Tuesday, March 29, 2005

Bubble, Bubble..........toil and trouble.

People don't seem to believe that a rural area of Northern California can have such outragous home prices. My wife and I have about $400 G's of capital to invest in a dwelling, and we can't get anything of value here in Ukiah.

Let me point you in the direction of the Los Angeles Times (free registration might be required, but worth it). It would seem that more and more people are getting into the real estate investment game, especially in the more rural areas of California. Take for instance the following chart in the article:

Most popular areas for investment, ranked as a percentage of all homes bought solely for investment in 2004

Redding, Calif. 19.08%
Medford-Ashland, Ore. 18.78%
San Luis Obispo-Atascadero-Paso Robles 18.20%
Visalia*, Calif. 17.98%
Merced, Calif. 17.53%
Chico-Paradise, Calif. 17.52%
Fresno 17.48%
Tallahassee, Fla. 16.78%
Bakersfield 16.56%
Reno 16.18%
*Also includes Tulare and Porterville.

These areas are not the greatest places in California to live. Redding, Visalia, Chico, Fresno, Bakersfield, Tulare.......all are California Central Valley farming communities, some larger than others. All the places have no significant special value to them at all. All are horribly hot in the summertime. All are becoming too crowded for their infrastructure. Where is the intellegence in buying this land? Simply put, it is real estate speculation.

It is pushing young professionals out of the state. You wonder how long until the state figures it out. The way I look at it, some of the California coastline is about ready to "burst".

Read and enjoy!
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