The Residential Real Estate Crash Index Message Board

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Strategies & Market Trends : The Residential Real Estate Crash Index

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To: David Jones who wrote (25649)	12/7/2004 12:38:17 AM
From: ild	Read Replies (4) of 306849

Bubbles can and do last longer than anyone expects. As an example Patron started this RE Crash thread on 6/16/2001 and he thought that RE crash was imminent. How little did he know about RE bubbles. -g- My guess is that coming spring will show if RE prices can still significantly advance. So far here, in Orange County, CA, real estate prices are pretty stable, inventory is double of what it was last year but at the same time is not very high. If a property gets a good mark down (5-7%) then it sells pretty fast, so there are willing buyers out there but they are not in a hurry. Generally asking prices are 3-10% lower than peak prices in May. I don't see a catalyst for higher prices as interest rates are higher now. Most purchases here are made with 5/1 loans and 5 year yield is on the rise. Also pure adjustable rates are at least 1% higher than in March. But we should not underestimate animal spirits of speculators. I know people who bought an expensive house here last year, now they are taking out HELOC to buy a house in some retirement community in Arizona. They are 100% they will make good $$$ on it.

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