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August 27, 2005

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brotherbrown

The RE numbers are mindbloggling in California, and I imagine a few other places elsewhere in the US. (I've heard about Boston and of course, Manhattan.) I bought my first house at the height of the last California bubble that ended in 1989, and was upside down on paper for many years after that. The county actually rolled back assessed values in the mid-nineties because the assessed value was greater by far than the market value. We saw a lot of foreclosures in my neighborhood then as well.

It took 8-10 years for prices to firm again, but since 2000, it's been steadily marching up, accelerating to now. I bought a new house in the proverbial perfect location at the perfect time at the right price, and am a lucky beneficiary of this bubble. The unsustainable aspect of this run up is that you cannot expect to continue to sell houses at no less than $200 per square foot in so-called marginal neighborhoods, nevermind $400-$500 in so-called better neighborhoods.

I see a lot of similarities to the last bubble and this one, but some differences to; we'll have to wait and see how it plays out. As long as you are staying put, you won't have a problem. If you are planning on moving, good luck, and be patient.

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