Reply #18: That's kinda what happened in San Jose after dotcom bust... [View All]

[cascadiance]

An extended period of "trickling down". Many people moved out of there then (including me), as it didn't drop enough for us to want to buy into it, but many wouldn't sell for a steep loss either, so it was a "slow drop".

I think there still are some factors that could send it down more quickly though:

1) Bankruptcy bill - If anything makes it so that people face an even greater sense of loss or risk of loss, this will dry up demand more than usual that we would have faced in other times. Before they have some insulation from financial disaster. Now they don't.
2) a significant earthquake or other similarly scoped natural disaster in one of the major metro areas (L.A., San Diego, Bay Area), would probably significantly drop prices in that area quite a bit at least, and might affect the others if the perception is that such earthquakes could affect the other areas in a similar way, adding to the risk perceived in making such an investment.