[ex-Texan]

I have been saying this for two months here on FR. Many people have said I was nuts. But the housing bubble is just starting to break. I posted a comment two days ago warning that California may face a similar fate soon and that right now housing is at it tip-top peak. Again, people were telling me I was wrong.

The national economy is really many regional economies. Nobody really studies regional economics in college but that is the most important subject books do not cover. California may be booming while Indiana is fading. I believe the bubble has already burst is sections of California. But, then what do I know?

My best buddy is moving to Nevada and will buy near Lake Tahoe. He was working for the holding company that owns Coldwell Banker and Century 21 and was running the entire western region of eleven states for them: Take the hint folks.

[sarcasm]

[jocon307]

"But the housing bubble is just starting to break."

For me that's good news, as I still have never bought a house. This is the second housing price bubble I can remember, the last one had a lot to do with high interest rates, IIRC. The price of houses here in Northern NJ is obscene. $300,000 for really crappy houses in really crappy towns. Hubby thinks it's only driven by immigrants who live together by the dozen. I can only suppose he is correct, because only to an immigrant from some poverty stricken land would these properties look good. Or to a slumlord.

[CatoRenasci]

The situation in California is (probably still) very different. When I was in law school, California had (still has?? anyone know?) an anti-deficiency statute and single action statute, both legacies of the depression, which prohibit a lender from collecting a "deficiency" judgement for the difference between the mortgage debt and the sale price of a property. In essence, if one gets in too far underwater on a mortgage (well, trust deed, actually, but that's technical) in California, you could just give the bank the keys and walk away with no debt.

[Hammerhead]

It's obvious.

How can housing keep going up at 10-20% every year when most raises are at 2-4%???

Right now in the suburbs of DC you're looking at $350K for a 1200 sq. ft rambler built in 1950.

It's just ridiculous.

If you didn't own a house before 3 years ago, and you make average income 50-60K per year, 100-130K per family, forget it, you are out of the market unless you want to drive an hour to work every day. But then, you have the problem with the public schools raising your kids.

Something's gotta give and we are getting the hell out of here.

[RonHolzwarth]

re: "I posted a comment two days ago warning that California may face a similar fate soon and that right now housing is at it tip-top peak."

Yeah. A good size quake now,, wow, homes out there will be selling for a song!

and the song will sound like,

Buy me, buy me, my walls are cracked, my foundation is cracked, my pipes are burst,,,

Very few to none have earthquake insurance out there, 'cause the insurance companies wised up after the Northridge quake, when the payouts were greater than the premiums collected - for the last TWENTY FIVE years! It was not even a big quake at all. The insurance companies wised up, but the mortage companies and banks did not.

Earthquake insurance is not required to qualify for a mortage. And why?

Because, essentially, it is not available. Because the risk is to great.

So yeah, the bubble is gonna burst out there someday, for sure!