10/13   Why I don't think the real-estate will ever bubble. Many young
        people seeking for opportunities from inland move to coastal metro
        CA. Most asian immigrants to move to CA. The people from the border
        love to move to CA. Kids are born and raised in CA. People who
        already stay in CA like to stay in CA. The fact of the matter is,
        regardless of the economy the CA population is still rising and
        there is a shortage of land. We talk about bubble as if people will
        all of a sudden will lose their jobs or move to apartments or
        move out of the state. Wouldn't such a movement trigger an apartment
        rental boom, which is unlikely since many are already close to full
        occupancy anyways? Real-estate bubble-- wishful thinking,
        it'll never happen.
        \_ Do you have statistics to show that the Bay Area population is
           growing?  I read an article that claimed the opposite.
        \_ There's an artificial shortage of land, in reality there is
           no shortage of land in CA. If the population does increase to
           a certain size we'll just expand the burbs is all. All you have
           to do is travel down interstates between the two large metropolitan
           areas of LA-OC-SD and the Bay Area and you can see the large
           amount of empty room still available. But real statistics show
           that the Bay Area has been losing population, contrary to
           popular belief, and that the growth has been in SoCal and
           Sac.
        \_ I think it's a matter of perspective. The housing bubble is not
           going to be like the stock market bubble. Houses won't end up
           being worthless. The problem are those people who are betting
           their property will continue to increase in worth by double digits
           and those who will get caught by the increasing high interest.
           The bubble will be stagnant markets, or slightly depressed prices.
           \_ actually considering that most people are financing their homes,
              likening it to stock merket would be likening it to a stock
              market heavy on margin traders.  If someone only puts up 10% down
              on real eastate, it only takes a 10% drop for them to lose it
              all.   Because of the heavy leverage, small changes in the
              market can produce big losses!
              The one saving grace is real eastate is not very liquid.  It
              won't take a week for the market to crash ; it'll take months.
        \_ Sorry, but people from the border can't afford the million $
           homes.  As for CA kids, they will all just live with their
           parents.  For speculators, if home prices don't rise, they will
           be bleeding money, and hence looking to sell.  Inflation is
           rising and the fed is forced to keep raising rates.  Add to
           that outsourcing, trade deficit, budget deficit, high consumer
           debt, and an overall ugly economy, and even though I wish to
           say housing would just calm down and stagnate, I have to be
           honest, and tell you that, more likely, it would pop and fall
           like 20%.     - worried homeowner
           \_ If this real estate bubble is anything like the last one in the
              Bay Area, I wouldn't worry too much. Even if prices start
              falling, it won't do dramatically. Incomes and prices are high
              enough that you can sell if need be.
           \_ Actually, the new immigrants are able to afford quite a lot.
              How? They share. It's common for several families of new Mexican
              immigrants to share a house. In this way, I've seen even day
              laborers buy a $400K house. Yes, this constrains prices
              because at some point income is always a limiting factor. By
              the way, why are you worried about a 20% drop? That's
              nothing. So your $500K house falls to $400K. BFD.
              \_ if you spent $100k down on that $500k house, after the 20%
                 drop,  that $100k of equity is GONE.  If you borrowed it all,
                 you're now $100k in debt; selling the house would leave you
                 still well in the red.
                 \_ Uhm no.  If I put $100k down on a $500k house and the sell
                    price drops 20% I have the option of "not selling" since I
                    live there.  If I was a speculator I'd probably take a hit
                    since a 20% drop is unlikely to recover quickly in which
                    case I'd lose a tiny amount of the millions I'd made over
                    the last 5-10 years.  Too bad I wasn't a speculator. ;-)
                    \_ Not selling is all fine and dandy if everyone took
                       out 30 year fixed mortgages.  Unfortunately, there are
                       too many 1 year, 3 year ARMs, no interest, blah blah
                       mortgages these days.  I am not worried about my own
                       home per se, but a deflating housing bubble pulling
                       the whole economy down.  IIRC, something like half of
                       the jobs created lately are real estate related.
        \_ I think the real estate market in CALIFORNIA will be a good
           investment IN THE LONG RUN precisely because the population
           here is growing quickly. However, this is not true in most
           places.
           \_ Yea, in the long run, stock market goes up too, but like my
              old Numerical Analysis TA says, "Why are we learning this
              faster algorithm?  Cause LIFE IS SHORT!"
              \_ Look, do you want to invest or are you trying to win the
                 lottery? If you're not in it for the long-term then just
                 go to Vegas already. Many people have long-term goals and
                 accomplish them by staying the course. That doesn't mean
                 to ignore short-term fluctuations, but most of us here are
                 quite far from retirement age and have time on our side.
                 \_ "Yea, things are overpriced, but you need to get in or
                    you will miss the boat.  Just invest for the long term."
                    That's what they say at the height of the internet
                    bubble too.
                    \_ Maybe. On the other hand, I thought we were at the
                       top 4 years ago (when I bought). I needed a place
                       to live. I wouldn't buy an investment property
                       right now. However, I'd buy a 'home' if I needed
                       one and could afford it.
                  \_ How far off is the DOW/NAS/etc now from where they were
                     at the top of the dotocm bubble?
                     \_ nasdaq: 5000 (top of bubble 5+ years ago), 2000 (now)
        \_ The End Is Nigh:
           http://www.golyon.com/images/sacsvs.png
           http://www.golyon.com/pricingtrends_f.htm