Wednesday, January 23, 2019

From Sunday's L.A. Times: a lot of potential home buyers are sitting on the sidelines

Sunday's L.A. Times had a really interesting article about how some home shoppers are calling it quits, believing that prices have peaked.  Read the entire article here.  Here are some of the more pertinent quotes:

"A belief that the price slowdown will lead to a price drop could become a self-fulfilling prophecy, experts said."

"Many who are struggling to afford a home in California would welcome a significant price drop, if it wasn’t accompanied by an economic collapse. But experts say such a prospect is unlikely, given that homes don’t appear to be in oversupply. The state has a well-documented housing shortage."

"Other factors argue against a crash. The California economy is still posting robust job growth,despite the shadow of a trade war with China, which has become a big market for goods produced in the state. Whereas last decade’s housing boom and bust were driven by questionable lending, loan standards are much tighter today. And as much as prices have risen, the jump hasn’t been as sharp as it was in the early to mid-2000s.

“We don’t have a debt problem. We don’t have an overbuilding problem. We don’t have an economic problem — prices are not going to fall,” said Christopher Thornberg, founding partner of Beacon Economics, who called last decade’s housing crash".

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