On just a couple of blocks in Chula Vista, CA, multiple homes are for sale. Given many have the same square footage, they probably have the same floor plans. Those who bought a few years ago have a paper profit of $200,000 -300,000. But wait, several homes in the same area were bought recently with 100% financing, no money down, and one is already in foreclosure with apparently no payments ever being made. Looks like the flipping flopped.
So when the foreclosed house sells for $150,000 less than similar homes nearby, and it will, the value of those homes will take a hit too. Worse, the homes for sale are basing their sale price on that of the 100% financed homes. And that’s just not sustainable, or even realistic, is it?
Bubble Markets Inventory Tracking has full info and is a solid resource for tracking the now deflating real estate bubble. No, it’s not happening everywher. But areas where speculation got insane is where pain is now. D.C. and South Florida condos. Phoenix. Las Vegas. Parts of southern California. This shakeout is just now taking hold too.