I have seen similar graphs many times and always find them amazing.

It just awes me every time. PArticularly before 2006. Like, where will this bubble end???

(BTW we bought in 1999).

Anyway, it also shows why I have confidence prices won't go below a certain level. It has always been insanely expensive in this state. But wow, the last decade has really taken it to a new level.

On the flip side I know A LOT of renters house shopping right now. I think a lot of the doomsdayers have kind of lost sight of that. Our neighborhood dropped like a rock and is on an upward trend right now, with people snatching up deals. There are a hell of a lot of people around who could not fathom buying real estate in California for the last decade or so. Now they are considering it.

Well, our area has settled into very 2002-2003 prices. Places like LA and the Bay? Yeah, not much of a downturn yet. So those areas are really skewing this chart. Likewise, that is another save for us. One reason prices have plummeted so much here, so quickly, is that so many people came here from other parts of the state, for more affordable housing. But they didn't really have any ties here and fled with their equity in 2004 - 2006. I mean most of the people I have met here? Weren't from here and didn't stay very long. So we were quick to feel the drop. Likewise, we now have this void where we are very attractive to the more expensive areas, again. IT will be interesting to see that cycle renew again.

As far as places like the Bay? As long as people have their jobs, they will hold on. But with resetting ARMs and an unsure economy? I think they are in for a bumpy ride. Recession will most certainly be the downfall of those high prices. Too many families relying on 2-income households to pay the mortgage. So of course, lost jobs will just spell disaster.

Homes in Bubble Regions Remain Wildly Overvalued