The title also reminds me of a neighborhood I saw a couple of years ago in Snohomish county. Seemingly every house in the neighborhood refinanced at least 2x a year! I’d never seen that type of behavior on such a scale before.

Ardell…

I’m in Hancock Park…just south of Hollywierd.

The bubble is breaking in certain areas here. When the median price in Watts hits 400k you know something is wrong…people can talk all they want about “gentrification” but throwing a Starbucks in the middle of a high crime rat hole doesn’t quite cut it. One thing we have going for us down here vs other parts of the U.S. is the sheer number of immigrants. We Amurikans…are a little too used to our “nuclear family” arrangements where we now cry foul that both Mom and Dad have to work in order to make ends meet. Well…if you go into many neighborhoods in L.A. you will more often than not see houses where there are 3 or more “breadwinners” contributing to living costs…and doing without the frivolous “stuff” that most people consider necessities rather than the luxuries that they actually are.

Redondo Beach is one of the better priced areas around here in my estimation. Venice, SM, etc have all gone through the roof…although the further west you go now…the more reductions that you see and the longer properties sit on the Market. The only problem with Redondo is that you do get some of the gangbangers there as when you head east…it’s a whole different story.

They are *trying to gentrify San Pedro with some condominiums…and they suuuuure do look purdy in their ads. (I think they are called Vue)…but I dated a girl that lived there and they are basically throwing up a shiny glass wall condo in a slum. IMO…it’s kind of like building one of the nice Belltown buildings over in Rainier Valley.

If you want cheap beachfront you have to head out of country now…and even then…I don’t think I could ever settle on just one beach so that’s where I would definitely rent. I have seen some beautiful oceanfront apartments on the Mayan Riviera for $300 a month…and SE Asia is even cheaper from what my Brother has been telling me.

I appreciate your replies…and understand them completely.

I have a feeling that just as stated above…is that many people who have used the exotic loans for purchases (not including those who have alternate assets)…are really falling victim to their lack of proficiency at math…It is all too easy to take advantage of someone when fiddling with loans and the numbers. It makes me think back many years when I was younger and bought my first boat while living (ehem…renting) on Lake WA. Being that I was going to finance the boat…the salesman was all too ready to find out what “payment I could live with”…and did the usual calculations. He seemed perplexed when I said that I wanted to go home and think about it…I didn’t tell him that I had a B.S. in Econ with enough finance/marketing /accounting classes under my belt to have a double major…but anyhow…after running the numbers at home on my old HP business calculator…his “affordable” payment was at about a 20% interest rate. I would be willing to bet that 8 out of 10 people would have signed on the line. I ended up with my own loan at an 8% rate at the time.

I do the same math still when I see those “teaser” payment amounts in the RE section of the paper here (I’m in Los Angeles) and it is easy to see how people get sucked in.

Props to both of you as you seem to be part of the industry that isn’t just out to make the quick buck. Admittedly…I am a “bubblehead” as the saying goes…what is going to happen?…who really knows…like the old saying in econ…’Ask 10 different economists the same question and you’ll likely get 11 different answers’…it truly is *the* great unknown right now and I doubt that anybody knows nor can predict what can happen. It’s kind of funny…I see both sides of the camp using statistics to support their view of whether it is or isn’t a bubble. It reminds me of another quote…”statistics are good for telling two things…lies…and damn lies”.

sorry for blabbing