Is California real estate in the midst of a speculator-driven bubble?
- Yes. (68%, 118 Votes)
- No. (32%, 55 Votes)
Total Voters: 173
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Speculators… the harder they fall
POLL: Is California real estate in the midst of a speculator-driven bubble?
This time around buyers really have cash and not buying homes with no doc adjustable interest only loans. There might be a slow down due to the affordability gap. If first time buyers cannot enter the market there won’t be a move up market.
Are the buyers living in the homes, flipping or renting them? If they are living in the homes they are not speculators. All others are.
Completely believe the market is being ‘fixed’ again. I have lost the last three bids due to all cash offers from speculators/investors. The issue is: we are selling our state to foreign investors because they have money – but it’s fake. For instance, the Chinese Stock market bombed – a lot of fake wealth in that country – which they have now invested in West Coast properties. They are not taking the money and reinvesting in their own country – but snatching up property in our country until their stock market evens out.
And none of you seem to notice. I mean, how often do you come against ordinary people forking out $700K in cash?!! The realtors play a huge part of selling their state down a hole. I understand that everyone needs to make a living, but really zero oversight into what is happening.
As long as buyers can continue to deduct the interest on their home mortgages or first trust deeds it will continue to be the best game in town. The government allows this tax break to encourage people to buy homes. Housing prices in most of CA have regained price and liquidity. Orange County homes are being updated and flipped, but demand is now slowing. Prices have seemed to stabilize. Market seems neither overpriced or oversold. Until economic growth turns above 2.5% demand may stay moderate.
The latest increase in seemingly unending price escalations is more fundamentally economic than speculative. Demand in certain areas (San Francisco Bay Area) where incomes have grown much faster than nationally and are still rising at rates faster than home prices or rents, is the cause. The “bubble” of 2007 and before was highly speculative and in many instances fraudulent (see the fabulous example of this in the film “The Big Short.”). The stats on percentage of homeownership, the aging millennials who will be starting families (and buying homes), the last days of terrific tax incentives to buy and the historically low interest rates, despite tough bank lending requirements, will drive this demand for some time to come… in an entirely non- speculative manner.