If California Pops, What Happens To Us....?
Well, being a holder of NYC real estate myself, and having experienced an absolute wonderful run over the past 4 years, I think we will see some SPILL OVER should the California market correct as I think it will.
A recent article on CNN Money brings up a few very valid points. For one, they estimate that the market value of some houses may now be up to 45% OVER-VALUED. WOW, that is crazy!
The article then goes on to mention that a 'soft-landing' is expected, in what most experts agree will be a cooling of the housing market in California. This is where I get a bit worried.
I have been saying on this website, through my post Interest Only Loans: Are they For Me?, back in August, that I think this nation has pockets of problems. There are some neighborhoods in California, Florida, & Nevada that have housing prices gains off the charts. This CAN NOT and IS NOT sustainable. So, it will be these markets that get hurt first, and probably the hardest.
Any downturn in the Riskiest 3 Markets (California/Florida/Nevada) housing markets will have a psychological effect on buyers in NYC. My prediction:
A SMALL BUT SHARP & TEMPORARY DROP IN HOUSING PRICES
Some financially weak homeowners will be selling out of necessity, while others will weather the storm just fine. If the market lulls for a period of 10 months and drops 10% from where we are right now, the wisest investors will be buying after the drop by recognizing the percentage change in value. New York City just has that incredible knack for recovery, and I think many people are out there waiting for prices to drop to get what will be a great value for down the road!
If Alan Greenspan & Co. keep interest rates low, and I think they will now that Katrina & Rita stopped by, there might be a great buying opporunity setting up if you are diligent and ready! Keep your eyes out, and watch those other housing markets first to see effect will really happen to ours!
Comments (2)
I think another reason fees are not being paid and free months not offered is that prices have come down. Apartments are moving but part of the reason is that prices came down to a point at which they will move.
Posted by Mbt | June 3, 2010 2:29 AM
Has anyone done a short sale in Real estate? Let me know what the lenders are looking for. Anyway thanks for this great post.
Posted by Homes For Sale Miami Beach | August 17, 2010 1:26 AM