CA RE PRICES FALL INTO THE SEA or YO Lynn

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I gota laugh at all this...

I agree with Lynn...Bonds/Stocks/RE (Hard Assets)..are the 3 legs of investment. When one leg becomes over priced and the rate of return becomes smaller and more risky MONEY flows to the most under valued area.....WHICH NOW IS...STOCKS (because of uncertain stability in world politics and economy). Bonds have run up in price because of uncertainity and ever pushing lower interest rate, now Bonds holders stand to lose princiople as rates push higher. RE has risen in price because of demand and low interest rates. With higher rates the affordabilty index declines.

Granted certain areas of the country will be hit harder than others. In CA lower priced homes will fall less than more expensive homes. There is always demand for the cheap stuff.

Now let me see here....I move to LV a year ago and bought a 3700 sq ft Trailer for 350K (while I have a mortgage, I have an equal amount of funds from the CA house earning a greater rate of interest than I am paying to make the mortgage payments...thus my home here in LV is essentially paid for). That said the value of my Trailer here in LV has increased to 700K.

LV Boyz and Girls is no longer cheap..the median price home is 253K up 33.1% in the past year (which is more or less equal to San Bernardino/Riverside median of 258K). The bizness climate and demographics are all favorable...Nevada is the 2nd fastest growing economy in the nation, after Florida. There are apx 6000 people moving here every month from other states. In any downturn Nevada will most likely be hurt the least. The problem here eventually will be water.

Hmmm a 30% decline in prices means....700K - 210K = 490K on a 353K investment...or 490K - 350K = 140K/350 still equals @ a 45% return.... I think I can handle that....

Sometimes even the stupid make out.........

[Icemaster]

Dont forget about the hookers.

[pbs911]

I move to LV a year ago and bought a 3700 sq ft Trailer for 350K . . . That said the value of my Trailer here in LV has increased to 700K.

Sorry man . . . I don't buy that for a split second. The fastest appreciating ocean front property in Newport Beach hasn't appreciated that much. And your talking about a trailer. Post the certified apprasial to substantiate your claim.

Hate to burst your bubble, but eEven if CA fell into the water, which experts say is impossible, it would take millions of years to errode the Ca fall of to errode to the level of what is acceptable "beach" front property.

The people moving to Las Vegas are doing so because they are poor based upon their value in society in the workplace. As history has shown, exclusing the exceptional individual, the poor with only be proceeded by the poor. Ever take a look at the slumbs lately? Not too much progress coming out of those neighborhoods. Sorry to burst your bubble. It ain't never going to happen.

[cowtown]

When you buy a 3700 square foot trailer, and you want to move it, do they give you the "wide load" signs, or do you have to buy them? Or do you just hook the thing up to your Jeep and take a chance, without any signage whatsoever?

I've always wondered about that.

[Porsche-O-Phile]

A 3700 s.f. TRAILER?!?!? How's that work?

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http://www.realtor.com/findhome/homelisting.asp?snum=118&frm=byzip&lid=&pgnum='*poe=realtor

Anyway this should be a link to Realtor.com zip code 89131...the listing is 1/2 mile away in my zip code..and is 3600 sq ft SS for 699,999K. Sorry 3700 sq ft in my part of LV is now 700K. It's higher in other parts

Your right only people from the slums move to LV....One of them is worth 250M has his own Gulf Stream..in which his wife flies to So CAl to get her hair done...They had a big piece of Country Wide Mortgage and when it sold....(they live in Turnberry Towers in a M+ Condo because she likes to gamble)

The other guy is heavy into the Safari club, once owned the Lynx Golf Club Co...sold it...and started putting up tilt up warehouses in Ontario (Safari Park), one day he decided he had enough of CA and left...settling where right here in LV.

[motion]

It might not be cheap to buy in LV anymore, but it is the poor man's Southern California, as is Phoenix.

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I tell people LV is the newest suburb of LA...

It's more than the poor mans So Cal...It's the tax structure, the congestion, the political mess, the bizness enviroment that people are fleeing from in CA. It's sad to say but true...because I love CA...I think it is the greatest place to live or should I say used to be... it has become paradise lost..

Money is coming here...when I drive around here it's all old geezers who have brought their CA money with them. LV used to be considered a cheap place to retire...not anymore....people are selling out here to move to Phoenix.They have lottos here to see who can buy a new house in a development ...There is virtually NO STANDING INVENTORY HERE a 2 week supply of houses on the market when 3 months worth is normal..... 93% of all houses sell within 21 days for full price.

[motion]

Wayne, I think you're on the right track... I'm predicting 40-50%. I'm amazed at how many people I talk to just cannot fathom the possibility that the prices will drop. When I say that real estate prices are always cyclical, they just look at me like I'm crazy. I think they expect that prices will keep appreciating at 20-30% a year until there houses are worth $10 million.

