California has been ground zero for bubble and bust mortgage market. From the WSJ, one can see how extensive and destructive the past five years have been. In this view, the deep red county is Merced, with 84% of the…

Affluent areas that have over-inflated will correct (50% off peak), if not more, as the market tends to overshoot in the end. AThese neighborhoods have always been and will continue to be, the last ones to fall.

http://www.westsideremeltdown.blogspot.com

I don’t think I’m out of line inviting your big city gained wealth into our community; spiking inflation in housing and other needs for/on the current residents that live on small town salaries. We understand “its the way that it is”.

Exactly right. The high housing costs have little to do with environmentalism and EVERYTHING to do with low-density dogma in Sacramento and tons of metropolitan suburban communities throughout the state.

I’ve lived in San Francisco and San Diego, and in San Diego every time someone’s tried to put up a high-density condo development, there’s instant outrage from the neighbors who scream about: a) falling home prices (increased supply), b) increased traffic (well…maybe we have been relying too much on car transport), c) “greedy developers” trying to destroy the suburban way of life and “force us to live in little boxes”.

When all you can build is McMansions….it’s not surprising that you run out of space and have to start building hours away from businesses.

Elitist Bay Area politics conveys a “Let them eat cake” attitude while not realistically dealing with all the people, jobs, and issues next door. (Including SF/SJ traffic being a major cause of the pollution in Los Banos and Sacramento.)

What about the tons of CO2 dumped into the atmosphere from the gridlocked cars coming in from Tracy and Gilroy every day? The anti-growth folks just made the environmental problems worse! Is the open space worth global warming? Is the open space worth forcing half the population to commute so much?

On the subject of open space, have you ever been to Japan? They pack 125 million people into an area the size of California and preserve gobs and gobs of open space. The urban areas in Japan are sprawling messes (akin to Los Angeles) but development EFFICIENTLY stays in the established urban areas and stops cold at the tree covered hills. They have a public transit system that makes BART look like a toy. They don’t force people to drive 100 miles a day to Los Banos just to sleep on once prime farmland.

Of course, head-in-the-sand politics is nothing new for California. The state government is broke, incoherent, and lost. I’m curious to see how things go in this recession, and am feeling a bit of schadenfreude for California.

Here in the western ‘burbs of Chicago, they are still tearing down $400,000 houses to replace them w/$2.5M houses. The best part that is although the houses were moving about a year ago, not anymore. While I will not dispute that the new home is beautiful, the fact is that your taxes are going to be over $25,000 per year. And that does not include your monthly nut. Good luck folks!

Santa Teresa, on the butt-end of San Jose, has houses going for $425k that went for $720k just two years ago. But they still need to fall to $325k to make sense as rentals.

If you think they don’t have to, you really shouldn’t be a landlord – you’ll lose your shirt.

My guess? They go below that, as rents fall during a hard recession. If we avoid the hard recession (fat chance), they’ll “only” fall to $325k.