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Non-Tech : Deflation
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To: Maurice Winn who wrote (493)5/7/2009 10:37:38 PM
From: JF Quinnelly  Read Replies (2) of 621
 
Sorry, my post wasn't clear- I don't mean that the housing crash is finished, just that the crash is now an established fact. In contrast to when we first were talking about a crash and the bubble was still bubbling.

I'm hearing that the California market has at least another 20-25% to fall. And that this time it will hit the higher priced coastal zones. Inland CA is pretty much cooked already. You could buy in the high desert and not have to worry too much about prices taking another big drop, unless a meth lab opens up next door.

But you're right to focus on rent vs mortgage payments. In previous cycles the market hasn't turned until it becomes cheaper to purchase than to rent. And we haven't reached that level yet.

The next collapse is supposed to be the commercial real estate market. Too many malls were built during the boom for them all to survive. Add in consumers changing their spending habits and malls have more trouble.
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