patrick.net

E-man says

I like pkowen’s perpective “It’s not ugly in my view at all, with regrets to your relatives. It’s what needs to happen.”

Agreed. I would add it was just plain stupidity and arrogance of buyers as prices skyrocketed to become cheerturds.

pkennedy says

Yes very informative, it basically debunks “fortress areas need to fall” that everyone talks about here. Many areas around here will never fall due to exactly what you stated. Places like palo alto, los gatos and others will remain high because they are very desirable.

http://www.paloaltoonline.com/news_features/real_estate/fall2000/2000_09_22.trends.php

"No one wants to recognize it, but between 1989 and 1992, prices dropped 30 to 40 percent. There's no question that could happen again. Everything has a cycle and real estate is no exception. It's foolish to think prices will go up forever. In the longer term they will, if you can weather the downturns in between. There's no way to know," Dancer said.

So what makes PA or LG imune to price declines? The majority of the price inflation comes form the free wheeling stock options of 1999. Take away IPOs and stock options what do you have left to support these prices. There is very little to support these prices. Desirabilty means very little.