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: GraceZ who wrote (43634)	10/25/2005 12:53:19 PM
From: mishedlo	Read Replies (2) of 306849

I do not care what the population growth is in California. Prices simply can not forever rise above people's ability to afford them. It just is not economically possible over the long haul. That they have in this bubble does not mean the fundamentals are stong either. The fundamentals in fact could hardly be worse. Prices will fall because demand will fall because of increasing bankruptcies or because selling will increase supply, people will decide to cash out, or the demand to live in California will simply go away. The situation is unstable and obviously in a bubble. Only rising wages can cure the problem but house prices are so far above wages that prices would have to remain where they are for 15 years or so just to get back to the trendline. Not gonna happen. Mish

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