California Incline

There has been a lot of conjecture lately about our being in a “real estate bubble” that has got to burst. I don’t see it like that. What I do predict is more of something like what we saw in Laguna Beach this week. As I watched those expensive hilltop and hillside properties slump to the sea, I saw a foreshadowing of Southern California real estate values: not a deflating burst, but a gradual slump. And, like the Laguna survivors, nobody has to get hurt.

As long as home buyers are in the market for a decent place to live, and as long as developers and community officials resist the temptation to speculative over-building, the coming slump will only be a reasonable correction on the path of property appreciation.