San Diego Housing Market News and Analysis
Forecasting the Real Estate Non-Market
Submitted by Rich Toscano on November 30, 2009 - 3:12pm
Readers may have noticed that I don't make the kinds of sweeping predictions about the housing market that I used to.
There are two reasons for this.
The first is that housing prices are no longer at an extreme. This can be seen in a semi-recent update to my price-to-income and price-to-rent charts, which show local home valuations returning from orbit and heading back to earth over the past several years. It's pretty easy, when homes are stunningly overpriced, to forecast that they will eventually reach something quite a bit closer to their fundamentally justifiable values. But once the valuations go from "extreme" to "somewhat reasonable," you just don't have that same analytical wind at your back.
The second reason for the dearth of forecasts is more specific to this particular time, place, and subject matter.
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