Worst. Housing. Ever.
For those thinking that a bottom in California housing is near, and that buying now is urgent, I’ve got a message:
“Not so much.”
Were the Kuznets Cycle to confirm to past patterns, real median CA house prices will not again return to the ‘04-’06 levels for another 15-20 yrs., if then, given the longer-term demographic profile, normalized lending standards, and likely slower real GDP growth trend (2% vs. 3-3.5%).
Seen another way, nominal SoCal median house prices will not bottom until prices return to the ‘99-’01 levels, implying another 20-30% avg. decline in prices hereafter; but even then nominal prices will likely not rise more than inflation for many years thereafter.
Click on the image for a larger, clearer version:
Read the Full Story at Mish’s Global Economic Trend Analysis:
“When Will Southern California Home Prices Bottom?”
September 1, 2008
John Blackburn wrote:
For those thinking a bottom in California housing is near, and that buying now is urgent, consider why you think this at all. Many parties are working hard to make you believe this while offering only short-term optimistic data as evidence. Long-term, forget it.
Posted 01 Sep 2008 at 6:32 pm ¶
Tom Chappell wrote:
Amen. The main-stream economic media is chronically bullish, no matter what, but their non-stop and repetitive calls of bottoms in real-estate prices and financial stocks have by now come close to self-parody.
Posted 01 Sep 2008 at 6:37 pm ¶