Wednesday, April 27, 2011

Housing Recovery In Calif.- Not Yet!

Mathews Realty Group

Retirement Advisor/Investment Services

Self Direct IRA/Solo 401K Plan Specialist

california foreclosures notice of defaults

The reason I think we are still years away from any normal market is the fact that there is still a large appetite for housing.  The current market is now dominated by investors and first time buyers.  These buyers are picking lower priced properties but again, a bulk of these people are speculating even for cash flow purposes.  Psychologically assessing the market I believe sentiment is still too strong in some areas.  The bottom will come when people look at homes more as a place to live instead of an investment.  The California market is facing challenges ahead:

The only things keeping this market together is artificial methods of intervention like the Federal Reserve and accounting gimmicks.  These actions have kept the above data stagnant for a year but how long can this game of pretend go on?  If incomes are not rising then how are households going to pay for their home?  What if mortgage rates start retreating to their more historical average?  Ultimately incomes have to go up or home prices have to go down.


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