Venice has an interesting vibe for a California beach city. It certainly doesn’t carry the glamour of Malibu but you wouldn’t get that from looking at the price here. Venice is undergoing full speed gentrification. We are seeing shoeboxes selling for more than one million dollars. The lemmings are lining up to make purchases just when the market is reaching a short-term peak. In California we only know two speeds: boom and bust. We’ve had a nice boom recently. All you need to do is look at the history of what is going on and you will understand this is unsustainable. It seems with every gyration in market volatility, we go from yes an interest rate is going to happen to full on retreat. If you haven’t suspected, the Fed is running a confidence game at this point. Buyers are diving in with maximum leverage trying to get a piece of the housing action. Yet real estate is trailing the stock market and the market is losing some steam. Venice highlights all the craziness that is SoCal housing.
Venice housing
The pitch for housing values going up is the same one used in 2006 and 2007. That is, the population is high while new housing is simply not being built in certain cities. The argument makes some sort of sense until you realize prices cratered with these characteristics in place last time.
This post was published at Doctor Housing Bubble on September 9th, 2015.
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