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: gpowell who wrote (49416)	3/3/2006 5:48:05 PM
From: Schnullie	Read Replies (1) of 306849

As for speculative activity one would have to assume that speculation causes out of equilibrium behavior, which effects the eventual equilibrium position of the market. That is possible, but not very probable without some other factors thrown in I have lost track of this discussion...or where statements like those above lead. Perhaps I'm not really understanding your point but this doesn't seem to lead anywhere. And since I'm insufficiently motivated to chase down Baumol's disease, I'll bow out here. But as a final thought I would point out that housing affordability in CA is in the low to mid-teen percentages....i.e., something like 12% can afford the median priced home. Or more telling, 88% of the population cannot afford to purchase the median priced home. These nosebleed prices would not strike the casual observer as simply "...normal 5% appreciation, in line with historical long-term price appreciation." Some improvement perhaps in percentages nationwide but in bubble markets, these prices should most definitely be regarded as....bubble prices.

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