Zeev's Turnips Patch-No Politics (ZEEV)

[punkle]

It's already happening in Northern CA, especially anywhere close to Silicon Valley. I believe in San Francisco, we're overbuilt with tons of high end (> $1M) condos and they have been dropping at least 10% from their highs. Also, commercial real estate in SF has an all time high vacancy rate of around 24%. And keep in mind I still see the Bay Area as one of the most desirable place to live on earth.

Just like everything else, we have too much inventory which is one of the reasons you see GDP improving. It takes a little time to stop the manufacturing presses but it will happen.

I see a correction in high end residential real estate of 10 - 20% off the highs coming in the next year or two. What happens is many of these people that were looking to buy $1M plus homes have now stepped down to let's say $500K - $1M homes so you are seeing that market and the lower end market improve in price but I believe that will only last another year at most and this is with interest rates at all time lows.