Recognition Of Housing Crisis Spreads
One Californian agrees with this blogger that the home boom is a serious matter. Rich Colwell, Deputy CEO for Redevelopment said, "It's gone from an issue or a problem to a crisis. It's not just a social problem but an economic problem if you can't get workers to live in places they work."
The Roseville Press Tribune continues, Mr. Colwell "produced statistics showing that while median incomes had grown slowly and steadily, housing prices have skyrocketed out of most people's reach."
6 Comments:
I'm thinking the same thing. If this blog is any indication, people are waking up to the real estate bubble at an exponential rate.
I think I was one of the first people to post about a week ago and look at us now. There are some good opinions in these comments.
There is a a lot to post on now. The sentiment has changed in the last few weeks. Discussion has shifted from "Is there a bubble" to "After the bubble"...Ben
We have finally reached a tipping point. The crash is coming. I'm graduating from law school in a month, and the housing market in NY, SF, LA, etc. has everyone in my class freaked out.
The market has to correct itself. People like us, with extremely high incomes but no equity, cannot afford to buy in if we're fiscally responsible. That, in and of itself, proves the market is insane.
I just can't believe it's taken so long.
(I just can't believe it's taken so long.)
These things take time to play out.
We just left San Diego after 9 years of living there, for a job transfer overseas (due to expanding European operations). It took me a good couple of years to believe what my sister who had already lived in SD for 8 years was telling me about it being a "sleepy retirement area." The aerospace industry had already taken a hit, and besides Qualcomm, some of the biggest industry is now pharmaceutical. SD simply does not have the professional jobs that San Francisco or LA did or does. The people who were buying in our area were Orange County/LA people who had cashed out of their homes, and wanted to live in SD. It was not the college grads, young people, etc., that you typically see. When we left the area, only 14% of the people could afford a median-priced home. There were commercials on the radio from representatives of the other 86% begging homeowners and state representatives to change things so homes would be more affordable. Now I see that since we left, an astonishing number of homes are being purchased with ARM's, and wonder if this was happening all along.
But this is also my concern: For the past 6 months, we have been traveling Europe, and have noticed that the homes in many parts of the U.S. in "bubble" status (which I do believe exists) are actually cheap by European standards. I've heard of people in countries like Germany buying property in Florida, as well as other foreigners. How will this affect the U.S. people, as our world gets much smaller, and the rich from other countries see investment opportunities? I realize Germany's economy is now threatened, as are some other countries, but I still think it could be a real problem for U.S. citizens in sought-after warmer climates. Any input will be welcomed.
(homes in many parts of the U.S. in "bubble" status (which I do believe exists) are actually cheap by European standards. I've heard of people in countries like Germany buying property in Florida, as well as other foreigners.)
The Euro zone has a bubble too, and their central bank is about to raise rates even though the economy is weak. As one reader pointed out, the Japanese came in and bought lots of US real estate in the 80's only to sell it for half just a few years later.
Thank you so much for the first hand report. That kind of info makes the discussion more valuable..Ben
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