[Kevin Powers]

a 3700 sq ft manufactured home for $350k? how much land did you get for that price? 2 doors down on my street a 2400+sq ft home on 1.75 acres sold for $264k.

[motion]

I think tabbie is joking about the trailer house thing... goes well with his gold chains, 60s muscle car and buffet-addiction.

[Porsche-O-Phile]

SoCal better correct soon or there won't be any working class people left. You'll have multi-millionaire movie star types and their serfs - gardeners / landscapers, hairdressers, cooks, etc. It's going that way now in a big way. The middle class is running from L.A. in DROVES and I may be doing the same if stuff doesn't correct soon. I'm not about to pay rent until I'm 70 years old and I'm sure as hell not paying a half million dollars for a piece of crap old house with no yard that's realistically worth about $200,000 if that. Anybody who buys a house in this market is a fool, and they're going to find out the hard way soon enough.

[tabs]

Pictures can be deceiving, theres more square footage under that roof than the picture indicates.

The middle class is running away from LA in droves

...Yep and LV is one of the choich destinations, because of that I think LV will fare far better than CA will in the coming correction. I dun know if the coming correction is going to be 40% or worse, but it is going to be substantial.

Problem is that not everybody is a Movie Star etc in LA...nor do they have the income level to support the current price levels. So with interest rate increases the affordabilty index goes down and with that so will prices.[IMG]http://[/IMG]

[motion]

I think you're wrong, Tabs. It happens every 10 years or so... prices get too high in California, people move to more affordable areas. Last time it was Seattle. They wait for the prices to deflate, then they come back to California and purchase at normal prices, decimating the housing market that they're leaving. Hate to say it, but I predict that Vegas will be another Houston in about 4-5 years.

[speeder]

Originally posted by Porsche-O-Phile
SoCal better correct soon or there won't be any working class people left. You'll have multi-millionaire movie star types and their serfs - gardeners / landscapers, hairdressers, cooks, etc. It's going that way now in a big way. The middle class is running from L.A. in DROVES and I may be doing the same if stuff doesn't correct soon. I'm not about to pay rent until I'm 70 years old and I'm sure as hell not paying a half million dollars for a piece of crap old house with no yard that's realistically worth about $200,000 if that. Anybody who buys a house in this market is a fool, and they're going to find out the hard way soon enough.

I agree w/ you 100+%. I was in a house yesterday that just changed hands in an "OK" part of the San Fernando Valley of L.A., I didn't want to ask the sucker, (I mean buyer), how much he paid but I'll guess $600k+. In a sane market it was a $200k house, (and probably was 3-4 years ago), but the main point is that I absolutely could not have lived in the house.

It was a *****box, built on the cheap 30-40 years ago w/ a pool surrounded by cement in the back. 2-1/2 BR/2 BA., small yard, and NO VIBE whatsoever other than the fact that only a real loser would ever live in it. I'd hang myself. But people are that desperate to buy a house, trying to get in before the American Dream is officially over in CA.

Sad. I felt sick as I left the place.

[Leader]

As a 30-year L.A. resident who's parlayed the real estate market up more than once, I agree that the current "hot market" is about to cool off. However, if history is any indication, the only time real estate values have actually declined significantly was the period immediately following a large earthquake. When the SoCal housing market "cools off" prices just stop going UP, they don't actually go down. And, if they do go down in some less desirable areas, they go down in single percentage digits - never in the 30-60% range. At least that's been my experience. Of course, there are always exceptions.
It's really about supply-and-demand. In the really "hot" areas of Los Angeles there are no (or very few) vacant lots upon which to build. As long as people want to move into those neighborhoods, the prices will hold. In the past the only variables that changed that dynamic were natural disasters. Even a recurring crappy economy has not had a large negative effect on Southern California real estate values in the past three decades. It's actually kind of amazing.

[JavaBrewer]

Originally posted by motion
I think you're wrong, Tabs. It happens every 10 years or so... prices get too high in California, people move to more affordable areas. Last time it was Seattle. They wait for the prices to deflate, then they come back to California and purchase at normal prices, decimating the housing market that they're leaving. Hate to say it, but I predict that Vegas will be another Houston in about 4-5 years.

Took the family to Mandalay Bay 2 weeks ago for some pool time and fun. It's been 12+ years since I've been there and was amazed to see the changes. Like Tabs indicates there is a ton of development going on in the area. Personally I don't forsee many relocating from Cali and being happy unless they're really into gaming and drinking. Honestly it's a very bleak and desolate region and the day time temp's really limit what you can do. Once money gets more expensive LV is going to look a lot less attractive to home buyers. Unless you're a homeowner with less than 20% equity and/or even worse holding an ARM, I'd never recommend people sell their Cali home to relocate out of state.