Making trend generalizations in Real Estate is troublesome given how localized each market can be. Since I'm not in your area I won't venture a guess on a recovery timeline; however, I will provide you with some clues on what to look for. Since it looks like you are in Riverside County I'll frame my response to this area.
First, there are two primary variables that influence the direction of a Real Estate Market (in order of relative influence):
Interest Rates (investor demand for Mortgage Bonds)
JOBS are THE most important leading indicator for a market trend. When I look at Riverside County and the surrounding areas unemployment is an issue. For example, here are the May 2010 unemployment rates for Riverside and immediately surrounding Counties:
Riverside 14%, Imperial 27.5%, San Diego 10%, Orange 9.2%, LA 12.1%, San Bernardino13.8%.
Typically, or shall I say before the "new reality" came upon us, an unemployment rate around 5% was considered normal. Now, the "new normal" is 7%. In any case, until jobs growth happens the best we could hope for is not having a further reduction in property values.
I expected INTEREST RATES to increase by about 1% after the FED stopped their artificial "rate stimulus" by getting out of Mortgage Backed Securities buying in 4/2010. Since then, the economic turmoil in the Euro zone countries has investors seeking the relative security of US bonds. As long as the US remains the benefactor of foreign investorsâ€™ â€œscared moneyâ€, mortgage rates will remain low here in the US. To understand more about the mechanics of mortgage interest rate trending please see: http://docs.Steven-Anthony.com/SAR-HowMortgageRatesAreDeterm
Prices are also sometimes focused on as a trend indicator; however, in my opinion prices (level of supply) are really driven by jobs and interest rates. Iâ€™m confident that if we had better employment numbers we would have less distressed property as part of our housing supply right now.
Is this where I get the cracked crystal ball out of the closet?
How about the magic 8 ball?
We can not for tell the future.
It is my opinion,...
In reality, you can expect the trend to start to rise in mid 2012.
The reason is economics of the housing and loan types.
The huge amount of zero down loans, neg am loans, will be reset.
see this interest rate rest chart and you may understand it
Knowing that buying sometime in 2011 should be the most opportune time.
It is my opinion we are not at are lowest point as many believe we are almost done.
We have are beginning one down turn now and will see another next year even worse than this year according to the charts.
I do believe that buying at some point this year or next is the opportune time.
in my opinion, in 2013 housing will rise at a pretty good rate.
Why housing will go up,....
right now there is no construction making housing inventory low over time.
right now many are moving in together to get through this economic low.
Those people will get on each others nerves and the demand for homes is going to escalate and as jobs happen, people will be on the move.
Housing will be in demand and the prices will go up sharply.
That's just my opinion and I may be right.
Harold Sharpe - Broker
So Cal Homes Realty
California Department of Real Estate License # 01312992
The bigger picture is the economy and job market. Until unemployment lowers there can be no real recovery. Our world is small these days and we are affected by the world economy as much as our own. Iâ€™m going to help out and go spend $4 on a coffee!