My Forecast for the Southern California Real Estate Market

I read Mcdull’s blog this morning about the real estate and stock market and have left some opinions.  I cut and paste my comments left for his blog and added some more points as follow:

I see the negative effects for the collapse in the real estate market will last at least 3 years in Southern California. 

As a matter of fact, the State of California has less revenues last facial year due to the weaken real estate market and result in a deficit budget.  There are many programs enacted by the State are falling apart due to the insufficient funding from the State; for example, the Education for All Programs.  There are few Unified School Districts are now suing the State due to State did not keep its promise to fund the programs.

In LAX, real estate prices in all of the Chinese areas are falling down.  However, those houses $1.5 millions and up are still very solid after 9 months' adjustment.  For example, in my area, Arcadia, CA, after the adjustments, all the houses with $1.5 millions have increased 3% in value last few months (due to the inflated construction costs and replacement costs.)  My house rose back up to $1.95 millions from $1.85 millions last right now.  (But it dropped from $2.15 millions.......)

For condos and other houses prices below $1.5 millions, they are all suffering.  For those newly developed communities (not very good areas) the real estate prices are dropped from 15% to 30% and thee transactions are very few.

The Fed had dropped 0.75% in rate this morning and I think they will drop another 0.25% or 0.5% next week and try to save the stock market.  Remember, this year is the Election year and the GOP wants to keep their Kingdom in order to make more money for their own interests.....

One more point, if any of my friends have savings, please go back to Hong Kong or China to buy some more blue chips stocks.  I will buy more HSBC, Cathay Pacific, China Life, Bank of China, China Merchant Bank, Hutchison, MTR.