Housing slowdown, state woes are forecast

Union Tribune link

The newspaper basically said what I’ve been saying for the past 12 months. 50% of all new jobs in CA created since 2001 were real estate related and if the RE market tanks, it’ll take the whole state’s economy with it.

I’m banking on this happening and the signs are all there. DOM is trending up, inventory is trending up, prices are trending down and
last year was the first time we saw a negative population net migration.

I think we’ll hit the bottom between 2008 and 2010 when all the people who couldn’t afford homes and still bought them with 3 and 5 year ARMs see their loans readjust to a 50% higher payment. The banks will get back a ton of homes and people who have cash will benefit! I fully expect to see a 25-40% drop in prices in different parts of CA,despite fervent pleas from my wife to keep my opinions to myself and stop scaring her friends and acquaintances.

I’m so glad I cashed out of the CA market.

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