The Housing Crisis Is Over

So what’s going to stop the housing decline? Very simply, the same thing that caused the bust: affordability.

Wow!!! According to the New York times article quoted, it’s official, the United States of America Real Estate debacle is over and April 2008 marks the bottom of the downturn. Now THAT is a bold statement. One I don’t agree with concerning San Diego real estate.

The next question is: Even if home sales pick up, how can home prices stop falling with so many houses vacant and unsold? The flip but true answer: because they always do.

Yes, I agree that home sales will pick up this year (Real Estate is experiencing a Nordsrom-style Half Yearly Sale) and yes property is way more affordable for certain market segments, especially first time home buyers. What I don’t agree with is that we have hit bottom. It will be nearly impossible to hit bottom for San Diego real estate prices with the insane amount of foreclosures and short sales going on at the moment. These distressed sales levy a heavy amount of downward price pressure on the typical retail market. My prediction is that we’ll shed two important things next year in 2009… the number of foreclosures and a president. At least one will be good for the state of the nation, hopefully two.