real estate property housing California

The last five years have seen a huge boom in the United States real estate market, which for the most part, floated all boats. But in California in particular, it has become insanely inflated since in this little piece of paradise in the West Coast, you are basically buying the weather. Purchasing any kind of real estate at this time and at these prices would be against my buy low, sell high strategies, so my real estate investing plans are for now put on hold.

What are the signs of a toppy, frothy real estate market? How about if:

  • you see a crumbling, rundown shack on undeveloped land with a flyer listing it for $1,300,000. Okay, that’s too obvious.

  • everyone you know and their brother is becoming a real estate agent/broker/loan consultant.

  • you see a house change hands in a span of two years after a few coats of paint and new plants in the yard.

  • everyone you know and their brother is talking about opening a home equity line of credit at 6%, 7%, 8% APR so they can cash out to buy more property.

  • all those people who say they would be great landlords don’t even own their own homes yet.

  • the guy who sits next to your cube spends most of his time scouring the internet for new homes in the flood plains as potential “investments”.

  • that same guy turned himself into a real estate AND mortgage broker in two months time (wow, you get two skill sets and services for the price of one!).

  • your day care provider closed her school down to become a real estate agent who advertises on the community pages. You see her beaming face on ads for foreign property. She invites you often to sales presentations held at what used to be the kids’ play den.

  • someone you know who used to live in a hovel now lives in a mansion reminiscent of Palm Springs replete with faux flagstones and a spillover pool and spa designed as a mini Niagara falls. Oh yeah, she’s a real estate agent too.

  • people are combining forces and families to pool their financial resources together to snag their first house, which is over $1,000,000 but with 5 bedrooms and 4 baths. Oh yeah, around three families will be living in this mcMansion (read: a house which is bigger than the lot it sits on).

  • your junk mail is 50% offers for refinancing, lines of credit, real estate agents’ cover letters and the flyers of homes they are selling

  • your mobile dry cleaning guy is moonlighting as a real estate agent. Or is he an agent now moonlighting as a dry cleaning guy.

I swear all these are true, and are my own personal encounters with real estate mania. I could go on and on but you get the picture. It’s been ridiculous for so long that I felt compelled to regularly visit this site; and for the good length of time that I’ve followed it, it would say the same things over and over (housing bubble will lead to crash — yadda yadda and repeat…) and yet, the market wouldn’t budge anywhere but up. Except now. Finally there are signs that the market is cooling. It’s about time. Now in a couple of years, I can think about jumping into the glut of underpriced properties or foreclosures and becoming that person I’ve always aspired to be…. a landlord.

 
 
Technorati Tags: , , , , , , , , , , , , , ,

< Thank you parca.org! >