Well, it’s official. The housing bubble is over.
Unsold homes are at an all time high.
There are 7.3 months worth of sales on the market, the highest since 1993.
Confidence among builders is at a 15-year low.
Do you remember watching cartoons when you were young? Characters like Wile E. Coyote and Daffy Duck were always getting fired out of cannons or launched into the air by mishaps. There was always a moment when they reached the apogee of their flight and hung there, motionless….after which they crashed to the ground and raised the proverbial puff of dust.
Where do you think we are now?
The areas that I think will be hardest hit are the inland CA areas such as Stockton and Fresno as a lot of speculators who could not afford Bay Area properties who wanted in on the “action” started hiking up prices in these areas even though as anyone who has been to these cities… there is plenty of open land! Hence, no reason for the insane price increases.
So when things come down, there’s very little resistance on the downside from saving properties in these cities from a hard landing.
Same with places like Phoenix or LV… during 2004/5 everyone was flocking to buy properties in these cities not because there’s lots of jobs or they have a growing population but because “its cheaper than California”.
I do think the Bay Area will take a wash, but these other areas will probably take it harder. IMHO.