Friday, November 03, 2006

What would it take for a spring bounce?

If you don't read Ben Jones' housing bubble blog, you should. In particular:

Ok, let's look at that article. Home prices are dropping in Australia, China, Canada, Hawaii, New York, Alabama, and Georgia; all in one article! Its already well know that California home prices are dropping and Florida's are crashing. DC is so overbuilt its not even funny.

First we need to consider the tendency of American's to move about. With 70% of families home owners, that means most people must sell a property before buying. That's getting tough... not improssible for the sensible (read, willing to drop the price to the market price), but most people aren't willing to do that... Thus the difficulty selling homes has to be slowing sales.

Second, read my previous post on housing affordability. I think sales are slowing due to a shortage of GF's.

Third, there seem to be far too many people who must sell.

My prediction? In the spring here in LA we'll be talking more about jobs leaving the state than a real estate 2nd boom. In fact, people will finally start to wake up and wonder what jobs are going to pay for the current homes. Ok, maybe only a few of the sheeple, but enough.

This is going to be a long ride down (read my previous post on RE emotions for my predictions on the length).


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