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: 8bits who wrote (69969)	1/7/2007 1:42:23 AM
From: Wyätt Gwyön	Read Replies (1) of 306849

I think we are basically on the same page for the SF Bay Area market (I sold my property last year am currently looking but at this point far away from buying...) but disagree as to how prices will drop and what will trigger that drop. i'm not sure we disagree re: "how" and "what triggers", insofar as i have no set opinions on these matters. it could be rapid or it could be slow. i think there is a bias to slowness due to price stickiness and seller denial of reality. however, a credit crisis, if one occurs, could catalyze a rapid crsh. in most previous RE "corrections", the dirty work is done by inflation in eroding real values. it is hard to see nominal values falling back to a rational level (such as 5 years ago, if that was rational), simply because of the insane debt levels. but if prices don't crsh, then it will sure take a long time for inflation to lower real prices. maybe 25-30 years (i am speaking about bubble areas in general here, not just the Bay Area).

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