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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: SouthFloridaGuy who wrote (5703)	9/30/2002 5:01:31 PM
From: Elroy Jetson	Respond to of 306849

Home prices in California declined 20% to 25% from their highs in 1990. csupomona.edu Given this, I think your estimate of a 25%+ decline for a deflationary period in California to be exceedingly modest. Of course home prices in some areas and price segments declined far more after 1990. Million dollar plus homes in desireable areas of Los Angeles declined more than 50% during this time period. For a bad case comparison, the same Real Estate Research Council index, with data since 1890, shows a 76% decline in Southern California home values between 1929 and their lows. Keep in mind that most home owners during this time period did not have a mortgage. Mortgages were limited to a five year period and most homes were bought for cash. The home price index in Japan has only fallen 40% over the past 11 years since 1990. So it's likely that US will implement Japan style "fixes" making a broad based 40% decline more likely than a 76% decline. Of course many areas where demand has been hotter will undoubtedly experience larger declines, as is the case in Japan.