It is time for us Angelenos who have been around a long time to point out some realities that virtually all of your “reporters” have missed in their rabid search for a big story.
First of all, houses are still selling. Yes, they are taking longer to sell. But as you pointed out, during ’86-'89, houses would sell within days or even hours of being listed. Of course such a frenzy could not sustain itself forever, nor should it.
Even during those boom years, houses nationwide would take months to sell. Also during those years, homes appreciated 20% or more (64% in Playa del Rey) per year.
One of the realities you are missing is that, even if house values depreciate 5% to 10% this year and next, homeowners have still seen staggering appreciation. You have cut from this historically cyclical real estate panorama a narrow slice, the decline from 1989 to 1990, while predicting even more doom and gloom in ’91.
If you look at the broader picture, say a 6-to-10-year view, you will see that not too many Angelenos lose on a real estate investment.
Take an unimaginable and highly unlikely worst-case scenario. Say the houses in California became worth absolutely nothing. At least we would still have someplace to live. Not so in the stock market. When you lose there, and millions have, you haven’t got anything but a few pieces of paper, if that.
I applaud The Times for making the sheep out there afraid to buy just because their friends aren’t buying. I’m going to--that’s right, buy low, and sell high the next boom, creating my security, if not my fortune, while all you guys will be scratching your heads five years from now wondering why the other guy got so lucky!