i just keep posting because i love seeing my name on the net

i just wanted to throw this out there. i live in the los angeles area. lately i've noticed many, many for sale & for rent signs on residential sites (single family homes, townhomes, etc.) A couple of years ago when a house in my neighborhood went for sale it was gone within HOURS – usually getting more than the asking price. Now I see the signs up for weeks – unable to sell.

Then today, as I drove home from a museum (about a two mile ride only) I saw 9 commerical building for sale or lease. These are big, 4 to 10 story buildings on major streets in LA – all empty! One was in Beverly Hills!

You think the real estate boom is done? Think we’ll crash? I know it’s different in each area but – Southern CA has had an unbelievable run… it may be time to pay the piper for us.

-ja

Joe,
I've seen the same thing in Vegas. I sold my house last May after it had appreciated about $100,000 in less than 6 months. Same conditions here, houses selling in one or two days and usually for more than the asking price. Real estate signs everywhere, "I buy houses" signs on every light pole. Condo units with lock boxes on 75% of the units and no one ever moved in. People just buying and flipping. I've talked to a lot of people who are buying 2 & 3rd houses, who have no idea what their doing, have no knowledge of real estate other than the fact that "real estate never goes down". It seems like the Nasdaq 2000 mentality to me. Now instead of selling in one or two days its 2-3 months. My old house is back on the market for $40'000 less than what I sold it for.

Gary

I had the same discussion with a couple of friends last week.

One simple approach is that when 10 year Government bonds yields are greater than rental yields the property market is in a bubble. This is the case, in the UK with Govt bonds paying 4.74 and property yields in London between 4.00 and 4.25.

My guess is that there is a similar situation in many countries at the moment.

The problem with bubbles is they generally go on longer than most people think possible. However the end is always the same.

Regards
Andy

I have no trouble at all in believing that there is a real estate bubble in places like L.A., Las Vegas, and different places along the east coast, but I'd say that most areas of the country, i.e. "fly-over country" there isn't much of a distiguishable real estate bubble at all. For example, would you say that there is a bubble in Texas where in some areas, like Austin and Beaumont, real estate prices have actually been going DOWN? In other areas, such as Colorado, appreciation has been very minimal, basically just keeping up with inflation.
While I understand that from a macro perspective, we have several potential problems looming in front of us such as a potential currency crisis, run-away inflation, or a stock market crash, I'd say that in "normal America" the potential macro problems pose a much greater threat than a busting real estate bubble that never seems to have happened. (Houses in these areas still sit on the market for 90 days or more).
Also, fundamentally, it isn't hard to recognize the problem that L.A. is about to have when they run out of people who can qualify to buy a $500,000 house, or when people end up making much larger house payments when their ARMs end up putting them on much higher interest rates. These problems don't loom nearly so large in Nebraska, although I wouldn't argue that too many people are way too overextended in credit-card and mortgage debt.

--Ben

K B Homes (KBH)
Descending Triple Bottom Breakdown.

Check out Point and Figure Chart

http://stockcharts.com/def/servlet/SC.pnf?c=KBH,P&listNum=

Look for bearish signs when leaders start to breakdown.

If you'd like a good laugh, read this:

http://money.cnn.com/2005/04/20/real_estate/market_hot.reut/index.htm

....ah..... "extraordinary delusions and the madness of crowds."