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

To: Elroy Jetson who wrote (59715)	8/11/2006 11:13:52 AM
From: Les H	Read Replies (3) \| Respond to of 306849

"The cutback in defense jobs, complete with multiplier effects, of slightly more than 1/2 of 1% per year didn't cause the collapse of the real estate bubble in California - but it was a popular story for smarting home owners and bankrupt speculators. Like all popular myths, this story will be repeated endlessly for generations just like stories of Zeus and Hera." I never said it was the cause of the real estate decline in California. The recession in the early 1990s and the job cutbacks in the defense industry contributed to lengthening the real estate decline. I think the people who think that job growth will bail out real estate today are likely to be severely disappointed. The first phase of every real estate downturn has always been led by the disappearance of speculators from the market. Most blame the 1986 tax act which limited deductions for passive activity losses in real estate. Mortgage rates also bottomed in early 1987.