Tuesday, October 21, 2008

BOING

A little over 3 months ago, I wrote the following:

Real estate is finite and is the least fungible thing on the planet. No two parcels are the same, and there are only so many places to build. The English knew this in 1100, and it's carried forward to this day. Before Clear Title statutes (mandating that any clouds occurring 60 or so years prior to present day are automatically extinguished) and abstracts, land titles were searched back to the original patent from the U.S. government. We take this stuff seriously. And we go through all that hassle up to and at closings to make sure that that parcel we bought will be OURS with no other claims on it, because it's that precious.

It helps to remember that when you hear some ignorant dingbats shrieking about some coming "housing collapse" portending doom in the year of a presidential election. The amount of buildable land will remain constant, even as the population grows.

California is one of those American locations that exemplifies the twin pressures of population and scarcity of usable land (with the mountains and the canyons and the desserts with the cacti and the stinging scorpions FLAVEN). Look at the bounce the Cali real estate market just experienced:

A real estate tracking firm says home sales in California jumped 65 percent in September from a year ago, as homebuyers seized sharply discounted foreclosed homes and other properties.

Figures released Tuesday by MDA DataQuick show the surge in more affordable homes helped drive the statewide median home price down to $283,000, a drop of about 34 percent from $430,000 in September last year.

In all, 40,317 homes were sold last month. That's up about 6 percent from August sales
.

We're still overbuilt, but at least it appears that we may be starting to catch up. The market is finding its equilibrium.

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