Wednesday, Sept. 26, 2007 | Those that think housing prices will fall to a level similar to the Midwest or South have not studied history. Both the East Coast and the West Coast traditionally have had much higher housing costs then the interior of the country. We have had many peaks and valleys here in my 40 years of home ownership. We have big run ups and smaller downturns. Every 10 years or so we see this cycle. It still is controlled by the law of supply and demand. This run up was facilitated by lenders who gave loans to some whom should not have ever been given loans. In the 80s, we had a big savings and loan scandal.
Remember all the great San Diego based savings and loans, they got taken over by regulators and their accounts were given to healthier lenders, lots of bankers changed careers. The current group of lenders didn’t protect themselves and now they will pay for their irresponsible ways. This downturn will be over, then prices will start their upward march again. Slow and steady would be better, but in a few years this downturn will be forgotten and exuberance will hit the housing market again.
Remember the stock market crash in the late 90s and the great tech implosion, most have recovered now and the market has hit new highs. Money is leaving housing and going back to the market, soon there will be exuberance in the stock market. Recently Orlando reported 4,000 condos were on the market, Miami reported 24,000 with more being built. Those are markets with real problems.
Now if you want a bargain: A friend just bought a 3,200 sq ft home in Georgia for around $250,000. New construction, large lot, built around a lake, tree lined roads, good schools (they are at 98 percent of goal) one mile from the coast. They also have alligators, watersnakes, bugs, hurricanes and humidity.