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Oerdin
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of Internet Music.
Sep 2001
time: 21:20
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If you look at the 1991 market bear in So Cal where property prices went down 20% they all bounced back in two years. The reason is the fundimentals are good in terms of limited amount of land, a rising population, and lots of people who can afford them even at the current prices. I'm a single guy in my late 20's but I was able to swing a house so a married couple with two incomes should do much better.
There is a lot of people doing the buy to rent option which could have a dangerous side effect of people having multiple mortgages they can't afford if they couldn't rent the place out. They could lead to fire sales and price drops but that's unlikely just because vacancy rates of 0.8% (at least in San Diego, I'm not sure about every where else) mean it should be easy to continue renting even if the market considerably softens.
Then there is the fact that open space laws and enviromental laws are constricting new house contruction so supply just isn't going to keep up with demand. Housing is a long term investment and long term the fundimentals are sound.
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18-05-2005 00:30
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