Things are getting nasty in California. Overall housing prices have dropped 10% with some areas showing declines of 25 to 40%. What I wonder is who is buying houses with the prices dropping like that? Don't they realize that their "bargain" will end up being pretty expensive if the prices drop another 10 to 20%? Crazy world.
The Bay Area is pretty bad as well. Do you want an example of what I mean by buying a so-called "bargain?" Here's a quote from the article: Larry St. John, owner of an insurance brokerage, bought a home for more than $900,000 early this year in a new development on the city's northwest side. This weekend, St. John said the builder - DeNova Homes - is planning an auction of more than a dozen similar homes, with starting bids about $300,000 less than what recent buyers paid.
Mr. St. John just paid 900,000 for a house that is worth 600,000 several months later. Ouch! What was he thinking?
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