calitom wrote:my area of CA(central valley/outer bay area) has stayed the same(sacramento) or gone down about 8%(betw SAC and SF).
backing and filling is normal for a housing market.The huge bubble of 12 yrs ago(and subsequent burst) was unusual but its cause was no mystery.there were idiotic lending norms put into place ..-We had what you would call LIAR loans--where anyone could just put down whatever they wanted for an income.-And lenders would loan them the money. Minorities werent turned down for any loans(like this was doing them a favor) because no one wanted to be accused of discrimination in lending. People working at MacDonalds would get 300k house loans;) Sure enough prices raced up---and spectacularly fell. The worst hit areas were Nevada,The central valley of CA,and Florida..followed closely by arizona.
So idiot policies caused the problem. Home prices in some areas tanked as much as 75%.
A normal correction in a market where you dont give out these stupid loans with stated income(liar loans) and zero down payment...is 10-20 %.thats just the way it works in the USa anyway.
The real estate market is rarely a steady climb. Its usually 3-4 steps forward and 1-2 steps back..with an overall average of 3-5 % annual gain over the long term.
My rentals are in areas that are higher in price than most of the usa but MUCH MUCH MUCH lower than in the SF bay area or NYC or London or honolulu.
My friend who lives a 30 minute drive from me in a toney oakland(SF BAY AREA) suburb called danville has a 3000 sq ft house valued at about 1.4 million. That same house in my area goes for about 600K.
And the avg house in my area goes for about 400k.
OK first cool it on the meths kiddo, you'll live longer.
The bubble 12 years ago, which followed deregulation championed by the GOP, was a global phenomenon and the troubles caused by Brexit are likely to be more local, here's why.
Borrowing money from banks on a global scale isn't a straightforward process. There are good reasons for that, currency manipulation isn't just something President Trump made up it really happens and can be used to stiff lender or debtor nations for billions - President Trump's claims that China has used the practice to explode US debt isn't without some foundation in truth. However the important thing is that to limit the scope for such activity there are regulations affecting the type of lending and borrowing that can happen.
Now very few mortgage deals are good for the term of the mortgage. A deal can last around five years but after that, as a rule, most people are going to look for a new deal, and that of course relies on banks being able to borrow money to take over the existing mortgage. If banks aren't able to borrow money less will be able for mortgage renewals, this will put a premium on banks retaining their existing customers, especially those who pay on time and maybe even get a little ahead and a very definite penalty on new properties and first time buyers. Fewer buyers means prices go down.
However that's not necessarily bad news if you own an investment portfolio that is rich in property. With fewer new owners there will be an expansion in the rental market and yields on rental property will go up. Brexit will be very good, therefore, for pushing up rents and pushing down prices. The exact opposite of what was promised but Brexit delivering the exact opposite of what was promised is nothing new.