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Politics : High Tolerance Plasticity
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To: Warpfactor who wrote (7518)9/7/2001 10:55:27 AM
From: edward miller  Read Replies (1) of 23153
 
Allow me to add my 2 cents on this from the perspective
of selling a house in Los Angeles 7 years ago. Also I
would like to add that I have read that real estate does
not fall until as much as two years after the peak in
the economy, so beware.

As to Los Angeles, the peak in the market was in 1988.
I know this because a friend was lucky and sold right at
the peak when he switched jobs and moved to Boise, Idaho
just before real estate took off there. Also, several
years later (1993) the LA Times showed a chart of housing
prices, which peaked in 1988 and were still dropping at
that time. We rebuilt our house from the foundation up
and had a property that, based on comparable sales in 1988,
would have been worth nearly $700K. We barely got $400K
in 1994. After we left California I occasionally followed
housing prices in the old neighborhood and they were still
dropping for at least two more years.

Now I realize that this is a location-specific example, and
it represents an area that was heavily dependent on defense
spending, which has been hammered since the fall of the
Berlin Wall, but this is what can happen.

If the Silicon Valley flounders for quite a while you will
see real "fire sales" on housing at some point. Just MHO.

Ed Miller
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