By Bob Schwartz, CRS,
GRI ©2006
www.brokerforyou.com All rights reserved.
Shanghai’s housing market
into double digit decline!
The LA Times ran a story on March
4th.on the bust of the Shanghai, China, real
estate market.
In one of the world’s hottest
housing markets,
the last three years saw a doubling of prices.
Things are now so bad now that thousands of real estate
offices have closed, many homeowners have loan amounts
that are greater than their properties resale value,
recent buyers are fighting with developers to rescind
their purchases, and banks are awaiting a wave of
mortgage defaults.
Morgan Stanley's chief
Asia economist said “Shanghai's housing slump is only
going to worsen and imperil a significant part of the
Chinese economy”. About the property now under
construction, this same economist said "They'll remain
empty for years!”
The similarities to our hot US
bubble markets, makes me believe this is preview of what
we are already starting to experience (though at a much
slower pace).
The first signs of trouble in our
real estate markets were very subtle and only picked up,
or acknowledged, by very few real estate (http://www.brokerforyou.com/blogger/index.html
) professionals. Since mid 2005 the red flags have been
quite obvious to even the layperson. Yet, the forever
optimistic ‘it’s always a good time to buy’ industry
line is embraced by the mass media (they certainly do
not want to lose their immense source of real estate
advertising revenue) and the naive general public.
In San Diego in particular and
most other major metropolitan real estate markets, it’s
quite acceptable to acknowledge and embrace the double
digit real estate appreciation of the past. Yet, even
the thought of depreciation of real estate is looked on
with the same disbelief and distain as if a child
molester moved in next door.
There is a proven saying in our
stock market: “You can never go broke taking a profit.”
In many US markets, seasoned investors can still turn a
profit. However, if Shanghai’s real estate market is any
indication of what awaits the hot US markets…..the
window of opportunity is closing very fast!
AbOUT
THE AUTHOR Bob Schwartz, is a
Certified Residential
Specialist, and a CA licensed
San Diego real estate broker with. Bob has
over 27 years of residential real estate experience,
authored a number of published articles and served as an
expert witness for
San Diego lawyers. You can contact Bob via
his highly popular
San Diego real estate website.
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