Personally, I maintain that the seeds of the property decline (at least in NYC metro area and possibly in Southern California) were planted at the end of the summer of 2004. I saw the more inventory at that time (esp. in the high end) then I had seen then in the past few years. However, the inventory did drop in the winter months, but not to the levels I had seen in previous years.
Now it is June 9, 2005 and I can officially say I have seen more houses for sale (and not selling) than in the past 5 years.
Now that hasn't stopped homeowners here tapping equity and buying "investment" properties in Florida. Tapping equity isn't the same as selling, it just requires a willing lender to give you money to F*ck around with.
So we find ourselves in the paradoxical situation of inflated home prices on paper, but those who are trying to sell are having problems (relatively speaking compared to the last 5 years). Meanwhile, those who don't care to sell are tapping home-equity to buy in other regions of the country, sprouting bubbles there.
This dynamic probably has another year to play out before people realize what is going on. I was in the UK last November and could clearly see what was going on (see my messages from end of Nov 2004), but at that time there was still debate and speculation was there, albeit moderated. Now there is no question what is going on there and Americans can say, "it's different here". Meanwhile, when I was in the UK in Nov 2004, the British were saying, "it's different here".
Laughable if the consequences weren't so scary. |
