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A RED HOT REAL ESTATE MARKET

October 26, 2004

For years people have been saying how HOT the California real estate market was. Well, I don’t think they had in mind the devastation going on there now. There’s never a good place to have a fire, especially your home. I try to not write about what I don’t know. What a philosophy, eh?

Many years ago our house burned to the ground in less than an hour. It wasn’t the Santa Ana winds, but 40 mph eastern Texas winds. As I write this Monday afternoon, close to a HALF MILLION acres have burned, 1,000 homes have been destroyed, 13 people have lost their lives and another 10,000+ homes are in harms way.

But to my point. Greenspan keeps saying he’ll keep rates low and that there is no inflation. So, you want to buy a small 2,200 sq. ft. four bedroom home with 2 baths? Well, in LaJolla California, you’ll pay $1,362,000 on average. California in fact has 3 of the 4 most expensive markets (Palo Alta and Beverly Hills being the other three).

The latest figures show the national average for the above is $318,172: up 9% in nine months and the Fed lending rate is 1%? It can’t be done- for much longer. Today, the average new home for the whole of our nation was reported to be $256,200. Who can afford a QUARTER MIL for an “average” new home?

So, there’s no inflation? If you believe that, then I’ve got some desert land in Arizona that won’t burn that I’d like to sell you. Better yet how about some alligator infested land in Florida?

Written by Ernie · Filed Under Daily Commentary 

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