CA Rush To Get Out Bids Up Albuquerque
The California price boom is driving markets in other areas of the country, as this Albuquerque Tribune story relates. "'We're meeting with at least one new West Coast person a week looking to get into this market,' Romero said."
"They're looking for tax-deferred 1031 exchanges. Investors are bailing out of California in fear the bubble there will burst. They're moving their equities out."
So much for the localized RE market. Those high prices in LA have another side effect. "In Los Angeles, the rate of return is about 4.5 percent. In Albuquerque the rate is from 5.5 percent to 7 or 8 depending on the property."
Not only are Californians cashing out, but the tax law is enticing them to bid up other "safer", areas. The big increase in sales and prices reported today is critical, because for every seller you have a buyer and now, further to fall.