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

To: 8bits who wrote (69969)	1/7/2007 12:01:27 AM
From: John Vosilla	Respond to of 306849

Good summary. Real economy seems to be on fire in much of the US.. RE bubble is part overvaluation and part overbuilding. SF and SV fall in the former which can support high valuations in a low rate, low unemployment, high wage growth economy with mostly end users actually living in the property..

To: 8bits who wrote (69969)	1/7/2007 1:42:23 AM
From: Wyätt Gwyön	Read Replies (1) \| Respond to 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).