Comments on: Market Watch on California Real Estate Market

By: Frugal

Frugal — Sun, 29 Oct 2006 17:02:00 +0000

Thanks Larry for your information.

I was simply too young to be watching any financial markets, or even had any money of my own.

I guess things will probably unfold with the same driving forces, but with maybe with different timeframe and/or price levels.

By: Larry Nusbaum

Larry Nusbaum — Sun, 29 Oct 2006 13:43:18 +0000

Correction: The boom followed rents after 1995/1996 period, beginning in 1997.

By: Larry Nusbaum

Larry Nusbaum — Sat, 28 Oct 2006 17:24:40 +0000

Specifically, rents started to rise in 1993. But, the rise in 1995 & 1996 was preceded by the beginning of a real estate boom: where prices catch up to rents. Right now, we have rents catching up to prices. It’s the normal point in the cycle for rents to catch up (by demand) as prices and to a lesser extent rates are “high”.

The problem with inflation and the middle class is simple: the biggest of big ticket items are up dramitcally despite what some like to say about core inflation still being tame. Those obvious items: energy, healthhcare, our homes/monthly housing expense, college educations and self-funding of one’s retirement.

By: Frugal

Frugal — Sat, 28 Oct 2006 06:37:46 +0000

Yes, Kara went bankrupt. Leveraging works both way.

Did rents go up during 1991-1994? I was too young to know anything about rents at that time. It feels like this time around many things are more inflationary, but I could be wrong, since I know little about 1991-1994 recession.

By: Larry Nusbaum

Larry Nusbaum — Sat, 28 Oct 2006 04:29:39 +0000

Same exact things happened in the 1991-1994 recession….

By: JC

JC — Fri, 27 Oct 2006 03:10:46 +0000

What is scary is seeing builders go bankrupt, and buyers losing their deposits, which maybe 6 digits. Kara Homes is such example.

http://www.thnt.com/apps/pbcs.dll/article?AID=/20061020/NEWS01/610200427/1005