Corrections - Secondary markets are first.
It's becoming pretty apparent that housing market correction doesn't bode well for the secondary California markets. These are markets that have been bouyed up by the bubble but whose fundamentals just do not support the price appreciation. They are just outside the major markets and include Bakersfield and parts of the Central valley. Most analysts are predicting major prices declines in these markets. TO my mind this makes complete sense as real estate is always highly regional. These markets were quickly driven up as they were the only affordable housing in the area - the problem of course is that the price of gas means that living in Bakersfield and commuting to Los Angeles is an incredibly expensive proposition. Add in a negative amortization loan which is going up, combined with negative equity and you are setting the market for some sharp price declines in the medium term and stagnated appreciation (probably below inflation) for the next 10 years.
Labels: Bakersfield, CaliforniaSecondaryMarkets, CentralValley, secondarymarkets
