO it is undeniable that there has to be a correction if exports continue to drop of.
And it has been my personal experiences that real estate, although a safe haven from inflation can drop in value very quickly.

Dave
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