RISING COSTS RAISING FEARS.Byline: Barbara Correa Staff Writer The stock market bubble A stock market bubble is a type of economic bubble taking place in stock markets when price of stocks rise and become overvalued by any measure of stock valuation. The existence of stock market bubbles is at odds with the assumptions of efficient market theory which assumes burst a long time ago. But the California housing market bubble just keeps on expanding, rocketing the median price for a home in the state to well over $300,000. Record-low interest rates and more first-time buyer first-time buyer n → persona que compra su primera vivienda first-time buyer n → personne achetant une maison ou un appartement pour la première fois first-time buyer programs have converged with faltering stock prices and scarce inventory - particularly acute in Southern California Southern California, also colloquially known as SoCal, is the southern portion of the U.S. state of California. Centered on the cities of Los Angeles and San Diego, Southern California is home to nearly 24 million people and is the nation's second most populated region, - to create a perfect storm scenario for residential real estate price escalation. The median price of an existing, single-family home sold in California in July - the most recent figure available - was $323,700, up 21 percent from the same period last year, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. the California Association of Realtors. The median is the price at which half the homes sold for more and half for less. Basically, everything, everywhere, is on fire, said John Karevoll, an analyst at DataQuick Information Systems, a real-estate research company in La Jolla La Jolla (lə hoi`yə), on the Pacific Ocean, S Calif., an uninc. district within the confines of San Diego; founded 1869. The beautiful ocean beaches, in particular La Jolla shores and Black's Beach, and sea-washed caves attract visitors and . ``Sales are strong in all (home) categories: prestige, fixers. L.A. and, to a degree, San Bernardino San Bernardino, city, United States San Bernardino (săn bûr'nədē`nō), city (1990 pop. 164,164), seat of San Bernardino co., S Calif., at the foot of the San Bernardino Mts.; inc. 1854. , were kind of the caboose of the statistics train, but L.A. regained all the ground it lost in the 1990s about a year and a half ago,'' he said. ``Since then, it's been very stable.'' At the same time, inventory is nonexistent non·ex·is·tence n. 1. The condition of not existing. 2. Something that does not exist. non . With most of greater Los Angeles built out and the local population continuing to swell, developers turned to San Bernardino and Ventura counties, the northern San Fernando Valley San Fernando Valley Valley, southern California, U.S. Northwest of central Los Angeles, the valley is bounded by the San Gabriel, Santa Susana, and Santa Monica mountains and the Simi Hills. and Antelope Valley in the 1980s. But when the real estate market slowed at the end of that decade and into the 1990s, building screeched to a halt. When it started back up again, the planning process couldn't keep up with sales, said Jay Moss, president and regional general manager of the greater L.A. division of KB Homes, one of the largest residential construction companies in the United States. One reason is that the farther out farther out Of or relating to an option contract with a later expiration date than a contract that is currently owned or being considered. For example, a contract with a May expiration date is farther out than a contract with a February expiration date of you build, the harder it gets to build at greater density. ``As you get more built out, people don't want to have their view of the vineyard or whatever obscured by new houses,'' Moss said. ``I'm probably building on more lots than I'm replacing every year.'' As hot as the market is, Realtors throughout the region agreed that they don't anticipate a replay of the 25 percent gains of the last 12 months in 2003, and some said they are already seeing signs that prices are leveling off and buyers are getting fed up. ``In the last (two months) we've started to see more listings ... and buyers aren't willing to go up to seller's prices anymore,'' said Vaughn Bryan, president of Century 21 Lois Lauer Realty in Redlands. ``Someday in the future we're going to lose the high-priced buyers,'' said Nick Guido, a real estate agent in the San Gabriel Velley. ``The baby boomers are already starting to sell the 3,000- and 4,000- square-foot homes to buy smaller homes and maybe a vacation place in the desert or the mountains. So who's going to want to buy those homes? They'll become a bargain.'' CAPTION(S): Chart: CALIFORNIA MEDIAN HOME PRICES SOURCE: California Associationof Realtors Warren Huskey/Staff Artist |
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