If the bubble burst in Cali what will..

happen? I don’t the home price will drop significantly but there should be a decrease.

Will this be good for someone who has foreclosure expertise?


Foreclosure expertise is only good when you are dealing with a foreclosure. Up market, Down Market doesn’t really matter. Foreclosure is only one strategy that can be used. That being said, I personally think that foreclosures will be rising in California over the next 4 years and that regardless of the outcome of the future, foreclosure experience is worth having under your belt.


Depending on what your objectives, goals, and timing are, a correction in the California market may be a good thing for you.

Ohhh the bubble’s again!

It was best said when someone said this is only important if you collect Bubbles I do not collect bubbles so it is not important!

when ever prices do fall they do not fall drasticly and or overnight! if you start to see a drop plan on doing one of two things either get rid of the property and or ride it out until times are better lets say your property does drop by 20k on a 400k value that is a 5% drop if the property goes up by 10% a year you lost 6 months equity if you have that same property rented to cover your mortgage it really does not matter!

Corrections in the Cali market can be much more drastic than 5%. However, Cali is a very cyclical market. It will go down if past performance is an indicator. However, some areas will suffer 1-2% while others suffer 15%. Be in the 1-2% and you are fine.

Where I live, there is a neighborhood where people bought during the high point of the last market. They lost 50k in equity in 3 years. They all thought they had made the worst decision in their life. Fast forward 10 years and they were selling the properties for 200k+ equity. So it is all timing. If you are buying a property that you can’t afford to carry in a worst case scenario, then maybe you shouldn’t “collect” that “bubble.”

during the last downturn, properties in moreno valley,CA dropped 60%.
on average, i believe the number was more like 20%.
but then who’s to say whats average.
it also took 9 years for prices to come back to pre-burst levels.

when the overvalued properties correct in CA, cash will be king. lending requirements will become much stricter as mortgage holders loose a lot of money.

parts of CA have already gone flat. where i live in san diego, the market has actually dropped 5% this year.

If you start to see a fall of over 4%-5% in a month or a week it is time to get out don’t you think? never said a week a month or a year! I just said it is time to consider options!

If it cash flows, who cares what it’s worth, just ride it out till the times are good. A 20-50% decrease is NOT unreasonable in markets that have went up 100% within the past two years.

I really hate to put it this way if I lived in Cali. I think I would invest in a different market for long term holds. San Diego dropped 5% last year. I have a good friend down there that just bought a property there that fixed would go for 500k he got it for 325k and it needs 15k in work! He wanted to rent it out I told him just flip if there is a decline in the market! He is selling it all and movin here!

it’s kinda hard to cash flow when south orange county, ca. 1,200sf 30 year old SFRs are selling for around $600,000 and renting for around $1,800 per month. maybe with 50% to 75% down payment, lol.

If you can’t cash flow it, don’t buy! Let some other sucker do it and buy it from the bank once they go under. Patience is the key to all investing, you have to time your entry and your departure. Don’t follow dumb money, let dumb money get burned, and pick up the pieces at deep discounts.

And why did Moreno Valley, CA decrease 60%? Because the local base closed and everyone that lived near it was leaving. Major glut! The prices in MV still havent come up to the levels that the rest of the area pulls, but they are still creeping up slowly. MV will be one of the last to stop rising I think. However, the rise will be nothing near what is seen in OC.

Sales are already slowing in CA. From this last June to June, prices still went up but sales slowed in most places. In my area 500k plus homes which were selling in a week are now sitting for a month or two (I read the same is happening in DC, btw). There’s like 5 on my street just sitting. Anything at the bottom of the market is still going strong b/c there’s still many people trying to become homeowners. I think that’ll continue and I hope the slowing at the top is good news indicating a soft landing.
I agree about the foreclosures. There’s a lot of folks that just had to have the brand new custom home in the gated community, and were willing to take out interest only loans and be leveraged to the hilt to do it. Then they took their appreciation and got HELOCs in order to get the $80k landscape. I’ll be there with cash when that all goes bad :slight_smile:

I agree dan 100% I do not invest in Cali. and there is a reason for it! And that is the reason!


nothing more nothing less!

Like here where I am I know that in four to five years there is going to be a demand for housing and so what do I have!


There are always more factors than supply and demand. But once an area gets overpriced for “no good reason” than you have to be cautious. I have my sights on areas here in NJ that I know will be going down faster than a fat kid on a smarty just because they doubled in two years for no good reason, the schools suck, crime is high, area is still poor the only reason they went up is because the surrounding areas did, and to me that is not a good reason. So when the crap hits the fan, this area will collapse, why cause it has in the past many times before.

i totally agree with you.
i just closed on once property here on monday and my primary residence is due to close any day now.

i’m geting out while the going in good!
since my primary residence went into escrow there are 4 more condos within a 20 second walking distance that have been listed for a total of 8 condos in my complex. until last year there was never
more than 1 condo listed at the same time in the complex.

Where are you going to that is the question?

personally i’m not going anywhere!

i’m renting it back from the buyer!

in terms of investing, i’m going to utah!
it kind of seems that the CA investors are moving in a concentric circle away from Socal.
after nevada & arizona, utah is next. to be followed by idaho.

after utah, idaho and the dakotas, they’ll go to unpopulated areas in canada and then the north pole, lol. did anyone read the article in the LA Times yesterday about land speculation in texas?? pretty interesting.


very interesting article about how the younger generation is fleeing high cost areas.