California a long way from recovery

Good post here on why California will continue to crater.

http://www.doctorhousingbubble.com/california-financial-dreaming-5-exhibits-showing-why-california-will-be-in-a-recession-until-2011-revenue-projections-housing-inventory-unemployment-toxic-mortgages-and-consumer-psychology/

I contend that there is another issue that isn't being discussed much which will make the housing crisis even worse in California - Total Cost of Ownership (TOC). Thousands of 5000+ sq ft McMansions were built over the past decade in CA. Who is going to buy them, even at a deep discount? TOC will eat many people alive even if they buy a $1.5 million McMansion for $300K. Utilities, maintenance (pools, jacuzzi's, huge kitchens, etc.), insurance, landscaping, HVAC units, roofing, cleaning, etc. will put a lot of financial stress on the new owners - especially over time.

I read stories that some new developments are being completely abandoned and people go in at night and gut the houses. I contend that many of these McMansions will never be sold, and many that are will end up in foreclosure once again once they have become delapitated. There just isn't going to be a new market for these huge houses - too much wealth has been destroyed.

And does anyone really think wages are going to increase anytime soon will such high unemployment?

As a hypothetical - suppose everyone decided to buy stretch limousines over the past 10 years because they were cool (like big houses) and they were appreciating quickly in value. Then the bottom falls out. Now there are 20 million surplus limousines. What do you do with them? They aren't good commuter cars. They're expensive to maintain. They just aren't designed to be used for much of anything useful.

That is how I see the housing in CA. Why would a family of 2 or 3 or 4 need a 6000 sq ft house? These houses just aren't designed well for living in long-term - they are too big and expensive and there just aren't enough "rich" people to buy them and live in them long-term. As I've read - a house is a place to live, not a speculative investment.

There are areas in CA that have become ghost towns. Ghost towns usually don't make strong comebacks - they die. I think we are going to see a lot of these McMansions bulldozed down at the end.