Dealers and dreamers see gold in California housing bust
By Dan Whitcomb
LOS ANGELES (Reuters) - California's tortured real estate market has brought heartbreak and ruin, but some investors, speculators and first-time home buyers are also dreaming big and finding opportunities -- a silver lining in the Golden State's epic housing crash.
For many young couples, plummeting prices and near record-low interest rates make it possible to own a home in California for the first time.
Investors and real estate speculators, meanwhile, can snap up foreclosed properties on the cheap to sell during the next boom in California's boom-and-bust real estate cycle, a boom they believe is inevitable and possibly not far off.
"This is the buying opportunity of our lifetime," said Bruce Norris, who heads an investment group that expects to purchase some 100 homes this year in Southern California's Inland Empire region.
California -- which would be the world's eighth largest economy if it were a country -- saw a near-doubling in home sales in the fourth quarter, a pace surpassed only by Nevada's 133.7 percent growth.
But experts warn it's a dangerous game to play when nobody is really sure how low home prices will go or when they will rebound as the recession lingers, jobs dry up and residents pour out of the state in search of better prospects.
Norris concentrates on the Inland Empire of Southern California, made up mostly of Riverside and San Bernardino counties, one of the fastest-growing areas of the country during the housing boom, driven partly by immigrant families who couldn't afford pricier coastal cities.
It's now one of the hardest-hit. In the past 18 months, the median home price in Riverside and San Bernardino, pummeled by the subprime meltdown and now recording some of the highest foreclosure rates in the state, has plummeted 55 percent. Continued...